Segment 2 Of 2     Previous Hearing Segment(1)

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Tuesday, June 22, 1999
House of Representatives, Subcommittee on Water Resources and
Environment, Transportation and Infrastructure Committee, Washington, D.C.

    The subcommittee met, pursuant to notice, at 1:02 p.m., in room 2167, Rayburn House Office Building, Hon. Sherwood L. Boehlert [chairman of the subcommittee] presiding.
    Mr. BOEHLERT. [presiding] The hearing will come to order.
    The Water Resources and Environment Subcommittee meets today to receive testimony on two of the Nation's most pressing environmental issues: meeting clean water infrastructure needs and improving the Clean Water Act's approach to so-called wet weather flows, such as combined and sanitary sewer overflows and stormwater discharges.
    The two issues are intricately related. Local government, where the rubber hits the road, and, unfortunately, the sewage may hit the streets and streams, faces a funding gap of approximately $330 billion in infrastructure costs according to a recent report by AMSA and the Water Environment Federation. Local government is also where the act's regulatory battle over flexibility with accountability is waged on a daily basis.
    We will receive testimony on infrastructure financing needs in general and three funding wet weather flow bills in particular. One is H.R. 828, introduced by Representative Jim Barcia, one of the hardest working members of this subcommittee, which addresses CSOs. And another Rep. Sue Kelly's and Rep. Ellen Tauscher's soon to be introduced bill to reauthorize the State Revolving Fund Program. The third is the yet to be introduced Urban Wet Weather Priorities Act of 1999, developed by a coalition of municipal and technical organizations.
    I want to commend all of you, including my committee colleagues, for your efforts, and I look forward to working with you to advance responsible legislation. We live in interesting times, however. Even with a budget surplus, we face budget caps and other serious fiscal constraints. The demands for financial and regulatory innovation and flexibility are greater than ever before. The informed debate over funding alternatives, including new revenue streams, must increase, and if regulatory flexibility is to increase, so, too, must accountability. The two go hand in glove—flexibility, accountability. The bill sponsors will need to work through several various funding and regulatory issues, all of which are raised by our witnesses in their testimony today.
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    On that note, let me welcome our friend and colleague, Chuck Fox, the head of EPA's Office of Water. We want to encourage your leadership in reversing the trend of decreasing clean water budget requests and in promoting public-private partnerships and increasing the tools to manage wet weather flows in a realistic yet responsible manner.
    Let me also welcome our other distinguished witnesses, particularly the We Build America Coalition, which is making its first appearance before this subcommittee. To each of you whose organizations range from local governments to construction, environmental, and labor interests, I personally want to thank you for your sacrifice and dedication. It is a worthy cause to want to improve the Clean Water Act, one of the Nation's most successful environmental laws, and to keep it current with today's challenge. Let me say we are blessed, in a sense, today.
    So often we have these hearings, we bring in expert witnesses from around the country, sit them down and have them sit and twittle their thumbs while we respond to vote after vote in the House, and I am always embarrassed by it all, but I am always thankful that so many people appreciate that it is beyond our control. Today, we have the luxury of having an uninterrupted hearing. So, your pearls of wisdom, Mr. Fox, and those who will follow will be absorbed in a sensible way, and we will have the opportunity for good exchange, free flow back and forth, without the interruption of those bells.
    But there is one interruption that I always welcome, and that is from my distinguished ranking member, my colleague from Pennsylvania, Mr. Borski.
    Mr. BORSKI. Well, thank you very much, Mr. Chairman. I want to, first, thank you for scheduling this hearing on meeting our Nation's clean water needs and wet weather flow legislation and for your particular wisdom, Mr. Chairman, of picking this day when perhaps we can get through this hearing without a lot of interruptions.
    As I reviewed the testimony to be delivered today, I noted with great interest the predictions on the level of funding needed to meet our Nation's waste water treatment and wet weather flow needs. Both EPA and the Association of Metropolitan Sewage Agencies have estimated that significant increases in funding in the hundreds of billions of dollars will be required over the next 20 years to meet this country's growing water infrastructure needs. However, with an annual Federal commitment of approximately $2 billion, it is clear that there are substantial infrastructure needs remaining to be addressed by this Congress.
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    As you well know, Mr. Chairman, our committee has demonstrated long-standing, bipartisan support of Federal assistance to meet infrastructure needs. However, I am concerned that under the current budgetary constraints in which we operate, many of these wastewater needs will go unmet due to arbitrary limits on Federal spending. While I am not advocating any increase in the current budgetary caps, I would recommend to my colleagues that we reexamine our spending priorities and renew our commitment to full funding of water infrastructure projects nationwide. With many of the Nation's wastewater facilities rapidly approaching or exceeding their life expectancy, we in Congress will sooner or later be compelled to make the investment in meeting our communities clean water needs.
    Mr. Chairman, one important area which also must be addressed to meet our Nation's community needs is the reauthorization of the State Revolving Loan Fund. This program, originated in 1988, serves as a primary financing method for infrastructure improvements in all 50 States and Puerto Rico. Since its creation, the SRF Program has provided much needed financial assistance to States and localities to finance water infrastructure needs, and, today, the total assets of the SRF Program stand at more than $27 billion. We on this committee must continue to work together to ensure the continued availability of SRF funding for State and local needs.
    In addition, Mr. Chairman, I believe there is some level of bipartisan agreement on several issues, such as legislative endorsement of EPA's combined sewer overflow policy to provide certainty to communities and direction to the States and working with EPA to develop similar policies to address the issue of sanitary sewer overflows.
    I look forward to working with you, Mr. Chairman, on addressing these and other important clean water issues in the near future.
    Mr. BOEHLERT. Thank you very much, Mr. Borski.
    Mr. BORSKI. Thank you, Mr. Chairman.
    Mr. BOEHLERT. The Chair is pleased to recognize the distinguished Vice Chairman of the subcommittee, Mr. Sherwood, of Pennsylvania.
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    Mr. SHERWOOD. Thank you, Mr. Chairman.
    I would like to echo my colleague, Mr. Borski's, comments on the State Revolving Loan Fund and how important it has been to us always. And, Mr. Fox, I welcome you, and I would like to thank you for your assistance with the Lackawanna County combined sewer overflow project. We have the Lackawanna River, which, unfortunately, is still one of the largest polluters in the Chesapeake Bay and a very complex situation that we have been working on for years, and I am quite concerned about EPA's reversal of its decision to approve the eligibility of $5 million in Bureau Mine Reclamations projects as an in-kind contribution. So, when we get a chance, I would like to discuss that, but the City of Scranton is the largest city in that watershed, and it is a distressed city, and its sewer authority is being privatized due to its economic condition. So, we need to work together on some issues, and I would be very glad to do that.
    Thank you.
    Mr. BOEHLERT. Thank you very much.
    Is there any other member that seeks recognition? Mr. Barcia.
    Mr. BARCIA. Thank you. I have an opening statement on the legislation, Mr. Chairman.
    First of all, I would like to thank Chairman Boehlert and Ranking Member Borski for providing the opportunity for discussion of House Resolution 828, the Combined Sewer Overflow and Partnership Act of 1999. I am especially pleased that Reed Phillips, the city manager of the City of Saginaw, Michigan, is here today to share his views of the real troubles facing our communities which are trying to address the problems of overflows. Reed as the city manager and the reigning EPA National CSO Program Excellence Award winner can attest to the difficulties his community in the fifth district of Michigan is experiencing and is also well aware of the problems other cities are facing across this Nation.
    While there are few refinements that we have in mind, let me make clear at the outset that H.R. 828 is intended to implement the 1994 CSO policy. More specifically, Mr. Phillips and representatives from hundreds of other CSO communities have convinced me that this bill is necessary to ensure that the EPA and the States will work with CSO communities to identify appropriate water quality requirements that will drive CSO control on a community-by-community basis. Moreover, the bill will authorize the critical funding partnership necessary to facilitate the implementation of the CSO control projects that will be necessary in every CSO community in order to meet those water quality requirements. Once we address those two critical issues, we will have eliminated what I believe are the two last legitimate obstacles to addressing and resolving the CSO problem in this country.
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    I should note that CSOs are the last intentional discharge of untreated sewage in this country. Many CSO systems date from the turn of the century when they were state-of-the-art sewer technology. While we have had a national CSO policy for five years now, congressional action is needed if we want to correct the problem as aggressively at the turn of this century as our communities were in building these then state-of-the-art systems at the turn of the last century.
    This bill give CSO communities across the country the tools and resources they need to develop affordable and cost-effective programs to finally address their CSO control obligations. It will also take away any excuse for not moving forward as community leaders will no longer be able to legitimately say that the water quality goals of the program are uncertain and/or the costs are prohibitive.
    Most of you have CSO communities in your districts, and I am confident that you have heard from them on this issue. In fact, I know that many of you have been working individually to help your communities address these issues as best you can. I want to emphasize how convinced I am that there is a problem here that this subcommittee needs to address. Our communities have and will, today, make a compelling case for our regulatory and financial assistance. They deserve our help, because the CSO communities in our districts, as well as those who you will hear from today are not laggers. To the contrary, they are the communities that have been at the forefront of the effort to implement CSO controls. I need look no further than my own district and the efforts of Saginaw over the past decade.
    The CSO Partnership, a national organization that supports H.R. 828, has been at the forefront of CSO control for a decade now. Under Mr. Phillips' leadership, these communities are not here to avoid necessary and appropriate controls. Instead, they have led the efforts of CSO communities nationally to get the job done. Partnership members have won EPA's top CSO award as well as second place in each of the last four years. They have made incredible efforts to tackle these problems. They have tried for years to work with EPA on the water quality issue. Moreover, they have raised their rates and borrowed to the limit of their ability to repay those loans. Nevertheless, it is clear to me—and I hope it will become clear to the subcommittee if it already isn't—that the reality is that EPA has not done its part in addressing the water quality requirement issue for CSOs and stormwater, I would like to add, and that CSO controls dramatically exceed our communities local resources to implement.
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    Very briefly, the bill will incorporate EPA's consensus 1994 National CSO Control Policy. By this act, the Clean Water Act will finally speak to the CSO issue, highlight the provisions in the policy that the water quality goals should be reviewed and revised before implementation of long-term controls, as required—the ready, aim, fire approach as opposed to ready, fire, aim—as well as it addresses the need for reasonable compliance schedules subject to communities making reasonable further progress during any compliance schedule, establish—also the bill will establish a Federal-local funding partnership by authorizing grant funding assistance for CSO communities that are progressing in step with national requirements—those that have and continue to implement the required technology-based controls.
    I should note that CSO control is estimated to cost from $50 billion to $100 billion in this country depending on the results of the review of wet weather water quality goals. CSO communities, which comprise much of America's declining urban core, simply cannot bear this burden alone. For the vast majority of these communities, these projects constitute the largest public works projects in their entire histories—seven important environmentally and fiscal sound precedents for stormwater management.
    Lastly, as CSOs can play a role in beach closure, this legislation will compliment the beaches bill that was recently approved by the committee and the full House. This legislation will not reward cities who are not in step with national requirements to address their CSOs. It will not preordain any change in water quality requirements. Those are decisions for EPA and the States with the benefit of input from all affected stakeholders, and it will not weaken the Clean Water Act's enforcement processes.
    This legislation will allow the CSO issue to finally be addressed in the Clean Water Act, and wet weather impacts from CSOs and stormwater will addressed in an environmentally and fiscally sound manner. This will yield a significant quality of life and environmental improvement nationwide. CSO control will diminish incentives for sprawl development away from America's urban core. Modest funding assistance will be available to those communities that need it and that demonstrate by their actions that they warrant it.
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    Mr. Chairman, local public officials hear from their constituents each and every day in the office, at the grocery store, in church, and at home. We can no longer put them in a position of defending the mandates without giving them the resources to meet those mandates. H.R. 828 is designed to put a constructive end to CSO problems, and it would merit your serious consideration and, hopefully, action.
    Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much, and the Chair has been indulgent, because Mr. Barcia has had one of the definitive bills that has been introduced, but I am anxious to get on to the witnesses, but before I do so, I call on Mr. McGovern who, with his colleague, Mr. Frank, has brought us the tandem team from Massachusetts. Mr. McGovern.
    Mr. MCGOVERN. We will straighten everything out, so we don't have to worry.
    Mr. Chairman, I want to thank you for holding this hearing today, and I want to welcome Mr. Fox from EPA for being here. I view him as an ally on these issues, and I look forward to hearing what he has to say. But, Mr. Chairman, I want to thank you in particular for allowing the Mayors of Fall River and New Bedford, Massachusetts and the Massachusetts Water Resources Authority to testify before this subcommittee. As always, you have been incredibly generous in allowing a representative from my State of Massachusetts to come before this committee and express their views on important environmental issues.
    The issues addressed in this subcommittee, particularly the Clean Water Act and the wet weather CSO issues, are extremely important to Massachusetts. Mr. Michael Hornbrook of the Massachusetts Water Resources Authority is here to testify about MWRA's long-term CSO control plan. The MWRA, which provides service to over 2.5 million people in 61 communities across Massachusetts, has received Federal and State regulatory approval for a plan which would cover the eastern portion of the State. This long-term CSO plan will cost $621 million and involve 25 separate waste water projects. This plan will play a crucial role in keeping Massachusetts in compliance with the Clean Water Act.
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    Additionally, Mayor Ed Lambert of Fall River and Mayor Fred Kalisz of New Bedford are seeking support for the completion of ambitious and much needed wet weather CSO projects. These two Mayors are in the process of forming a regional plan to address the serious wet weather issues facing southeastern Massachusetts. They should be commended for their efforts. The manufacturing and textile intensive economy of this area is absolutely dependent upon water resources, and Fall River is nearing phase I completion of a three-phase, $115 million CSO abatement project. To date, over $30 million has been expended on this project. And New Bedford has recently completed a $100 million waste water treatment project. The city now faces the prospect of spending $175 million for its own CSO improvements.
    I should also mention, Mr. Chairman, that the depressed economy and higher than average unemployment of this region present serious challenges for these two cities. Federal support for CSO abatement is crucial to both Fall River and New Bedford's efforts to comply with the Clean Water Act, and it cannot be stressed enough that the CSO challenges in Fall River and New Bedford and throughout this country are more than just environmental challenges; they are economic challenges, as well. And I know this subcommittee is eager to hear from two innovative Massachusetts Mayors, and I am pleased they can join us here today, and I, again, thank you for allowing them to have the opportunity to testify.
    Mr. BOEHLERT. Thank you very much, and thank Congressman Frank for bringing to our attention the Mayors.
    Congressman Baird?
    Mr. BAIRD. Very briefly, Mr. Chairman, I want to thank you and the Ranking Member for holding this hearing today.
    When it comes to wet weather overflows, I am from a State where we know something about it. It rained 94 consecutive days in Washington State this spring, and many of our communities are very small, rural communities facing multimillion dollar sewage upgrade needs, and this program has the potential to really help them out, and I want to thank you for it and thank the folks who will be speaking today.
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    Mr. BOEHLERT. Thank you very much. Mr. Blumenauer?
    Mr. BLUMENAUER. Thank you, Mr. Chairman. And Portland goes to Brian's district to get good weather.
    So, I can identify a little bit with the issues of the water cycle.
