SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 1263 words

COMMITTEE: HOUSE TRANSPORTATION

SUBCOMMITTEE: WATER RESOURCES AND ENVIRONMENT

HEADLINE: WATER QUALITY FINANCING

BILL-NO:

 

H.R. 3792             Retrieve Bill Tracking Report


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TESTIMONY-BY: JOHN DESTEPHANO, MAYOR OF NEW HAVEN, CONNECTICUT

BODY:
Statement of John DeStephano, Mayor of New Haven, Connecticut

Mr. Chairman, members of the Committee: I am John DeStephano, Mayor of New Haven, Connecticut and first Vice President of the National League of Cities. I am here today to testify on behalf of NLC and the 18,000 cities we represent across the United States on the Water Quality Financing Act of 2002. First and foremost, I would like to congratulate the co-sponsors of the bill for recognizing the need for a renewed federal partnership in helping finance the rehabilitation and replacement of the nation's aging wastewater infrastructure. We deeply appreciate your willingness to commit significant resources over the next five years to this critical national need and are optimistic that the authorization level will at least match the $25 billion in the Kelly-Tauscher bill, H.R. 3792. The introduction of the Water Quality Financing Act demonstrates your understanding that the nation's cities and towns truly face an uphill struggle in assuring the continuation of the environmental progress made in the past thirty-plus years and your acknowledgement that we need your help in protecting the significant investments we have jointly made. As the committee knows, the gap between available resources at the local level and the total wastewater and drinking water infrastructure replacement needs are expected to approach $1 trillion over the coming two decades.

We recognize this committee deals only with half the equation - wastewater - but, at the local level, we have to find the resources from our ratepayers to address both. And, for many local ratepayers, water and sewer fees are approaching or surpassing their ability to pay them.

While we understand that the Clean Water Act already authorizes the expenditure of State Revolving Fund (SRF) resources for wastewater infrastructure rehabilitation and replacement, NLC believes water infrastructure should be one of the expressed priority purposes of the Water Quality Financing Act.

NLC appreciates the inclusion of water security as an appropriate use of these funds. Our wastewater facilities were constructed with little, if any, thought given to the potential for the unprecedented terrorist activities of the type witnessed on September 11th. The security mechanisms built into these systems were not designed for anything of that magnitude. We believe federal assistance to enhance wastewater security needs is both necessary and a legitimate use of these funds.

NLC fully supports the bill's provisions with respect to loan subsidies as well as the provisions that make these subsidies available to communities that do not meet a state's affordability criteria. And, we support the flexibility incorporated in these provisions - allowing the local government to determine how best to insure that the benefits of such subsidies are targeted to its disadvantaged residential ratepayers.

Other provisions in the bill affecting funding which NLC supports include

-the extension of the transferability provisions allowing the use of a portion of the wastewater and/or drinking water funds to be used interchangeably;

-revisions to the allocation formula in the Clean Water SRF to reflect needs more closely;

-the extended repayment period for loans from the SRFs. We would recommend, however, that these provisions be applicable to all loans to municipalities, not just those for communities that meet affordability criteria.

-the provisions targeted to small and rural communities with respect to technical assistance, training and facilitating access to the loan program.

ISSUES OF CONCERN

NLC has concerns about expanding the activities eligible for assistance under the SRF, and even more so, about expanding the availability of the limited loan subsidization provisions to nonpoint sources of pollution. Given the overwhelming needs at the municipal level, coupled with the availability of significant grant funding in other federal programs for nonpoint source pollution control activities, we question the rationale that provides nonpoint sources equal access to these funds.

While NLC has serious reservations about the equity of pollutant trading, we can reluctantly support provisions in the bill allowing limited use of subsidies to test the workability of this concept. Our concern with incorporating the trading concept into the Clean Water Act is the fact that local wastewater treatment facilities are permitted. Permits involve enforceable requirements that can be the subject to civil and criminal penalties. Nonpoint sources - for the most part - face no such liabilities. To include requirements in municipal permits for activities that are to take place outside of our jurisdiction, by sources that are private, for profit enterprises over whom we have no authority, is unacceptable. Furthermore, to have penalties for the failure of nonpoint sources' initiatives imposed on the municipal permittee is - at least in our opinion - egregious.

While we understand the legitimate concerns of the federal government in protecting its investments, we are concerned that the additional requirements imposed on municipalities seeking financial assistance may serve as a disincentive to using the fund - regardless of need. Despite the fact that this bill will ultimately provide significant new resources for wastewater infrastructure, the funds represent a very small part of the overall investment in these facilities.

We are unclear about the requirement for "the study and evaluation of innovative and alternative processes, materials and techniques." If these provisions mean municipalities are to undertake research to determine the adequacy and effectiveness of such innovations or alternatives, in our opinion, this is not an appropriate municipal responsibility. If the provisions are a requirement to review available information and assess its potential effectiveness in a given jurisdiction, then there is no problem. We recommend the intent be clarified.

With respect to public/private partnerships, NLC just recently began analyzing the impact of international trade agreements on the privatization of local services and the relationship of such agreements to the maintenance of local control and autonomy. While having little expertise, NLC considers it important to raise the issue for further review by the committee. As the committee undoubtedly knows, the majority of the large private water companies operating in the United States are foreign-owned. At the local level, we have concerns that contracting with these foreign-owned companies may - because of the terms and conditions of international agreements - adversely affect the ability of a local government to make many critical determinations about the utility once it is under contract with such a private partner. We would be happy to provide expert resources and additional information to the committee on this issue and ask only that there be a full understanding of the ramifications of public/private partnerships in the water business before requiring or encouraging such activities in federal law.

Mr. Chairman, members of the Committee, thank you for the opportunity to testify for the National League of Cities and for taking the initiative in developing, proposing and starting the legislative process on the Water Quality Financing Act of 2002. NLC looks forward to continuing to work with you on making this one of the most important and effective pieces of legislation in the 107th Congress.



LOAD-DATE: March 21, 2002