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24–656 PDF 2017

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR 

AMERICA: THE ROLE OF FEDERAL AGENCIES 

IN WATER INFRASTRUCTURE 

(115–5) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MARCH 9, 2017 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

GARRET GRAVES, Louisiana 

BARBARA COMSTOCK, Virginia 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

BRUCE WESTERMAN, Arkansas 

LLOYD SMUCKER, Pennsylvania 

PAUL MITCHELL, Michigan 

JOHN J. FASO, New York 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida 

JASON LEWIS, Minnesota 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

ANDRE ́ CARSON, Indiana 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut, Vice 

Ranking Member 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

FREDERICA S. WILSON, Florida 

DONALD M. PAYNE, JR., New Jersey 

ALAN S. LOWENTHAL, California 

BRENDA L. LAWRENCE, Michigan 

MARK DESAULNIER, California 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

GARRET GRAVES, Louisiana, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

THOMAS MASSIE, Kentucky 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida, Vice Chair 

BILL SHUSTER, Pennsylvania (Ex Officio) 

GRACE F. NAPOLITANO, California 

LOIS FRANKEL, Florida 

FREDERICA S. WILSON, Florida 

JARED HUFFMAN, California 

ALAN S. LOWENTHAL, California 

EDDIE BERNICE JOHNSON, Texas 

JOHN GARAMENDI, California 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

CHERI BUSTOS, ILLINOIS 

JULIA BROWNLEY, California 

BRENDA S. LAWRENCE, Michigan 

PETER A. DEFAZIO, Oregon (Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vii 

TESTIMONY 

Jerry Ellig, Ph.D., Senior Research Fellow, Mercatus Center at George Mason 

University ............................................................................................................. 7 

Gary McCarthy, Mayor, Schenectady, New York, on behalf of the U.S. Conference of Mayors ................................................................................................. 7 

John Linc Stine, Commissioner, Minnesota Pollution Control Agency, on behalf of the Environmental Council of the States ............................................... 7 

Mike Inamine, Executive Director, Sutter Butte Flood Control Agency ............. 7 

Jonathan Kernion, President, Cycle Construction Company LLC, on behalf 

of the Associated General Contractors of America ............................................ 7 

Kathy L. Pape, Senior Vice President Regulatory Policy and Business Development, American Water, on behalf of the Bipartisan Policy Center, Executive Council on Infrastructure ............................................................................. 7 

Kevin DeGood, Director of Infrastructure Policy, Center for American 

Progress ................................................................................................................ 7 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Jerry Ellig, Ph.D. ..................................................................................................... 47 

Gary McCarthy ........................................................................................................ 52 

John Linc Stine ........................................................................................................ 66 

Mike Inamine ........................................................................................................... 107 

Jonathan Kernion .................................................................................................... 114 

Kathy L. Pape .......................................................................................................... 121 

Kevin DeGood .......................................................................................................... 129 

SUBMISSIONS FOR THE RECORD 

Hon. Grace F. Napolitano, a Representative in Congress from the State of 

California, submission of letter of March 1, 2017, from John Linc Stine, 

Commissioner, Minnesota Pollution Control Agency, and President, ECOS, 

to Hon. Mick Mulvaney, Director, Office of Management and Budget, and 

Hon. Scott Pruitt, Administrator, U.S. Environmental Protection Agency ..... 22 

Gary McCarthy, Mayor, Schenectady, New York, on behalf of the U.S. Conference of Mayors, response to question for the record from Hon. Grace 

F. Napolitano, a Representative in Congress from the State of California ..... 65 

Hon. Garret Graves, a Representative in Congress from the State of Louisiana, submission of the following documents: 

Written statement of Larry A. Larson, CFM, P.E., Director Emeritus, 

Association of State Floodplain Managers .................................................. 136 

Letter of March 8, 2017, from Laura Ziemer, Senior Counsel and Water 

Policy Advisor, Trout Unlimited, to Hon. Garret Graves, Chairman, 

and Hon. Grace F. Napolitano, Ranking Member, Subcommittee on 

Water Resources and Environment ............................................................. 153 

Written statement of Mary Grant, Campaign Director, Public Water for 

All, Food and Water Watch .......................................................................... 156 

Letter of March 8, 2017, from National Rural Water Association, to 

Hon. Garret Graves, Chairman, and Hon. Grace F. Napolitano, Ranking Member, Subcommittee on Water Resources and Environment ........ 161 

Article of November 4, 2016, ‘‘Water Strategies for the Next Administration,’’ by Peter H. Gleick, Science Magazine ............................................... 163 

Blog post of November 3, 2016, ‘‘New Major U.S. Water Policy Recommendations,’’ by Peter Gleick .................................................................. 166 

Page

VI 

Hon. Garret Graves, a Representative in Congress from the State of Louisiana, submission of the following documents—Continued 

Op-ed of February 16, 2017, ‘‘Oroville Dam Crisis Shows Why We Can’t 

Take Water Infrastructure for Granted,’’ by Peter Gleick, The Hill ........ 168 

Written statement of American Rivers ........................................................... 171 

Written statement of John A. Coleman, Chief Executive Officer, Bay 

Planning Coalition ........................................................................................ 180 

Report, ‘‘The Future Role of Dams in the United States of America,’’ 

January 24, 2017, by Michelle Ho, et al., published by the American 

Geophysical Union ........................................................................................ 184 

Resolution on Reservoir Sustainability, from the Subcommittee on Sedimentation, a subgroup of the Advisory Committee on Water Information ................................................................................................................. 201 

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(1) 

1The 100-plus-page report entitled ‘‘40 Proposed U.S. Transportation and Water Infrastructure Projects of Major Economic Significance’’ prepared for the U.S. Department of the Treasury 

on behalf of the Build America Investment Initiative can be found online at 

https://www.treasury.gov/connect/blog/Documents/final-infrastructure-report.pdf. 

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL AGENCIES IN WATER INFRASTRUCTURE 

THURSDAY, MARCH 9, 2017 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON WATER RESOURCES AND

ENVIRONMENT, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The subcommittee met, pursuant to notice, at 10:02 a.m. in room 

2167, Rayburn House Office Building, Hon. Garret Graves (Chairman of the subcommittee) presiding. 

Mr. GRAVES OF LOUISIANA. The subcommittee will come to order. 

Good morning, and thank you for being here. Before I begin introducing our witnesses and doing opening statements this morning, 

I want to dispense with some of the unanimous consent requests. 

I ask unanimous consent that members not on the subcommittee 

be permitted to sit with the subcommittee at today’s hearing and 

ask questions. Is there any objection? 

Without objection, so ordered. 

I ask unanimous consent that written testimony submitted on 

behalf of the following be included in this hearing’s record: from 

the Association of State Floodplain Managers; from Trout Unlimited, including attached report prepared for the Building America 

Investment Initiative; 1 from Food and Water Watch; from the National Rural Water Association; three articles by Peter Gleick; from 

American Rivers; from the Bay Planning Coalition; a publication 

from the American Geophysical Union; and a resolution from the 

Subcommittee on Sedimentation, a subgroup of the Advisory Committee on Water Information. 

Without objection, so ordered. 

[The information can be found on pages 136–201.] 

I ask unanimous consent that the record remain open for 30 days 

after this hearing in order to accept written testimony for the hearing record. 

Without objection, so ordered. 

2 

And finally, I ask unanimous consent that the record of today’s 

hearing remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in 

writing. 

Without objection, so ordered. 

Thank you very much, again, for being here today, and looking 

forward to hearing from our diverse witness panel today. 

The impetus for this hearing was thinking about the fact that 

there has been a lot of talk about a major infrastructure package, 

about the talk of investment of $1 trillion in addressing some of 

America’s infrastructure needs. If we are, say, a year out from beginning, from moving forward on that implementation, what are 

some of the things that we should be thinking about right now? 

What are some of the obstacles to delivering, to efficiently delivering infrastructure? What are some of the impediments or opportunities to improve our ability to quickly get these projects on the 

ground? 

And that is what we are doing here today. We brought, again, 

a diverse panel of witnesses to come provide to us their insight and 

thoughts on some of the things that we could be doing to help improve this process. 

In the short time that we have been named subcommittee chair, 

we have met with dozens and dozens of non-Federal sponsors, of 

local governments, of State governments, and other organizations 

from across the country, raising strong concerns about regulations 

and permitting processes that are in place that simply do not provide value. 

And I want to be clear: the need for regulations that ensure the 

protection of our environment, ensure the protection of the health 

and safety of Americans, things that look to make sure of the efficacy of investments, the cost-to-benefit ratios are all things that 

make a lot of sense. But in many cases, we have found regulations 

are solutions in search of problems. And that raises strong concern. 