    One of the concerns I have is that we are not paying enough attention to the role that the entire water cycle plays in the infrastructure development of our communities, and I appreciate what we are doing here with CSO, but I hope that we will have an opportunity with this committee to be thinking also in terms of how it fits with the entire water cycle, whether we are talking about water supply, if we are talking about stormwater in CSO, and sewage. All of the pieces need to be pulled together in a comprehensive fashion. I have personally been frustrated when I have heard from communities that are struggling with CSO. Some of the same people are struggling with issues of water supply, and there are comprehensive engineering studies that are taking place that aren't integrated, and I would hope that we could, on this committee, look for ways to pull the pieces together.
    Second, I hope that we can look for ways to give more flexibility to our friends in local communities who often are dealing with waters that are already polluted before they get to them and whether they are going to spend $100 million or $200 million or $1 billion, as in my community, to treat, to a very high level, water and then release it into a river that is already polluted; thinking about ways that we might give them flexibility and, again, thinking about the entire water cycle that maybe spending some money upstream on some of the vexing problems of non-point pollution that would end up saving money for these communities, help upstream towns, and the total environment, if you are a fish, will end up being better served, and I would hope that we could think in ways that we would be more flexible and more creative as long as the bottom line, the most environmental impact for the dollars spent are provided.
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    There are 1,100 communities that are facing this problem around the country, and the extent to which we help them get more out of the dollars and think about ways to invest it, in ways that they get more when they are done than just having the water disappear or the reduction in pollution, but ways that we can provide incentives for linear parks, wetlands, other recreational activities that I think would add more value to the community and raise public acceptance so that they will be willing to make the investments they might not otherwise if it were just traditional CSO treatment.
    Those are things, I hope, Mr. Chairman, that we can look at in the course of these deliberations under your leadership. Thank you very much.
    Mr. BOEHLERT. Thank you very much, Mr. Blumenauer. I think I have a pretty decent feel for both sides of the aisle, and flexibility and accountability are almost a mantra on this subcommittee, and, if anything, we need more not less money, and I know Mr. Fox is a magician, but maybe he would be able to explain to me how we can do more with less.
    But before you get a chance to do that, it is the pleasure of the Chair to welcome the distinguished ranking member of the full committee, my colleague, Mr. Oberstar, from Minnesota.
    Mr. OBERSTAR. Thank you very much, Mr. Chairman. I do appreciate the hearings that you are holding, along with Mr. Borski, to reawaken, refocus interest on the Clean Water Act. We have been diverted on so many other issues that the fundamental issue of clean water remains a great challenge for us. We have come a long way from the days I remember so vividly—the Cuyahoga River catching on fire, Lake Erie declared dead by Life magazine, and strategies that were imaginative but not very useful that tried to revive the dead lake, included punching a hole in the bottom of the lake and let all the gook drain out of it. Fortunately, cooler heads prevailed, but billions of dollars were spent, something like $20 billion, on the Great Lakes to clean up the Great Lakes. Suds no longer float in great clouds down the Ohio River, and fish have returned to Lake Erie—the most sensitive fish, Walleyes—but they are back with cancers and sores and PCBs and high levels of dioxin. If you eat fish once a week and live within 20 miles of one of the Great Lakes, you are likely to have 440 parts per billion PCB in your body. That is more than 20 times higher than people living elsewhere in American not exposed to the same levels of concentration of PCBs.
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    There are long range consequences for those of us who live along the Great Lakes where much of our industry—one-fifth of the Nation's industrial jobs are located, 45 percent of its agriculture, and 40 percent of the exports are generated. This is a treasure; this is 20 percent of all the fresh water on the face of the Earth, and we need to continue to invest in maintaining it.
    Well, the challenges were great when we crafted in this very room the Clean Water Act of 1972, which was the result of what I call the long march conference between the House and the Senate; it lasted 11 months. At the end of it, 137 deadlines written into the law and a whole new vision and a tantalizing goal of fishable and swimmable waters in 10 years. We have achieved much of that goal. We have spent in the range of $100 billion in Federal funds and loans and grants and loan guarantees. States have spent an additional $10 billion or $15 billion, and industry has spent over $130 billion.
    But the next horizon lies ahead of us; that of nonpoint source runoff from open land that continues to challenge our estuaries, rivers, and tributaries into the major rivers of this country. That, I think, remains the most difficult and the most challenging and the most complex portion of the Clean Water Program that we must address, and we cannot fail to address it. Let us hope that these hearings get us started back on track toward consensus in that direction.
    Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much, Mr. Oberstar.
    Life magazine may have declared Lake Erie dead and it was wrong, but inside EPA assures us that our first witness is very much alive.
    And it is a pleasure for this subcommittee to welcome as our first witness, a panel of one, Mr. J. Charles Fox, who is the Assistant Administrator for Water at the Environmental Protection Agency. Mr. Fox, it is a pleasure to welcome you back to the committee.
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    Mr. FOX. Thank you, Mr. Chairman and Mr. Borski and Mr. Oberstar. You have very eloquently, I think, put forward the challenges that we face as a Nation.
    It is a real pleasure to be here today. My testimony is intended to talk a little bit about some of the financing problems that are confronting our Nation's water infrastructure and speak specifically on the three pieces of legislation that you had indicated in your opening remarks.
    By way of a little bit of background, I think we all can take in pride in the tremendous accomplishments we have made as a Nation since the 1972 amendments that Mr. Oberstar talked about. We have had obvious health benefits by eliminating the discharge of raw sewage into water bodies around the country, and the improved waste water treatment has contributed to improvements in the protections of ecosystems and watersheds, habitats for wildlife, birds, and fish. Cities like Boston or Cleveland or Baltimore are in fact seeing a resurgence of development around their waterfronts in large part because of the cleaner water that has resulted from this kind of investment.
    When we have these tremendous accomplishments, I think it is also important to know that water pollution challenges that we face as a Nation are still very significant. The best data that we have today suggests that about 40 percent of the waters in this country are still not meeting our goals for fishing and swimming, and the single biggest cause of this is wet weather pollution associated with agricultural, urban, and suburban runoff.
    About 10 years ago, Congress amended the Clean Water Act to create the Clean Water State Revolving Loan Fund Program to replace the previous Waste Water Construction Grants Program. The SRF Program was designed to provide a national financial resource for clean water infrastructure that will be managed by the States to provide funding in perpetuity for the kinds of infrastructure investments that we have been talking about.
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    In my testimony, attached to it, you will see two charts—charts numbers two and three—which indicate a little bit of the value of the SRFs and the fact that we believe they are a very good investment. Funds invested in the SRFs provide about four times the purchasing power over a 20-year period compared to funds used to make grants. In addition, low-interest SRF loans provide local communities with dramatic savings compared to loans with higher market interest rates. We expect the States to make about $3 billion in loans in 1999 for a cumulative total of $26 billion since this program was born in the 1987 amendments. Since 1988, States have made over 6,800 individual loans.
    In trying to assess the needs that we face as a Nation, EPA works with the States to develop what we call a clean water needs survey to identify needed water infrastructure investments. The most recent survey was the 1996 survey, and that estimated waste water needs of about $128 billion. Of that $128 billion, approximately a little over $70 billion was for various types of sewage conveyance projects, including collectors, combined sewers, and interceptors and stormwater. So, that single factor represents the largest of the needs that we have seen. Because these are capital costs, they are documented by project specifications that generally reflect the needs over a 10-year period.
    At the same time, we are working with the States to frame a comprehensive program to address what we call sanitary sewer overflows. Unlike combined sewer overflows, in some cases, systems were set up just to provide sanitary waste treatment, and in fact these systems are in fact overflowing as a result of improper maintenance, inappropriate infiltration, and sometimes just poor management. Our best estimate for sanitary sewer overflows, in fact, is close to an additional $80 billion it needs to address this problem of sanitary sewer overflows. We also have some new estimates for non-point source pollution that would probably add tens of billions of dollars to the overall capital needs that I have described for waste water infrastructure.
    The President's Fiscal Year 2000 budget proposes to maintain Federal capitalization of SRFs into the next century. Our goal is to assure that the SRF Program revolves at a level of at least $2 billion annually over the next several decades. I have a chart attached to my testimony that looks at the revolving levels of this account based on our funding levels. The administration has committed to capitalization of at least $800 million in each Fiscal Year from 2000 to 2005, and this is consistent with our deficit reduction plan, and we believe it will provide for substantial and sustained contributions to meeting our overall need.
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    The subcommittee requested that I comment specifically on draft legislation reauthorizing the SRF Program that was proposed to be introduced by Representatives Kelly and Tauscher, and I am pleased to say, Mr. Chairman, that many of the provisions of the draft bill are consistent with recommendations that the administration has made in the past, including President Clinton's 1994 Clean Water Initiative. EPA stands ready to provide technical assistance in the drafting of these provisions. In addition, we would be happy to work with the committee to address a number of other needed adjustments in the SRF Program. For example, in reauthorizing the Safe Drinking Water Act, Congress provided governors with the discretion to use specified amounts of SRF funds to support key drinking water programs and priorities. Our experience with this provision in the Safe Drinking Water Act is positive, and a comparable provision modeled after the President's 2000 budget proposal should be considered in the Clean Water SRF Program.
    Finally, Mr. Chairman, I note that the proposed authorization level for the SRF in this proposed legislation is $2.3 billion in Fiscal Years 2000 to 2004. I have indicated in previous testimony that the administration would like to encourage a constructive dialogue on the appropriate long-term funding level for the SRF Program.
    Turning briefly to the wet weather legislation, in past years, we have seen growing evidence that discharges of polluted runoff in urban areas pose serious public health threats to our Nation's waters. I am pleased to report, Mr. Chairman, that EPA, the States, and municipalities have made dramatic progress in defining cost-effective and flexible responses to urban wet weather sources of water pollution. Unfortunately, H.R. 828, the Combined Sewer Overflow Control and Partnership Act of 1999, and the draft bill that you asked that I comment on, the Urban Wet Weather Priorities Act, would slow or undo the progress we are now making. The administration strongly opposes enactment of these bills.
    In 1994, EPA published the Combined Sewer Overflow Policy. This policy was the result of consensus process that included Federal, State, and local governments, environmental organizations, and other interested parties. Communities are making good progress in implementing the CSO policy. Today, 83 percent of all combined sewer systems are either implementing the 9 minimum controls that are articulated in the policy or they are putting the measures in place. In addition, 74 percent of combined sewer systems have their long-term control plans in place or they are required to put them in place. The CSO policy is working. It is the best road map to achieve our goal of protecting public health and the environment in areas that are impacted by CSOs.
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    The administration objects to several provisions of H.R. 828, including provisions that could require States to weaken water quality standards, that would prevent the implementation of final long-term control plan until completion of a review of State water quality standards, that would overturn long-standing enforcement orders, and would create an authority for permit to have a compliance schedule of any period that would be deemed ''appropriate'' by the permitting agency.
    Turning to stormwater runoff, in 1997—I am sorry, 1987, the Congress amended the Clean Water Act and directed EPA to develop regulations requiring the issuance of discharge permits for stormwater pollution sources. In 1990, EPA finalized the stormwater phase I regulations to address polluted runoff from a large number of priority sources and is now in the final stages of developing our stormwater phase II regulations. We anticipate these will be finalized by October of this year. The administration is strongly opposed to the provision in the draft urban wet weathers priority bill that would exempt stormwater discharges from the requirement that stormwater permits result in the attainment of water quality standards.
    Although the act requires that permits attain water quality standards, it does not require that permits include numeric effluent limitations in every case. The agency affirmed this approach in 1996, and it is not necessary to amend the Clean Water Act to give permit issuing agencies discretion to use BMPs in stormwater permits.
    Finally, commenting on sanitary sewer overflows, they result in the release of raw sewage into our communities, streets, playground, and waterways. Our best estimate is there are over 40,000 sewer overflows each year across the Nation. SSOs are a leading identified cause of beach closures and swimming advisories. In May of this year, President Clinton directed EPA to propose by May of 2000 a strong national regulation to prevent the over 40,000 sanitary sewer overflows. We expect to meet that deadline and propose our SSO regulation by May of 2000.
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    The draft Urban Wet Weather Priorities Act calls for a strong national initiative regarding SSOs. We share this determination to address SSOs and are eager to work with the municipal and other organizations interested in SSOs to define how to best respond to the President's directive. Although we recognize the need for issuing regulations, the agency does not believe that the deadlines in the draft legislation are practical, and we also believe that the draft legislation contains a statutory provision that will provide inappropriate liability protection for certain SSOs. We prefer to address this through the ongoing rulemaking.
    In conclusion, Mr. Chairman, I would like to thank you and members of this committee for this opportunity, and, as always, we stand ready to work with you on individual pieces of legislation. Thank you.
    Mr. BOEHLERT. Thank you very much, Mr. Fox, and the Chair was generous, as it should be, to the Assistant Administrator, because we want to hear what you have to say, and we appreciate the comprehensive nature of your submitted testimony.
    In your testimony, you talk about the Clean Water State Revolving Loan Fund. You call it a sound concept, and I think we all agree, and you say that the administration is maintaining Federal capitalization of this fund for over the next two decades, but, like Paul Harvey, I want to know the rest of the story. I mean, you are maintaining the Federal capitalization, but you are not putting any money where your mouth is. How can you explain to this committee and to everyone else how you can recommend, in view of the proven needs for hundreds times what you are proposing, you are cutting. The budget recommends a cut of $500 million. Can you talk me through that so I can try to comprehend it?
    Mr. FOX. Yes, Mr. Chairman. I think as you will know well, when Congress reauthorized the Clean Water Act of 1987, it was for the stated purpose of getting the Federal Government out of providing sewage treatment funds to State and local government, and it created the SRF Program, which Congress envisioned would end in 1994. We have continued to provide funds to this program past the 1994 deadline because of its value in meeting these needs, and, overall, the administration has met the commitment that that was required in the Clean Water Act, and we are including in our budget forecast out till the year 2005 at least some modest amount of funding for the Clean Water SRF.
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    I think what is most important is to look to the future and a commitment that we have to work with you about defining what this new SRF should look like for the future. The current one expired in 1994, and we stand ready to work with you, side by side, to figure out what it should be for the future.
    Mr. BOEHLERT. But in your heart of hearts, I mean, you have got to find a culprit someplace. Is it OMB? I mean, I can't believe that EPA got what it requested this year. Please tell me I am right.
    Mr. FOX. As you know, budget issues are very challenging, and there is a lot of fingerpointing that we can all do. I think that the very real challenges that you all will face is the caps and the ceilings that will be given to the different subcommittees are going to add additional challenges. Our HUD and independent agencies, VA HUD Independence Agency Subcommittee is down, I think, about 10 percent from the previous year, and I don't know where that money is going to come from, but I don't see any significant increases for EPA in the budget that is being kicked around right now on the Hill.
    Mr. BOEHLERT. Well, everybody is professing fidelity to the caps, which I think is a game that we are playing on both sides, quite frankly, because I think there are an awful lot of us that recognize we would have to make some adjustments in those caps, and, invariably, we are going to have a new forecast from OMB and CBO, and they are going to project an even higher surplus than is now projected, and if that is the case, then would you be recommending, would you be fighting hard for more money for this State Revolving Loan Fund? I mean, you are going to get back in the mix; I know that.
    Mr. FOX. I will just leave it that we stand ready to continue to work with you as these new budget realities kind of unfold in the months ahead.
    Mr. BOEHLERT. Boy, if that isn't a finesse, I have never seen one.
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    No wonder you have got this highfalutin job.
    The Chair is pleased to recognize Mr. Borski.
    Mr. BORSKI. Thank you very much, Mr. Chairman, and let me also welcome Mr. Fox and congratulate you on a great statement.
