Copyright 2002 eMediaMillWorks, Inc.
(f/k/a Federal
Document Clearing House, Inc.)
Federal Document Clearing House
Congressional Testimony
February 26, 2002 Tuesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2777 words
COMMITTEE:
SENATE ENVIRONMENT AND PUBLIC WORKS
HEADLINE: WATER INFRASTRUCTURE AND
CLEAN WATER
TESTIMONY-BY: JIM BARRON
AFFILIATION: RONKIN CONSTRUCTION
BODY: Statement of Jim Barron, Ronkin Construction
Testimony Before the Senate Environment and Public Works Committee
February 26, 2002
The National Utility Contractors Association
(NUCA) is a family of more than 2,000 companies from across the nation that
build, repair, and maintain water, wastewater, gas, electric, and
telecommunications systems, and manufacture and supply necessary materials and
services.
Every day utility contractors witness the atrocious conditions
of America's failing wastewater infrastructure facilities that threaten our
public health and the environment. These conditions grow worse as federal
funding for clean water projects continues to be woefully inadequate. On the
job, utility contractors see firsthand the benefits of the federal water
programs like the Clean Water
State Revolving Fund (SRF), an
extremely effective financing program that provides the capital resources to
build and rehabilitate this infrastructure.
NUCA supports the Water
Investment Act of 2002 (S 1961), which would increase resources provided to the
Clean Water SRF and Drinking Water SRF programs that would boost state's efforts
to address the looming crisis facing America's water and wastewater
infrastructure. We applaud the Senate Environment and Public Works Committee for
holding today's hearing, and we hope to see quick action on this important
legislation. A View From the Trenches
Last year, the American Society of
Civil Engineers awarded the nation's wastewater and drinking water categories
"D" grades in their annual Report Card on America's Infrastructure. Aging
wastewater systems are; failing in every state. Each year, 400,000 homeowners
find sewage backing up in their basements. Another 40,000 municipal sanitary
sewers overflow into the nation's streets, waterways, and beaches, dumping
potentially deadly pathogens.
It is difficult to describe the appalling
state of clean
water infrastructure as utility contractors see
it in the trenches, building and repairing America's unglamorous but vital
water infrastructure system. What is out of sight and out of
mind to most people is clearly visible to utility contractors on a daily basis.
In our work, it is not uncommon to find dilapidated pipes with gaping holes
spilling raw sewage into the surrounding ground in residential neighborhoods.
This leakage can go undetected for months, even years in some cases. To make
matters worse, these conditions are often within yards of waterways where we
fish, beaches where we swim, and playgrounds where our children play.
The U.S. Environmental Protection Agency's 1996 Clean Water Needs Survey
Report to Congress placed a $139.5 billion price tag for 20-year capital
investment needs for publicly owned wastewater treatment facilities. By March of
1999, an EPA Needs Gap Study found that sanitary sewer overflow needs in the
1996 study were grossly underestimated. Originally estimated at a total $10.3
billion, sanitary sewer overflow needs are today estimated at $81.9 billion,
bringing the total national wastewater infrastructure needs to more than $200
billion. Neither the $139.5 billion nor the $200 billion EPA estimate reflects
replacement costs. EPA now indicates that the current needs for water and
wastewater infrastructure could exceed $500 billion.
Independent studies
report a $23 billion gap in federal investment, and there are groups that claim
that the current water and wastewater needs are approaching $1 trillion over the
next 20 years. However, NUCA believes that whether the needs are $200 billion or
$1 trillion is not the key issue when recognizing the current federal
contribution to remedy this situation is continually less than 1 percent of the
lowest needs estimate. The priority should be to provide increased resources
immediately to begin closing this spending gap.
Clean Water
State Revolving Fund The Clean Water
State
Revolving Fund (SRF) program is a pragmatic and cost-effective program
that provides states with vital financial resources to address their wastewater
infrastructure needs. It has been hailed as the most successful federally
sponsored infrastructure financing program in history. The SRF program plays a
key role in enhancing public health and safety, protecting the environment, and
maintaining a strong economic base. It increases labor productivity, creates
jobs, rehabilitates old neighborhoods, restores brownfields properties, and
ensures the availability of recreational use of our waterways and shorelines.
Congress annually capitalizes each
state's revolving
fund programs, and loans are made to local communities to be paid back
over time, at a low interest rate. The money paid back to the fund "revolves,"
and is available to loan out to other communities, thus sustaining the money for
future projects.
