tv Hearing on Water and Wastewater Infrastructure CSPAN April 7, 2016 8:02pm-10:04pm EDT
six month high. johns hopkins hospital lab and security director will talk about recent hacking issues. melissa jaeger, senior staff writer, talks about the organizations ongoing efforts to highlight what they describe as the outsized role fund-raising plays in the daily lives of our congressional lives. join the discussion friday morning. water safety and infrastructure affordability were the focus of a senate environment works hearing today. they talked about the challenges of modernizing deteriorating water systems and the financing
challenges of mandates of the federal government. from capitol hill, this is about 2 hours. >> good. the meeting will come to order. >> i've been talking to some of you down there. we went from oklahoma. you'll be real happy to do this. >> the epa has identified 271 billion in wastewater needs over the next 20 years, based on capital improvement plans developed by local utilities. according to the u.s. conference of mayors, the -- which i really enjoyed visiting with you, i'm glad to have you here to represent them. that was what, just about three weeks ago or so? anyway, your meeting, it's nice to see some of the people who are still in the u.s. conference of mayors who were there when i was a mayor. that's a long time ago.
but according to the u.s. conference of mayors through 2013 local governments have invested over $2 trillion in water and sewer infrastructure and continued to spend $117 billion a year. these local expenditures represent over 98% of the cost of providing services and investing in infrastructure, these costs are paid by you and by me and by our rate pairyers d as a general rule, this is an appropriate thing to have users pay. water and wastewater is refunded by the taxpayers who receive these services. we are no longer paying for services. we are paying for federal mandates. as they pile up, the bills paid by individual homeowners get bigger and are becoming unaffordable for many americans.
federal mandates force local communities to change their priorities in the water and sewer world 37 this pushes basic repair and replacement to the bottom of the list we forced communities to chase mandates that may have small changes in environmental health. there is a federal interest in maintaining these health protections in economic benefits and there are a variety of ways we can help. first, i'm going to list four here. you have to continue to support the clean water and drinking water state revolving funds. the president's fiscal year 17 budget proposed cutting the clean water fund by 114 million and providing a 197 million
increase. this is robbing peter to pay paul. the net is a loss second, we have no -- we have to find new ways to increase investment and infrastructure. we took action by adding the water advanced information act. that's wifra to the water bill. epa is requesting funding to start up the program. they are only requesting 15 million. and our proposal to help flint and other communities around the country, we are planning to provide around 70, not 15 but 70 million to capitalize wifra. third, we need to look for ways to encourage even more private investment in water and
wastewater management. it's a 5050 thing, if it can't be raised through municipal ponds, where is it going to come from we need to increase support for small rural communities who simply can't afford the investment that epa wants them to make. mr. robert moore will offer testimony on this. and finally we have to make sure that federal mandates don't force communities to spend hundreds of millions of dollars for projects that may have little impact on water quality. while delaying other critical programs the u.s. conference of mayors has spent a lot of time trying to work with the epa on this issue. communities are still being threatened with penalties even
as they are trying to negotiate with the epa. i strongly believe that investment and infrastructure expands our economy. each public dollar invested in water infrastructure increases long term gross domestic product by 735. the joint tax committee has not been persuaded by these numbers. they assume these programs increase the use of tax exempt bonds to the treasure ary and we need to offset funding authority for the state revolving funds and loan programs and wifra also. the water environment federation is represented here today as conducted a new study to measure the increases in personal and corporate income taxes paid into
the u.s. treasury, attributable to water infrastructure investment. more money is coming into the treasury as a result of this, this hearing is laying the foundation for legislation on water and wastewater infrastructure, and hope they'll be ready to move the same time our water resources development act is taking place. senator boxer? >> thank you so much. i am very pleased that we're having this hearing and i think it's important to look at this issue of mandates, where the parties do have some significant differences. to me, useless mandates make no sense. for example, we had a hearing on nuclear power plants.
we could say, you know, let's not spend any money worrying about the safety, then we'd have more problems like we had at three mile island, god forbid a fukushima. we're not going to have that, because we have a law that says we're going to set standards and regulate these power plants. we may have a disagreement on how far that should go, that's fair. we do something important for the american people it's called protecting them, and that is critical. as we discussed, safety should be prominent in our minds. aging drinking water pipes and waste treatment systems are a nationwide problem. and the society of engineers, they are not democrats or republicans. they give us a d for our drinking water and wastewater infrastructure. that's unacceptable.
the way we do it, we have to be smart. but we have to do it. i don't think it's fair in one city in the country our kids are getting poisoned water and we have examples of that all over including in my state. because we've had some disposal of dangerous lead. we have it in mississippi, flint michigan, ohio, it's not fair that the child born there just by the circumstances of their birth have less of a right to clean water the american people have a right. these minimum standards extend to our infrastructure. i was proud to join with my colleagues in a rare moment, we said there's too much lead in fawcetts and those facilities that drive our water, and we changed that lead requirement
based on science now, millions of homes across america receive water from pipes that date before we understood lead exposure. we worked on these. and we know now from the american water works association, that 7% of homes, this is a new study. 7% of homes, that's 15 to 22 million americans have lead service lines. it doesn't mean that that lead is leeching. but some of it could be, and a lot of it could be in the future, as parents in flint know, there is no safe level of lead in children. it affects their brains, their nervous systems. the children poisoned in flint will be dealing with these harmful consequences all their lives, we have a long way to go. we also have cities across the
u.s. with sewage systems that discharge raw untreated sewage waste into waters where our children swim. we know the problem in flint was due in part to change to the highly corrosive flint river as a source of drinking water. nearly half of u.s. waterways are in poor condition and one in four have levels of bacteria that fail to meet human health standards. i know some testifying today have expressed concerns of affordability for protecting their own people. i understand the concerns, i was a county supervisor like many of us, i started there i dealt with nose mandates. what we have to do is hear you, if you think something is totally useless, tell us, if it's going to have a benefit, we have to work together and make
it easier for you. to protect your people, your kids, you want to do that as much as any one of us. we need increased investment. it's clear. we should fund existing financing programs, i think there's broad agreement on that one, at least there used to be. we should update those programs to target those investments where it's needed most. when we invest in water structure, we support jobs in the country. a billion invested can create up 27,000 jobs. jobs are important to all of us. mr. chairman, i believe there is broad bipartisan support for the need for federal investment in water infrastructure. we have an opportunity to address our aging drinking water infrastructure.
the health and safety of our children and families depends on a modern infrastructure that supplies clean rivers and streams. can i put my full statement in the record? >> without objection. >> what we're going to do, we normally don't have this many people on a panel. we're going to try to keep within the five minute limit we have. we'll start with david berger, the mayor of the city of lima, ohio. >> good morning. thank you for the invitation to give mine and the conference of mayors perspective on the nation's water and wastewater issues. my name is david berger and i'm in my 27th year as the mayor of lima, ohio. i spent near 20 years in negotiations with ohio epa and
usepa. also participated in over five years of discussions with epa concerning integrated planning green infrastructure and affordability. this makes me a reluctant expert in the field. local government not the federal government is where the job of providing water and wastewater services gets done, it's paid for. local government has invested over $2 trillion in water and sewer infrastructure and services since the early 1970s, and 117 billion in 2013 alone. at the conference we have unanimously adopted policies dealing with this issue. one is a simple message to the congress and the administration, give us money or give us relief the mayors of this nation would be happy to implement any rule or rel taking you or epa comes up with, you have to provide at
least half the resources, i'm talking real money, not authorization levels that never get funded. i'm talking about grants, not loans that must be paid back the costs for unfunded mandates are paid for by our customers, our citizens many of whom are residential households. and the cumulative costs of these mandates have exceeded thresholds on the burden of many american households. epa demanded i spend $150 million to fix combined sewer overflows for a community which has only 38,000 residents. projected average annual sewer bill will be over $870 a year this means that 46% of lima households will be spending more than 4% of their household
incomes on just their sewer bills. with nearly 14% of my residents spending 9% of their household income on their sewer bill. in the conference of mayor study of just 33 california cities. 24 cities report that more than 10% of their households are now paying more than 4 1/2% of their income on water, sewer and flood control costs. with ten of those cities having more than 20% of their households spending 40%. please keep in mind that many of these cities have not yet factored in the cost for tmdls, which are estimated to put just the cities in los angeles county up to $140 billion. one county, $140 billion. how did we get here?