    Let me ask it this way: It appears that the needs for improving water quality are somewhere between $140 billion and $330 billion. Can you tell us how we are going to solve this problem?
    Mr. FOX. I think the key question that we need to look at is what are our needs, and what are our annual spending, and then what is the deficit, the differences, between our needs and our annual spending? And we are still in the process of trying to refine these numbers, but EPA testified before this committee before that we estimated an annualized need in the $13 billion range. We have done some revisions to our needs numbers, and those are probably higher than that. We know from census data that we are spending today, as a Nation, probably about $11 billion. So, my sense is that the deficit, if you will, that we are facing, at least at some level, is going to be at least $3 billion in terms of the needs that we have to meet, and I think that is going to be challenge, is figuring out what precisely are those needs and how are we going to address them?
    Mr. BORSKI. Do you have any recommendations on how we will be able to solve that problem?
    Mr. FOX. As I testified, the SRF Program has really proven to be, I think, a very successful one, and to the extent that there is more and more capitalization that is presented into the SRF over a longer period of time, the States will then have a certainty about a long-term funding source. If there is a higher level of capitalization, in turn, it will give the States more flexibility to provide funds for projects that might not have the same kind of revenue streams associated with them, and we will start seeing more money going to non-point source pollution projects and the like. So, I think the SRF Program reauthorization is going to be key to that future.
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    Mr. BORSKI. You have always talked about $2 billion. EPA has always talked about $2 billion. Where does that come from?
    Mr. FOX. This was an agreement that had been reached, I think, at some level with the Congress, but I am going to have to look into that part. I know it was at least within the aAdministration that we would have a long-term level of revolving at $2 billion. It might have been in one of the budget agreements from years ago, and I will have to check on that, Mr. Borski, but it is a number that has been around for at least a few years. It is certainly one that is worthy of revisiting if that would be Congress' intent.
    Mr. BORSKI. Mr. Fox, does EPA support codifying the CSO policy, and should we develop a free-standing bill that does that?
    Mr. FOX. A codification of the CSO policy could be helpful. I think the challenge is going to be to the extent that we go beyond the codification of the CSO policy, and with due respect to Mr. Barcia and that bill, we really have analyzed that bill and feel that it does go beyond the CSO policy, and that would be the challenge. The CSO policy—and trust me, I understand these are very difficult decisions for communities around the country—but the CSO policy is built on the notion that this a problem, and we have to do better, and I really believe that rewriting the rules and weakening the standards is really not the way to do it. I think we need to continue to challenge ourselves to try and get better levels of water pollution control.
    Mr. BORSKI. OK, thank you. Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you. Do you detect a very similar theme between Mr. Borski's question and my question? A couple of observations before I go to Dr. Horn. One, we consulted with the world's foremost historians on water infrastructure policy, and no one has the first clue where that $2 billion a year figure first came into existence. It came from never-never land. And, secondly, as we consult across the center aisle here, because we are working together on this, we figure that that proposal of $2 billion in a very timely manner will deal with our infrastructure needs. It will only take about 150 years.
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    The Chair now recognizes Dr. Horn.
    Mr. HORN. Thank you very much, Chairman, for calling this hearing. I think it is one of the most important hearings we will have in this session. People want clean water.
    Let me ask you just a few brief questions. Mr. Fox, in your division, Water, what did you ask for in the budget for this fiscal year coming up; the year 2000?
    Mr. FOX. I can get you more detailed information. In general, the SRF account that we have been talking about for the wastewater side was $800 million.
    Mr. HORN. That was your recommendation to the Administrator? I have only got so much time, so I need a fast answer. Did you recommend $800 million to the Administrator?
    Mr. FOX. Yes, I did.
    Mr. HORN. All right. Did she recommend it to OMB?
    Mr. FOX. Yes, she did.
    Mr. HORN. What did they recommend?
    Mr. FOX. Eight hundred million.
    Mr. HORN. So, you got what you wanted in that area, then.
    Mr. FOX. That is correct.
    Mr. HORN. Do you feel you should have asked for more given this Nation's needs?
    Mr. FOX. As I tried to describe, I know the $2 billion figure at least goes back to the President's Clean Water Initiative, which was 1994, and this Administration has been saying, at least since 1994, that we would like to see it revolve at a $2 billion level. We have always met the funding commitment to meet that, and $800 in this year will continue to meet that commitment.
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    Mr. HORN. You know, the President could request a supplemental when you get to water.
    Let me bring up an example that I also want to discuss with you and that is has any survey been done by EPA of either water, power, any type of energy there, in terms of the effect of the so-called year 2000, the millennium bug, Y2K, whatever you want to call it? A good example of why we ought to have a survey on that by EPA is the Los Angeles situation in Van Nuys just recently where three million gallons of raw sewage was pumped out due to a glitch in a test on the Y2K situation. The Hyperion Plant, which processes, I believe, three million gallons of raw sewage every day—well, that was the one from the Tillman Plant—but the Hyperion treats 370 million gallons of sewage a day. That is six times more than the plant that dispelled this in the neighborhood. Has there been any survey done on water works around the country and whether the computer system is a problem?
    Mr. FOX. We have, in fact, been working very aggressively with States and with utilities to make them aware of this problem, to walk them through the kinds of tests that they need to do with their system to make sure they are Y2K compliant, I am cautiously optimistic that we have been making a lot of progress. I think one thing we can't lose sight of is that the exercise that Los Angeles was going through is a pretty good thing for communities to do; to actually test to see if you have, in fact, worked out all the bugs in your system so that we don't find ourselves on January 1 facing massive failures of these systems throughout the country.
    I have personally been to a number of facilities, met with all the national trade associations talking about this problem. I have sent letters to all state commissioners and public works directors talking about this problem. We have Website materials that are available for people. The biggest concern I have, I think, at this point, going into the new year is going to be the smaller systems, particularly the small drinking water systems around the country that might not have been reached by some of these information and education campaigns.
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    Mr. HORN. I agree with you completely on that. Is there a model test that EPA might have designed which the smaller systems could take advantage of?
    Mr. FOX. I know there is some model information that we have for them, but let me check on the test question. I know you are interested in this subject, and I will get back to you on that one.
    Mr. HORN. Well, we appreciate that.
    Do you think based on the data before you now on your surveys, on your visits, and all the rest, do you think that Administrator ought to recommend to Congress a supplemental which would provide some funds to help these small water agencies, the medium type? The big types can take care of themselves. I live where they work, but think about the rest of the country. In aggregate, they could easily beat the spills of a Los Angeles and a New York City, whatever it is, and do you think that, based on your knowledge, that the Administration should seek a program and a supplemental appropriations bill to deal with some of this?
    Mr. FOX. Based on my current knowledge, the answer would have to be no, and I predicate that on the fact that in every system that I have investigated so far, there is—I think in every case that I am aware of—always a manual backup system should there, in fact, be some failure, so that we can still meet our public health goals in, I would imagine, in virtually every case. That doesn't say that I haven't missed something here, and I appreciate the intent of your question, and we look at that and get back to you.
    Mr. HORN. Thank you; I appreciate that.
    Mr. BOEHLERT. Thank you, Dr. Horn. Mr. Barcia.
    Mr. BARCIA. Thank you very much, Mr. Chairman. I have a few comments and questions for Mr. Fox.
    I am glad, Mr. Fox, that you raised the point about the water quality standard review in your testimony. However, I am surprised that you seem to believe that the States understand these water quality reviews are progressing satisfactorily. I note that only one review has been done since the policy was issued more than 5 years ago, and at that rate, it would take more than 5,000 years for you to get to each CSO community. Moreover, I understand that the use review that has been completed was for Boston and basically replicated what Boston had proposed. This obviously suggests significant disconnect between the understandings and expectations between EPA and the States.
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    Mr. Chairman, I would ask unanimous consent that the document I would like to submit be included as part of the record.
    Mr. BOEHLERT. Without objection.
    Mr. BARCIA. And I have here excerpts from the State of Ohio's March 1995 CSO strategy session. I understand that Ohio has approximately 100 CSO communities and a very sophisticated State permitting staff. Ohio's written strategy seems to indicate that these use reviews will be conducted routinely. For example, the document states Ohio EPA will meet with communities as they develop their long-term CSO control plans to discuss cases where changes to water quality standards may be appropriate to better address wet weather conditions. However, I also have an excerpt from the meeting of your staff that your staff held earlier this month with State CSO coordinators in EPA regions three and four. During that meeting, EPA headquarter staff asked the following question according to the EPA summary: Pitts asked if there was anything else. The reluctance of States to conduct reviews was one of the primary reasons for the insertion of CSO related language in the conference report to EPA's appropriations bill. The same gentleman from Ohio EPA wrote that All is Well Sounding Strategy: A Discussion of Water Quality Issues Above, had, this to say: Mr. Stoelfalk commented that Ohio is glad that no one has asked them to do a review since they don't know how they would do it. This is five years after the CSO policy and four years after Ohio adopted their CSO strategy. It sounds to me like there is a major problem here that your agency is on notice but apparently still in denial over it. I hope you recognize that if EPA won't step up and fulfill its responsibilities in this area, then we will have no choice in Congress but to impose mandates on the agency.
    Additionally, in your testimony, you state that 74 percent of combined sewer systems are in place. However, according to this document put out by your agency, which would be item two, which I would like to submit in the record, less than one year ago, only 11 percent of CSOs have long-term controls in place. How do we account for this rapid acceleration, and how come we have not heard about this rapid progress? And, Mr. Chairman, I ask unanimous consent that the document I would like to submit just simply be included as part of the record.
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    And in way of a final comment, I would just like to share with you, Mr. Fox, that just this past week there was a spill in Flushing, in my district, a small community outside of Flint. Now, unfortunately it was not a CSO but rather an accident—some construction work that was taking place, and there was a spill of some 20 million gallons of raw sewage into Shayawasee River, Flint River, and the Shayawasee into the Saginaw River, which goes through Mr. Phillips' community, through my community, a base city, and out into the Saginaw Bay, and I can assure you, I have a whole lot of irate property owners who paid very high property taxes for waterfront properties that now have a thick, green, pea soup-like liquid in front of their homes and their properties, and the odor from that 20 million gallon spill is significant, and I just hope, as we sit here in Washington, we can appreciate when there is a spill of this magnitude or smaller spills. I know my hometown has worked very diligently to promote tourism and recreational use of our waterfront and our sport fishery, and this really sets our efforts back when we have these kinds of CSO spills on a regular basis.
    Mr. FOX. Mr. Barcia, you raised a number of comments or questions, and I would like to respond to a few right now, and we can do more for the record, if you would like. First, with respect to our data suggesting as to how many communities have long-term controls in place, the figure in my testimony of 74 percent was a subtotal of a number of different subcategories. The figure you quoted, it was actually where long-term controls were in place, and I think you used the figure of 11 percent where they actually had them in place; my latest data on that suggests 14 percent. However, 28 percent have—a long-term plan is either required or underway, and another 32 percent are under a requirement to develop a long-term plan, pursuant to the State permitting authority, and when you add those up, that is how I came up with the 74 percent were either implementing or required to be implementing the long-term plan, meaning they have been included in their permits.
    On the subject of State reviews of water quality standards, I would agree that this is a fair issue that is worthy of some more time and attention. Our count, again, is slightly differently from yours. Of the dozen States that have significant CSOs, a number of them—and by my count, at least four of them—are somewhere on the process or having completed a review of their designated uses. According to my data, that would be Virginia, Massachusetts, Maine, and Ohio. I don't want to belittle the fact, though, that this is a fair issue, and, as you indicated, we are in the process of conducting a report and analysis about impediments to the review of these water quality standards. We do intend to meet the congressional deadline and have that up here by, I think it is December of this year, and we will get you more information on that.
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    Mr. BARCIA. Thank you.
    Mr. BOEHLERT. Thank you very much.
    The Chair recognizes the Vice Chairman of the subcommittee, Mr. Sherwood.
    Mr. SHERWOOD. Thank you, Mr. Boehlert.
    And, Mr. Fox, like everybody else, I am concerned that our budget is $550 million less than it was last year to do what I see is equal work, at least equal work, and so I don't understand that. But I have a specific question that I need to get to you, if I can. The Lackawanna River, we have taken a watershed approach to it, and, of course, it goes into the Susquehanna, and the Susquehanna goes into the Chesapeake Bay, and we all know how concerned everybody is with what goes into the Chesapeake, and in the Upper Lackawanna, we have really cleaned some things up, and it has become from an old, pretty rough stream to a stream that the trout fishermen fish in, but we still have some huge consolidated sewer overflow problems in the Lower Lackawanna, and we have money appropriated, but we can't come up with the matching funds that you folks have asked us to do. I have two letters, one of March 1998 that says that the $4.9 million of in-kind costs from a BAM project could be used, and then on December 15, later, it says it can't be used. I would really like to get with you and see if we couldn't solve those issues, because that is one direct example of exactly what we are trying to do today.
    Mr. FOX. Mr. Sherwood, I think, as you know, I actually spoke with your county—chief operating officer in the county about this problem, and you can trust that we will continue to work to try and find a resolution so that we can in fact have these monies going to their intended purpose. We really do try and be pretty strict about the matching requirements, because we feel that the best use of taxpayer dollars is to assure that we do have a certain amount of non-Federal match.
    With respect to the specific issue you raised, there have been some inconsistent messages that we have been sending your county on this one, and I think we are now at the point where we believe that some of these abandoned mine funds can in fact be used as a match, and I think that is our current and final view on that, but we will continue to work with the county to find the other issues and the other match, because this is only a small part of the match that we ultimately have to find.
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    Mr. SHERWOOD. Well, but that is a good start towards it, and if we have that money to use, then maybe we can go back to some of our little authorities and squeeze them for a little more, because this is a project that needs to be done to get the Lackawanna River to the point it should be, and there has been great progress made, and this is something that I want to continue to work with you and make sure that we get this project accomplished.
    Mr. FOX. Thank you.
    Mr. SHERWOOD. Thank you very much.
    Mr. BOEHLERT. Thank you, Mr. Sherwood.
    Mr. Baldacci.
    Mr. BALDACCI. Thank you very much, Mr. Chairman, and thank you for holding this hearing.
    And, Mr. Fox, I just wanted to reiterate what Mr. Barcia was talking about in terms of regulatory reform. It is my understanding that there is a tremendous unmet need that is out there, and a lot of it has shifted to local communities, local property taxpayers. There is no question that we want to have clean water, we want to have cleaner water, but, at the same time, we want to be able to achieve that using reasonable approaches. We don't want to go backwards; we want to go forward, but we need to do it in an coordinated, efficient way, and the legislation, H.R. 2828, which I am a co-sponsor of and other members are, it seems to at least point in the direction that we will be able to work towards to help local communities in States that have had an inordinate burden placed upon them financially but, at the same time, the importance of cleaning the waters and rivers and lakes and streams being very important also in getting to that point.
    It is also my understanding that there is also an unmet need as it pertains to leaking sewer pipes, and I was under the impression that it may run into the trillions of dollars in terms of the national survey that was done either a year or two ago. And what I was interested in, is the EPA taking into consideration any of that in formulating its loan program or its grant program or its estimates or are they intertwined with these proposals in terms of communities being able to tap into funds to be able to repair leaking sewer pipes?
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    Mr. FOX. The short answer to your question is our best estimate right now of the total need, the cost for fixing leaking sewer pipes around the country is in my testimony, and it is at $81 billion is our current estimate of what we call our replacement costs for sewers that are suffering from some kind of infiltration problems. In terms of the kinds of funds that are available, eligible, or places where you can get funding to solve that problem, the SRF would be a prime vehicle to address those needs.