Besides serving as the key mechanism to finance
water infrastructure installation and rehabilitation projects,
the SRF creates scores of jobs for American workers. Up to 55,000 jobs are
created with every $1 billion of federal capitalization in the Clean Water SRF
program. Recent research conducted by the Association of State and Interstate
Water Pollution Control Administrators suggests that several billion dollars of
federal resources for Clean Water projects could put hundreds of thousands of
Americans to work in the near future. This work will have a ripple effect,
multiplying project funding through the economy. Rehabilitation of key
infrastructure brings revitalized communities and opportunities for future
business and investment. Thus, increasing SRF funding will provide economic
stimulus in the short term as well as the long term at a time when America needs
all the jobs it can get.
Authorization for the Clean Water SRF lapsed in
1994, but because of its effectiveness, Congress has continued to fund the
program every year through the annual appropriations process. The 15-year
performance record of the SRF has been spectacular. Federal capitalization
grants totaling approximately $18 billion have leveraged capital to more than
$34 billion in perpetuity loans that are continually redistributed. When
authorization expired, appropriations were just over the $2-billion mark.
However, that level has dropped to $1.35 billion, which has been the amount
provided in the last few years.
Evolving Legislation
For the
past several years, NUCA has worked with Senator George Voinovich (R-Ohio) to
gain support for the Clean
Water Infrastructure Financing Act
(S 252), which would reauthorize the Clean Water SRF at $3 billion per year for
five years. Similar legislation in the House (HR 668) gained the bipartisan
support of more than 100 cosponsors from over 30 states. NUCA is very pleased
that the EPW Committee has incorporated all key components of the Voinovich bill
into S 1961, which will authorize $20 billion to the Clean Water SRF program
over five years and $15 billion to the Drinking Water SRF program over the same
period for a total of $35 billion toward refurbishing our water and wastewater
infrastructure. NUCA applauds the Senate EPW Committee for incorporating the
fundamental elements of S 252 into the Water Investment Act of 2002.
In
addition to the substantial funding increases authorized for water and
wastewater infrastructure projects, S 1961 would modernize the Clean Water SRF
to ensure that funds better address state needs, expand the eligibility for SRF
projects, streamline state programs to maximize use of federal funds, and
provide for additional assistance to disadvantaged communities.
The
committee's comprehensive legislation would increase the SRFs' operational
effectiveness by allowing states to operate their Drinking Water and Clean Water
SRF programs in a more similar fashion. Water and wastewater infrastructure
management is, and should continue to be, a state function. Federal resources
should be allocated to assist the states without getting in the way of SRF
program managers who know the best ways to operate their unique systems.
Concerns
While NUCA fully supports the intent of this
legislation, NUCA is concerned with certain parts of the "community development"
provision in Sec. 103 of Title 1. While coordination and consultation with land
use officials is appropriate, we are concerned that requiring substantial
coordination may obstruct and delay the progress of many necessary water and
wastewater installation and rehabilitation projects.
NUCA is in full
support of the concept of quality growth. NUCA is a member of the Quality Growth
Coalition, and participated in the development of "Building Better Communities:
Quality Growth Toolkit, " a document designed to help citizens, civic leaders,
and elected officials identify effective, common-sense solutions to traffic
congestion, overcrowding in schools, and management issues regarding future
development. NUCA believes that maintaining communications with state and local
land use officials is beneficial in any infrastructure rehabilitation program to
ensure consideration of the concerns and perspectives of local communities.
However, contrary to the opinions of certain environmental organizations, water
and wastewater treatment work is not a catalyst for what is known as "sprawl."
These projects are fundamental to ensure the safety and viability of these
communities. NUCA suggests the committee clarify the "community development"
provision in Sec. 103 to require "coordination and consultation" and not
approval of water projects by land use officials.
Another concern NUCA
has pertains to the assumption that only five more years of federal investment
will eliminate the need for future funding. The SRF originated as a way of
moving away from costly and politicized construction grants. The objective was
to build the SRF over time until it reached self-sustainability. The plan for
this investment was to help service providers to gain solid financial footing,
after which fees would be sufficient to cover costs. However, this has not come
to pass, and current conditions indicate that the objective of financial self-
sufficiency is far from a reality. This is especially true when recognizing that
needs estimates nationwide are skyrocketing. NUCA commends the EPW Committee for
it's commitment to increasing funding to address this environmental problem, but
we believe some form of federal financial support will be essential in the
future to ensure the availability of safe and clean water.
The
Davis-Bacon Issue
For the past several years, the main issue that has
prevented some members of Congress from co-sponsoring SRF reauthorization
legislation was the application of prevailing wage requirements under the
Davis-Bacon Act, which requires that local prevailing wages be paid on all
federal construction projects valued over $2,000. While collective bargaining
and wage determination are important aspects of the construction bidding
process, the issue of Davis-Bacon coverage should not delay or block legislation
that will increase the resources that fund clean water projects.