So, again, looking forward to hearing from our witnesses today. 

And, with that, I am going to turn to the ranking member, Mrs. 

Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chair, and welcome to the 

Subcommittee on Water Resources and Environment as the new 

chairman. 

Mr. Chairman, when you and I met just over a month ago to discuss a potential agenda for Congress, I suggested we start those 

areas where we could find common ground. This subcommittee is 

most successful when we work together in a bipartisan fashion to 

rebuild our Nation’s crumbling infrastructure and prepare our communities for challenges they will face in decades to come. 

Without question, this Nation is witnessing a changing water-related environment, and those changes are having a profound implication on our local communities, our national environment, and our 

overall way of life. Ironically, our respective districts are facing 

very different challenges: yours with too much water, and mine, too 

often, too little. But the reality is that both districts must adapt 

and adequately prepare for what lies ahead. 

I am pleased that our first hearing focuses on an area that we 

should find common ground: the need for increased investment in 

3 

our Nation’s water-related infrastructure, especially Federal investment. We all know that the challenges facing our communities are 

in addressing the local water resources needs and adapting to a 

changing world, whether the issue is crumbling dams and levees, 

outdated sewers and stormwater conveyances, inefficient navigation corridors, or large-scale ecosystem restoration authorities. 

I am certain that every Member in this room can point to waterrelated challenges facing their constituents at home. Yet, if your 

elected officials are like mine, the central theme in meeting these 

challenges is the help needed for additional funding. As former 

chief of engineers once noted before this subcommittee, by failing 

to officially fund projects, we ultimately fail the American taxpayer 

by delaying the realization of project benefits, and by unnecessarily 

increasing costs due to these delays. 

Similarly, when we fail to provide the necessary resources to invest in, update, and adequate maintain our infrastructure, we 

should not be surprised when systems fail when communities are 

placed at risk, and the cost begins to become greater, and when our 

State and local economies underperform. 

My communities want to do the right thing. They want to provide our citizens with safe, reliable, affordable water and wastewater services, but they cannot do it alone. They are calling on us 

in Congress to renew the Federal commitment on—to our water-related infrastructure. 

I was excited when infrastructure investment became a recurring 

theme during the 2016 Presidential election. I was equally pleased 

when the President made his commitment to triple the funding 

level for the Clean and Drinking Water State Revolving Funds. 

This subcommittee needs to take the next logical step and advance legislation like a reauthorization of the Clean Water State 

Revolving Fund, to renew the Federal commitment to meeting our 

community’s infrastructure needs. This straightforward legislation 

last approved on a bipartisan basis by this committee in 2009 will 

help our communities meet the challenge of a changing water-related environment and create well-paying jobs in the United States. 

But we need to do much more. We need to address the very real 

affordability concerns raised by the communities in a way that does 

not weaken the Clean Water Act protections, and ensures our 

neighborhoods have access to clean, safe water and reliable waters—local environments. We need to look at targeting more additional Federal resources to our urban and rural communities when 

the traditional tools fail to meet the financial challenges these communities face on a daily basis. 

Mr. Chairman, I believe this committee can play an integral part 

in creating and sustaining family-wage jobs, and ensuring U.S. economic competitiveness and improving the daily lives of all Americans. And I do look forward to working with you on a bipartisan 

basis to honor these commitments to our communities. And I yield 

back. 

Mr. GRAVES OF LOUISIANA. Thank you. And again, I look forward 

to working with you and continuing to find common ground. 

With that, I yield to the chairman of the full committee, the gentleman from Pennsylvania, Mr. Shuster. 

4 

Mr. SHUSTER. Thank you, Chairman Graves. And this is a great 

way to start off your first hearing as chairman of this subcommittee, with a hearing like this. So I appreciate it. I won’t tell 

anybody our private advice I gave you beforehand, but I know you 

will do extremely well. 

This is an important hearing. And, as the chairman mentioned, 

the President of the United States has said that he wants to figure 

out how to spend $1 trillion on infrastructure. And look, $1 trillion 

is not going to come from the Federal Government. It has got to 

come from a number of different sources. There has to be a Federal 

component to it. We know—look at the Highway Trust Fund, the 

Harbor Maintenance Trust Fund, the Inland Waterways Trust 

Fund, other sources of revenue. We have got to figure out how to 

get the Federal revenue up to help with these projects and do its 

fair share and do its important part of the work. 

Public-private partnerships are part of that solution. I think it is 

a good tool in the toolbox, but it is not the toolbox. It is in there 

to help and assist, and we got to figure out ways to do that better. 

But there is a lot of private money and local money out there. Just in my home State of Pennsylvania there are two $4 billion 

pipeline projects, 100 percent privately funded, and we have got 

Government agencies getting in the way of moving these forward. 

And I look across this country and there are billions of dollars 

across this country that are stuck in the mud, so to speak, with 

these Government agencies, and most of them, many times, it is 

the Federal agencies. And so reform has to be a huge part of this 

effort. 

And I know that you folks here, you all deal with the Corps of 

Engineers. And I know, as my experience has been across this 

country, it takes far too long to get these projects approved. And, 

in many cases, they take years to do it, and the projects don’t 

change that much because they were pretty sound projects to begin 

with. So it is not just the Corps, it is FERC, it is—again, you go 

across the Government agencies. 

They have got to get to the table at the same time, they have 

got to get these projects done. Because if you think about the Interstate Highway System, they built 47,000 miles of road, of interstate 

highway, in 14 years. I have 60 miles of roadway that took 35 

years to get through my district. And that is just unthinkable in 

today’s society, with the technology, the science we have to be able 

to check these different projects out. We ought to be able to move 

them forward, and that is something that I know the chairman, 

this chairman, the former chairman, Mr. Gibbs, and myself are all 

committed to getting these reforms in place to move these projects 

forward. 

When you look at the lack of investment in our ports, our harbors, inland waterways, the locks, the dams, flood protection, environmental restoration, these are all things that we need to move 

forward with much faster than we have in the past. And I think 

that we can do that. 

One of the things that I will be supporting moving forward—that 

I have always supported, but we got to get the system put in place 

in the right way—is the Harbor Maintenance Trust Fund. Those 

dollars, $1.8 billion, we only spent $1 billion on harbors and ports. 

5 

The other $800 million, I am not sure where it goes, here and there 

and everywhere. But those dollars were put in that fund, and the 

trust was that it was going to be spent on those projects and those 

ports and those harbors. 

So again, I talked with the President, his people. We have got 

to get that into their budget. It makes it easier for us to get it into 

our budget. So I am committed to working forward to see that 

those dollars get spent on what their intended purposes were. And when you look at that $800 million, there is probably a 

three-, four-, five-, six-times multiplier, because when the Federal 

Government comes to the table with these dollars, the locals, the 

States, the private sector are all going to make the investments 

needed to do what they have to do in those ports and harbors 

around the country. 

So again, for me this is an exciting time. Never did I think that 

a Republican President would be the one to stand up at an inaugural address and use the word ‘‘infrastructure,’’ but it happened. 

And I am just glad to be here and be part of this, and I am really 

excited about this hearing today, and as we go forward. 

So thank you all very much. I yield back. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. And now 

I recognize the ranking member, Mr. DeFazio. 

Mr. DEFAZIO. Thank you, Mr. Chairman. I want to both welcome 

the witnesses, and I want to congratulate you on your first hearing 

as chair. I know you are vitally interested in water issues, coming 

from a somewhat watery State, shall we say, and I am pleased to 

be working with you. And I am pleased that today we are jointly 

sending a letter to President Trump, urging him to fully utilize the 

Harbor Maintenance Trust Fund as a part of his $1 trillion infrastructure plan. As Chairman Shuster noted, $9 billion have been diverted into 

a theoretical fund over at the Treasury. Every day, every American 

who buys an imported good pays a little bit more for it with the 

understanding that that is going to facilitate the movement of 

freight in and out of the United States through our ports, and that 

more efficient movement would actually pretty much offset the 

minuscule tax. Unfortunately, if you don’t spend the tax, then you 

still have the delays, the ships parked miles out into the ocean, and 

so people are paying the tax, the money isn’t being spent, and they 

are paying more for the imported goods because of the delays. 

We are breaking faith with the American people. It seems kind 

of like a no-brainer. On a daily basis, our 59 busiest harbors have 

35 percent availability of maximum depth. And that is not even to 

deal with the new challenges of the post-Panamax ships. So I am 

hopeful that we can move forward with that. 