when the clean water act and safe drinking water act were first established, congress established lofty goals. that investment foss toured a reasonable attitude about how to accomplish those goals together. that is not the case now. congress retreated from the grant program because of the high costs, but the implementation of the water policies by successive administrations did not retreat with congress's retreat from funding. quite the contrary, the administration's transformed the aspirational goals into unfunded main dates, involving hundreds of billions of dollars of costs imposed on local communities. cities are held by epa policy to an arbitrary number of no more than four overflows per year. however, there is no science substantiating the need for that.
so in some cases, cities are allowed 14 while in other cases zero overflows. engineering a system that could handle any type of storm event with zero overflows is almost impossible and wasteful of local resources, in my own city, i have a river that is labelled as fishable and swimable. that river dries up in the summer to only four inch deep pools of stagnant water. i can safely say that no one is ever going to swim in that river, yet we're held to that standard of compliance. epa is dictating our priorities and where our taxpayer money is spent. i do not want to give any impression that mayors don't care about clean water, we do. we need federal and state government to once again be our partners. we fundamentally believe that
change must take place, and we're asking congress to act on the following. codify integrated planning, define affordability develop reasonable and sustainable goals, allow for additional time and establish a review process to repeal decisions made at the regional level. i thank you for the opportunity to speak here today. >> thank you, mayor. mr. ciao is the chairman of department of public works the city of baltimore. >> good morning. i'm the director of the department of public works for baltimore city. it's my honor to be here today on behalf of the city of baltimore to discuss the importance of the federal role in keeping water and wastewater infrastructure affordable. i have over 30 years experience
working in the water and wastewater field. today you are examining a very important national issue, how we can address the need for investment in our water infrastructure. my boss appeared before this committee's subcommittee back in 2012 to testify on the challenges of financing water infrastructure using baltimore experience. baltimore is faced with massive costs of over $3 billion of regulatory mandates, including enr as well as storm water improvements and covering up our open finished water reservoirs. this is just a snapshot of the project we must undertake to upgrade and meet today's standard. we consider ourselves to be good
stew 5rds of the community and take these obligations seriously. we are tasked with maintaining and improving a large infrastructure solution. how do we pay for all of these. to say that baltimore is not a wealthy city is an understatement. the median income 40% of the national income. 25% falls below the poverty line. it is that population base that will be disproportionately impacted by water bill increases to pay for the investment we must take. my written testimony highlights areas we are identifying policy changes and programs that will assist communities and rate pairs dealing with affordability
issues. i urge you to review these items in the testimony. the srf program is an important first steb. congress should reauthorize both srf programs. in baltimore, we have direct experiences with trf programs and know they have worked well. we have gotten over $168 million in low interest loans from the maryland srf program, and $4.5 million of principle forgiveness loans. addition ali, congress should support increased funding from other existing financial -- financing grants programs such as wifra, u.s. da development programs. all these programs are vital to help communities make needed and wise investment in their
infrastructure. when i speak about the water infrastructure. i use the word investment. those of us that are familiar with our federal infrastructure funding program, have long known the congressional budget office scoring for the program does not fully reflect the complete economic benefits of these programs. for this hearing a team of economists to conduct a quick analysis of the economic benefits although the report has not been completed, but upon completion we'll submit that for the record. the nation is estimated the economic impact of srf's spending in four states namely, california, ohio, california and oklahoma. which represent a good cross sections of states, representing
size, cost of living and rural and urban population and general age of infrastructure. the modeling of analysis was based on the economic model. labor income, jobs and federal tax revenues in the four states it captures the effects of spending as it ripples through the economy. utilities will result in a direct impact, which is the construction contractor. when the construction contractor reused that money to buy goods and services. that's what we call an incorrect effect and the fact that the indirect spending creates employment in induced effect. it's the sum of the direct, indirect and induced effects the
result of the analysis shows that federal investment in water and wastewater infrastructure have meaningful benefits to the economy, u.s. treasury and households across the nation. so for starters the srf spanning tax revenues, total state and annual spending in the four states, average about 4.4 -- 1.46 million. and so in other words, every million dollars of srf spending is estimated to generate 2.25 total output for the state economy on average. i urge the committee and congress to continue to support our efforts in the local levels,
the investment we make with your support delivers environmental public health and economic benefit to our country. thank you very much. >> thank you, mr. ciao. robert moore from oklahoma representing the national rural water association. robert? >> good morning. i am robert moore from rural oklahoma, i'm a general manager of the marshall county water corporation. i'm representing all small and rural community water and wastewater suppliers today. through my association with oklahoma and the national rural water associations. our member communities have the very important public responsibility complying with all federal regulations and for supplying the public with safe drinking water and sanitation every second of every day. most all water supplies in the
u.s. are small. 94% of the country's 51,000 drinking water supplies serve fewer than 10,000 people. i want to acknowledge that rural america is appreciative of you for standing up for real -- rural communities on environmental issues, your actions have improved the lives of all rural families, environment and rural health. while we have fewer resources, we are regulated to the exact same manner as large communities. and in 2016, there are rural communities in the country and even in my county that still do not have access to safe drinking water or sanitation due to the lack of density or the lack of funding. i am what you would call a
working general manager. much of my day is spent in the field repairing waterlines. helping conduct routine maintenance on our distribution system. if someone in our community loses their water in the middle of the night that call gets forwarded to my cell phone marshall county water has a similar story to tell many other rural and small water suppliers. we were starting to provide the first water service to rural communities that had limited access to water or marginal water wells. in 1972 we began operations to supply water to 800 farms and ranches. the federal government provided that funding to begin and later expanded our water service through low interest loans through usda. we now serve approximately 15,000 customers through a
little over 6,000 taps. in crafting water infrastructure funding policy. we urge congress to consider the following. local communities have an obligation to pay nor their water infrastructure and federal government should only subsidize infrastructure, when the local community can't afford it, and there's a compelling public interest. such as health, compliance or economic development. we've recently been denied a usda loan for a waterline. they determined we could afford a commercial loan. the u.s. da and epa funds achieved this principled objective by requiring that federal subsidies be sarg etted
to communities most in need. the new program lacks any needs based targeting means testing or focus on compliance issues. this year the request for decreased funding for srf's and substantially increased funding for the wifra program. this means programs are being moved from communities to communities with less need. all programs should be deads indicated to the compliance issues with epa federal mandates and standards. profit generating water companies should not be eligible for federal taxpayer subsidies. please note that the sfr's have
no limitation on size or scope and can currently leverage federal dollars to create a much larger loan portfolio. oklahoma currently leverages dollars at a 1 to 10 ratio. according to the epa, most srf funded is allotted to large communities. a simple review of projects included in my testimony show numerous projects funded that cost over $50 million and some over a billion dollars, thank you for your assistance and this opportunity, i'll be happy to answer questions. >> thank you very much, mr. moo moore. mr. arndt is from pennsylvania. >> good morning, mr. chairman. ranking member boxer and members of the committee.
i want to thank you on behalf of the 50,000 plus water professionals that make up the member of the american water works association for this opportunity to provide comments on the critical issue of affordable financing of water infrastructure and in particular what the federal role should be awwa has two policies on financing. first, that they should be self-sustaining from local rates and other charges, and second that water infrastructure can best be financed with a multifaceted toolbox, recognizing there's significant diversity among water systems in our country and their infrastruck tire needs differ widely. i would like to provide some context for the suggestions i'll make in a few minutes. i think they're important to set
the stage for the circumstances in which we face. the results vary widely, what we spend yearly on water infrastructure. the number fluctuates widely from year to year, based on circumstances such as the general economy, interest rates, the regulatory requirements that are imposed and competing local demands in our communities. what is very clear is the annual need for investment in our water infrastructure is going to grow dramatically in the coming decades, it will at least triple and possibly quadruple by 2040.