    Mr. BALDACCI. So, this part about the needs survey, is it incorporated in the needs survey?
    Mr. FOX. No, and that was one of the new amendments, if you will, in my testimony that I tried to make the committee aware of. We have been doing some additional costing analysis on this issue of leaking sewer systems, and in the original needs survey done in 1996, there wasn't the full cost of those that were included in the needs survey, and so that is why in my testimony I have added that additional $81 billion. I think our current estimates are approximately $10 billion of that need was in fact included in the initial needs survey, so there is a delta there of a about $70 billion increase in need as a result of leaking sewers.
    Mr. BALDACCI. And this need that has been estimated and revised, is its total incorporated with that $81 billion, the $330 billion figure?
    Mr. FOX. That $330 billion figure was—I think the one you are referring to was done by an organization called AMSA, the Association of Metropolitan Sewage Agencies, along with the Water Environment Federation. They, I think, looked at those figures plus they added some operation and maintenance, perhaps; they have added maybe some replacement costs that we didn't add into ours, but there were some different assumptions they used in their survey. We would be happy to get you the differences that we used in approaching this problem.
    Mr. BALDACCI. Well, I would appreciate that information and also suggestions as to how communities could go about trying to take care of those problems in a reasonable and efficient manner.
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    Thank you very much, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much.
    Mr. Bateman.
    Mr. BATEMAN. No questions, Mr. Chairman.
    Mr. BOEHLERT. Mr. McGovern? Is there any other member that seeks recognition?
    Mr. Fox, it has been a pleasure.
    Mr. FOX. Thank you, Mr. Chairman.
    Mr. TAYLOR. Just a quick question.
    Mr. BOEHLERT. Mr. Taylor.
    Mr. TAYLOR. Mr. Fox, going back to your statement, on the second page, you talk about the number people served by secondary or advanced waste water treatment doubled between 1972 and 1996, from 85 million to 173 million. Does that mean for the other 100 million Americans, there is no treatment at all?
    Mr. FOX. That is a good question; that is a very good observation. Technically, yes, but no treatment at all is a little bit misleading.
    Mr. TAYLOR. Some live rurally but not 100 million.
    Mr. FOX. No, a number of these are going to be for systems that are on sewage or septic systems so that they might not be hooked up to a municipal system. There are a number of communities that in fact have received waivers of secondary treatment requirements, like San Diego—a bill that was debated by this committee a few years ago—Anchorage. I can get you some more detailed information about what else would be in this delta, but those are the major categories.
    Mr. TAYLOR. Yes, would you, please?
    Mr. FOX. Yes.
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    Mr. TAYLOR. Thank you. Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much. Mr. Fox, thank you, and we look forward to continuing to work with you and your staff as we try to deal responsibly with, one, the funding shortfall; two, the need to be flexible but also maintain accountability. Thank you very much.
    The next panel from the Rebuild America Coalition, city/county councillor from Indianapolis/Marion County, Indiana, Beulah Coughenour; from the National League of Cities, Rudolph McCollum, Jr., the Vice Mayor of Richmond, Virginia; from the CSO Partnership, Mr. Reed Phillips, city manager for Saginaw Bay, Michigan; the Mayor of Fall River, Massachusetts, the Honorable Edward Lambert, Jr., and the Mayor of New Bedford, Massachusetts, the Honorable Frederick Kalisz, Jr.
    I would appreciate a couple of things. One, we will go in the order in which you were introduced, so, Ms. Coughenour, you will be first; secondly, I would appreciate it if you could summarize your statement to relatively five minutes. We won't be hard and fast, because you have come a long way and you have got a lot to say, but I want you to know we do have the benefit of your written testimony. It will appear in the record in its entirety at this juncture, and let me assure you that every member of the committee reads every statement. We are just really glad to have you here.
    Ms. Coughenour, you are up first.
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    Ms. COUGHENOUR. Thank you. Congressman Boehlert and Congressman Borski and distinguished members of the committee, my name is Beulah Coughenour, city/county councillor for Indianapolis/Marion County, Indiana. I also serve as vice Chair of NACO's Environment, Energy, and Land Use Steering Committee.
    I am pleased to be here today to testify on the importance of our Nation's clean water infrastructure, and I understand that you, Chairman Boehlert, are a former county official, so I know our testimony today will be familiar to you.
    Mr. BOEHLERT. You are right, I am, and I am very proud of those days as a county executive, and I know who does the work.
    Ms. COUGHENOUR. Well, we are glad to have you up where you are.
    I am here representing the Rebuild America Coalition and bring greetings from the coalition's chairman, Mayor Edward Rendell of Philadelphia who, unfortunately, wasn't able to be here today.
    The Rebuild America Coalition is a broad group of public and private organizations, including local elected officials, public works managers, the finance community, engineers, contractors, unions, and many others, but we are committed to reversing the decline of our decline of our counties' investment—country's investment in infrastructure. The Nation's public works constitutes a huge system of infrastructure facilities and services, but the system is far more than just roads and bridges. It includes mass transit, airports, schools, drinking water, wastewater, solid waste disposals, dams, ports, parks, libraries, courthouses, and other public buildings that form the foundation of our communities.
    The challenges before us are great. Repair needs are mounting in urban and rural areas. Suburban growth outstrips our ability to build new infrastructure, and yet our current level of infrastructure investment is lower in the United States than in any other industrialized nation in the world.
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    The needs go far beyond patching a few potholes. The Rebuild America Coalition estimates that the total infrastructure price tag for major components of the infrastructure, including water and wastewater systems is well over $1 trillion. Our investment in clean water infrastructure has significantly improved the quality of our water since Congress enacted the first Clean Water Act. The percentage of rivers, lakes, and streams deemed safe for swimming and fishing have risen from nearly 40 percent to nearly 60 percent, and that is the good news, but there is much work to be done. Many of the Nation's 16,000 publicly-owned wastewater systems are aged and overburdened but are being forced to meet increasingly stringent regulations without the corresponding Federal investment.
    The Rebuild America Coalition National Needs Overview, compiled in January of 1999 includes data from EPA and municipal wastewater management agencies that project at least $213 billion is needed over the next 20 years just to improve the wastewater treatment, upgrade collection systems, build new sewers, and control sewer overflows and urban wet weather runoff. Moreover, expanded treatment goals could warrant the building of 2,000 additional wastewater plants by the year 2016. Current wastewater infrastructure investment is falling far short of the needs.
    According to Rebuild America's data, governments currently spend an estimated $26 billion per year on operations, maintenance, and construction and an even more recent study by AMSA and WEF, who are both key players in the Rebuild America Coalition, they put the clean water infrastructure price tag over the next 20 years at $330 billion, excluding operations and maintenance costs. Even EPA has acknowledged that this number is closer to what is actually needed. Addressing these needs won't be easy, but I ask you, if not now, when? We must take advantage of our strong and growing national economy and invest more heavily in our infrastructure to begin addressing these needs.
    A national poll conducted for Rebuild America Coalition early this year revealed that Americans relate infrastructure to quality of life issues and overwhelmingly support Federal funding for infrastructure. Ninety-three percent saw the quality of the infrastructure as an important factor in determining their satisfaction with their community. The survey results demonstrate quite clearly that America's infrastructure is one of the few areas where the public believes that a dollar spent by the Government is a dollar well invested. Moreover, the survey results indicated that the public also understands the clear connection between Federal dollars and cleaner water. A full 55 percent felt that additional Federal dollars and private sector investment in sewage facilities nearby would make a noticeable difference in how clean our local rivers and streams and lakes were. At the same time, the survey indicated that 62 percent of the public would not mind paying more than 1 percent per year in taxes if it meant that the fish would return to local waterways, and 74 percent would support a marginally higher tax for the guarantee of a safe and efficient sewage and water treatment system.
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    As the slogan says, ''You can pay now or you can pay later.'' Failure to take action will saddle future generations with an even more monumental price tag; it is simply a question of priorities. We commend the subcommittee for addressing this subject and look forward to working with you.
    Thanks, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much, and we are going to provide Mr. Fox a copy of your testimony.
    Ms. COUGHENOUR. Thank you.
    Mr. BOEHLERT. Mr. McCollum.
    Mr. MCCOLLUM. Good afternoon, Mr. Chairman, Mr. Vice Chairman, members of this esteemed committee. I am Rudy McCollum, Vice Mayor of the City of Richmond, Virginia, the great city to the south, home of the best urban whitewater rafting in the country. I also am serving as Vice Chair of the National League of Cities Energy, Environment, and Natural Resources Committee. I am here today to testify on behalf of the National League of Cities and the 15,000 cities and towns across the Nation we represent on wet weather mandates facing municipalities and restoration and enhancement of our financial partnership to facilitate municipal compliance with the Clean Water Act.
    NLC believes that there is much Congress can do to assist cities in meeting their Clean Water Act wet weather responsibilities. A coalition of local government groups, including organizations representing both local elected, as well as professional officials, has developed the Urban Wet Weather Priorities Act of 1999, a proposal I would commend to your attention. It is intended to facilitate municipal compliance with the wet weather requirements of the act.
    You will also have before you, of course, H.R. 828, the Combined Sewer Overflow Control and Partnership Act of 1999, and you are also anticipating legislation that will reauthorize the Clean Water Act State Revolving Loan Fund. Issues raised in these proposals will be the focus of my testimony this afternoon.
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    With regard to combined sewer overflows, both the Urban Wet Weather Priorities Act and Combined Sewer Overflow Control and Partnership Act would codify EPA's 1994 policy on combined sewer overflows. Formal congressional approval of the policy will certify this policy's validity, eliminate the basis for any reluctance to use it, and assure that the expenditure of local resources consistent with the policy are legally unassailable.
    With regard to sanitary sewer overflows, where municipalities are addressing their combined sewer overflows, there should at least have a national policy to guide their efforts. Communities with sanitary sewer overflows are at the mercy of the varying whims of State and Federal bureaucrats. NLC believes Congress should provide the framework within which an SSO policy should be developed and direct EPA to do so.
    Regarding municipal separate storm sewer systems, one of our most frustrating mandates is the stormwater program. We sincerely believe that Congress made a clear distinction between what they believed appropriate for municipal stormwater discharges versus appropriate actions for industrial sites. It is essential that this distinction be reinforced.
    In addition, Congress should clarify that there is only one municipal stormwater program applicable to all municipalities regardless of their population and that it is limited to implementation of best management practices that are known to have a positive impact on water quality. Such practices would include the six minimum measures in EPA's proposed Phase II regulations.
    We also remain concerned about the issue of numerical effluent limits in the stormwater program. The local experts who have been implementing the Phase I program do not believe there are cost-effective strategies or techniques currently available which can accomplish this requirement. Without further congressional action on this issue, municipal stormwater permits are, and will continue to be, subject to endless legal challenges. This is a decision that should be made in the Congress, not in the courts.
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    NLC also believes Congress should clarify that a stormwater permit issued to a municipality will cover all municipal operations, that there will be no additional requirements for so-called municipal industrial facilities to file for or obtain individual NPDES permits. If a municipality is ultimately responsible for the quality of stormwater runoff, it will not ignore its own facilities. It is redundant then, to say nothing about costly, to require numerous permits to accomplish an objective which is already incorporated in a city-wide permit.
    Federal financial assistance, of course, is something that is of importance to us. The Clean Water Act, which established a Federal local financial partnership over 25 years ago, of course, is in decline, as you have heard today. The administration is proposing major cuts in and redirection of funding for the Clean Water State Revolving Fund. Simultaneously, both you, the Congress, and the Administration are struggling with spending caps, as you stated. That can only result in deeper cuts in domestic discretionary spending.
    The most recent estimates of the cost of compliance with Clean Water Act mandates is staggering, as you heard, over $330 billion over the next 20 years. No municipality, no matter how large, no matter how well off, or how committed can find or generate the resources required to finance the needs of this magnitude. For example, I would like to cite just my own City of Richmond. We have over 200,000 residents in my city. In looking at the actual source of our revenue, one in four of those residents are living below the poverty level. We are the number one fiscally distressed city in the State. Water and sewer rates currently are about 2 percent of median household income. Our debt ceilings are such that even with the State Revolving Loan Funds, we have certain limitations as to how much we have available to us.
    Mr. BOEHLERT. Would you repeat that, the 2 percent figure?
    Mr. MCCOLLUM. The 2 percent figure reflects the median household income and the amount that those households pay in utility rates alone.
    Mr. BOEHLERT. All utilities?
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    Mr. MCCOLLUM. In water utilities.
    Mr. BOEHLERT. Just water utilities?
    Mr. MCCOLLUM. Yes, sir.
    Mr. BOEHLERT. Thank you.
    Mr. MCCOLLUM. Richmond also has its own specific issues as they relate to the infrastructure needs that we have which compete with those in the water and wastewater area with regard to education for our young people. Our average school is over 50 years old. We also have a gas utility which we are trying to replace. So we are competing against ourselves to find the resources necessary to provide for our citizens. We have already committed, however, over $200 million in our CSO program, most of which comes from local revenues. CSO controls will cost the city an additional $200 million—for a total of $400 million—to complete the program.
    So in conclusion, Mr. Chairman, members of this committee, I believe it is important to point out that we are not proposing to relieve municipalities of their responsibility to protect the Nation's waterways. What we are proposing is to overlay the realities of limited resources, common sense, and what is possible on the requirements for attaining our shared environmental objectives. This committee has been uniquely successful in developing and protecting dedicated sources of funding for our Nation's major infrastructure programs, highways and airports. We would like to work with you to see if we can develop a source or sources of funding that can be protected and dedicated to helping finance the cost of our public water pollution control efforts.
    Thank you for your time and your attention.
    Mr. BOEHLERT. Thank you very much.
    Next witness, Mr. Phillips?
    Mr. PHILLIPS. Thank you. Good afternoon, Mr. Chairman, and personally thank you for making me feel at home here today and the rest of the subcommittee members. My name is Reed Phillips and I am the city manager of Saginaw, Michigan. Saginaw lies within the Fifth District of Michigan, and is so ably represented in Congress by my good friend and your colleague, Mr. Jim Barcia.
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    I am also the Chairman of the CSO Partnership, a national association of over 80 communities with combined sewer systems, including many communities in your own districts.
    Saginaw and the CSO Partnership strongly support H.R. 828, the CSO Control and Partnership Act of 1999. We believe H.R. 828 will be the catalyst to remove the obstacles the CSO communities and the State and EPA regional representatives are facing. Some of the things that we talked about today, accelerated implementation rather than further delay as the guiding purpose of this legislation, is sorely needed.
    Now I would like to push this aside and tell you a little story about Saginaw, Michigan. I think many of you could probably sit down here and tell this same story about communities in your own districts. Saginaw, like many CSO communities, is a core city, one that had industry many years ago, is a community where the industry now has either moved out or downsized. It's a community where many of the people that lived in that community have left to, as we call it, ''suburbia.''
    I just want to recite some stats that I told City Council last night. Some of the problems that we are working on relate to these statistics and I am going to relate it back to H.R. 828. And I think we can all relate to these.
    Some stats on Saginaw, in 1970, Saginaw's population was roughly 93,000 people. In 1990, it was 69,000. The median income as it relates to the median income of Saginaw County, the city in 1970 was 91 percent of the median income of that county. In 1990, it had dropped to 63 percent. The percent of poverty in the City of Saginaw: in 1970, there were 21,000 families, 2,300 of those families roughly were below poverty, 10.9 percent. In 1990, with the loss of that population, 17,800 families remained, 5,100 were below poverty. We went from 10.9 percent in 1970 to 28, almost 30 percent in 1990. City employees went from 1,200 in 1970 to 650 to provide those services we all know that we have to provide in the city.