I did get a version of that, somewhat awkward and crippled, out 

of this committee because of the budget rules—which are waived 

on a daily basis around here, but in that case, boy, they had to be 

enforced—so I am hopeful we will do it honestly and just say, hey, 

forget about the stupid budget rules, let’s spend the tax for the purpose for which it was collected, deal with the maintenance backlog 

in our harbors, and more efficiently move freight. 

There is a regulatory pendulum. It can swing way over here and 

way over there. The sweet spot is in the middle. And it is always 

6 

difficult to get there. I believe there are unnecessary delays and 

impediments due sometimes to bureaucracy and to, you know, misguided regulations. I have been having an ongoing dispute with 

FEMA and National Marine Fisheries up in my region. So I can 

understand that, and I welcome an honest discussion of that. 

But I also caution that you don’t swing to the other extreme, 

which is, you know, we are just going to facilitate projects, whether 

or not they are well thought-out, whether or not they have community support, and whether or not they might have unintended consequences. Look at 50 years ago, the central and southern Florida 

project, which was authorized in 1948, which diked Lake Okeechobee, Kissimmee River. Part of the Everglades was drained. It is 

widely recognized by the residents, the communities, and everyone 

around there, as a disaster. And now Congress, 50 years later, 

passed a plan that cost $10 billion to reverse some of that. 

So, if we approach some of these major projects in a more balanced way, I think we will be better off and not have to try and 

reverse their impacts later. 

We have had significant testimony before this committee, including a former colleague who was head of the Corps of Engineers for 

a brief period of time until he came here before this committee, 

presented the Bush budget for Corps of Engineers, and I said, ‘‘Is 

that budget adequate to deal with these backlogs and all these 

other problems we have,’’ and he said no. The next week he resigned to spend more time with his family. 

So, you know, we need to encourage honesty. And the honest 

thing is the most major impediment is lack of funding, plain and 

simple. And then we can deal with any regulatory burdens that 

crop up in the interim. I mean, in surface, you can’t say that the 

150,000 bridges out there, 99 percent of which are not going to require any major environmental analysis, that need to be repaired 

or replaced, are not getting done because of environmental, you 

know, restrictions. They are not getting done because the Government isn’t investing the money in the National Highway System. 

It is the same with our ports and harbors, which is under the jurisdiction of this subcommittee. 

So, I welcome the witnesses here today. I want to hear and hope 

to hear about that kind of balance and the need to better invest. 

Thank you, Mr. Chairman. 

Mr. GRAVES OF LOUISIANA. Thank you. With that, I would like 

to turn to our first witness. 

We have Mr. Jerry Ellig, who is the senior research fellow at the 

Mercatus Center at George Mason University. Mr. Ellig, you are 

recognized for 5 minutes. 

OK, this—is the timer working? OK. 

7 

TESTIMONY OF JERRY ELLIG, PH.D., SENIOR RESEARCH FELLOW, MERCATUS CENTER AT GEORGE MASON UNIVERSITY; 

GARY MCCARTHY, MAYOR, SCHENECTADY, NEW YORK, ON 

BEHALF OF THE U.S. CONFERENCE OF MAYORS; JOHN LINC 

STINE, COMMISSIONER, MINNESOTA POLLUTION CONTROL 

AGENCY, ON BEHALF OF THE ENVIRONMENTAL COUNCIL OF 

THE STATES; MIKE INAMINE, EXECUTIVE DIRECTOR, SUTTER BUTTE FLOOD CONTROL AGENCY; JONATHAN 

KERNION, PRESIDENT, CYCLE CONSTRUCTION COMPANY 

LLC, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA; KATHY L. PAPE, SENIOR VICE PRESIDENT REGULATORY POLICY AND BUSINESS DEVELOPMENT, 

AMERICAN WATER, ON BEHALF OF THE BIPARTISAN POLICY 

CENTER, EXECUTIVE COUNCIL ON INFRASTRUCTURE; AND 

KEVIN DEGOOD, DIRECTOR OF INFRASTRUCTURE POLICY, 

CENTER FOR AMERICAN PROGRESS 

Mr. ELLIG. Thank you, Mr. Chairman. I guess I should say to 

multiple chairs and multiple ranking members, thank you for the 

opportunity to testify today. My name is Jerry Ellig. I am an economist and a senior research fellow at the Mercatus Center at George 

Mason University. And I come to approach today’s topics a little bit 

differently, because I was asked to talk a little bit about some general problems and tendencies in the U.S. Federal regulatory process that may be the source of some of the frustrations that some 

of the members of the committee and the subcommittee just mentioned in some of the opening statements. 

I come to this as a generalist. Most of my research in the past 

15 years has focused on the Federal regulatory process and performance management of Federal agencies. So I don’t come to this 

as an expert on the particular programs this committee has jurisdiction over. But, nevertheless, I was asked to talk about some general regulatory issues. 

There is a tendency in our Federal regulatory process for folks 

to focus on intentions, rather than outcomes; intentions, rather 

than results. And there are at least three kinds of symptoms of this 

that I can mention. 

One is a tendency of regulatory decisionmakers to focus on activities and outputs, rather than results. So we have, for example, a 

lot of folks in Federal agencies who honestly believe that their job 

and their success should be measured by production of regulations, 

or perhaps by enforcement activity, rather than how many problems did they solve, what did they actually accomplish. 

A colleague of mine at the Mercatus Center interviewed a number of economists in Federal regulatory agencies a number of years 

ago, and one of them described the way his agency worked as, 

‘‘Success is putting out 10 regulations a year, and bigger regulations are bigger successes.’’ You notice there is nothing in there 

about actually achieving results, because we are focused on measuring activities and outputs, rather than focused on measuring 

what have you actually accomplished with the regulation. 

And the solution really has to start with Congress articulating 

what outcomes it wants to achieve when it authorizes regulatory 

legislation, and then following up to ensure that retrospective asVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
8 

sessment is done to find out whether the regulation achieved the 

intended purpose. And, if so, at what cost. 

Another related problem is there are often serious deficiencies in 

the analysis that Federal agencies are supposed to do. They are 

supposed to inform regulatory decisions. Now, a lot of water 

projects and other types of projects go through some type of benefitcost analysis. And you might say, well, gee, what is sauce for the 

goose ought to be sauce for the gander. Folks who want to constrain what can be done in those projects through regulation 

should also be going through the same kind of analysis. And executive branch agencies are required to do this by Executive orders, 

but we often find that there are serious deficiencies and omissions 

in the analysis. I have seen that in my research. A lot of other folks 

who actually research the quality of agency analysis, regulatory 

agency analysis, find the same thing. 

The final problem we often have is something I call ready-fireaim regulation. Now, this occurs when regulatory agencies essentially decide what they want to do, and only then conduct the research that is supposed to inform their decisions. And the process 

of doing the research becomes the process of creating a litigation 

support document to support decisions that have already been 

made for other reasons. 

One of my colleagues, who actually spent 27 years as an economist in the Federal Government, told me about an adventure he 

had where he was working on a regulation. The agency had already 

decided to issue it. He was still working on the analysis that was 

supposed to determine whether it was worth doing, and he was told 

on a Friday afternoon, ‘‘If you can’t find more benefits over the 

weekend, don’t bother coming back to work on Monday.’’ 

Folks, that is not the way that regulatory agencies should be approaching regulation. And again, this does not always happen. 

There are good, committed people at regulatory agencies who do a 

good job figuring out what they are supposed to do before they 

make decisions. But there is also plenty of research that demonstrates that there are often some pretty significant deficiencies 

in either the quality of agencies’ underlying analysis, or maybe 

they do good analysis but they don’t necessarily pay attention to 

it. 

So, all three of these kinds of problems occur when we focus on 

good intentions, rather than focusing on outcomes. And if we want 

to fix the problem, we need to flip that around so that we are focused on regulatory outcomes first, and the evidence of what is 

happening, whether it is being done, and what agencies are actually trying to accomplish. 

Mr. GRAVES OF LOUISIANA. Thank you. 

Our next witness is the Honorable Gary McCarthy, mayor of 

Schenectady, New York. 

Mayor McCarthy, you are recognized for 5 minutes. 

Mr. MCCARTHY. Chairman Shuster, Chairman Graves, Mrs. 

Napolitano, members of the committee, thank you for the opportunity to be here this morning. 

Since 2011, Schenectady has borrowed, collectively, just under $53 million to be spent on upgrading pipes, replacing equipment, 

and rehabilitating our wastewater treatment plant. In 2017 the 

9 

city is embarking on an SSO [sanitary sewer overflow] mitigation 

project, including a $24 million project to eliminate a sanitary 

sewer overflow, and $6 million to improve our system’s overall resiliency. 