buried no longer, confronting america's water infrastructure challenge specifically, it looked at our aging water mains, what that report concluded is that we will require an investment of $1 trillion over the next 25 years to replace the water mains that will become obsolete during that time frame it includes no drinking water needs or cso or sso or other wastewater types of issues. clearly a significant number when you compare it to what we're currently spending. another important feature to recognize, that water services are the most capital intensive that we provide in our country what this means is that when we invest bigger dollars, more
dollars in that water infrastructure, it's going to have a big impact onrait and in turn have a big impact on the affordability of the rates to consumers. we believe given these circumstances that we have to do two things. and we have to pursue these relentlessly. we need to preserve existing sources of capital. and add new sources to the toolbox to address those needs that are unmet by tools. in our written testimony, we identify four areas where we believe that the federal government has an important role. specifically, they include tax exempt bonds, the state revolving loan funds and private
activity bonds. in my comments, i'm going to address the first two. not because the other two are unimportant. but i believe those other two will be addressed by panelists here today. it is important to recognize that tax exempt bonds are currently the largest source of funding for infrastructure, between 75 and 80% of our annual investment is currently funded via that investigation. tax exempt bonds are used by 70% of the utilities across the country. we acknowledge that the concerns and scrutiny on tax exempt bonds that is currently under discussion. we believe that discussion is wholly inappropriate consideration they are used to finance essential public services. as water utilities, we need
billions of dollars annually for infrastructure. we need to have lenders who can provide those billions of dollars. recognizing the tax treatment, the steady stream of revenue and the security of the investment, investors willingly accept a below market interest rate that is passed along to utilities who use those tax exempt bonds. they are used to reduce the rates to customers and improve the affordability of rates. if we take away this financing, the cost of capital and the customer rates that follow will raise to unprecedented levels and create unprecedented difficulties for affordability particularly in our older cities. with regard to wifra, i want to thank the committee for their role in enacting wifra, and
removing the ban on using tax exempt bonds for providing the match for wifra loans. it's -- >> you are quite a ways over your time please wrap up. >> i will wrap up quickly. >> that's been another one of our mutual projects by the way. so -- >> very proud of that. >> we have four recommendations with regard to wifra. most importantly, we need an appropriations so that program can be launched and that money can be put to work for water systems across the country. thank you for your attention. >> thank you. >> mr. guiser is here from phoenix, arizona, representing the national association of water companies. >> good morning chairman.
my name is joe geyser, i serve as the president of the national association of water industries. i'm pleased to join you today to talk about actions the federal government can take to inact innovative needs. they range in size from large, national and millions of customers to utilities serving less than a couple hundred customers. we're regulated by state utility commissions and have one of the best compliance track records in the industry. currently we serve more than 73 million americans. by embracing public service and private enterprise, we can improve customer service and create jobs. we applaud this committee for bringing water infrastructure
issues to the forefront. i'd like to emphasize a few points regarding private water's role as part of the solution to our infrastructure resource needs. it's unfortunate that our aging and deteriorating water systems threaten the environment and public health the american society of civil engineers gives u.s. infrastructure a failing grade of d addressing these needs including innovative solutions. federal fund ago lone will not be able to bridge the investment gap. the private water industry is part of the solution. the private water sector continues to help communities with significant capital investment.
six of the largest members are collectively investing approximately $2 billion annually in their systems. this is significant when compared to $2.25 billion. the private sector has the financial ability to invest in the challenges that plague many of our cities. it includes innovative technologies for long term planning. these range from water conservation programs or long term public private regional water agreements such as the one epcor signed when shifting applications. further support can also be achieved through public private
partnerships, our member companies have experience with p3s in delivering superior waters service. these same models can be applied to broader water implementation to serve state water projects to address water scarcity requirements. current rules and regulations permit many municipalities from entering into partnerships with municipalities. congress can act to remove the vast potential of private capital in much needed water infrastructure projects. removal of state volume caps on volume activity bonds and the alignment with airports, high
speed rail and waste disposal. long term concession agreements are no longer penalized. expansion of state revolving funds and their lidgeability so private funds are no longer -- private investment and infrastructure and ensure private companies have the opportunity to participate. establish a centralized office providing professional services to all municipalities with this model. >> thank you again for the opportunity to address you today. we're committed to work with you and our stakeholders to meet the challenges of sustainable water infrastructure. >> thank you. >> mr. olson is the director of the health program for the natural resources defense
council. mr. olsen? >> thank you, chairman inhofe, thank you senator boxer and other members of the committee. it's an honor to testify this morning on behalf of the 2 million members and activists at the national resources defense council. it's been more than 30 years i've been working on drinking water and water infrastructure issues. we've been talking about deferred maintenance about the failure to upgrade treatment and technology, steady deterioration of our water supply, for many, many years, i find myself in agreement with several of the point that is have been made earlier, we need to be making these investments. we've long known that wastewater and drinking water infrastructure are deteriorating, and frankly the chickens are coming home to roost. where we are now is that what we've all taken for granted which is safe drinking water, we can't really consider a given any longer. flint really does remind us that
the penny wise and pound poolish decisions to save a few bucks by not investing in our water in a infrastructure can come home and harm public health as well as harming the economy and really erode public trust. i think in these debates sometimes it's easy to forget the impacts of these decisions on real people. this really came home to me a week or so ago, when we were working on behalf of some of the citizens in flint. we were working with one mom, her name is miriam. her husband and two kids live in flint and she's lived there most of her life, when the water was switched in 2014 in flynt, she noticed that the water started to smell like rotten eggs, that it tasted awful, it was brown.
they switched over to bottled water, public officials kept saying it's perfectly safe don't worry about it, so they switched back to tap water. unfortunately, plemiriam's fami started to suffer from adverse health effects, miriam had a miscarriage, she had never had a miscarriage before. she started getting skin rashes. clumps of her hair started to fall out. a dr. prescribed treatments for her hair loss which helped a little bit, her skin rashes continued. her son who is 13 had a bad outbreak of ex-ma sores all over his back. they stopped using the flint water for bathing and his skin
rashes disappeared. miriam read that lead contamination can be linked to miscarriages. just not knowing whether lead exposure caused my miscarriage is painful. she worried about the possible iq effects on her children and their ability to learn. and she's worried about having to use bottled water for all of their needs. it's really taken an emotional toll on her family. the reason i mention this, it's easy to forget that we're really dealing with real people who are adversely affected and we have a widespread problem with lack of investment. i think a lot of water utilities have done a familiar taftic job, but we have huge challenges, we
do not want a two tiered water system where wealthy get water that's clean and safe, and poor people as we have heard of investment in water infrastructure. we really need to fix this problem fast. infrastructure investments, the good news is, create a lot of good jobs and we strongly support as our testimony highlights, investments in this area. i wanted to also point out that there are ways we can reduce the costs for citizens that are paying for water bills. i lay out several of them in the testimony including protecting the water before it gets contaminated, so polluters are paying to clean up rather than consumers paying to take those contaminants out of the water. the national drinking water advisory council affordability group which i served on had several recommendations including low income water assistance program, affordability rates for low
income consumers, targeted compliance assistance and increased funding. i realize my time is almost out. so i will just highlight the seven recommendations very briefly that we lay out in the testimony. first we need to fix flint's infrastructure. we support senator stabenow's bill 2579. second, we need to really invest in our water infrastructure. we support senator cardin's bill that would increase state revolving fund funding. we need to fix our source water protections. we need to address small system regionalization to cut costs, fix the lead and copper rule and finally, let citizens act immediately when there's an imminent substantial endangerment to their health. thank you very much for the opportunity to testify. it's an honor. >> thank you, mr. olson. mayor, 27 years, is that right? >> yes, sir. i'm a slow learner.