    And in Michigan, we use a State equivalent value to kind of look at a community and judge its wealth. In 1970, Saginaw represented 40 percent of the wealth of Saginaw County in SEV, state equivalent value. In 1990, that 40 percent has dropped to 18 percent of the wealth.
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    Now as it relates back to the bill that we are so supportive of. In 1989, the EPA, through the State, mandated a CSO control program on the City of Saginaw that had some 40 fixed dates to accomplish over a five year period. It was a three phase program, with the first phase to be done in the first five years. The first phase included $80 million of CSO retention basin work, collector sewers, restricted plates, bio-solids tanks, you name it, we did it. And I want to say that the community of Saginaw was strongly behind the project and when we had the public hearings on these projects, the $80 million worth of projects, there was not one person in the City of Saginaw that came and spoke against these projects.
    Right now what we are looking at, we have completed Phase II. We have moved on to the 1995 MPDS permit. We completed another $27 million of these projects through the use of the State Revolving Loan Funds.
    We are currently looking at Phase III of another $62 million to complete a $170 million program for a city of 69,000 people, probably being downgraded at the next Census to around 60,000. We feel that we have done our part. We feel that underneath the new Act, as it is related to you, there are three things that our city could have used and that future cities can use. And that one is the funding mechanism. The State Revolving Loan Fund is great, but you get to a point where the market won't buy the bonds because your community cannot make the payments on them and that is one of the problems with the SRF and these smaller communities are faced with these huge projects.
    So one is funding that the bill covers. Two, these projects have got to be stretched out somewhat. Longer term projects for these communities that are financially impaired, that can't afford them in the first place, that want to do them.
    And, third, is taking a look at the water quality and relate that back to the projects you are building. Right now, we are doing an analysis of the receiving body that we probably should have done before we started these projects because we might have used the money to a better extent and a better way to clean up the receiving body even more.
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    CSO control is a mature water management issue that needs, and I submit, deserves both congressional attention and your support. We believe H.R. 828, with several refinements that we have in mind, as well with the benefit of your input, is the right vehicle to provide solutions at the turn of the century to the problems caused by CSO systems installed at the turn of last century.
    Thank you for letting me testify.
    Mr. BOEHLERT. Thank you very much.
    Now the next panel, we will have a panel of two. Who wants to go first? Mayor Lambert, Congressman McGovern and Congressman Frank have both besieged me to invite you two to be expert witnesses here because they tell us that you have a lot to offer this subcommittee. And so I welcome the opportunity to have you both here.
    First off, Mayor Lambert.
    Mr. LAMBERT. Thank you, Mr. Chairman. And while we hope we have something to offer you, we hope that you have much more to offer us.
    Mr. BOEHLERT. And I think it is very apparent, as you have listened to both sides of the aisle, that we feel very strongly about the SRF and the fact that it is under-capitalized. We don't think anyone should be bragging about cutting $500 million from a program that we estimate needs $330 billion over the next several years. So we look forward to your testimony. We will work in partnership.
    Mr. LAMBERT. Mr. Chairman, your message is very clear and much appreciated. And to you and members of the committee, I am sure that we thank you on behalf of all cities for your leadership and attention to these important issues, and we also very much want to thank our Congressmen, Congressman McGovern and Congressman Frank, for the help that they provided to our cities.
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    I am here today certainly not to argue against the need to clean our environment or to protect our waters. I think that all of us recognize the importance of achieving those common goals. My purpose today is to represent my city and others like it in asking for the kind of partnership that only the Federal Government can provide in getting the job done.
    Fall River is an older, urban city of about 92,000 people. And as we confront a massive $115 million CSO project, I can speak to how few Federal mandates have created such an enormous burden. This project and its projected cost comes at a time when we have so many schools to build, water mains to replace, roads to repair, and needs beyond our ability to pay. We certainly ask for help in the form of regulatory flexibility, certainly not in the form of reducing standards. We have a waterfront that we want to improve with new waterfront attractions, dredging plans, and improved public access. More importantly, we need your financial assistance. Cities like Fall River cannot do it alone, and as we consider our goal of clean water within the context of quality of life issues, it makes no sense to clean up the bay if it means closing down the city.
    With the help of this Congress and EPA officials and the cooperation of our own citizens, we have nearly completed Phase I of our CSO project at a cost of $30 million. The major part of this project, however, is to begin this coming fiscal year with a massive tunnel to be built under the length and breadth of our city, the largest and most expensive public works project in our history.
    We face this dark cloud as a community which has not fully participated in a good national economy, with continued chronically high unemployment, and a median family income amongst the lowest of communities anywhere. In fact, since 1984, Fall River has lost one-third of all its manufacturing jobs and national trade policies pose new and even greater challenges for us. It is vital for us to hang on to the textile manufacturing base that we have left. Consider that 5,000 to 6,000 workers are currently employed in water-dependent industries in Fall River, companies who just in the last two years have seen their rates skyrocket. Without Federal grant assistance in facing another 300 to 500 percent increase, these companies will close, putting our people out of work and devastating our local economy.
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    With all of these, we have put together a solid corrective plan, and we are also working regionally with the Cities of New Bedford and Providence to protect the greater resources that exist beyond our own immediate waterways. The establishment of grant funding to help our cities is not only appropriate, but absolutely necessary.
    In determining the provision of assistance to Fall River and cities like it, I ask you to consider the combination of the great burden and demonstrated need to poorer communities, the importance of the resources that we seek to protect, and the willingness to work with surrounding communities, Congress, and Federal officials to get the job done. While there has been much more discussion these days and proposals relative to preventing urban sprawl, and certainly H.R. 1300 sponsored by the chairman in terms of brownfields legislation speaks to the type of investment that we need to promote in our cities, that conversation should lead us all to the notion of investing in our communities to ensure that they are liveable communities with a good quality of life. The good work that this Congress and this administration has done leaves us with a great opportunity to ponder new investments in infrastructure. There is no greater time than now to help rebuild our cities, and we look forward to your partnership in that effort.
    Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you. You have lived up to your advance billing, particularly that section where you mentioned H.R. 1300.
    Mayor Kalisz?
    Mr. KALISZ. Thank you very much. I am the mayor of the beautiful and historic port City of New Bedford, a city of 100,000 people in southeastern Massachusetts. Thank you for the opportunity today to testify on the subject of Combined Sewer Overflow control. I have prepared a written statement, which has been submitted for the record.
    I am very proud of the job New Bedford has been doing controlling CSOs and protecting the waters of Buzzards Bay, an estuary of national significance. We have reopened 5,000 acres of shellfish beds to the public for the first time in a generation. My basic problem is that I need to continue protecting the environment while at the same time growing my economy. That is why I, incidentally, support the Chairman's brownfields bill because it recognizes that economy and ecology must go hand in hand.
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    Here is my shopping list for a national CSO policy. First, flexibility in methods and schedules.
    Secondly, coordination of CSO programs with the management of other urban assets, such as street repair, cleaning, park development, and so forth.
    Thirdly, coordination among other major capital programs, such as Superfund cleanup of our harbor and navigational dredging, which we sorely need. We have already identified ways of saving $17 million by coordinating the Superfund cleanup with our CSO program.
    Fourth, our community's financial needs should be a big part of the equation in scheduling cleanups and the distribution of Federal aid.
    Fifth, we need money in the form of grants and loans. I believe that with grants or grant equivalents of $125 million over the next 12 years, we could eliminate the threat that CSOs pose from New Bedford to Buzzards Bay. Even if you are able to provide assistance at that level, New Bedford will have to come with yet another $50 to $60 million to complete the project. This means more rate increases on top of the 1300 percent in increases we have experienced over the last five years.
    I realize that you may not be able to fund every worthwhile project. Let me suggest four criteria for prioritizing national assistance for CSO control. They are competence, economic hardship, environmental benefit, and regional leadership. New Bedford scores high using these criteria, as outlined in my written testimony.
    Mr. Chairman, Mr. Borski, and members of the committee, thank you for this opportunity to participate in your deliberations as you chart the future of America's clean waters.
    Mr. BOEHLERT. Thank you very much for some excellent testimony on the part of every single member of this panel. We really appreciate it, and you have had the benefit of the previous panel and the statements on both sides, and I think you can understand that we are sort of on the same wavelength here. This is not an adversarial relationship.
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    Let me ask all of you, what are your reactions to EPA's statement that the 1994 CSO policy is working and that 83 percent of combined sewer systems are implementing the nine control measures and 74 percent of combined sewer systems have long-term control plans in place or requirements to do so? In essence, they seem to think things are going just fine. What reaction do I have from anyone on the panel? Any volunteers?
    Mr. PHILLIPS. Well, in all actuality, it is hard to take a look at the numbers without really getting down to the basics of where the numbers are coming from. I think there was some testimony today that the 74 percent was somewhat over inflated. As we take a look at it, I think we feel there is probably significantly less of those communities that have long-term compliance plans in effect or underway.
    Mr. BOEHLERT. Let me try a different one. Mayors, you both indicated, and I understand it, I'm a former county executive and I know the problems you face back home, higher authority, the State or the Federal Government says you must do so and so, and, incidentally find the money to do it. I can appreciate your call for grant programs. I am not overly optimistic about the likelihood of a positive response, but with the SRF, we do allow negative interest loans. And in a sense, you could make a case that that is a grant. I would assume you would both, or all the panel members would be supportive of that portion of the SRF program as we go forward?
    Mr. KALISZ. Mr. Chairman, with all due respect, it almost appears a situation that extended SRFs would be similar to giving extended credit to a bad debt. The money still has to be paid back. The grant situation, if made available, allows for an ability to step up to the plate. In our community such as ours, we have just built a $100 million wastewater secondary treatment plant using SRF funds, granted that there is some cost benefit to the utilization of those funds, but the bill still has to be paid by the city over a projected time frame.
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    And then going back to your first question, a community such as ours then looks at the CSO issue, which may be in the vicinity of a $200 million project and it becomes almost beyond the ability to comprehend what impact that will have upon the local economy.
    Mr. BOEHLERT. Anybody else care to comment on that?
    Mr. MCCOLLUM. Yes, Mr. Chairman, I would like to.
    Mr. BOEHLERT. Mr. McCollum?
    Mr. MCCOLLUM. As I look to the issue of the State Revolving Loan Fund, Mr. Chairman, I think back to what I do in my professional career. I am an attorney in private practice where I practice in the area of consumer bankruptcy law. I can always recognize when I have a client who is in trouble when they come to me and talk about how they have been spending their funding on their credit cards for purchasing food. Once it reaches those proportions, we know that they are pretty much stretched to the limit. That is not where we as a city want to get to. What we have been trying to do is to remain fiscally responsible in order to be able to ensure that we maintain opportunities, for our bond ratings to be maintained, as we look towards addressing all of the needs that we have from a capital investment standpoint.
    We have, as I stated in my testimony, many issues that make us feel as if we are competing against ourselves. We are trying to respond to the many demands in our cities—from revitalizing our neighborhoods, building new schools, addressing the brownfields issue (for which we have major concerns in Richmond), as well as providing for the other needs or our community and our citizens.
    And although the State Revolving Loan Fund is certainly a great resource opportunity for us, one of the reasons that I also look to support H.R. 828 is because it provides a much more realistic, comprehensive response, everyone getting in and helping to address this vital issue as it relates to the urban core.
    Mr. BOEHLERT. Well, in an ideal world, no one disputes the proven need for hundreds, what $330 billion, as you indicate? No one disputes that figure, plus or minus a few percent, but we are talking real money here. But I think the reality of the situation from the Washington end is that it is highly unlikely that we are going to get a significant new grant program approved through the House and Senate and signed into law by the administration, despite the fact that many of us might want something like that to be initiated, Republicans and Democrats alike. But I think we are probably in the minority, so I am just trying to get you to think in terms of what I would view as being realistic. And that is why I think the Revolving Loan Fund when you do have subsidized interest or no interest or a negative interest, in effect, that is a partial grant. So I would hope that while you might wish for something more, at least you would be very supportive of that which offers some relief.
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    And my red light is on. My time is up. I will now defer to Mr. Barcia.
    Mr. BARCIA. Reed, I want to thank you for your appearance on the panel today. And here with my colleagues on the subcommittee, that Mr. Phillips brings a wealth of experience to the committee today, as to the other distinguished panel guests. I know that he spent fully half of his adulthood to date in the utility side of management, municipal management of utilities, and water utilities specifically and wastewater treatment and also city management. And so now asked to confront the financial constraints that a city or a local unit of government has to confront to address these problems, and I commend you, Mr. Phillips, for all that you have done in marshaling the resources of the community of Saginaw, some $120 million I believe to date and expenditures trying to address the CSO challenge that your community faces.
    When we look across Michigan, and I am not as familiar with some of the other States who are represented, Massachusetts and Virginia and the others, but if you totaled up all of the communities, such as Midland, a lot of the smaller communities also in the watershed areas, if you were able to compile the need, would our State Revolving Fund in Michigan even begin to meet the need in terms of the demand there for dollars if these communities approach the State? Sort of in a one or two or three at a time, how deficient are we in terms of having the capital needed to assist our communities, whether it be through partial grants and zero interest or low-interest loans? And if anyone else on the panel, after Mr. Phillips responds to Michigan's situation, would want to comment on their home State, I would be interested in hearing that too?
    Mr. PHILLIPS. Well, obviously, anybody that is involved with the SRF funding that applies for those type of monies realizes there is a list done every year, a priority list of projects. So, no, there is no way near the amount of money to get the projects done on a yearly basis that need to be done. And I agree with the Chairman that it kind of all boils down to money, unfortunately, like where is the money?
    The one thing with the SRF, I think ultimately you are confronted with a situation where the bond companies, the bond rating companies and the people that buy those bonds are going to control what you build because they are not going to be able to sell or rate the bonds. And Saginaw is just about to that point. You can only put so many bonds out there, whether they are through the city or through the State because the State needs the backup of the city to make sure that the city can come through with the money to pay them off.
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    So I think if you are going to continue, and the SRF program is a good program, but you are not going to get all these projects that need to be done, as rapidly as we want to get them done, done with just SRF monies.
    Ms. COUGHENOUR. I might just add to that that the Rebuild America Coalition really would like to see the establishment of a Federal capital budget, just like you have for transportation and some of these other huge infrastructure needs. I think personally that that is going to be the only way that we can meet the kind of deadlines—we are in a Catch–22. In many of our States, we don't have people that are interested in seeing these things happen. And I can tell you in Indiana, we are probably the only State that has one use designation because they haven't bothered to go out and do anything. And that puts us in a terrific bind.
    Mr. BARCIA. Chairman, if I could just make one last comment. I know our situation in Michigan is we are talking about additional tax cuts after a series of at least 30 tax cuts that have been provided by the legislature in the last three or four years, and we are in a budget surplus situation in Michigan because of the health of the economy and the rebounding of the automotive industry and things. I was a State legislator for 16 years and it seems that some of that surplus could be used to assist communities who, as some of my other colleagues already mentioned, is not only treating waste water but also I have communities in the middle of a peninsula surrounded by fresh water whose ground water, they rely on the ground water and the aquifers are contaminated with barium, lead, and arsenic. And it is a massive cost to even try to get fresh, clean, safe water into these communities, even in a State like Michigan and yet there is very little in the way of assistance to local communities at the State level. And maybe we need some of our State governments also to step up to the plate and try to play a role in assisting communities.