Schenectady does not contest the importance of environmental 

protections and efforts, and has significantly invested in these 

projects. But we are being forced to expend even more funds, while 

we are still attempting to recover from the great recession and decades of population decline in an old industrial city. Our strong local 

economic recovery has been placed in a precarious situation by this 

significant burden. 

In addition to the tax burden, the consent order the Schenectady 

operates under requires a 4-to-1 exchange for new connections. I 

want to emphasize that, that Schenectady is not allowed to do a 

new hookup unless I remove four other hookups or entry points 

within the system. This critically limits our economic development 

projects, and is totally counterproductive to what we have been trying to accomplish in our community. 

While we face the burden of traditional infrastructure, we are 

only scratching the surface on what is possible through Smart City 

technology. Our partnerships with our business community have 

allowed us to install at this point roughly 200 smart lights, which 

will reduce our cost and improve the delivery of several key city 

services. This emerging technology allows us to use this platform 

for real change. Data will be collected and disseminated to users, 

allowing much more educated and appropriate decisions to be 

made. 

Additional devices, such as analytic cameras, temperature and 

motion sensors, traffic monitoring devices, and the potential for 

interconnected health care and other life safety devices deployed on 

a network of over 5,000 city streetlights provides an opportunity to 

evaluate numerous core challenges in an urban environment. 

This 21st-century infrastructure cannot be ignored while we bear 

the burden of investment in the more traditional infrastructure. To 

do so would be to put the city and the Nation’s long-term—is a 

peril, as we have missed this critical opportunity for economic 

growth and improve educational opportunities and long-term efficiencies within our communities. 

What I would ask today is that we need increasing partnership. 

We look to continue the SRF program, as well as CDBG, and looking to provide grants in the WIFIA funding in protecting municipal 

bonds. 

And other ways that you can help would include passing the Integrated Planning and Affordability legislation, commonly referred 

to as H.R. 465. I want to thank Mr. Gibbs for listening to the mayors’ concerns regarding unfunded mandates and affordability in his 

introduction of H.R. 465. This bill would allow local governments 

to work with the EPA to develop plans where we can comprehensively deal with the biggest environmental and public health needs 

first, and do it in a way that is more affordable to our citizens. 

I have a letter that is signed by members of—representing the 

U.S. Conference of Mayors, asking for cosponsors in the passage of 

H.R. 465, and that has been attached to my testimony submitted 

to you. 

10 

By reauthorizing and fully funding the brownfields law, you will 

be encouraging the recycling and reusing of properties and upgrading of existing infrastructure. In addition, many communities redevelop brownfields to create more green infrastructure, which helps 

with stormwater controls. 

And I have already mentioned how Schenectady is utilizing new 

technology for our above-ground systems. However, there can also 

be improvements that can be made below ground. All utilities can 

improve service through the incorporation of modern technologies 

specifically designed to increase efficiencies and reduce cost. Congress and the administration should be supporting the renewable 

public water and sewer infrastructure in America through new 

technology. 

There is much Congress and the Federal Government can do to 

work in partnership with our Nation’s cities to upgrade our infrastructure and invest in our future. And we need to end the siloed 

approach of handling issues, and think holistically on how to deal 

with our infrastructure, environmental, economic development concerns, as we work together. 

Again, I thank the committee for the opportunity to be here 

today, and look forward to your questions. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Mayor. And to introduce our next witness, I am going to recognize Mr. Nolan. 

Mr. NOLAN. Thank you, Chairman Graves and Ranking Member 

Napolitano, and members of the committee. As a member of the 

full committee, I am grateful for your allowing me to sit in on today’s important hearing. 

And by way of introduction, let me say, you know, one thing we 

all agree on is that our Nation’s outdated and obsolete wastewater 

treatment and drinking water systems are desperately in need of 

repair. And in many cases, crumbling before our eyes and degrading our waters and the health of our people. 

With that in mind, it is my honor to introduce my good friend, 

Minnesota’s good friend, our commissioner of the Minnesota Pollution Control Agency, John Linc Stine, who is here on behalf of the 

Environmental Council of the States. 

John has spent over 30 years as a powerful and tireless and gifted advocate in the fight to protect our precious air and water and 

land from pollution and degradation. We are all very proud of his 

great leadership, and I am very proud to have the opportunity to 

introduce him to the committee here today. 

John, welcome. 

And thank you to the committee for allowing me to make this introduction. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Nolan. 

Mr. Stine, you are recognized for 5 minutes. 

Mr. STINE. Thank you, Congressman Nolan. Thank you, Mr. 

Chair, for this opportunity, and Ranking Member Napolitano. I am 

John Linc Stine, I am commissioner of the Minnesota Pollution 

Control Agency, as Mr. Nolan said, and I represent also, as the 

president of the Environmental Council of the States, or ECOS, a 

nonpartisan national organization of my colleagues who lead State 

and territorial environmental protection agencies across America. 

11 

And, Chairman Graves, as you know, the Mississippi River begins in the State of Minnesota at Lake Itasca, and ends in your 

State. And I take it as my duty to deliver the cleanest water possible that Minnesota can send your way. 

States hear every day from our citizens about the value of clean 

water, adequate flood control, and prevention of pollution. Infrastructure underpins every one of those issues, and we know that 

a society cannot thrive without clean water. Industry and jobs depend on a reliable water supply and the capacity to process wastewater. 

Clean water is vital to manufacturing, recreation, and other industries that are central to our economy. The community of Worthington in southwestern Minnesota is making needed improvements to their wastewater treatment plant to accommodate a meatpacking operation that needs to expand. Nearby, Morris, another 

community, needs to make improvements to their drinking water 

system to provide water for their ethanol plant. 

ECOS aims to strengthen the partnership between the States 

and the Federal Government to implement our Nation’s environmental laws and policies while focusing on results. Water infrastructure is one of the focus areas of our ECOS document, ‘‘Priority 

Issues in a Time of Political Transition,’’ which we produced to address the new administration’s priorities. Our members identified 

20 priority projects for wastewater and water supply, by State, that 

are ready to go in 2017. That list amounts to $18.2 billion in need. 

Our country prospered and thrived, thanks to the investments 

that were made in water infrastructure 75 to 100 years ago. Some 

of the most significant of those have occurred since the passage of 

the Clean Water and Safe Drinking Water Acts. Federal, State, 

and local partnerships helped make those investments successful, 

and we need to continue to make investments that are critical to 

the upkeep of those initial investments. Federal funding, using portions of the EPA’s State and Tribal Assistance Grants, which make 

up the Clean Water and Drinking Water State Revolving Loan 

Funds, are critical to those investments. 

The revolving nature of those loan programs and States’ efforts 

to maximize the Federal capitalization grants ensure a continuing 

return on investment. The successful history of national water and 

wastewater programs, however, is overshadowed by the enormous 

and extensive need. Estimates range from $384 billion through 

2030 for our drinking water infrastructure, and $271 billion 

through 2022 for wastewater infrastructure needs. 

Our distressed urban areas, small communities, and rural communities are particularly pressed to make the needed water infrastructure investments. Many of these communities find it difficult 

to keep up with the numerous increasingly complex Federal requirements due to a small tax base, lack of adequate financing options, management skills, trained personnel, and systems to manage environmental requirements. 

ECOS continues to raise the importance of efficient, affordable, 

and timely financial award to these distressed communities. For 

example, the community of Gilbert in Congressman Nolan’s district 

is a mining town that is facing an $8.6 million project to replace 

a old wastewater treatment plant to reduce overflows of raw sewVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
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age. They have a declining population and high unemployment. 

They simply cannot afford a project of that size without assistance. 

Reliable infrastructure is critical to the protection of public 

health and community well-being because lack of clean water is a 

serious health threat. In the southern Minnesota community of St. 

Peter they had high nitrate levels in their groundwater because 

shallow groundwater is the only available water source in that part 

of our State. And in order to protect their community, they needed 

to make the investments to treat for nitrates. They did it to protect 

their children’s health, and the health of their elderly. 

Minnesota has invested in programs to monitor and regulate corrosion and aging water systems, and we need to continue to do that 

at the State level. 

As science has increased the awareness of public health risks, 

and the environmental regulatory system has grown more complex, 

there are disagreements over the cost and levels of protection that 

continue to make national headlines. But we must remember our 

foremost obligation: to protect the environment and public health 

through investments in our country’s infrastructure. Thank you 

very much. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Stine. 

Our next witness is Mr. Mike Inamine, who is executive director 

of the Sutter Butte Flood Control Agency. 