>> well, there's been a lot of ideas here, lot of testimony here, but the thing that seems to be missing is affordability and flexibility. can you tell us why, you're here representing the u.s. conference of mayors as well as a mayor yourself. can you tell us why the u.s. conference of mayors believes that the epa's integrative planning policy isn't sufficient to address mayors' concerns about affordability that we talked about? >> thank you. >> it was meant to do that, but is it doing it? >> first of all, i think part of our -- i can say for a fact that because lima was the first city to actually negotiate successfully a consent decree involving integrative planning that we would never have gotten to that point of actual agreement without the integrative planning policy.
it does give us the flexibility that we need to proceed and move forward and we actually are grateful for the fact that there were champions in headquarters at us epa that created the policy and actually worked through with us the negotiations with the regional office. our concern is the fact that it is a policy. it's not the law. our concern is that it should be codified so that cities all across the country, in fact, have the opportunity to use it to do their long-range planning and priority setting for their own systems. we're coming up on a process, we are already in this process of actually electing a new president. who knows what happens to that policy under the next administration. so there's that transitional change that we're concerned about, but secondly, i can also tell you that the experience of
cities around the country is that there's enormous resistance in the regional offices to actually implementing the integrative plan with cities. as of this point, we know of really only four communities that have been able to successfully put in place integrated plans. that being lima, ohio, evansville, indiana, springfield, massachusetts and spokane, washington. our concern is these are opportunities cities have but aren't able to successfully implement. it needs to be part of the law. >> thank you. it was some place in the u.s. conference of mayors that the word was used is prosecutors, that the epa treats some of the small communities like prosecutors. >> oh, i think that's a widespread experience for cities. we are treated as polluters.
we are not treated as stewards along with the state for the public environment, for our systems and it was very clearly the case that regional staff was dismissive. it took us ten years to get to an agreement. >> all right. >> i believe that that attitude of frankly an arrogant dictatorial attitude out of the agency is very real for most cities. >> do you agree with that, mr. chow? >> yes, sir, i do. first of all, we also use integrative planning and basically try to manage our $4 billion worth of capital projects, but yeah, we do experience that as we negotiate with our consent decree. we do get more favorable
comments or support from the headquarters rather than from the region. >> mr. moore, the committee passed, this is senator wicker over here, he introduced s-611 i think it was and they passed his bill. it is now a law. that establishes technical assistance under the safe drinking water act for small and rural communities which you are representing. do you think that bill should include also communities meeting waste water mandates? >> yes. technical assistance end of this, we certainly support certainly percentage of whether it's srf to go to technical assistance to supply that assistance to the smaller systems that cannot go out, you know, and afford the engineers or it puts a burden on them. >> you know, i understand this
because in our state, our state of oklahoma, there are a lot of communities that would say you are representing them well, and i think these are some of the things that we can do in our committee. senator boxer? >> thanks, mr. chairman. many say that in addition to bread, wer is the staff of life. you are dealing with something that's critical and i thank you for all your passion about it. i really do. dedicating your life to it. everybody takes it for granted, we all do, until a kid gets violently ill or a woman has a miscarriage or there's rashes all over a body, then we go what have we done wrong, all of us together. we are in this together. this isn't an us versus them situation. as erik said it's all about our families. so when something goes wrong like that or when a child swims in a lake that has untreated sewage in it, and they get very ill because of it, everyone
focuses on it. today we are focusing on it. we are focusing on other things that i believe are secondary because let me tell you something. we have spent so far $2 trillion in the war in iraq. i care about this country. i care about our kids being safe. and to say oh, we can't afford it, baloney. we could afford the war. thank god not with my vote, but we could afford the war. so we can afford this. so i mean, i really appreciate all of you coming here today to help us figure out how we can do this and not harm our people physically, mentally from this problem and also in their pocketbooks. so i want to talk about a few of those things. first i wanted to ask mr. olson, are frequent discharges of combined sewage overflows and sanitary sewer overflows, are they a concern? because we are focused on lead as we should be. what about these overflows with the bacteria? >> yes.
these are definitely a concern -- >> i'm going to ask you -- >> these are definitely a public health concern as well as an environmental concern. from a public health standpoint, very often raw sewage is actually dumped into lakes and streams and that can cause massive contamination. we see beaches being closed, we see people getting sick, water-borne disease from swimming in it, from being exposed to it. >> so it is a problem that should be addressed, in your opinion? >> it's definitely a big problem in hundreds of communities. >> because that's what the studies are now showing. it's disgusting. and we have to fix it. and we can argue over everything. we have to fix it. now, mr. berger, i want to be your partner. the first part of your testimony, i agreed with. but the rest of it i found very disturbing. first of all, you mentioned my state and you talk about what it costs. i want you to know that my state has tougher environmental laws than the federal government, a. that's what the people there want. okay. b, no one in l.a. ever called me
to complain so who is it you talked to specifically that i can contact and say what are the problems? >> well, the conference of mayors published a study of -- >> don't talk to me about -- you mentioned los angeles. >> that's correct. >> who told you they're upset about this? because i want a contact. >> we will give you the published study -- >> just give me -- i'm not asking for a study. you talked about l.a. i want -- because you do not represent l.a. i do. so you tell me who's complaining and i would really appreciate it if you sent it in writing. now, mr. berger, in your testimony, you complain that epa resists flexibility. this could be true. we want to make sure they don't. we want to get it done just as much as you do, with maximum flexibility. and it sets an unrealistic timetable for meeting water quality requirements yet your consent decree provides the city 24 years to come into -- let me ask my question -- to come into
compliance with the clean water act. this consent decree comes after years of the city failing to comply with water quality requirements and it is also my understanding that you have one of the longest consent decrees in the country. is 24 years an unreasonable timetable? >> that's why we agreed to it, because it's not. >> so it isn't. so then why on the other hand -- >> but it took us ten years of negotiation in order to be able to deal with the agencies -- >> you didn't mention the fact that your efforts paid off and let the record show you got a 24-year consent decree. now, let me ask you, mr. berger, do you think it's appropriate for cities to make improvements to stop the discharges of raw sewage into waterways that are used by our kids? >> i believe that it is appropriate for us to take reasonable measures, whether it's with combined sewer overflows or sanitary sewer overflows to minimize those kinds of problems. >> good. >> but there are also instances and many instances where the
requirements are not realistic. >> i understand. you said that. mr. chow, would increased funding of the programs that you say are helping you increase funding, help the communities facing affordability issues? we all care about that. >> yes. it definitely would. with the fact that we are forced to basically pay for the local -- using local money to pay for the rehabilitation of our infrastructure. >> thank you. >> so with the federal dollars certainly would be very helpful. >> i will close because i know my chairman wants me to. i will. but i want to thank mr. arndt for your kind statements. we are excited about it. we have to fix it to meet some of the rural needs. we will, but we're very excited about it. we think it's a new tool and we think the leverage is going to be fantastic for you. thank you, mr. chairman. >> thank you, senator. senator wicker, now that i have teed you up with your legislation, you are recognized. >> thank you, mr. chairman. i have so much to say and five
minutes is inadequate but i will do my part. it is a fact that epa has used its discretion to actually reduce the availability of technical assistance to small communities by 75%. this has eliminated two full-time circuit riders in my state of mississippi and i do appreciate the chair mentioning the legislation which we championed last year, the small community water system assistance act. this was signed into law by the president on december 11, 2015. let me just tell you what we're facing in mississippi. the town of new hebron has 400 people being told they have to spend $3 million to comply with the epa. how are they going to do that? large county water system with approximately 2,000 persons needs half a million for a new well. the town of como, population 1200, is facing overwhelming
water challenges and failing to meet the current epa permit. they just finished paying approximately $1 million loan. now they have to spend another $1 million. the town of utica with a population of 850 persons is facing $1 million compliance upgrade. i don't know why anybody runs for city council or mayor in these small towns. my hat is off to them for trying to make small town local government better. small town of shaw, 1900 people, was under a water order because of a broken chlorinator they couldn't afford to fix. another city with approximately 2300 persons need $7 million to pay for a new sewer treatment facility that epa is mandating on them because of nitrogen and
phosphorous discharges. we had hoped that at a very minimum, the legislation that the president signed would result in a return of circuit riders in rural areas. increasing -- instead of increasing regulatory requirements. sadly, the circuit riders have not returned to my state with the assistance that they have so capably provided to us. mr. moore, we see the burden of federal unfunded mandates increasing and epa assistance decreasing. is epa insisting on a cadillac
for these communities when actually, a used chevrolet would do all right? is there a middle ground there? i'm very concerned about the horror stories that senator boxer mentioned. i think we all are. lead in the water, completely unacceptable. children swimming in lakes polluted by raw sewage, absolutely unacceptable. anywhere, particularly in the united states of america in the 21st century. but is there a balance there that the regulators who come in and treat you like they are prosecutors rather than partners, is there a balance there that we're missing and what can you tell us in that regard? what do you say to these small towns? >> well, first i would say that even as a small community or a small rural water system, it's our top priority to put out safe water. we will not put out water that
is in any way unsafe. >> absolutely. >> talking about comparing a cadillac system, you know, or something that -- a big municipality would need, you know, compared to us. we have to have the facilities that create that safe water and there's only so much, you might say bells and whistles that go on some of the bigger water treatment plants that maybe we don't need. i don't know what was your other part of your question? >> mr. berger, how can these small communities, these small towns and municipalities, pay for these mandates? >> well, senator, i think that part of it has to do with what the requirements are and i think
the opportunity for technical assistance is essential to be able to make certain that they have proper technical advice about what is appropriate. when it comes to the actual affordability issue, there's no question that the federal government needs to become a major funder in the form of grants. grants are now made to states and states turn around and loan those moneys to cities. that impacts the affordability and makes it unaffordable. so i think that the federal government needs to look back at the time of the clean water act first being implemented and the safe drinking water act, and look at the successes that were achieved when the federal government had skin in the game in the form of direct assistance to localities. >> thank you very much.