NUCA
supported the Voinovich legislation (S 252), which would have restored
DavisBacon coverage for the first round of Clean Water SRF funding, leaving
coverage of subsequent rounds to the discretion of the states. This was the way
Davis-Bacon applied to the SRF before authorization expired in 1994. S. 252
would have restored DavisBacon provisions, but would have limited them to the
first round of funding. NUCA believes that this was a middle of the road
solution that many members on both sides could agree on, and it seemed like the
only compromise that could move the bill forward.
Opponents of the
Davis-Bacon Act argue that the Depression-era law is no longer relevant in
today's construction market. They say Davis-Bacon requirements force employers
to pay higher wages for specific crafts, regardless of the workers' skill level
in that craft, which can lead to reductions in productivity and inflated costs.
Some say the requirements can also hurt small businesses that can't keep up with
the complex work rules on federal projects. Opponents generally believe the free
market and competition should determine wages, not the federal government.
Advocates of Davis-Bacon believe the requirements provide a level
playing field, and ensures fairness to workers on federal construction projects.
They maintain that DavisBacon requirements provide for community standards for
workers, and avoid pay discrimination based on religion, sex, race, etc.
Since Clean Water SRF authorization lapsed in 1994, federal Davis- Bacon
requirements have not accompanied appropriations to the SRF program. In June of
2000, EPA issued a settlement agreement with the AFL-CIO's Building and
Construction Trades Division (Building Trades), agreeing to restore Davis-Bacon
requirements in the same manner as they were applied to SRF projects before the
program's authorization expired in 1994. This would apply Davis-Bacon to the
first round of federal funding, leaving subsequent rounds to states' discretion.
The Building Trades argued that Davis-Bacon requirements should have applied to
SRF projects as federal money was appropriated to the SRF program. Although EPA
previously ruled that Davis-Bacon requirements did not apply to SRF projects
after reauthorization expired, EPA later announced that prevailing wage rate
requirements should continue to apply regardless of reauthorization. The
agreement was to begin in January 2001, but the Bush Administration has
suspended the implementation of the settlement's provisions, which have been
under review ever since.
Thirty-one states have Davis-Bacon coverage at
the state level. It seems to us that federal Davis-Bacon coverage should only be
an issue for the 19 "right-to-work" states that do not cover Davis-Bacon at the
state level. Many of NUCA's construction company members, union and open shop,
will tell you that the current construction industry labor shortage,
across-the-board drug testing, and technical know-how warrant employers to pay
higher wages regardless of Davis-Bacon requirements. If construction companies
want the workers, they must pay prevailing wages, or more in some cases. This is
dictated by the free- market, not by federal or state requirements. Others will
tell you that Davis-Bacon stabilizes the construction market by making wage
determination easier during the bidding process. Rather than haggle over wage
rates for different job functions, employers simply pay the prevailing wage.
The bottom line is that only time and extensive debate will resolve the
Davis-Bacon issue, and time is something that we cannot afford when it comes to
the problem with our wastewater and drinking
water
infrastructure. While our nation's elected officials argue about wage
determination, our nations infrastructure deteriorates and the infrastructure
crisis continues to grow.
Conclusion
Over the years, the annual
federal investment in the Clean Water SRF Program has been cut in half, yet
there remain thousands of miles of barely functioning sewer pipelines that are
leaking raw sewage into underground aquifers daily.
A few years ago,
Congress passed the Transportation Equity Act for the 21 st Century, or TEA-21.
The legislation provided a blueprint for development and maintenance of
America's highways and roads. TEA-21 has paid off, and Congress is to be
commended for its investment in the nation's roadways. Now it's time to focus on
what is underneath the roads. The underground
water
infrastructure is literally falling apart as we speak.
The math
is simple. The past several years have shown a decline in federal investment in
ensuring the resources to maintain our wastewater and drinking
water
infrastructure. At the same time, while the existing infrastructure
continues to age, failure rates continue to grow, as the declining investment is
not able to keep up with the aging pipes. This has created a major financial gap
that will only get worse if a firm commitment is not made and continual federal
resources are not provided to needy communities.
People understand that
their quality of life is linked to water quality and the collection and
treatment of wastewater. The SRFs have become increasingly efficient and
effective, but need more resources. Sufficient federal seed money must be
invested to ensure that human and environmental costs of the multi-billion
dollar funding gap are prevented. The provisions in S 1961 would be a huge step
in that direction.
LOAD-DATE: February 26, 2002