Mr. Inamine, you are recognized for 5 minutes. 

Mr. INAMINE. Good morning, Chairman Graves, Ranking Member 

Napolitano, and members of the committee. My name is Mike 

Inamine, and I am executive director of the Sutter Butte Flood 

Control Agency. Thank you for the opportunity to address the committee on this most important timely issue. 

Before beginning my testimony, I would be remiss if I did not acknowledge Congressmen LaMalfa and Garamendi who are not here 

right now. These are two members of the committee who have been 

true partners on these local efforts from the start. But for their efforts, I would be telling a very different story today. 

Sutter Butte Flood Control Agency, or SBFCA, as it is known, 

was formed in 2007 to consolidate the efforts of several agencies 

and communities with flood management responsibilities and implementing locally led flood protection projects. SBFCA is a joint 

powers authority composed of the cities of Biggs, Gridley, Live Oak, 

Yuba City, the counties of Sutter and Butte, Levee Districts 1 and 

9. SBFCA leads the planning and implementation of flood control 

projects in this historic agricultural basin. 

The Sutter-Butte Basin covers 300 square miles along the west 

bank of the Feather River, immediately downstream of Lake 

Oroville. The basin is home to 95,000 residents and encompasses 

$7 billion of damageable assets. The region has sustained numerous floods, including the 1955 levee failure on the Feather River, 

which resulted in the deaths of at least 38 people. 

The goals of the agency are to achieve 200-year level of flood protection for urban communities in the north, and 100-year protection 

or equivalent in the south, in the rural areas. Under State law, 

urban or urbanizing areas cannot be developed without achieving 

a 200-year level of protection—that is twice the FEMA level of protection—thus eliminating opportunities for risky residential develVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
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opment. SBFCA is nearing completion of the $300 million Feather 

River west levee project that provides a 200-year level of protection 

for the northern basin. 

The United States Army Corps of Engineers has traditionally 

been the most important builder of flood projects, as well as the 

most powerful regulator of these same projects. I would like to 

briefly comment on the local relationship of the Corps of Engineers 

under these two important processes. 

Basically, there are two ways for a local agency to get a Federal 

project levee fixed in California: partner with the Corps of Engineers under the Civil Works Program and wait a couple of decades 

or more; the second path is for a local agency to pass a local assessment, often very difficult, then cost-share with the State of California and be consistent with the strategic Central Valley Flood 

Protection Plan, then seek permission from the Federal Government to fix their levee under an article of law called section 408. 

This latter process is also quite slow, taking 3 to 4 years for large 

flood projects. This year, SBFCA will complete the Feather River 

west levee project, which improves about 30 miles of Federal 

project levee, without changing the design or purpose of the project, 

and without spending a dime of Federal money. Yet this permission 

process took 19 months, and is considered light speed, a world’s 

record. 

The Corps has recently improved the civil works planning process. SBFCA was pleased to be one of four pilot projects selected 

from throughout the country to test the 3x3x3 planning process. To 

the Corps’ great credit, the Sutter Basin study was a great success, 

and met all objectives. The Corps delivered. 

However, authorization is only part of the story. The appropriations process takes more Acts of Congress and takes several years, 

never mind construction. In the case of the Feather River west 

levee project, we have already constructed 80 percent of the Federal project with our own money, yet we are struggling to get the 

Federal Government to finish the job. Thus, the successes of the 

planning study, State/local innovative financing, and local initiative 

may be squandered on this traditional appropriations process. 

There are a number of things the Corps can do to improve risk 

reduction, whether performed by local, State, Federal, or even private entities. 

Prioritize work by risk reduction, not who builds the project. Incorporate the successful 3x3x3 process into the 408 permission. We 

are heartened and grateful that Civil Works Director James Dalton 

has already initiated changes, and we hope to see these expanded 

and codified. This is a big deal for local agencies. 

Do not intermingle 408 permission processes with separate civil 

works processes. Otherwise, delays are inevitable. 

Allow local, State, and even private entities to construct civil 

works projects. WRRDA 2014 [Water Resources Reform and Development Act of 2014] includes a provision to advance this concept. 

However, this pilot has not happened to date. 

And finally, proactively consult with the Advisory Council on 

Historic Preservation on issues concerning Native American cultural resources. 

14 

This statement would be incomplete without noting the importance of the single most important flood control feature on the 

Feather River, Oroville Dam. Feather River is the discharge channel of Oroville’s spillway. Dams and levees are a system, and as the 

ongoing crisis at Oroville Dam evolves, it is easy to forget that the 

primary failure mode that will result in loss of life and property is 

not necessarily dam spillway failure, but rather, levee failure. 

Oroville Dam has appropriately captured all of our attention at the 

moment, but we cannot neglect the vulnerability of our levees in 

the system that includes the Oroville Dam. 

Thank you for holding this hearing and your continued attention 

to these important issues. Our lives and livelihoods depend on it. 

Mr. GRAVES OF LOUISIANA. Thank you very much. 

Next witness is Mr. Jonathan Kernion—thank you very much for 

being here—president of Cycle Construction Company. 

Mr. KERNION. Thank you. Chairman Graves, Ranking Member 

Napolitano, Chairman Shuster, and other members of the committee, thank you for inviting me to speak before you today. 

I am Jonathan Kernion, president of Cycle Construction Company, based in Kenner, Louisiana. Our company is a family-operated general construction firm founded in the late 1990s. We focus 

on heavy civil construction, marine construction, coastal restoration, environmental infrastructure, underground utilities, roads, 

bridges, demolition, waste management, and emergency response. 

I testify before you as a member of and representing the Associated 

General Contractors of America. 

I want to add something in this—what I am talking, and I am 

going to plagiarize something I heard from one of our levee district 

heads in—down in South Lafourche. He has been waiting now to 

build the levee for 5 years to get a wetlands permit so he could 

build the levee to save, literally, hundreds of thousands of lives, 

money, property, everything else. And he still hasn’t got a wetlands 

permit. 

And he made a very, very unique reference to that, and he said 

that in 1941 Japan bombed Pearl Harbor. We were not a superpower at the time, but at the time we didn’t have much, you know, 

as far as power. And what he said was, in the 4 years after that, 

we built close to 80,000 aircraft, 1,200 large combat ships, recruited and trained well over 7 million combat-ready troops, and 

we became a superpower of the world. But today, in 2017, he can’t 

get a Federal wetland permit in 5 years to build a levee to save 

lives, which pretty much sums up the story and tells it. 

I will go on from there. In order to build a 21st-century infrastructure, we need to be able to build it some time this century. 

Sadly, that is easier said than done. There are many kinks in the 

chain that can delay construction for years. In my testimony, I try 

to highlight some opportunities to more efficiently deliver water infrastructure projects during the preconstruction and actual construction phases. 

Before construction begins, there are many—too many—Federal 

agency cooks in the environmental review and permitting kitchen. 

They follow laws and regulatory processes that came about independently, laid on top of one another with little or no regard for 

how they fit in the overall process. And even when you get to the 

15 

top of the environmental review ladder, a backyard lawsuit can 

shoot you down to the beginning of the game. 

As such, projects can be delayed years and even decades, waiting 

for environmental reviews and permits to be completed. In my 

home State of Louisiana, we don’t have years to protect and restore 

our environmental sensitive coastline. A football field worth of 

coastline erosion is caused, on average, every hour. It is alarmingly 

ironic that the lengthy environmental permitting and review processes that are intended to protect our coastline could, at least in 

part, lead to its further destruction. 

AGC looks forward to working with this committee to better integrate the Federal environmental review and permitting process, 

building upon the reforms of NEPA and the past transportation reauthorization bills, and curving frivolous environmental lawsuits. 

During construction, contractors face two primary problems: certain and reliable project funding streams, and Federal agency indecision. We do not build our homes from the ground up over a course 

of 30 years. However, we too often build our Nation’s water infrastructure that way. 

While we can point to Federal agencies as a cause for many problems, the buck starts and stops with Congress, literally. Until Congress allows water infrastructure projects to be funded outside the 

whims of the annual appropriation process, where funding comes 

in uncertain dips and drabs, we will continue to face unnecessary 

construction delays. 

One of the greatest challenges contractors face on the Federal 

water infrastructure job site is obtaining decisions from Federal 

agencies. Former President Theodore Roosevelt is credited in saying, ‘‘In any moment of decision, the best thing you can do is the 

right thing, the next best thing is the wrong thing, and the worst 

thing you can do is nothing.’’ 

