SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 2720 words

COMMITTEE: SENATE ENVIRONMENT AND PUBLIC WORKS

SUBCOMMITTEE: DRINKING WATER, FISHERIES AND WILDLIFE

HEADLINE: TESTIMONY WATER INFRASTRUCTURE

TESTIMONY-BY: NATIONAL UTILITY CONTRACTORS ASSOCIATION

BODY:
National Utility Contractors Association Statement for the Record Senate Environment and Public Works Committee Fisheries, Wildlife, and Water Subcommittee Addressing Water and Wastewater Needs and The Clean Water State Revolving Loan Fund March 27, 2001 NATIONAL UTILITY CONTRACTORS ASSOCIATION Introduction 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 environment. And these conditions grow worse as Congress fails to reauthorize the Clean Water Act. 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. The National Utility Contractors Association supports legislation that would provide immediate resources to the SRF program to boost state's efforts to address the growing sewer crisis. A View From the Trenches Recently, the American Society of Civil Engineers released its annual Report Card on America's Infrastructure. The wastewater and drinking water categories earned "D" grades. Aging wastewater systems are failing in every state. Each year, 400,0000 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's out of sight and out of mind to most people is clearly visible to utility contractors on a daily basis. It is not uncommon to uncover 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. Infrastructure Needs Increasing, Federal Investment Declining While no one disputes that America is facing a water infrastructure crisis, there is no consensus on how much it will cost to repair and replace our sanitary and storm water sewer systems. 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. Independent studies indicate that when 20-year replacement costs are added, the total wastewater infrastructure needs will exceed $300 billion. Independent studies now report a $23 billion gap in federal investment when taking drinking water needs into consideration. Two hundred, three hundred, even four hundred billion dollars does not really matter when the current federal contribution to remedy this situation is continually less than 1 percent of either figure. Clean Water State Revolving Fund The Clean Water State Revolving Fund (SRF) program is a pragmatic and effective program that provides states vital financial resources to address their wastewater infrastructure needs. It has been hailed by high-ranking public officials as the most successful federally sponsored infrastructure financing program ever. The SRF originated with the last Clean Water Act passed in 1987 as a way of moving away from costly and politicized construction grants. The objective was to build the fund over time until it reached sustainability. States match 20% of federal capitalization grants. Congress capitalizes each state's revolving fund, and loans made to local communities are paid back over time, with interest. The money paid back to the fund "revolves," and is available to loan out to other needy communities. The plan was for this investment 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. Some form of financial support appears essential for the future. Authorization for the SRF lapsed in 1994, but because of its effectiveness Congress has continued to fund the program through the annual appropriations process. 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. The thirteen-year performance record of the SRF has been spectacular but it's not enough. Federal capitalization grants of approximately $18 billion have leveraged capital to over $30 billion in perpetuity loans that are continually redistributed, or "revolve" to other needy areas in that respective state. The SRF Program provides badly needed resources for communities across the country to address problems described above. The SRF program plays a key role to enhance public health and safety, protect the environment and maintain a strong economic base. It increases labor productivity, creates jobs, rehabilitates old neighborhoods, and ensures the availability of recreational use of our waterways and shorelines. Current Legislation In 1999, Senator George Voinovich introduced the Clean Water Infrastructure Financing Act (S 1699), which would reauthorize the Clean Water SRF at $3 billion per year for five years. Similar legislation in the House gained the bipartisan support of over 100 cosponsors from over 30 states. Twenty-four members of the Transportation and Infrastructure Committee were on board, including ten members of the Water Resources Subcommittee. On February 6, Senator Voinovich reintroduced his legislation for the 107th Congress. The new legislation, S 252, is identical to S 1699 and would reauthorize the Clean Water SRF at $3 billion per year for five years. S 252 would take immediate action while future funding mechanisms are explored. While the amount of money authorized by S 252 is modest in comparison with the needs, it will go a long way toward rehabilitating and refurbishing America's wastewater infrastructure and NUCA urges Congress to consider this legislation. The Road Ahead 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. People intuitively understand that their lives are directly linked to water quality and the collection and treatment of wastewater. The SRF has become increasingly efficient and effective, but more needs to be done. Sufficient federal seed money must be invested to ensure that human and environmental costs of the multi-billion dollar funding gap are prevented. SRF Reauthorization is a big step in that direction. A few years ago, Congress passed the Transportation Equity Act for the 21st Century, or TEA-2 1. This 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 falling apart by the minute. An increase in funding would be put to full use and is long overdue. People in my business wear the boots to address these problems. You can provide the resources to help promote clean water. The math is simple. The past several years has shown a decline in federal investment in ensuring the resources to maintain our wastewater 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. There are many opinions and perspectives about the most effective funding mechanism to use to fight this sewer crisis. Some believe funding in the form of grants is appropriate, some believe the revolving fund mechanism works better. Some want to form a trust fund not unlike that provided in TEA-21. There are many alternatives, and there are many strong opinions about what is most appropriate. NUCA is ready to engage in the discussion, but please recognize that the long-term solution won't happen overnight. This will be a multi-year effort. NUCA believes that the SRF reauthorization provided in S 252 will provide the additional resources needed to begin to close the spending gap while Congress works out long-term solutions to the big picture.

LOAD-DATE: March 27, 2001, Tuesday