    Mr. BOEHLERT. Thank you very much, Mr. Barcia. Dr. Horn?
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    Mr. HORN. Thank you very much, Mr. Chairman. I enjoyed reading your testimony, and I suspect some of you were here when I questioned Mr. Fox on the need of EPA to take a look at both large cities, medium-sized cities, and smaller cities and towns. And I would just like the panels views as to whether you have done any surveys in your respective organization of governmental entities at lower levels in the Nation where they might well have problems that they recognize on this year 2000, the so-called Y2K, the millennium bug, whatever you want to call it. It's a problem. And we had a estimate when we held the first hearing on this in April of '96 that this would be a $600 billion worldwide problem. We have now got it down in the Federal Government to approximately $10 billion has been spent and will be spent certainly by January 1, 2000.
    Could you give us a little feeling for the groups you represent as to whether or not there ought to be an emergency supplemental that deals with the cities of the country or the smaller towns, maybe the big ones can take care themselves, but smaller towns, it might be very difficult? Who would like to answer that question? Obviously, the League of Cities is one person to answer it, Mr. Mayor?
    Mr. MCCOLLUM. Thank you, Dr. Horn. One of the things we, at the League of Cities, recognize is that despite the fact that cities are working to address the Y2K problem, none of us are yet able to tell exactly what the impact will be. I think we should have some mechanism in place to respond to this issue because come January 1, all 'bugs' will be local. Regardless of the source of any of the Y2K problems, it is going to be many of us at the local level who will be inundated with demands to respond to such problems.
    Mr. HORN. Has the city for which you are responsible, have they had a test on the Y2K business? We have had Lubbock, Texas. We have had Rockville, Maryland that we know of.
    Mr. MCCOLLUM. We are still in the process of testing some of our major systems. But we recognize that there is so much in the way of the interdependence of our systems with counties, States, Federal Government, that we haven't been able to maximize that. That is something we are continuing to proceed with as we move toward January 1.
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    Mr. HORN. Yes, Ms. Coughenour?
    Ms. COUGHENOUR. Indianapolis, Marion County spent about $13 million on this Y2K. We feel that we pretty much got a handle on what we can control. I think the biggest concern that I even heard today is that we would be fined for violations that we really can't control because they are either not caused by us or some connected system, that concerns me. I personally feel that it is really difficult for any community to try to take liability for things that they can't control, whatever area it is in. And I think that is something that I hope Congress will look at, and I think you are looking at it.
    Mr. HORN. We are looking at the litigation side and that has passed the House and it now rests with the Senate.
    Mr. PHILLIPS. Dr. Horn?
    Mr. HORN. Yes?
    Mr. PHILLIPS. I think it is a very good question. I take that in a little different avenue. We have done tests and many cities got sold a number of years ago that they should go to computer process control equipment at their water and wastewater plants, so you totally computerized your plants and you run everything on a CRT now. Many of those programs and projects throughout the United States were done within the last three to seven years and where I think the big problem and where I have approached our legal counsel is somebody has got to be responsible for this. You can't develop these programs and sell them on a national basis and not be responsible for them when you know that they are going to fail in four years.
    You can always run the plants on manual, the majority of the plants on manual. The problem that I see is that the communities are spending hundreds of millions, it not billions of dollars doing software updates to equipment they just bought and that to me is a national shame.
    Mr. HORN. Well, I think you are correct on that, and I hope you pursue it as a group. Thank you, Mr. Chairman.
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    Mr. BOEHLERT. Thank you, Doctor. I appreciate it. Mr. McGovern?
    Mr. MCGOVERN. Thank you, Mr. Chairman. I want to thank the entire panel for their testimony. And, Mr. Chairman, while I understand the political realities and the political difficulties of trying to initiate a new grant program, I hope that this committee will still try to look into whether that is a possibility and maybe we could gain some sort of bipartisan consensus on it if we renamed it. Instead of calling it a grant program, a tax cut program because that in essence is what it is because these grants that would be transferred to States and local governments would in essence result in lowering the rates that taxpayers pay for water and sewer services. And I think that is the kind of tax cut that we could even get the administration to embrace and support.
    And some of these rates are out of control. Mayor Kalisz, you said that your rates went up 1300 percent. And I am curious, what has been the impact on families and on industries in New Bedford and what would be the impact if those rates doubled? And, Mayor Lambert, I think it would be important for this committee to hear what the impact of the CSO project in Fall River has had on rates in the last couple of years and has there been any impact on industry and employment thus far?
    Mr. KALISZ. Congressman McGovern, the direct impact has been since the rate schedule stepped in, which was during the planning and construction of our secondary wastewater treatment plant, we have lost 2,000 manufacturing and service related jobs in our community because companies could not afford to do the extension expansion and in-town change that they were looking to do. We are currently already in a situation, we have 10.2 percent unemployment in the City of New Bedford. Sixty percent of the dropouts, teenage dropouts from high school are unemployed. Fifty percent of the mothers who are head of households are unemployed. And the situation just becomes progressively worse. The per capita income runs about 50 percent of the State average in the City of New Bedford. Now with that significant amount of loss of jobs in a relatively short period of time, that certainly shakes the local economy, puts a challenge upon those remaining manufacturing interests and companies using water and water treatment processes within the community and drives the cost of goods through the roof.
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    New Bedford recently had a recipient of a Department of Energy grant program called Nice 3, which made a local company competitive not only globally but also economically and as a result of that, we have been able to begin to turn the tide and make things begin to work. But you don't recover 2,000 jobs within a short period of time after they have left because of the rate shock that they have endured.
    Mr. LAMBERT. Congressman, thank you for your question. Certainly, we think that in the case of Fall River, we are at the tip of the iceberg or I think maybe, as the Chairman more appropriately said, it's the time where the rubber hits the road. In the last two years, in the first phase so far of our CSO project, industrial rates have gone up 170 percent. Companies like Pioneer Finishing have closed their doors, putting 200 employees out of work. Priority Finishing, just a few weeks ago, declared Chapter 11, putting another 150 jobs in jeopardy. And I think it is the kind of thing that causes us all some real concern. When you look at the potential for SRF funding in Massachusetts, we don't have the ability for negative interest funding. We can get low-interest funding, but certainly when you are looking at within the next several months having to embark on the remainder of $115 million project, it is a fairly scary proposition.
    And I certainly respect what this committee's intent is relative to the discussion, as I have heard it this afternoon. And the realism of the situation here in Washington requires us to work with you within that reality, but certainly the realism, as it exists in our communities, also requires all of us I think to work together to find something greater than currently exists now because what is currently there is not going to get the job done for us.
    Mr. MCGOVERN. Thank you.
    Mr. BOEHLERT. Mayor, could I just piggyback, the Pioneer company example you gave, 240 jobs?
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    Mr. LAMBERT. About 150 to 200 jobs.
    Mr. BOEHLERT. What was the impact, do you have any figures on the impact of the rate increase on that one company?
    Mr. LAMBERT. Their rates over the last two years, or just prior to that, would have gone up nearly 170 percent.
    Mr. BOEHLERT. But I am trying to get a figure on dollars?
    Mr. LAMBERT. Oh, in dollars. Well, let me put it to you this way. We have several water dependent industries and the average water bill for those companies went within that two year period from $114,000 to $180,000 per year.
    Mr. BOEHLERT. Wow. That is significant. Because my principal city is very similar, northeast Utica, New York, population decline, industry fleeing, that type of thing, and so I am very mindful of what you are going through and I am very supportive of the idea that we have to do something on a bipartisan basis to respond to it.
    Mr. LAMBERT. Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much. Mr. Blumenauer?
    Mr. BLUMENAUER. Thank you, Mr. Chairman. Just for context, how do your sewer rates compare to cable TV rates in your community?
    Mr. LAMBERT. In what regard?
    Mr. BLUMENAUER. Household, what do they pay for sewer as opposed to cable television? Just to put it in context because I am trying to understand.
    Mr. LAMBERT. The cable rates in our community are approximately $35 a month. They actually probably approximate where the sewer rates are at now. When you look at the potential for a 300 to 500 percent increase, however, for instance, ratepayers in Fall River will be paying in excess of 3 percent of their median income relative to what we project for sewer rates.
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    Mr. BLUMENAUER. I used to be a public works commissioner. I dealt with double-digit sewer rates for a long time, had angry people being rather upset.
    And I think that we as public officials maybe have an obligation to talk about the importance of clean water, what difference it makes, and put it in perspective in terms of what other people are paying.
    That being said, I agree with the Chairman in terms of being sympathetic for assistance. There isn't a snowball's chance that there is going to be a new grant program. I mean, I don't think anybody thinks that is going to happen. It seems to me the only hope we've got is to be more aggressive about putting money into and beefing up the Revolving Fund so it really revolves, and that there is an opportunity for a greater interest in part. Giving away free money is not going to happen anymore. It is not going to happen in transportation. It is not going to happen I think here. And I would hope that you might reconsider your approach in terms of being more aggressive. A capital budget would help us. We have got these odd, bizarre budget rules where this counts the same as paper clips at the Pentagon, things that are going to last for 50 or 100 years and deal with long-term capital requirements, that is going to be necessary. Part of it is being aggressive about putting more money in the long-term Revolving Fund because it is going to help more people and there may be a way of restructuring the rules and getting more support for it. And then doing a tandem with the States because the States, as near as I can tell, are in as good a fiscal condition as the Federal Government. And, in fact, we are giving lots of money back to them and being able to do something in tandem because these are more localized problems. I would be interested in your thoughts about how we coordinate with the State, whether it is Massachusetts or Michigan, or States that are running around cutting taxes and feel like there are lots of things that they can do.
    I would appreciate additional information, in written form, Mr. Mayor, regarding the $17 million savings you achieved by coordinating brownfield cleanup with other water projects.
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    Mr. KALISZ. We have been presenting that, we have been presenting that, sir, in the form of our harbor dredging and the combination of the CSO projects working not only with the EPA but with the United States Army Corps of Engineers. Right now, we are on a schedule to change the CSOs by digging them up, but at the same point, a little bit later down the road, we are looking at resurrecting the same roads and moving pipes, so we are looking to do it all at the same time and that is where the creativity of this comes into play. We are also working with housing developments in our city through HUD and using monies that come to us for sewer and waste water transmission by minimizing the impact and combining resources.
    I would also like to just touch upon briefly the point you made earlier with the comparison of utilities. You may be very correct in the fact that there is a close comparison. In our community, a basic cable rate, no frills, basic package is about $240 a year. A sewer rate may be in the range of some $371 per year. But the fact of the matter is many of the households are not affording cable any more, which are also the households that are contributing through rental income where many landlords have not been able to raise their incomes to become competitive in an urban environment when you have multi-story houses. So the whole problem becomes a very, very complicated one and one that is very taxing on the local community.
    Mr. BLUMENAUER. The information I would like from you is areas where the coordination takes place?
    Mr. KALISZ. Will be pleased to supply that.
    Mr. BLUMENAUER. And where Federal rules and regulations get in the way. I mentioned earlier the notion that some people are being called upon for hundreds of millions of dollars to clean up rivers to a certain high level that are already polluted before they get there, and that there may be ways of reallocating those investments throughout the watershed, maybe even those outside your jurisdiction. And that is where the State cooperation comes in where you actually will end up providing more environmental improvement with a savings to you. Those are things that if you have examples, I would be very interested in receiving them.
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    Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you, Mr. Blumenauer.
    Mr. McGovern?
    Mr. MCGOVERN. I just want to say one thing. With all due respect to Earl's comments, we have gone from any kind of grant assistance to there is not a snowball's chance in hell. I would like to think that we could reassess that because I do think that there is an incredible need out there. There is not a single community in my district that doesn't have a water and sewer problem. And, yes, we have some States with surpluses and Massachusetts is one of them and they are foolishly talking about additional tax cuts when there are lots of infrastructure problems to be done.
    But I should also say that a lot of the things we have done here in the Federal Government in balancing the budget, like slashing Medicare by $120 billion and now increasing the number of people going into long-term nursing care facilities or kind of added all kinds of unfunded mandates on States. This is a problem that I think is so great that we need to think as boldly as we did during T–21. There were a lot of people when that bill was first being talked about who said, ''Well, we are not going to get to the point we can take the Highway Trust Fund off budget.'' Well, we did. And I would hope that that kind of boldness would prevail in this debate as well.
    Mr. BOEHLERT. I will be glad to work on a bipartisan basis with you to try to convince the Administration they should advocate a program of this nature.
    Mr. MCGOVERN. The Boehlert-McGovern tax cut.
    Mr. BLUMENAUER. It is also the budget caps that we are operating under. I mean look at the transportation budget that we are going to see here on the floor this week. We authorize and then we get stuff back that looks a little grim. And I am willing to be as bold as anybody, but I just think it looks pretty awful in terms of what we have seen on the floor the last couple of weeks.
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    Mr. BOEHLERT. I think what all of us are saying is we got to get our priorities in order and this is a matter of the highest priority. So I want to thank all of the panel members. You have been very valuable resources, and I appreciate the time and effort to come here and help in our education. We are working with you and for you.
    Now we are coming up to the third and final panel of the day, Mr. Barcia you can't leave yet, no. From the Association of State and Interstate Water Pollution Control Administrators, Mr. David Pollison, head, Planning Branch, Delaware River Basin Commission; Mr. William Schatz, general counsel, Northeast Ohio Regional Sewer District from the Association of Metropolitan Sewage Agencies, AMSA; Mr. Michael Hornbrook, director of Sewer Facilities Development from Boston. He is with the Massachusetts Water Resources Authority. Ms. Sally Bethea, executive director, Upper Chattahoochee Riverkeeper Fund, Inc. She is with the Clean Water Network. The National Utility Contractors Association, Mr. Bruce Hottle. He is the chairman of the Water and Sewer Funding Work Group of Somerset, Pennsylvania. And the general counsel of the National Contractors' Association, Mr. Bradford Coupe from Washington, D.C.
    All of the panelists should know that your statements will appear in the record at this juncture in their entirety. We would appreciate if you could summarize in approximately five minutes. And we will go in the order introduced, Mr. Pollison, you are up first.
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    Mr. POLLISON. Mr. Chairman, members of the committee and subcommittee, my name is David Pollison. I am a member of the board of directors of the Association of State and Interstate Water Pollution Control Administrators and a director for planning for the Delaware River Basin Commission. As you know, Mr. Chairman, ASIWPCA is the national organization of State officials responsible for implementation of the Clean Water Act and is committed to environmental objectives set forth in the law.
    The committee has asked that we focus on several fundamental themes associated with wet weather issues and from his perspective of State and interstate officials responsible for the setting and implementation of water quality standards, there are a number of priorities we would ask that you would consider.
    First, functional equivalency. Successful resolution of wet weather issues will require the cooperation of many levels of Government, creative problem-solving, and approaches that go well beyond the Clean Water Act tool box. States need to maintain their authority to design programs, in active partnership with their stakeholders, that are appropriate and responsive to specific priority water quality problems. ASIWPCA supports the Clean Water Act requirements that are performance-based. State programs should be deemed acceptable if they achieve the same or better environmental results in a watershed. We recognize that some State equivalency programs may be defined as a lesser rather than a greater program. However, in many States it equates to a program superior to existing Federal requirements.
    Water quality standards. The Act's provisions on the role of State water quality standards should be maintained. They should not be revised or weakened to make a special case for combined sewer overflows or stormwater.