As with any construction project, unforeseen issues may and will 

emerge. The problem comes with getting the Federal agency to 

make a decision to act or not. Decisions may have to move up the 

chain of command. If the right person or persons are not available, 

the decision sits on their desks. AGC hopes to work with the committee to reduce the links in the chain of the command necessary 

to shorten and obtain timely decisions during construction. 

Thank you again for inviting AGC to testify before the committee 

today. I look forward to answering any questions you may have. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Kernion. 

Our next witness is Ms. Kathy Pape, senior vice president of regulatory policy and business development at American Water. 

Ms. Pape, you are recognized for 5 minutes. 

Ms. PAPE. Thank you, Chairman Graves, Ranking Member 

Napolitano, Chairman Shuster, and members of the committee. My 

name is Kathy Pape. I am senior vice president of regulatory policy 

and business development at American Water, which is the largest 

investor-owned water and wastewater service provider in the 

United States. We provide water and wastewater service to about 

15 million people in 47 States, and that includes 12 military bases, 

as well. 

I appear before you today on behalf of the Bipartisan Policy Center’s Executive Council on Infrastructure. That group’s goal is to 

16 

focus on how private investors can help to fund public projects. We 

have three recommendations for you today. But before I get into 

those three recommendations, I would like to give you a real-life 

example of a private company helping a public project about 110 

miles north of here in Fairview Township, Pennsylvania, in late 

2015. 

Fairview Township decided to sell its wastewater system to 

Pennsylvania American Water. As a result, that township was able 

to pay off all of its sewer debt, was able to reduce property taxes 

by 50 percent, and it was able to refund a $10,000 per-customer 

hookup fee that the township charged. Just one example of many 

that I could give. 

We have three recommendations today, and the first one involves 

where investment goes. And our belief is—and recommendation 

is—that investment should go towards sustainable and compliant 

water and wastewater systems. That means spend Federal money 

wisely. The way the system is set up now, most Federal dollars will 

go toward the most noncompliant systems. There is points given for 

noncompliance. Our belief is that putting money toward a poorly 

run system is like a shot of Botox. It is short term, it won’t erase 

years of abuse, and you will need it again and again and again. 

Dollars should go towards those systems that are capital-efficient 

and that are also cost-transparent. And by that I mean systems 

that charge true cost of service. Many times true cost of service is 

not charged either because there has been an influx of Government 

money, or because Government leaders don’t believe that charging 

true cost of service will help them politically. But a system is not 

sustainable if true cost of service is not charged. 

Our second recommendation goes towards options and alternatives. As somebody said this morning, the Federal Government 

can’t fully fund $1 trillion. But there are many, many private investors who are willing to help do that. We have 56,000 community 

water systems, 19,000 wastewater pipe systems, 14,000 wastewater 

treatment systems, many of which were funded in the 1970s by 

Government grants, and those Government grants aren’t around 

any more. 

So we have our economic vitality being challenged, as well as the 

health of our children and grandchildren. We need to look for new 

ways and break down regulatory burdens. More alternatives, more 

options. 

And finally, the third recommendation is relatively simple, and 

that goes to the Clean Water State Revolving Fund. Private companies are not eligible for funding under the clean water or the 

wastewater part. We can access Drinking Water State Revolving 

Funds, so we would ask that that is one of the ways to help private 

companies help the Government to fund the infrastructure that is 

needed. 

In summary, our recommendations are three: invest wisely, put 

dollars toward those systems that are most compliant, that are sustainable, and have a track record of doing what should be done; 

second, that is break down those regulatory barriers and offer more 

options—many of those barriers have been mentioned this morning; and finally, provide access to the Clean Water State Revolving 

Fund. 

17 

Mr. GRAVES OF LOUISIANA. Thank you, Ms. Pape. I appreciate 

your testimony. 

And our last witness is Mr. Kevin DeGood, who is director of infrastructure policy at the Center for American Progress. 

Mr. DeGood, you are recognized for 5 minutes. 

Mr. DEGOOD. Thank you, Chairman Graves and Ranking Member Napolitano, and members of the committee, for inviting me to 

testify. It is an honor and a privilege to contribute to this committee’s work. 

Water is an essential element of our daily lives and vital to our 

economy. The start of the 115th Congress presents Members with 

the opportunity to review the investments and policies needed to 

move the country forward in the coming years. 

And while the elections on November 8th produced a change in 

leadership in Washington, one thing remains clear: no one walked 

into a voting booth demanding dirtier water, lower wages, and 

higher profits for Wall Street. And yet, weakening the Clean Water 

Act, eliminating Davis-Bacon prevailing wage standards, and pushing high-cost equity capital through public-private partnerships 

will do all of those things. 

Rather than rolling back the environmental progress of recent 

decades, this Congress has a clear mandate to build a stronger, 

cleaner future for our communities by providing direct funding to 

improve water quality and reliability, flood control, and navigation 

in a sustainable way. 

State and local governments, as well as drinking and wastewater 

authorities face enormous infrastructure challenges. Many legacy 

facilities have come to the end of their useful life, requiring major 

rehabilitation or outright replacement. At the same time, population growth, source water pollution, and increasingly extreme 

weather patterns brought about by climate change have added to 

the complexity and cost of providing safe and reliable water and 

protecting against the ravages of flooding, drought, and sea-level 

rise. 

The EPA estimates that the Nation will need approximately $655 

billion to maintain current health and environmental standards. 

The recent winter storms that have lashed northern California 

offer a powerful lesson in how rapid swings from intense drought 

to intense precipitation can overwhelm critical facilities that were 

designed using more stable climactic assumptions. 

More than 180,000 residents in the Oroville region had to be 

evacuated on short notice due to spillway failures. This episode 

highlights the fragility of older facilities, and the essential role that 

water infrastructure plays in supporting public health, safety, and 

economic productivity. 

California is not alone in facing water infrastructure challenges 

from climate change. For example, south Florida must modernize 

a host of facilities to deal with rising seas. For these communities, 

adapting to climate change is an issue of basic economic viability. 

Based on detailed technical work from Swiss Re, a company in the 

reinsurance industry, the Miami-Dade sea level rise task force determined that major improvements would be needed to ‘‘avoid or 

postpone wholesale abandonment due to noninsurability or the 

high cost of premiums.’’ 

18 

The stress that climate change places on the built environment 

will only grow over time. We have a choice: invest and adapt, or 

pay an even higher price down the road. 

In the Cleveland area, the Northeast Ohio Regional Sewer District faces significant challenges meeting Clean Water Act standards. Like many older communities, Cleveland has a combined 

sewer system that, during heavy rains, often discharges untreated 

wastewater into the Cuyahoga River and Lake Erie. On average, 

the district discharges more than 4 billion gallons of untreated sewage each year. In 2011, the district entered into a consent degree 

with the Environmental Protection Agency to make numerous upgrades to their system, including a combination of gray and green 

infrastructure. 

These public agencies responsible for managing the water infrastructure highlighted by these examples share one key characteristic. They don’t need another credit card from Washington or 

to saddle taxpayers with expensive private equity through publicprivate partnerships. What these jurisdictions need is a strong Federal partner ready to provide direct funding. 

Proponents of public-private partnerships often state that there 

are billions of dollars of capital waiting on the sidelines. Implicit 

in this statement is that water agencies and other project sponsors 

face a lack of liquidity. This is simply not the case. Demand for 

public debt in the U.S. is robust. Moreover, the favorable tax treatment afforded to municipal bond investors means the public sector 

is able to secure municipal financing that is often three to five 

times cheaper than equity capital. 

Today the public sector has access to municipal financing, as well 

as Federal credit facilities like WIFIA and federally supported 

State revolving funds at historically low rates. Simply stated, for 

many cities and water utilities, access to affordable credit is not 

the binding constraint. Instead, there is a shortage—the shortage 

of local revenues to support new project debts. 

Many communities do not take full advantage of their capacity 

to generate additional revenue through taxes and user fees. However, even when they do, there are real limits on the total additional revenue they can reasonably generate, which often falls 

short of overall needs. 

Increased Federal funding is needed to grow our economy, ensure 

timely compliance with water quality mandates, as well as to deal 

with changes presented by climate change. These resources should 

be used to leverage additional State and local dollars where possible, and to target those communities facing the greatest need. 

Additionally, Federal funds should focus on those categories of 

projects that, all too often, take a back seat to traditional gray infrastructure, including efficiency upgrades, watershed restoration, 

and nonpoint source pollution mitigation. 

Thank you again for the opportunity to address this committee. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. DeGood. I appreciate 

your testimony. We are going to go ahead and roll into questions, 

and I am going to recognize myself for 5 minutes. 