>> thank you, senator wicker. senator cardin? >> thank you, mr. chairman. i want to thank the entire panel and my good friend senator wicker, i want you to know that i visited the water treatment facility plants in my state. i was just at the ashburton facility in baltimore city this past monday. he was at the wssc plant also on monday and i'm very proud of the commitment that the local governments of maryland have made to make sure we have safe drinking water, and we do. but it's not a cadillac. it's not a used chevy. we are rebuilding the model t. they are a hundred years old. the plant in baltimore was first built 100 years ago. it was state of the art. state of the art. we are modernizing it, but it's still the hundred-year-old facility. so it's a struggle. obviously, we all want to make sure that regulations are done as efficiently as possible, but
bottom line is we must make sure that there is safe drinking water for the people of our country. and what happened in flint was absolutely outrageous. i think we all understand that. there was some conscientious decisions made there that shouldn't have been made. but we have problems throughout this country. let's make no mistake about it. in washington, d.c., in the early part of last decade, lead leached into water possibly 42,000 children and nearly a decade ago, in my city of baltimore, we have closed the drinking water fountains in all of our public schools. the reason is not that the water isn't safe coming into the community. it's the connections into the facilities that contain lead, that can't be used. so we have serious modernizat n modernizatio modernizations. you indicated that your organization studies showed in 2012 i think it was that there's $1 trillion of backed-up water
infrastructure improvements over a 25-year period that could be spent, epa did a study showing there's over $600 billion in the next 20 years in order to modernize and i was listening to each one of you and you all said the capacity here just isn't there to do that. the rate payers can't burden that type of amount. and when you look at the federal tools and there are several, including the tax exempt authorities that you all would like to see, but if you look at the state revolving funds it's one third the level it was in 2009. i want to thank the chairman, i want to thank the ranking member, because they are trying to do something about that. we are going to try to reauthorize the state revolving fund and that would be at a level i hope that reflects at least with the federal partnership should be and i thank our leadership on our committee because this committee in a bipartisan manner has tried to make more predictable water infrastructure federal
partnerships and a reasonable amount to deal with the needs that are out there. we are going to continue to try to make those investments and i have introduced some legislation and i thank the leadership of this committee for their encouragements of the legislation we are pursuing. mr. chow, i want to give you an opportunity to respond to a point that you made in your statement, and that is recent findings of economic benefit analysis on the state federal revolving fund, you indicate that the way this is scored doesn't always reflect the true economic cost and benefit of the federal investment. could you elaborate on that a little bit more? >> sure, senator. so traditionally when we're looking at the state revolving fund, we're looking at the money coming from the federal government and/or from the state which is looking at it from that sort of one-sided. however, those state and federal, so, for example, the four states in the study that
showed a total state and federal investment for the years 2012 to 2014 amounted to about $1.46 billion. so out of that, as a result of that study, actually showed that combined investment generate about $160,000 in terms of the federal tax from that investment. but if we just look at a federal portion of the srf, which is only amounted to about 23% of that total combined federal and state, that every million dollars actually generates $695,000 in terms of the federal tax from those states. so in other words, $695,000 in federal tax revenues generated by federal investment of 23% of the $1 million. so that's quite awesome. >> thank you for underscoring that. obviously we are interested in clean, safe drinking water but
there's also an economic impact here and i think the committee understands that. i appreciate your testimony. >> thank you, senator cardin. senator fischer? >> thank you, mr. chairman. i thank the witnesses for being here today. we need to discuss the real world implications of these unfunded federal mandates as well as the lack of flexibility and the fair penalties that many of our communities are facing. the affordability of water and wastewater infrastructure is a critical concern around the country. in my home state of nebraska, the city of omaha is faced with the challenge of addressing a $2 billion unfunded combined sewer overflow mandated from the epa and the cost to the 600,000 residents in omaha sewer service area is a burden and it's particularly hard on our low and
fixed income residents. so mr. mayor, i would like to ask you a question. in your testimony, you discuss the extensive and the costly process that your city endured to reach an agreement with the epa's required cso mandate. in your experience, what are the necessary tools that congress can provide municipalities and communities to better equip themselves to comply with those mandates with the cso? >> thank you, senator. i believe that first of all, one of the critical elements of integrated planning is the opportunity to prioritize and for an example, we have ssos in our community that we demonstrated had no public health impact or environmental impact, but which will cost us $30 million to eliminate. we were able to push those off
to a later time while we took on much more serious issues relating to the csos. that ability to prioritize is part of integrated planning. it needs to be part of the law. it shouldn't just be a policy. the second issue really is around affordability. and the conference of mayors has developed proposals for how to in fact define affordability based upon not mhi, because median household income really masks the impact that these costs will have on low income households and we believe that a definition of affordability which absolutely respects the need to do something but to do it within the affordable limits of a community's resources is important to ultimately getting to solutions. and we think that additional time. you know, the clean water act
was -- just had its i think 42nd birthday, and what we have accomplished didn't happen overnight. what's been accomplished to the nation's waters in fact took 40 years to get to this point. and we're still making advances. so any expectations which are there in the regional offices that things must be accomplished in 10 or 15 years as the norm really are not realistic. so part of the challenge of dealing with affordability is allowing for the kind of time that communities need to accomplish it within their budgetary means. >> right. could you speak a little more on the necessity to address those high priority control measures and specifically, what impact does that prioritization have on public health and water quality? how can we have omaha be able to benefit from that prioritization flexibility?
>> well, i think that that comes back to technical assessment of where the -- in any system, there are places where things are happening at higher levels, more frequency events, and then there are places and systems which do not have that kind of frequency or impact. and i think assessments of the entirety of the solution and then plotting that over time for implementation is the key to ultimately getting to something that's reasonable for any given community. >> thank you. mr. chow, the mayor just spoke about the median household income and in your testimony, you spoke about the impact on epa when the agency looks at the community's affordability to cover the unfunded mandates, and you specifically mentioned that the benchmark that's used there.