    The decision-making is at the watershed level. Wet weather problems need to be resolved at this level, taking a holistic rather than a piece-meal approach. The Clean Water Act should not prescribe or limit how State and local stakeholders should address this problem. Watershed management is designed to be a bottoms-up process and cannot be dictated from D.C.
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    I can say on a personal level in the Delaware Basin, we have a project ongoing in southeastern Pennsylvania and northern Delaware in the Christina River Basin where it started with Government officials going in there, we got the locals involved, and now it is much pretty much run at a county level within their programs with guidance and facilitation from us.
    Integrated Problem-Solving Approaches. Wet weather issues involve many Federal program and funding authorities. These include U.S. Department of Agriculture funding programs, source water protection, 319 non-point source management, total maximum daily load development and implementation, the Endangered Species Act, Federal land management and Coastal Zone Act. The Clean Water Act needs to enable the States and implementing agencies to integrate or harmonize these programs in a results-oriented process so that programs are consistent and coordinated to resolve priority water quality problems; point and non-point sources receive consistent messages and not conflicting requirements; and scarce resources are used efficiently.
    As discussed today, funding is a big issue. ASIWPCA is delighted that Chuck Fox is providing some preliminary estimates on the funding gap, what it is expected to be. ASIWPCA will continue to work with Mr. Fox and the staff to refine the funding gap information and make sure it is available to you.
    Mr. Chairman, committee members, as Chuck Fox as indicated, we need to look at the issue in terms of not only in total capital needs but also annual program funding. We all know that wet weather issues will place enormous resources demands on our programs, as well as local governments and citizens in the private sector, particularly the SFR. This must be better capitalized. An authorization level up to $5 billion, in our opinion, would be justified.
    We are pleased that EPA is willing to come back to the table and talk about how this can be done and as an association, we stand ready to work with him and with you.
    States need more flexibility in the fund to address communities' financial hardships, principally subsidies, point source, stormwater, and annual feeding operations.
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    The Association urges Congress to maintain a Federal fair share under 106, with at least a $180 million authorization level. In the 319 program, we feel that should be authorized at $500 million annually for three years and $1 billion thereafter.
    In closing, I would like to comment in the area of what I would call better science. There are a number of areas where we feel programs can be improved with better information, completion of guidance, that has been longstanding at EPA, and that collectively with better science, increased funding, I think these programs can move forward and achieve the Water Quality Act goals.
    Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much. My experience, at least from the Congress standpoint, is call for better science but when the science is politically inconvenient in its conclusion, then we ignore it. I hope that you will be more of a purist and I will be with you.
    Mr. Schatz?
    Mr. SCHATZ. Mr. Chairman and members of the subcommittee, I am William Schatz, general counsel for the Northeast Ohio Regional Sewer District in Cleveland, Ohio. I represent the Association of Metropolitan Sewerage Agencies, known as AMSA, and serve on AMSA's board of directors and am currently the vice chair of the Association's Legislative Policy Committee. I welcome the opportunity to discuss clean water infrastructure and wet weather flows legislation, and I thank the subcommittee for initiating this discussion on strengthening the Clean Water Act. There is from AMSA's point of view an enormous potential today for congressional leadership on the important issues we are discussing.
    To continue the progress achieved by the Clean Water Act, AMSA has been extremely active focusing on three priorities: gaining more Federal funding for Clean Water infrastructure, addressing non-point source pollution, and leading a consensus-based effort to draft narrowly targeted legislation to address the financial and regulatory challenges posed by urban wet weather flows.
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    AMSA firmly believes that definitive steps are needed to help local governments across the country fulfill their role in implementing the Clean Water Act. In ''The Cost of Clean,'' which I have enclosed as part of my testimony, AMSA and the Water Environment Federation presents some alarming figures. Currently, financial trends indicate that local governments pay 90 percent of the cost to build, replace, rehabilitate, or expand their wastewater treatment plants. At the same time, these communities must also fund staggeringly expensive projects to control urban wet weather flows. Unfortunately, many communities simply cannot afford these costs.
    We have heard today from a number of sources that over the next 20 years, America's communities will need to spend $330 billion on waste water treatment plants and wet weather overflow construction projects. Unless we as a Nation do something soon, we really risk losing ground in the battle against water pollution.
    Another AMSA priority is the control of non-point source pollution, which we discuss in ''Clean Water: We've Got the Point, Now Let's Get to the Non-point,'' also included with my testimony. AMSA advocates a comprehensive solution to non-point source pollution, a combination of better scientific data, new laws, tougher regulations and increased funding.
    In the near term, Congress can take a critical first step by passing the Urban Wet Weather Priorities Act of 1999. This bill, we believe, is essential to the future success of the Clean Water Act and the future of communities across the country that are grappling with an uncertain regulatory climate and the skyrocketing costs of correcting sewer overflows and controlling stormwater. Narrowly targeted, this bill is designed to do the most good while making only minor, we believe, non-controversial changes to the Act. It will provide consistent standards for controlling urban wet weather flows and a direct infusion of desperately needed Federal funds to jump start community remediation projects.
    AMSA, working with a coalition of municipal organizations, identified urban wet weather flows as the number one Clean Water Act issue facing communities today because urban wet weather discharges constitute the most pervasive and most costly municipal challenge to achieving the goals of the Clean Water Act. And because current and projecting funding gaps threaten to jeopardize hard fought progress, we believe that any reform should seek to remedy these problems first. Above all else, municipalities desperately need and deserve nationally consistent requirements and the availability of sufficient funding for the enormous urban wet weather flows controlled cost.
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    The bill amends the Clean Water Act to establish nationally consistent wet weather control standards for each of the three major areas of concern: combined sewer overflows, sanitary sewer overflows, and urban stormwater. The bill also addresses the clean water funding gap head on by establishing a new urban wet weather grants program. As such, the Urban Wet Weather Priorities Act of 1999 addresses the highest priority municipal problems under the Clean Water Act today.
    The Urban Wet Weather Priorities Act of 1999 was developed and is supported by the following coalition of municipal and technical organizations: AMSA, the National League of Cities, the National Association of Counties, U.S. Conference of Mayors, American Public Works Association, the National Association of Flood and Stormwater Management Agencies, and the Water Environment Federation.
    The bill distinguishes itself by providing administrative improvements and funding assistance to all communities. All communities throughout the Nation would benefit with the passage of this bill. And, as part of our testimony, we have included snapshots of the exact benefits this bill would provide to selected communities across the country.
    In the Cleveland area, the Northeast Ohio Regional Sewer District would benefit greatly from this bill. To comply with the 1994 CSO policy, the District has spent over $130 million on its combined sewer system and expects to spend between $500 million and a $1 billion more in the next 10 years on combined sewer compliance alone. This is in conjunction with $1.3 billion overall expended since 1974 to meet requirements of the Clean Water Act.
    There is no way to know how much compliance will cost because the regulatory requirements tend to be either nonexistent, inconsistent, or constantly in revision. The Urban Wet Weather Priorities Act of 1999 will help my district greatly by ensuring that these programs establish definitive expectations for the control of urban wet weather flows.
    AMSA believes that EPA's widely recognized combined sewer overflow policy is a model for how environmental policy should be developed. However, the success of the policy is jeopardized by differing interpretations among Federal and State regulatory authorities. Municipalities have dedicated billions of dollars towards the implementation of CSO control projects. The need to formally codify the policy is paramount and the passage of the bill would accomplish this important step.
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    There is widespread inconsistency in the implementation and enforcement of sanitary sewer overflows. EPA has made efforts to develop a national SSO policy through the Federal Advisory Committee Act process, but at the same time, the Agency has pursued aggressive enforcement actions, often requiring inconsistent steps from city to city to correct SSOs. This bill would ensure the accelerated finalization of a badly needed consistent approach to controlling SSOs.
    The 1987 amendments to the Clean Water Act clarified that municipal stormwater permits are required to reduce the discharge of pollutants in urban runoff to the maximum extent practicable. We believe that compliance with this standard was always intended to be achieved by using best management practices and control technologies, not numerical standards. Congress recognized the impracticalities involved in tying inexact pollution control methods and widely fluctuating weather variables outside of the municipalities' control to a precise set of limits. Currently, city stormwater permits are being challenged in courts across the country over the inclusion of numeric limits. Without congressional intervention to clarify the appropriate level of stormwater control requirements, the cost to America's communities could be astronomical. This bill would amend the Clean Water Act to clarify Congress' original intent on this critical issue.
    Mr. BOEHLERT. Are we getting close?
    Mr. SCHATZ. Yes, sir.
    Mr. BOEHLERT. Because the red light is on there.
    Mr. SCHATZ. I am just about finished.
    Municipalities cannot keep up with the skyrocketing Clean Water infrastructure costs. AMSA and EPA both agree approximately what the cost is to meet municipal Clean Water infrastructure needs over the next 20 years. This bill authorizes $6 billion in wet weather grants over the next three fiscal years. This would be with a Federal share of at least 55 percent of the cost of the projects. We think that this would be the first initial jump start for communities across the country who desperately need additional funding.
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    Again, on behalf of AMSA, I thank you, Mr. Chairman, and members of the committee, and I will be happy to answer any questions you may have.
    Mr. BOEHLERT. Thank you very much. And AMSA and ASIWPCA have both been very valuable resources for this subcommittee, and I do appreciate it.
    Next, Mr. Hornbrook, and I want to tell you, you have a strong advocate in Congressman Joseph Moakley. Over the years, I have had the pleasure of working closely with Mr. Moakley. I have tried to guide him to appreciate that the New York Yankees are superior to the Boston Red Sox. I have not convinced him of that, but he has convinced me that you are an important resource for this subcommittee. So your testimony will be welcome.
    Mr. HORNBROOK. Thank you, Mr. Chairman. And by the way, I am also a long-time Boston resident but a Yankee fan as well.
    Mr. BOEHLERT. Your time is extended.
    Mr. HORNBROOK. Thank you. Good afternoon, Mr. Chairman and members of the committee. Again, my name is Michael Hornbrook. I am representing the Massachusetts Water Resources Authority in Boston, and I would like to thank you for the opportunity to present testimony here at your hearing this afternoon.
    As has been previously mentioned, MWRA is a regional wastewater and water provider serving about 2.5 million people in 61 communities. We are in the process of completing what has been referred to as the Boston Harbor Project, the construction of primary and secondary treatment facilities in Boston, a massive civil engineering project under a Federal court order with a total cost, including related improvements, of $4 billion. At the same time that we are constructing our new secondary treatment facilities called the Boston Harbor Project, we are also meeting our obligations, again under a Federal court order, for a long-term CSO control plan.
    In 1997, MWRA completed and received regulatory approval of a CSO plan consisting of approximately 25 wastewater projects having a value of about $621 million. To our knowledge, we are the first and only CSO community in the country who has completed a CSO control plan in compliance with the new national policy, have received Federal and State approvals of that plan, and that plan includes revisions to water quality standards.
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    MWRA's current plan is a significant revision to an earlier plan that we adopted prior to the 1994 national CSO policy. That earlier plan consisted of a deep rock tunnel storage system at a cost of $2 billion. The new national CSO policy was our impetus at MWRA to look at and revise our CSO plan. And our new CSO plan was developed in strict conformance with the 1994 policy, and we feel provides superior environmental benefit at considerably lost cost than the original plan. So we have gone from a $2 billion plan to a $620 million plan that we feel provides us far superior environmental benefits.
    But more importantly, MWRA's long-term CSO control plan documented that higher and more expensive levels of CSO control would yield no measurable water quality benefits. Based upon MWRA's experience, the single largest impediment to implementation of a reasonable CSO control program is an apparent disconnect between the national CSO policy and EPA's approach to revising water quality standards. The policy specifically allows for and encourages communities to evaluate use of the water quality and water quality standards and, if appropriate, to revise them. Also, utilize a cost-benefit evaluation to determine what would be the appropriate CSO level of control. This is essential in selecting a CSO control alternative that achieves the highest water quality attainable, but at the same time not spending limited public funds on CSOs which will have little or no measurable benefits.
    MWRA received approval of our CSO plan in 1997. For those receiving waters where we did not propose for elimination, our State approval was based in part on cost and benefit as well as financial affordability. EPA, on the other hand, took a much stricter interpretation and only approved our plan based upon affordability. EPA's inability to consider cost-benefit in its deliberations, we feel is inconsistent with the national CSO policy and the proposed legislation must clarify the legitimacy of an approach similar to that used in Massachusetts. Our experience indicates that there are many receiving waters nationwide where CSOs contribute a minor percent of total pollutant loads and alternatives to total CSO elimination would provide superior water quality benefits at equivalent or lower costs. The key is to determine how rate payer dollars gain the most improvement in water quality.
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    MWRA also strongly supports the establishment of a grant program, as discussed in H.R. 828. We know it is difficult in these days of budget caps and many competing demands to establish additional grant programs or special appropriations, however, communities including Boston are staggering under the costs. A question was asked about household costs. In Boston, we are looking at about $1,000 per year for an average household of four by the year 2000.
    In summary, MWRA strongly supports the national CSO policy. We think it is proven to be extremely effective in enabling MWRA to achieve savings without compromising environmental benefits. However, codifying the policy will assist communities in implementation where they may now be impeded by regulatory enforcement and hold communities to a higher standard than the policy envisioned even without environmental benefit simply because the policy is not law.
    Establishment of a Federal grant program for CSOs is also essential to address the high cost of CSO controls, especially for communities where water and sewer rates have already become burdensome. Without such relief, political consensus necessary to achieve environmental goals may be threatened.
    Thank you for this opportunity to testify before your committee on this important initiative. I would like to extend an invitation to the members of this committee and to their staff to visit Boston and to tour our new secondary treatment facility plant, which has already helped transform Boston Harbor into a shining example of the success of the Clean Water Act. We are ready with your assistance to achieve the same level of success for our CSO program.
    Mr. BOEHLERT. Thank you very much, Mr. Hornbrook. And, boy, I would like to take you up on that offer because one of the things I think we do wrong in Washington, and there are a lot of things we do wrong, and there are a lot of things we do right too, but we bring everybody to Washington, and I think we should bring Congress out to the real America and see firsthand these facilities and maybe listen to some of the families tell us how they are going to make ends meet when they have $1,000 bill for water and sewer and maybe they could help convince us that we have got to do a little bit more.
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    Thank you. The invitation is noted and be more inclined to accept during baseball season.
    Ms. Bethea?
    Ms. BETHEA. Yes, thank you very much for asking me to testify today. I am the director of Upper Chattahoochee Riverkeeper, which is a nonprofit organization of 2,000 members dedicated to protecting Georgia's Chattahoochee River. And I am here today on behalf of Riverkeeper and the Clean Water Network, which is an alliance of more than 1,000 public interest groups, of millions of Americans dedicated to enforcing clean water laws in this country. Both of our organizations strongly opposed H.R. 828, as well as the proposed Wet Weather Priorities Act.
    For almost 30 years, Federal and State agencies have recognized that Atlanta's urban streams were open sewers due primarily to the fact that over 20 square miles of Atlanta are served by a combined system of pipes that receive domestic and industrial sewage and storm runoff. These combined sewers dump hundreds of millions of gallons of untreated sewage and stormwater into tributaries of the Chattahoochee, which is the drinking water supply for approximately three million Georgians, which is close to 40 percent of our State's population.