Mr. Ellig, when I was reading your testimony last night I was 

really impressed with the thought process, and that you talked 

about appropriate metrics on regulations in ensuring that regulaVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
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tions are truly focused upon outcomes that are in the best interest 

of the American public. 

Just a few months ago, or a few weeks ago, we had bipartisan 

legislation that was included into the Regulatory Accountability 

Act, a bill that we had introduced last year called PROVE IT [Providing Retrospective Observations Validating Economics and Increasing Transparency]. And what that does is it requires that Federal agencies come back 5 years after a regulation has been finalized to collect actual compliance information from stakeholders. 

Not predicting, but actually collecting real information, doing a 

look back, determining the impact of—the true impact of those regulations, and we were shocked to find that there was little in—required of agencies to actually go back and true-up their cost estimates on—in terms of the cost of compliance with regulations. 

Do you have specific examples of where you have seen regulations, or the regulatory process, improperly applied that you could 

say? 

Mr. ELLIG. Well, I think some of the types of problems like that 

that I have seen, and that my colleagues at the Mercatus Center 

have seen in their research, involve barriers that maybe prevent 

better or more intensive use of some of the existing infrastructure. 

For example, several of my colleagues have looked into the issue 

of supersonic flight and found that one of the biggest barriers to 

supersonic flight in the United States is it is banned in the Continental United States. And this was because of a legitimate concern 

about noise, about sonic booms. But with advances in materials, 

advances in engineering, it may very well be possible to design airplanes—probably not as big as the Concorde—but design airplanes 

that can actually travel supersonic speeds while meeting a reasonable noise standard that protects the public. And that is the difference between focusing on outcomes versus just focusing on intentions. 

If we really want a regulation that focuses on outcomes, then 

have a noise standard that supersonic air transport needs to meet. 

Don’t ban it, entirely. But those are the kind of barriers to innovation that we get when we just, you know, focus more on the process—— 

Mr. GRAVES OF LOUISIANA. Sure. 

Mr. ELLIG [continuing]. Rather than getting results. 

Mr. GRAVES OF LOUISIANA. Yes, thank you. And I think—I would 

love for you to give a clinic to Federal regulatory agencies to focus 

on outcomes and true interest to the American public. 

Mr. Inamine, I want to ask two questions. Number one, you 

talked about the 408 process. And certainly that has been something that I think Ranking Member Napolitano and I have both 

heard a lot of concerns about, just predictability and timeframes 

associated with that review process. While certainly it is important 

to ensure that we understand the impact of any project to Federal 

infrastructure, Federal water resource infrastructure, can you talk 

about the timeline of—and I know you mentioned 19 months, lightning speed, but the timeline of that decision, and what would have 

happened if it was approved faster? 

Mr. INAMINE. So for that specific incident—I say 19 months. It 

actually took much longer. And I want to point out—this is not a 

20 

hit piece on the Corps of Engineers. They are a really competent, 

well-meaning, smart people, people that are working on this 408 

process. I think they are bound up in a very stovepiped organization, and it makes it very difficult to perform, because the outcome 

of this, as noted by a previous speaker, is public safety. It is very 

important. Most people are generally pointed in that direction. 

Now, with regard to 19 months, what had to happen was the 

Corps of Engineers, in order to set that world’s record of a very fast 

408 process, they had to split the project up into two pieces. We 

had a levee at the time, just prior to construction, that was suffering some internal erosion. We just found evidence of that just a 

year prior. It is the site of the historic 1955—very dangerous site. 

It was recognized as the highest priority, highest risk levee on that 

system. 

And so, staff—to their credit, Corps staff, to their credit—split 

the project into two pieces. But under the normal process—— 

Mr. GRAVES OF LOUISIANA. I have got 25 seconds left. 

Mr. INAMINE [continuing]. We might still be waiting for that 

project to resolve. 

Mr. GRAVES OF LOUISIANA. Last, very quickly, you are a non-Federal sponsor with a project with the Corps of Engineers. Can you 

just tell me the percentage of cost that you, implementing the 

project on your own, as opposed to doing it with the Federal Government—you compare those two? 

Mr. INAMINE. So we have—so we prepared—so we were completing a locally—State of California and locally funded project. It 

encompasses the vast majority of the parallel Federal project. And 

so, our costs have been roughly half of what the Federal cost estimate is to do it under the normal process. 

Mr. GRAVES OF LOUISIANA. Thank you very much. I recognize 

Ranking Member Napolitano for 5 minutes. 

Mrs. NAPOLITANO. Thank you all for your testimony today. And 

as I stated in the opening statement, my communities often approach me about the need for increased Federal funding. That is 

why I am conflicted by the statements of President Trump. One 

hand, he called for tripling the amount of funding the Clean Water 

and Drinking Water State Revolving Fund. We call that a win. On 

the other hand, the forthcoming infrastructure proposal is reportedly to focus solely on increased use of private financing to close 

our Nation’s infrastructure gap. It won’t work for many of my communities. 

Most recently we learned the President plans to cut the funding 

for EPA by close to 30 percent. It would have a devastating impact 

on the ability of my State and other State communities and communities to address the water quality challenges. 

Starting with the State revolving fund authority, Ranking Member DeFazio and I are planning to reintroduce legislation to finally 

reauthorize clean water SRF. 

To the panel, all of you, yes or no. Clean Water State Revolving 

Fund program is an important tool to address local water challenges. And would you urge this committee to authorize—reauthorize the program? Yes or no? 

Mr. ELLIG. I would say yes and no, and use private capital when 

you can get it. 

21 

Mr. MCCARTHY. I would encourage it be reauthorized. Again, the 

revolving loan fund provides that mechanism for financing for municipalities that sometimes just is not there, otherwise. 

Mr. STINE. On behalf of all States, we have several resolutions 

at ECOS that would say yes. 

Mrs. NAPOLITANO. Thank you. 

Mr. INAMINE. I will abstain, as the flood guy. 

[Laughter.] 

Mr. KERNION. I tend to agree with—that use a little bit of 

both—— 

Mrs. NAPOLITANO. When necessary. 

Mr. KERNION. Yes, ma’am. 

Ms. PAPE. I would say yes, and certainly give access to private 

companies, as well, and marry it up with private funding, as well. 

Mr. DEGOOD. We strongly support the ranking member’s proposal to reauthorize the SRF and to expand to $4 billion a year. 

Mrs. NAPOLITANO. Thank you. Many of you directly utilize programs of—or funding provided through the EPA. What would be 

the impact of a 30-percent cut in these programs to the ability to 

meet your local needs? 

Mr.—let’s see, Mr. Stine? 

Mr. STINE. Thank you, Mr. Chair, Mrs. Napolitano. The States 

have been working with the EPA and with OMB in the last 3 

weeks to understand the magnitude of the cuts. At this point we 

have not seen the actual programmatic budget line items that are 

proposed. 

However, a 30-percent reduction in the State and Tribal Assistance Grants, which include a variety of sources of revenue that 

States rely on for implementation of our basic water and air protection programs, as well as brownfield and superfund sites, would cut 

across approximately 15 to 25 percent of most State programs. 

Mrs. NAPOLITANO. Thank you. Last week, Mr. Stine, the Environmental Council of the States submitted a letter to Mr. Trump 

and the administration on proposed cuts, which I ask unanimous 

consent to include in the record. 

Mr. GRAVES OF LOUISIANA. Without objection. 

[The information follows:] 

22 


Insert offset folio 7 here 24656.007
23 


Insert offset folio 8 here 24656.008
24 

Mrs. NAPOLITANO. In this letter you state the cuts to EPA budget 

‘‘will have profound impacts on States’ ability to implement the 

core environmental programs as expected by our citizens,’’ including clean water programs and State permitting programs. Can you 

elaborate a little more? 

Mr. STINE. Mr. Chairman, Mrs. Napolitano, yes. That is a statement that builds on my previous statement, which is States use the 

funds to leverage existing programs at the State level. For example, our clean water and drinking water revolving loan programs 

are matched in the State of Minnesota by capitalized bonds that 

the State issues to leverage the Federal dollars. So that would be 

one specific impact in my State. 

But when you look at how States fund their existing environmental protection programs, whether it is air, land, or water, all 

of the States utilize Federal funds across a suite of activities. It is 

too soon to say what the direct impacts would be, but they would 

be, as I stated in the letter, profound. 

Mrs. NAPOLITANO. To Mayor McCarthy, while not a direct focus 

of the hearing, I too support the EPA’s brownfield program. That 

is why I am concerned to read the President may propose to eliminate all Federal funding for brownfield. Is that a proposal you 

would support? 