could you explain why that median household income benchmark is harmful to our low and fixed income families? >> sure. of course, as i mentioned, baltimore, 40% of our population in the cities are below median household income at this level and 25% of the population's below the poverty line. so when you are looking at just the median household income, the curve is skewed. you are sort of looking at -- >> what should they look at? >> they should be looking at the low end, meaning the folks who are most vulnerable, and because that's the greatest economic impact is to that population. as we raise water rates, for example, we raise water rates across the board so in essence, what the local end up having to do, we had to come up with programs that would assist senior citizens as well as low income citizens to help offset,
so looking at the low end is actually more practical and more reasonable for us. >> thank you. mr. chairman, we have a lot of low income residents in omaha and people on fixed incomes who are being hit right now with their water and sewer bills, so anything we can do to provide that flexibility to help those folks out, i would really appreciate it. thank you. >> thanks. three quick points i would like to make. one is that when you are talking about waste water, it's like talking about real estate, location, location and location. they're the three keys and very often, what's reasonable is in the eye of the beholder. there is a conflict inevitably between the upstream and the downstream. i would say to mayor berger, there are a whole bunch of municipalities up in massachusetts who are up the
blackstone river from rhode island who probably think they are doing what's reasonable for getting rid of their wastewater and their overflow into the blackstone river, and they push back pretty hard against epa trying to get them to clean it up, but the blackstone river leaves their municipalities and comes down and flows through our municipalities in rhode island, and we got to deal with water that isn't clean, because they haven't bothered to do the steps that we have undertaken actually in rhode island to protect our bay, that they haven't done themselves. so i hope we all remember that there's an eye of the beholder issue here and the downstreamers very often have a different opinion about what a good job the upstreamers are doing. the second point that i would like to make is that for all of the mockery and scorn that conversations about climate change generate from that side of the commission -- the committee, in rhode island, the wolf is already at the door. this is not a hypothetical for
us. what we are seeing is the things that are most clearly connected with climate change, from a weather point of view it's rain bursts and from a general point of view it's sea level rise. unless somebody wants to repeal the law of thermal expansion, the sea level's going to rise and our coastal states are going to get it. we are already seeing that. we had in 2010, back-to-back hundred year storms. we had more than ten feet above flood level flooding. our towns had their sewage facilitieses flooded out by the rising river. i remember stopping on a highway overpass near where 95 was flooded and looking down into the warwick sewage treatment facility and all kou syou could see was the tops of the fences and the roofs of the building and everything else, all the sewage was off and down and out into people's yards. so if you're talking about how individual communities should
pay for that, pretty tough to tell warwick by the way, you got to rebuild your thing entirely because suddenly, rain bursts that you had no cause in, that 15, 20 years ago when this was built weren't anticipated, are suddenly drowning out your system. on our coasts, it's actually even worse. our sea grant program and university of rhode island have identified ten at-risk coastal wastewater treatment facilities. ten in little rhode island. where sea level rise plus stronger offshore storms mean that velocity zones and flood zones, treatment plants are now there. so who's going to pay to move that? you're going to ask north kingstown to pay to build a completely new -- i don't think they are capable of doing that and again, they didn't cause the sea level rise. it wasn't something that years and years ago was anticipated but now it's very very clear. so i urge my colleagues, say what you want about sea level
rise, enjoy your jokes and mockery but remember that for states like mine, it's very very real. it hits home. the last thing that i want to say is to senator cardin's point, we are dealing with a lot of pretty old model t stuff. you guys have seen these before but i love to bring these out. here's a pipe from a water repair that was done in rhode island. you can see how big the pipe is. you could barely get your finger through the little hole in the middle of it because it's been so filled up with sediments over the years. here's a bigger version of the same thing. this was a nice big pipe at one point. now you can see it got pretty clotted up. in my lifetime we have been removing wooden water infrastructure out of older rhode island communities. so we have a big, big catch-up gap just in terms of this being -- this ain't a chevy, this ain't a cadillac. this is horse and buggy stuff.
we need to invest in building it so that we don't get the public health concerns that we have experienced and i thank the chairman for his attention to this. i think that working with chairman inhofe on these infrastructure issues is a very positive thing and i appreciate his interest in it and of course, the ranking member as well, who is terrific on these things. thank you both very much for this hearing. >> thank you, senator whitehouse. senator sullivan? >> thank you, mr. chairman. i want to thank you and the ranking member for calling this hearing. it's a really important one and i want to commend the witnesses today. i have read through your testimony and really appreciate the diverse views and a lot o the insights that you're bringing to this hearing. i wanted to ask a couple questions that relate more to -- and i appreciate the focus on the small communities, because that's one of the things that we struggle with in alaska. you know, a number of those
senators have been talking about the challenges of old infrastructure. actually, in my state, i he the knowledchallenge of no inf a infrastructu infrastructure. big difference. i'm sympathetic with communities that have to get rid of pipes and deal with old aging infrastructure, but we are kind of unique in that we have entire communities with no infrastructure so in rural alaska, there are over 30 communities, thousands of my constituents that have no running water, no flush toilets. they use what we call in alaska honey buckets and trust me, the honey buckets don't smell good. that's a euphemism. so i'm going to be looking forward to working with the committee. i have talked to the ranking member about this a little bit. i'm trying to address some of these urgent issues. as i mentioned, one in four rural homes in alaska lack
running water or flush toilets, and as you know, particularly those from the rural communities, that can actually lead to very high levels of disease, third world disease levels in some of these communities, in america, in america. i think most americans would be surprised. yeah, we have old infrastructure but we have third world conditions. it's unacceptable. i wanted to ask mr. moore, you were talking about the small community paradox. i think it's a really important point that even if we did have infrastructure or tried to get it or tried to upgrade it, in a lot of small communities, like you're talking about, there's no ability to bond, there's no ability to amortize financing on future projects just because of the lack of a population base that hits critical mass. how do we address that? i will start with you on that issue and then really want to open it up to anyone else. >> well, we address, you know,
trying to reach out our water system to those around us that does not have like you said, even access to water at this point, or they have, you know, wells that are marginal water quality. >> but i mean in terms of financing, should it be grant programs, should it be -- if your community doesn't even have the ability to bond, there's kind of a different step you need to take. anyone else see what em i'm talking about? it seems like you're stuck if you're not like l.a. where you can do a bond or any big city. it's different for the small communities. >> the low interest loans, you know, combined with a grant is our best option. >> you think the federal grant program also has to be part of that option? >> yes. >> does everybody else agree on that? >> yes. >> senator sullivan, i think one of the things that we need to look at closely as it relates to small systems are the state
revolving loan funds. they, at least in my state in pennsylvania, they have used a substantial part of their funding for the small system needs in the state of pennsylvania and certainly, given the volume of dollars that are available through the state revolving loan funds, it's not like they can fund these major cso and sso issues and needs that are out there. so i think there's a direct linkage there and so robust funding for the srfs is clearly something that's important. the other thing i would say to you, like many, many problems, there's no silver bullet, but my authority over the last 40 years has acquired approximately 40 systems in pennsylvania. of those systems, all but two or three of them were small systems and what we were able to do is leverage the presence of our
core system to solve problems in those smaller systems, whether it's replacing supplies, upgrading mains. the fact that you have the ability to spread the costs over a broader customer base is an advantage. i recognize that may not be practical in alaska. >> let me just ask one final question and mayor berger, you raised it and it's been in testimony. i think it's a really important issue. according to the u.s. conference of mayors, the epa with regard to these water issues has moved from being quote, no longer a quote partner to local government that it once was. the agency has instead assumed the role of a prosecutor. i couldn't agree more with that assessment. that's from the u.s. conference of mayors. but mayor berger, you were alluding to this issue of moving from partner to prosecutor to one size fits all to extremely onerous regs even for small
towns like you mentioned lima, ohio. could you go into that a little bit more? is there anything we should be able to do from a statutory standpoint if the epa has turned into a prosecutor, not a partner, which i fully agree with? they also don't abide by their own regs and law a lot of the time. what should we do in the congress in terms of trying to change that attitude which you articulated so well? >> well, in the consent decree process, you have got not just the agency, epa, you have also got the department of justice. this is a hostile setup. so the principle fix that can change that is to take it, and transform it to a permitted process. it doesn't have to -- this set of arrangements made between the state and federal governments and locals doesn't have to be enforced through consent decrees. it can be built into permits
that get renewed with a set of obligations that get attached to it over time. so changing it from a consent decree process to a permitted process would change that. >> thank you. thank you, mr. chairman. >> thank you. senator capito? >> thank you, mr. chairman. thank the ranking member as well. i want to thank all of you for being here today. i wanted to talk to you, mr. moore, about rural america. we heard our senator from alaska, some of the issues obviously he has much greater land mass and fewer people than anybody else in the united states, so those are particular challenges, but i think we found in rural west virginia at least that the places that have the least amount of resources are still asked to comply at the same kinds of levels and it's difficult, because you have to go to the rate payer first to try to see if you can -- we have a public service commission, that's how ours is regulated, to
see if the rate payer can bear some of the burden and a lot of times in these rural areas is where we are economically challenged at the same time. so what kind of solutions do you see to be able to alleviate maybe -- not alleviate the burden because we want clean water everywhere, of course, but to help rural areas get over this hump? >> technical assistance is -- our oklahoma rural water association through epa funding has circuit riders. >> right. >> they are instrumental in our state at helping with compliance and getting the ideas there, you know, that hopefully can solve a problem rather than, you know, bringing in millions of dollars of new equipment, you know, because we just can't afford that. >> so when you're putting into an expansion or doing a