    Because of the public health threat this situation imposes, the city has installed warning signs along these streams declaring them off limits due to their filthy condition. Local health officials have issued a general advisory that people should not play or swim in urban streams due to the possibility of disease causing organisms. For communities downstream, the Chattahoochee is in fact so polluted that growing counties cannot use our river as a drinking water source. At great expense, they have had to construct reservoirs on tributaries for the Chattahoochee. Pollution from city sewers and other sources have rendered the river below Atlanta an abused wasteland, unable to achieve economic potential as a recreational resource. Bacteria counts downstream of the combined sewer overflows have ranged from 10 to 5,000 times the State standard even after the city constructed control facilities pursuant to a State law, which was passed in 1990.
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    So in 1995, Riverkeeper joined in a bipartisan effort with six downstream local governments, a Chamber of Commerce, a civic association, and two individuals to file suit in Federal court against the city for its longstanding clean water violations. In 1997, Federal Judge Thomas Thrash found in favor of the plaintiffs, stating: ''The CSO control facilities are dumping massive amounts of proscribed metals and bacteria into tributaries of the Chattahoochee in violation of their permits.'' Over four months, the plaintiffs, along with Federal and State agencies, negotiated with the City of Atlanta and ultimately we agreed upon a consent decree outlining a eight year program to achieve compliance. When settlement was presented to Judge Thrash over a year ago, he remarked, ''The consent decree is fair to the parties and to the public. It is adequate and reasonable and it is consistent with the mandate of Congress in the public interest. The consent decree imposes a firm but realistic deadline for the City to be in full compliance with the law.'' Currently, Atlanta is moving forward to meet all deadlines imposed by the consent decree.
    I think it is also important to note that, pursuant to that 1990 State law, five additional Georgia cities have funded and have completed renovations of their sewage systems to eliminate and/or treat CSOs.
    Riverkeeper and Clean Water Network strongly believe that H.R. 828 could seriously impact both the Atlanta consent decree and CSO reform throughout Georgia and the country in the following ways:
    First, unnecessary waste of resources. This bill would allow our State environmental agency to change the negotiated terms and conditions of the Atlanta decree with little justification. Not only would such an action waste years of litigation, months of cooperative negotiation, and millions of public and private dollars, but it would also effectively render moot conditions and schedules agreed upon by the City as a reasonable and feasible strategy for cleaning up Atlanta's CSOs and reducing public health threats.
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    Number two, unnecessary delays. H.R. 828 in essence amends the Clean Water Act and sanctions an open-ended compliance schedule which would allow Atlanta to apply for and receive an extension of the decree's deadlines, virtually indefinitely so long as the City was making ''reasonable further progress,'' something which is undefined.
    The City of Atlanta is already well on its way to developing a long-term strategy to address its CSO pollution problems. We are afraid that the Barcia bill could throw a giant wrench in this progress.
    Third point, the bill separates water quality standards and use attainability review by the States from the CSO planning of local governments. This proposed provision directly conflicts with EPA's CSO policy, a document H.R. 828 purports to support. We believe separation of these two processes could seriously delay CSO clean-ups in Georgia and throughout the U.S.
    Fourth point, the bill proposes to require States to conduct a review of the current water quality standards and designated uses. The proposal implies that States can downgrade water quality standards and drop designated uses to meet site-specific conditions. This proposal would not only impact existing decrees, but affect all future long-term CSO plans.
    Fifth point, the bill contains numerous vague and undefined terms, as I mentioned previously, that invite litigation, forcing local governments, States, and affected third parties to seek interpretations and clarifications from the courts. In our case, the bill would open the door for Atlanta to seek an undefined extension of its CSO permit in conflict with our decree. Litigation would most likely ensue, resources would be wasted, and Atlanta's neighborhood streams would remain seriously threatened by pollution.
    Finally, the Barcia bill proposes to revive the Federal Sewage Treatment Grants Program, potentially endangering adequate funding for the Clean Water Act State Revolving Loan Fund from which the States finance an array of sewage and stormwater treatment needs. The net result would be to limit States' flexibility to fund their highest overall waste water priorities.
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    I have just a few remaining comments on the Wet Weather Priorities Act of 1999. Like the Barcia bill, this Wet Weather bill would negatively impact Atlanta's consent decree and national CSO reform in four ways: unnecessary delays, unfounded exceptions to civil liability, vague and unclear sanitary sewage overflow remediation provisions; and inadequate public participation in sanitary sewer overflow reform. Each of those items, I have described more fully in my testimony.
    For all the reasons above, Riverkeeper believes that these two bills represent a serious threat to existing efforts of States, municipalities, and the public to address the disgusting pollution that has been allowed to flow through our Nation's neighborhood streams, endangering the public's health and impacting the economic viability of our communities.
    Thank you.
    Mr. BOEHLERT. Thank you very much for your statement. For the purpose of an introduction, the Chair recognizes the Vice Chairman, Mr. Sherwood?
    Mr. SHERWOOD. Thank you, Mr. Chairman. It is my privilege to introduce a fellow Pennsylvanian from Somerset, Pennsylvania, the distinguished chairman of the Water and Sewer Funding Work Group of the National Utility Contractors' Association. And, Bruce, my friend, Eric Lindy, assures me that you know everything about the get-it-done end of building sewers. Mr. Bruce Hottle? Mr. Hottle, the floor is yours.
    Mr. HOTTLE. Thank you. My name is Bruce Hottle. I am an Associate Director with National Utility Contractors and also chairman of the Water Sewer Funding Work Group. More importantly, I have been involved for the last 22 years in building sewer systems throughout western Pennsylvania, western Maryland, and northern West Virginia. Also, I am the Chairman of a small, rural municipal authority, serving 460 customers in Lincoln township where I reside. And I also serve as the water and wastewater industry representative to the PennVest SRF board appointed by Governor Tom Ridge for a second term.
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    Just to let you know what we have been able to do in Pennsylvania with the SRF program, we receive today $644 million from the Federal Government towards the SRF program in Pennsylvania. Pennsylvania has coupled with that $1.3 billion of State funds to create a program. At the end of our last meeting on March 25th, we had funded a total of $2 billion, 8 million worth of projects in Pennsylvania. That's a total of 1,207 projects serving $4.3 million households, 13.4 million people, and generating 22,930 permanent jobs. That doesn't take into effect all the construction jobs that were created during the last 11 years while we constructed those projects.
    I am here today in support of the proposed Kelly-Tauscher bill and particularly the funding level of $3 billion in that bill. It is a great increase over what has been proposed by the current administration of $800 million, which I find, based on the testimony of everyone else here today, to be a laughable amount.
    We have heard testimony today that we have a $330 billion problem to solve over the next 20 years. Pennsylvania's share of that is approximately $25 billion. Our program at PennVest currently is $182 million a year, $180 million for loans and $2 million a year for grants. That $2 million grant money comes out of State funds put into the program because the current Clean Water Act does not allow the making of grants for sewer and water systems with the Federal share. The Administration's proposal would allow is 20 percent to be given out as grants for non-point source pollution. But if we give out 20 percent of our yearly appropriation, the snowball we have been trying to build to solve this massive problem begins shrinking instead of growing. We have successfully grown this program over the last 11 years, and I would hate to see us turn around now and start giving out grants that would deplete the supply of money that revolves in the fund.
    We do have a definite need for additional funds in the program to provide grants that won't shrink the program. There are many small, disadvantaged communities that even with the low interest rates that PennVest is able to offer, and the SRF programs are able to offer, still can't afford the projects. For instance, the community that I serve as chairman of the municipal authority for, we have a current indebtedness of $1.7 million. We have totally rebuilt the water system over the last four years. We replaced pipelines that were installed in 1936 with pipe that was salvaged from the Johnstown flood, and we brought it to the country and built a water system for the poor people in the country.
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    One of the problems we still face in Pennsylvania, our highest priority, is human contact with raw sewage. There are many communities in Pennsylvania where that is still a problem. The other thing is providing good, safe, clean drinking water. The last three years that data is available for geriodosis infection in Pennsylvania are the years 1995, 1996, and 1997. In 1995, we had 1,578 reported cases. In 1996, it climbed to 1,600 reported cases. And in 1997, 1,727. Those are only the cases that require hospitalization. And in many cases, the important figure to note is that 62 percent of those people are young children between the ages of 2 and 6 whose immune systems aren't strong enough to fight off the disease.
    As far as the combined sewage overflow problems, in Pennsylvania, we were still building those systems up to three years ago. My company, along with two others, worked on a project that includes a 48 inch diameter line dumping into the Allegheny River, directly across from the City of Pittsburgh water treatment plant. Every time it rains, that system floods and dumps 7.5 million gallons a minute of raw sewage into the Allegheny River. Just like the lady before me who testified about the Chattahoochee River, we in western Pennsylvania often experience moratoriums on using the Allegheny River for boating, swimming and otherwise.
    I think that the work the committee is doing is very important. I think the $3 billion figure in the Kelly-Tauscher bill is more appropriate, and I wish it was more. I think in reality it ought to be $6 billion a year.
    Thank you.
    Mr. BOEHLERT. Thank you. Certainly, the need is there. Thank you very much.
    Mr. Coupe, you are the final witness.
    Mr. COUPE. I am obviously at the end of the table, indeed, off the table. In the interest of keeping this hearing within manageable time limits and bounds, I will do my best to summarize the testimony that has already been handed up to the committee. I am Bradford Coupe. I represent the National Constructors' Association, a national organization comprised of large contractors performing major industrial projects in the public and private sector and the infrastructure of the industry, including wastewater treatment and other water resource environmental projects.
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    As is evident from all of the testimony that has been heard today by virtually every witness, the degree of funding that is going to be necessary for the reauthorization and for the continuation of the goals of the Clean Water Act through its reauthorization is going to be extraordinary. That funding will undoubtedly involve Federal funds for many years to come. And for that reason and for the reason that even the Revolving Funds have their stock with Federal funding, the National Constructors' Association and its member companies are anxious for the committee to continue the application of the Davis Bacon prevailing wage law to these projects, whether they are funded by grants or by the Revolving Fund.
    Davis Bacon has come under a great deal of attack in various sectors of the Congress on grounds that they drive the cost of public construction up. Happily, we have seen in recent years studies that demonstrate that indeed the prevailing wage laws on the Federal and the local level do much to save funds. They do a great deal more than they have been accused of in terms of driving costs up.
    We are in a place today where we confront a critical shortage of skilled craft workers. As the baby-boomers pass through the workforce and on into retirement, the future of the construction industry and the staffing of it with skilled workers is a crisis of growing proportion. Finding new entrance into that industry is going to be very much dependent upon paying an adequate wage that inspires people to move to the industry. The prevailing wage has done that and will continue to do it. It will inspire people to become apprentices. It offers benefits to contractors who have apprentices because they are able, through provisions of the prevailing wage law, to pay a percentage below the journeyman level for these new trainees. In addition, tax revenues and State and local taxes are enhanced by paying workers a decent wage.
    It is perhaps surprising for a contractor employer to be before this committee to urge the continued application of the Davis Bacon Act to this construction, but it is fair to say that my clients recognize that quality construction and skilled workers, safe construction, and the benefit the public derives from such construction comes directly through paying workers at a wage that is not a low wage, it is not a wage that is going to cause unfair and irresponsible contractors to under-bid and perform the work in a fashion that in the end will cause cost overruns.
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    I will be happy to submit studies that demonstrate these facts to the committee, but it is, for the reasons that I just cited, important to our organization that any legislation reauthorizing this Act continue the application of Davis Bacon to grants or Revolving Fund monies.
    Thank you for your attention.
    Mr. BOEHLERT. Thank you very much. The Chair notes that the Chair is supportive of Davis Bacon for many of the reasons you outlined, but I would also observe that some members of the panel might not share the same point of view.
    Let me ask Ms. Bethea, you expressed some rather strong opposition to H.R. 828 and you outlined your reasons. Is there any legislative initiative, any direction you would guide us in? Do you think there is any legislative requirement that we do something to deal with the problem of SSO and the combined sewer overflow?
    Ms. BETHEA. Well, first I want to clarify. The Clean Water Network agrees with my testimony and assessment of the situation, but apparently has not taking any position on these two bills yet. Living in a large metropolitan area with these serious problems, these expensive problems, I can say that I think it is very important for this subcommittee to be grappling with these issues. They are expensive. I think that, however, what we are looking at here with these proposals is a major step backwards for the Clean Water Act. I think it takes away the opportunities for citizens to be fully engaged in the process in a way that we need to be to get solutions in our communities. We have local governments and States who are effectively working on these situations. Georgia had moved forward in 1990 to get its local government to deal with this pollution.
    I think that is about what I have to say on that.
    Mr. BOEHLERT. Mr. Schatz, do you have any observation you would care to pass along not necessarily in rebuttal but in response to the expression of concern that has been given?
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    Mr. SCHATZ. Mr. Chairman, there are several different things that ran through my mind during her testimony today. First of all, in our industry, as you well know, we are in the business of removing pollution. That is our industry. That is what we do. Most of our member agencies, the vast majority do it well. They comply with all the requirements of the Clean Water Act. There are and have been circumstances throughout the country over the years where some don't do it as well as perhaps they could or should.
    The difficulty that we as an industry continue to struggle with, however, is to move forward and improve the quality of our environment, we must have first of all discernible goals. We have to have some reliance that the things that we are going to do are going to be beneficial and that the requirements, the regulatory requirements are not going to be changing all the time. So the problems in our industry are generally caused because of the various changes that are made either regulatory wise or legislative wise. And the fact that there is not enough funding to stay ahead of the curve to do the things that both the Congress and EPA has asked and required us to do.
    So in terms of the legislation we are proposing, all we are saying is let's clarify the certain points in the Clean Water Act and let's begin to move forward with some viable funding. And we believe in the preservation of the SRF, but we think that there needs to be another program to address these urban wet weather issues in terms of the funding of the mandated projects that we know we are going to have to build. And the way to do that, as has been done in transportation and has been done in respect to airports, is to get the ball rolling, get it started, provide some impetus, some momentum and some years later, then we can figure out how we are going to fund the rest of the things.
    My assurance to you is in fact we want the same benefits that all of the citizens want. We want cleaner, better waters throughout the Nation.
    Mr. BOEHLERT. In your neck of the woods, northeast Ohio, do you meet periodically with representatives of various environmental citizens groups to talk these things through? Do you have a conscious outreach program?
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    Mr. SCHATZ. Yes, we do. We meet with citizens, and I can truly say that we have had really beneficial dialogues. We have had a very aggressive program, obviously, Cleveland back in the early 1970's with the Cowlitz River situation, the Lake Erie situation was held out to some national ridicule. So our program has been very aggressive. We have actively pursued all the Federal funding, and I must say I believe most of the environmental organizations in our area are extremely supportive of what we do. We have never had a citizen suit filed against us and hopefully we never will.
    Mr. BOEHLERT. But you know what I find so often, and this is refreshing to hear what you say, when disparate groups sit down and sort of talk things through, it is amazing how many similarities are revealed rather than differences. Keep doing a good job. My two youngest grandchildren live in Rocky River, so I am very mindful of that.
    Mr. SCHATZ. And they are both Indians' fans.
    Mr. BOEHLERT. Yes, they are, I am embarrassed to say. Is there anyone else that has any other offering for the good of the cause? I apologize for me being the only member to sit through this whole thing, but that is not because my colleagues are not interested. It is just that they have other demands on their time. And your statements are part of the record in their entirety, and they will be very carefully examined by the staff. And I can assure you that most members follow through and check these things out.
    I thank all of you for being resources. I appreciate your endurance. And this hearing is now officially adjourned.
    [Whereupon, at 3:58 p.m., the subcommittee was adjourned.]

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