replacement, what other resources are you looking at besides the rate payer? i don't know if oklahoma has a state infrastructure bank or anything of that nature. >> yes. >> what other -- if you could enumerate them kind of quickly what small cities block grant? >> yes. yes. we do have that. and the sfrs, you know, are administrated through the oklahoma water resources board and then usda rural development. that's normally where -- >> where your resources are. yeah. okay. i would like to talk about public/private partnerships because in the last bill we passed the wfia which we think has some promise in terms of being able to access public and private dollars to maximize the availability of resources. how do you see that and are you familiar with it, number one, and then i mean, it hasn't actually been funded yet so as soon as we had it funded maybe
you will have a better answer. what kind of promise do you think that has? >> thank you, senator. we think it has a lot of promise in the fact that wfia, we are going to assume it going to go ahead hopefully. it allows for both the blending of federal funding as well as private money to come together and leverage that out properly. as we said in our testimony, the infrastructure gap is so great right now, we don't think that federal funding will be able to bridge that gap and we have to bring in these other funding resources through public/private partnerships to do that. a big part of public/private partnerships is not just the funding component but also the risk transference that happens between the municipality or the customer and the company taking on that risk. and we feel that through what we have accomplished through public/private partnerships that risk transfer can generate
incremental value to that customer as a definitive delivery of a model for fixed price and for fixed delivery over the life of the project. the infrastructure initially is very important but the life of the project is 30 years of operations before you turn that infrastructure back to the client is very important as well. >> right. i know the transportation that has allowed a lot of ppps to move forward, one of the things we are doing in our state through the creativity of our governor and others is to have the company come in and sort of forward fund the project, then have the state reimburse over a longer period of time so you cut not just the initial dollar that's needed at the public but you also cut the timing and you know, you can front end load it. do you see that as having the same possibilities in these kinds of projects? >> very much so. very much so. in fact -- >> your dollars are going to go farther. >> they will. our company is in the process of
building the largest p-3 project in regina, saskatchewan, a $200 million wastewater treatment plant for compliance reasons. they have a 30-year ongoing maintenance operation program for another $600 million, then they turn it back to the city at the end of the time. but the timeline, you are very correct, the timeline to crunch this down, to turn the financing and deliver the project is critical in these value generations. >> i'm a big supporter. thank you. >> thank you. >> thank you, senator. senator markey? >> thank you, mr. chairman, very much. clearly, flint, michigan is the perfect example of how water policy can just go completely wrong. they had the highest water bills and the worst water in terms of quality simultaneously. in a very poor community. and we know that communities that are poor are
disproportionately harmed by this issue and other environmental issues as well. so i have a group of questions i would like to ask, because as we saw in flint, michigan, the timeliness of reporting water quality issues to the residents exacerbated the problem. it took too long for the proper agency to receive notification of the extent of the problem and too long for the information to be relayed to the citizens of flint. does anyone disagree that one way to get epa the information would be to require states to inform the epa about persistent violators or systems who have serious violations? does anyone disagree with that? >> senator, i believe they already are required to do that. >> they are already required? >> yes. >> okay. so none of you disagree with
that. it's already a requirement. does anyone disagree that public awareness of drinking water quality in their communities would be increased if it was online and reported electronically instead of through annual paper reports? >> we agree and in fact, our utilities are moving to that very online reporting as well. >> so would that be a reasonable requirement for communities to do it online rather than on paper reports? >> that's what we're doing. yes. >> does anyone disagree with that? >> the only difficulty with going exclusively to an electronic based report is that there are still elements of the community that are not accessible to that kind of information, surprisingly, and so i think really, the best way is to do it in both fashions. >> so you're saying that a flint, michigan wouldn't have the capacity to be able to report that?
a poor community would not have the capacity to be able to do it electronically as opposed to paper? >> i don't think he was -- not to sfe fpeak for him. i think what he was saying is the customers may not have the ability to receive that electronic information. >> okay. but ultimately, should a community have that capacity even if individuals do not within it, have it within, because even in a minority community, you would have well over 50% who would have a digital access that would make it possible for them to report. >> i would think you would find general agreement in the water works industry that electronic distribution is a preferred approach. but you also have to be careful so that you can reach everyone of your customers. >> okay. so there were clear communications issues between agencies with the flint crisis. does anyone disagree that the cdc and state and local public health agencies should be immediately notified if drinking water violations are found that
could have an adverse effect on public health so that those public agencies can help to detect and respond to the illness or evidence of exposure? >> we are pretty much doing that as a part of our water quality permit requirement already as is. >> does anyone disagree that encouraging real-time monitoring of drinking water quality can ensure that potential concerns which may have adverse effects on human health are handled in a timelier manner? obviously that was not the case in this situation. mr. berger? >> senator, real-time implies a huge sophisticated system for testing and evaluation. again, i think that what's
now -- now required is a timely report and i think flint broke down not because of reporting, but because there were some pretty bad decisions made, deliberate human decisions made, that with a variety of circumstances that just built on itself. so my sense is that the regime in most places allows for the kind of notification and timeliness that you're seeking. >> senator, i think that there was a combination of problems in flint that some of it was a lack of swift reporting and adequate testing and we certainly would strongly support immediately reporting of violations and providing that to public health authorities, particularly in cases of significant health threats and frankly, blood lead
levels aren't even being automatically reported to cdc. i know there's legislation, senator cardin and others have proposed to address that. >> thank you. thank you, mr. chairman. >> thank you, senator. senator barrasso? . >> thank you, mr. chairman. mr. moore, shortly after they passed the clean water act in 1971, continuing to today, congress has appropriated money to the epa to provide non-profit organizations with experience and with expertise in the water and wastewater industry to assist rural communities, to assist them on operations, in training, management, regulatory compliance for their water and wastewater systems. but it seems to me that the epa over the last several years has shifted a portion of that funding provided for this initiative away from this previous on the ground technical assistance and training to other methods that included funding entities with very little or no experience in the water industry, with no established relationships, with the utilities that are being served,
things like webinars were used as a primary tool to provide outreach and training rather than people on the ground. do we want communities and utilities to use a website or webinar or call some university automated help line to get help or is it better to have them rely on experienced boots on the ground technicians who can provide on-site training, technical assistance especially during an emergency? i would just appreciate your thoughts on that. >> i do know that the circuit rider program has taken cuts in the last few years and a lot of states have lost circuit riders. there's nothing wrong with the webinars but in the state of oklahoma we have many small rural water systems that may have 100 users. they operate out of an office, you know, at someone's home. they do not have access to this,
the webinars and where the circuit riders can come in, and they do a job, they are there, you know, face-to-face and they see the infrastructure. they see the problem. and they normally have immediate response, you know, that they implement. >> they have knowledge of what the system situation is on the ground. >> yes. >> because they live there. they are part of the community. >> yes. the circuit riders, you know, they are there for that reason. they have seen other systems, the neighborhood -- neighboring systems, the systems across the state, and they have gathered that information and they can bring that information that applies to your system and give it to you. >> in your testimony, you talked about the on-site technical assistance that allows communities to comply with the epa rules. i just ask how valuable it is, this on-site technical
assistance, especially to utilities that lack the capacity or the financial ability to have the expertise to comply with the epa. >> it's -- yes, it's critical that we fund these circuit rider programs. like i said, on the very small rural water systems in the small cities, they rely very heavily on that technical assistance. >> thank you. mayor berger, if i could ask you about a question you mooif insight into. we have small communities in wyoming. southwest wyoming, where they were in compliance with the epa's arsenic maximum containment level, contaminant level standard until that level was changed from 50 parts per billion to 10 parts per billion a number of years ago. these communities had arsenic levels in the mid to low 20s but the epa lowered the level from
50 to 10, so you know, for decades, the 50 parts per billion was an acceptable health level. suddenly it's changed. it becomes very expensive, very cost-prohibitive to implement the technology to get down to that 10 parts per billion. some engineering quotes in the first years were in the millions to get that number down. so the costs have come down maybe $100,000 but for a community of 200 and 400 people, that money is still out of reach when you think about the other issues that a mayor has to deal with. other people clamoring for that same money and you see more bang for the buck with other things. shouldn't we be reducing the regulatory burden on other communities to allow them to have the funds to address the immediate health and safety challenges of an aging infrastructure and give them the authority to make these decisions? >> well, sir, there's no question that the technology of measurement has changed dramatically over the last 40
years. who could have imagined that we would ultimately be measuring things down to the nano level. and following the measurement, the regulations have become mandates to treatment levels. so the question becomes for any given circumstance, when you're looking at a single regulation, how does that compare to the other public health challenges that a community has, and i think that often, the regulators come in in a very silo'ed kind of way. they are charged with this particular mandate and ignore the rest of the mandates that a community might have. so i think again, integrated planning allows folks to be able to look at all the challenges in front of them and make choices and set priorities. i think that's why it has to become a part of the law. >> thank you, mayor berger. thank you, mr. chairman.
>> senator carper? >> thanks so much. i apologize for arriving late. we have had a classified briefing on another subject. i needed to stay there until its conclusion. thank you for still being here. thank you for attending and responding to, giving us your thoughts and responding to our questions. i would like to ask a series of questions and i'm going to ask these for each of you, and just yes or no answers, at least initially, and i'm not going to ask mr. olson, i'm not going to ask you to respond to these questions. they are really more for folks that are representing a utility or maybe a city that has -- provides water for its residents. here's the first question. do you charge more for water when supplies are tight? >> no, sir. >> no. >> no, sir. >> no, sir. >> okay.
do you charge more for water used for, say, watering lawns or washing cars than for essential functions like drinking and bathing? >> no, sir. >> no, sir. >> >> we do have a tiered system that the water rights began at 5 per 5,000 and then at 10,000 it's $7 per 10,000. >> i think you may have just answered this question for yourself. do you charge more per person for water use as people use more water? >> yes, it is a tiered system. that's for each of you. >> we do not. >> okay. >> actually ours is a declining rate. the more you use, the lower the rates become. >> go ahead, mr. moore. >>ist just saying, ours is an escalating tiered system.
the water cost goes up. >> just the opposite. >> we have multiple different rate schedules. but in some cases we have a flat rate where the same rate is charged. in some cases there's a declining block rate where there are lower rates as consumption increases. >> okay. >> we have inclining block rates that are accelerated so the largest tier is that much more more of your bill as well. >> this will be for all of you, including mr. olsen. why can't or shouldn't we embrace time of use rates or
price increases demand increases similar to what we do, say, with electricity. and if you just lead off, mr. berger? why shouldn't we embrace time of use races where prices increase as demand increases like we do with electricity. >> i think it depends upon the stress of the system. if your system has plenty of water, then there's no need to impose those kinds of restrictions. we do have the authority under city ordinance that at the point of drought or other kinds of stress, shortages, we do and can impose limits on consumption. >> great, thank. >> just very briefly, please. >> we do not have restrictions set. however, we do get into the drought situation, that mayor berger spoke about. >> okay. very briefly, why couldn't we're why shouldn't we. not just do you, but the
rationa rationale. >> well, i think first of all, water usage is individual. so individual household, individual residents within the household, the usage pattern is different. to sort of set a standard per person, how many gallons you can use per day, that might not be practical. >> thank you. >> especially on a residential rate, i have no problem escalating that rate because they use a certain amount for domestic use, and then everything above that goes on a lawn or something, that type of use. >> i think one of the issues that relates to the technology, the availability of the metering capability to do this? a practical way. the other part of it is that in our state, we have what we call a uniformity clause that you
have to charge a customer the same rate wrch within a class. every rez dntial customer needs to be treated the same. if you have a customer that works night shift and perhaps uses water differently than someone who works day shift, you're actually creating a disadvantage or discrimination in the rate structure. >> thank so much. >> very briefly, same question. mr. gysel. >> it's all about technology. we have metering that's just going from fixed full meeting to amr technology. we're now moving from ami technology. we haven't advanced as far on the technology side to measure the time of the use, never mind to do the repository for all the data that would be required for 8760. >> i have one more yes or no question if you would give me the opportunity. should water utilities consider
an inverted block pricing where prices increase with consumption? again, should water utilities consider inverted block pricing where prices increase with consumption. yes or no? >> no. >> it really depends on the driver in terms of are you trying to stimulate economy and/or are you looking at industry versus residential. every municipality community might be different. >> thank you. >> i do recognize the difference in municipal water and rural water. but yes, i do think we have the right to set those rates. >> it should be an option, but i think it is very much driven by the specific circumstances of each system, whether it's workable or not. >> i would agree with the caveat
that the cost structures of utilities are usually inversely related to the revenue structure. 70% of our costs are fixed, but usually 70% of the revenues are at risk on consumption. if you have increasing block rates, if that last block is large enough, it threatens a true utility to recovering the cost service. >> i would agree that generally it makes sense to increase the rate with more water usage. it encourages conservation and helps low income people pay a lower rate. >> thanks. >> thank you. >> we've had good participation today. i would first like to recognize that there's a very significant thing that came from dale, oklahoma. the it's the wife of the speaker of the house. so we want to recognize that.
>> i'm talking to the leadership and or side. barbara has done the same thing on our side. i'm anticipating that we should do this, get this out of committee. the srf legislation and his proposal for grants to replace the lead service lines, senator booker's trust fund ideas, senator bozeman's alternative water supply bill, row waters ideas in addition. so we are look working on ideas. and it's been very helpful to have you folks coming in from your different perceptives and levels.
senator boxer? >> let me be brief and take a couple of moments to thank every one of you. the questions were fascinating to the center of the california where perspective such a terrible drought. so for us to hear well, you pay less when you use more, it's culture shock. i understand that every district and every state is quite different from the next. i think that's a critical part of the discussion. but as we move, you don't know how bad it gets until you have a severe drought then you don't have enough water. so i'm going to be looking at desal nation and other kinds of ways we can help. very briefly, all of you want to see more grants rather than loans and i completely get it and i will work towards that. best we can, given resources. if you look at the federal grants on waters, it was 100%
grants until 1987 and ronald reagan worked with the congress because they were putting pressure on federal spending. and it changed to the state revolving fund where now there was more of a partnership in terms of funding. but what's important is, and we have the srf. it was added to drinking water later. the states can come in to pick up the matching, too. the states can really help you as well. i want to make that point. that's another funding level we can count on. what's interesting to me is i looked at flint. i wish the heck they have been.
they were very soft. they wrote little notes behind the scenes. problems, problems. they were quiet. they weren't aggressive enough. i still don't dismisthe point that you feel like they're prosecutors. i hate those broad brush comments. and i think what's very important is that you write to us and tell us the case is specifically, specifically where they were. some o of you may not believe prosecutors, but i know a couple of you do. please give me that in writing. if that's going on, that's not good. i say thank you very much, thank you to my chairman. we have just dwindling time on our partnership here. you'll be here forever, but i won't. so as long as we're a team and we can proven we can do it, i'm counting on you. do you have any advice -- >> we're going to be doing it. it is funny because we don't agree on a lot of things. >> really? >> for a lot of things, i think one of the reasons that i
disagree with her last statement was that i sat on that side of the table for a long period of time. and i know what bureaucrat and bureaucratic intimidation can mean. and i've been suffering from that. but on things that i believe government is supposed to be doing, our highway bill. we wouldn't have had a highway bill if she and i hadn't worked together to make this happen. i would say the same thing with the water bill. it's very significant. we're going to be working together. and we are adjourned. >> thank you.