Mr. MCCARTHY. No. I would encourage, you know, Congress represents the State level to look at those options, to remediate 

brownfields, to do conversions that bring them back as productive 

pieces of real estate. 

Schenectady, my testimony reflects—the testimony submitted reflects an old brownfield site, which was the American Locomotive 

Works in the city of Schenectady. It sat there for 50 years. It was 

abandoned, underutilized, really an embarrassing piece of real estate. Everybody was afraid that it was beyond salvage. 

When we actually got in and worked through in a systematic 

process, the remediation was not that—or the problems weren’t 

that bad. We were able to put there—now there is a—we just 

opened a new casino, which is a $300 million project. We have underway a $150 million mixed-use housing project going immediately adjacent to the Mohawk River. 

And so it shows that, again, working together, we are able to 

take that site that people had really ignored, and make it really 

an asset, not only for Schenectady, but the region. 

Mrs. NAPOLITANO. Congratulations, sir. Thank you, Mr. Chair. 

Mr. GRAVES OF LOUISIANA. Thank you. We are going to go to the 

chairman of the full committee, Mr. Shuster, for 5 minutes. 

Mr. SHUSTER. Thank you, Mr. Chairman. 

Ms. Pape, I appreciate your testimony. Besides upsetting the 

Botox world—— 

[Laughter.] 

Mr. SHUSTER [continuing]. It was fantastic, fantastic testimony, 

and I think a great example, too. 

When I talked earlier about private-sector dollars, I think the 

water systems, wastewater, clean water, is—this is an option for 

us. And only 2 percent—I think was your testimony, you said—of 

water systems are operated by companies like yours. Do you see 

25 

that growing? Do you see people coming to you more and more, 

saying we need to use the private-sector solution? 

Ms. PAPE. Sir, we have certainly seen it more and more as municipal governments, especially, have dealt primarily with underfunded pension issues. 

Mr. SHUSTER. Right. 

Ms. PAPE. They have looked around and just tried to decide what 

assets can we sell. Scranton, Pennsylvania, is one that we recently 

acquired at the end of 2016. 

Mr. SHUSTER. And you always buy them? Do you lease them, 

or—— 

Ms. PAPE. We always buy. 

Mr. SHUSTER. Always buy. 

Ms. PAPE. And I would like to explain one of the reasons why, 

because it goes to the affordability question. One of the methods we 

have in Pennsylvania is that we can spread the cost, the expenses 

and the capital cost of our assets, over our large base of customers, 

which is 700,000 in Pennsylvania. So we can use that law when we 

acquire assets. We couldn’t use it if we leased. 

Mr. SHUSTER. And your rates, when they go up, do you do that 

by yourself, or you have to consult with somebody to—— 

Ms. PAPE. The rates have to go through the Public Utility Commission—— 

Mr. SHUSTER. Right. 

Ms. PAPE [continuing]. Through a long 8-, 9-, 10-month process. 

Again—— 

Mr. SHUSTER. So there is protection for the citizens if you—somebody saying, ‘‘Oh, that is a private company, they are going to jack 

our rates up.’’ Because one of the biggest challenges I face in my 

district, a rural district, a high senior population, incomes declining, and half the district flows into the Susquehanna, which is the 

Chesapeake water—and which causes us a lot of problems with 

water. 

So again—and I have many, many water systems, old systems 

that, you know, we have tried to push them this way. But it is a 

challenge to get them to consider this, because they are afraid they 

are going to give up their water, and not have any kind of control 

over it. So I appreciate what you are doing. And I would like to see 

more examples, because I have seen the—many examples where 

you are rebuilding their systems, and their rates have not gone 

through the roofs. In fact, some cases they stay relatively stable, 

so—— 

Ms. PAPE. We do have a customer assistance program also for 

people who cannot pay the rates. 

Mr. SHUSTER. Thank you. 

Mr. Ellig, have you seen any examples of good governance in— 

when it comes to these regulations, in either the U.S. Government 

or in foreign governments that you can point to to say this is how 

it should run, this is how we see it, so we can use it as examples 

to demonstrate to other agencies that there are cases where this 

can be done? 

Mr. ELLIG. Yes, let me highlight one example. One of the things 

that I have spent a lot of time looking at is how well Federal regulatory agencies account for costs. And typically, what they do when 

26 

they are issuing regulations, most of the agencies that do a good 

job, they are still only counting compliance expenditures as a measure of cost, and not looking at broader costs to society. And some 

of those costs have been mentioned here. In general, agencies are 

not good at taking account of the costs that arise when regulations 

make people wait for stuff. 

Now I am going to give you the good example. The good example 

is, the U.S. Department of Transportation is actually better at this 

than most, maybe because it is transportation, and they realize 

that waiting time and transit time are important. And so, I will 

single out USDOT as being pretty good at trying to take into account the effects of making people wait when it is issuing regulations. And they actually have values that they ascribe to people’s 

travel time and waiting time. So that is a good practice that a lot 

of other agencies could learn from. 

Mr. SHUSTER. It is good to hear there are some good examples. 

I would like to continue talking to you in this discussion to try to 

identify more and more of these types of good programs that are 

out there. 

A final question to the mayor. You are under a consent decree. 

One hookup for every four you have to de-hookup. What is—why— 

what is the ratio? Who came up with that, and what is the sense 

in that? I don’t—— 

Mr. MCCARTHY. In New York State we work with the New York 

State Department of Environmental Conservation, which acts as 

the EPA’s representative. And it was the terms that they put forth 

on the city to enter into the decree and move forward. And we want 

to remedy the problem, where we have the outflow, but that is the 

terms that they gave us. 

Mr. SHUSTER. Right, but what is it based on, just their—they just 

pulled it out of the sky and said, ‘‘one to four sounds good to us’’? 

Because it sounds to me like, from your testimony, it causes you 

a lot of harm. 

Mr. MCCARTHY. We have right now a project where—it is an old 

industrial city. We have—a number of partners have come forth 

within the community, and we are doing a new construction housing project, fair market, within the city. We are having trouble getting the approval to be able to hook those houses up within the city 

of Schenectady to handle the wastewater because of the consent 

order. 

And over—we are permitted at 18.5 million gallons a day. Our 

average now is running about 11.8 million last year. And over the 

last 7 or 8 years, we have reduced the flow within our systems by 

about 4 million gallons a day, through dealing with I&I [inflow and 

infiltration] issues. So we have tried to do that. But again, it is 

that regulatory environment that sometimes logic just is not part 

of the discussion. 

Mr. SHUSTER. I went over my time, Mr. Chairman. Thank you 

very much for letting me. 

And you mentioned the important word, because my father keeps 

staring me on the wall. He would always say that people come in 

his office—when you start talking logic, he says that is the greatest 

sin in Washington, DC, is to think logically. So I think all of you 

are sinners at the table today. 

27 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. We are 

going to go to the gentlewoman from Illinois, Mrs. Bustos, for 5 

minutes. 

Mrs. BUSTOS. Thank you, Chairman Graves and Ranking Member Napolitano. I appreciate you holding this hearing. And I also 

want to thank all of our witnesses for being here today. 

In Illinois—I represent the northwestern region of Illinois—we 

have a real problem. Our aging water infrastructure is inefficient 

and can even put public health at risk. On top of that, we know 

that our fix-as-fail approach to locks and dams puts our growers 

and manufacturers, as well as the navigation industry, in a guessing game of whether they will be able to deliver to consumers on 

time. So, simply unacceptable. 

When we invest in our water infrastructure we create good-paying jobs, protect our public health, and help get goods to market 

more efficiently. There is no reason we shouldn’t work together to 

make sure our country’s water infrastructure programs work for 

users and help address the massive backlog many of our communities face. 

So, again, my district, northwestern Illinois, live along the Mississippi River. The Illinois River runs through the southern part of 

my congressional district. So locks and dams are absolutely critical. 

So when I think of the water infrastructure, certainly I also think 

of water lines and the Clean Water Act. But in my district we also, 

as I said, think about navigation. 

So, for the panel, is anyone here prepared to discuss the navigation infrastructure on our rivers? And just wondering if that is 

something that any of our panelists would care to address. And 

that can be addressed to any one of you. Anybody want to volunteer for that? 

Mr. DEGOOD. I would go ahead and just say that I think, as part 

of a broader infrastructure package, that inland navigation has to 

be a part of that. And we support efforts to try and take both the 

Harbor Maintenance Trust Fund and Inland Waterways Trust 

Fund off budget, so that the full amount of revenue that is paid 

in by users through excise taxes on barge fuel and through the 

goods that are moved through our ports can be put to good use constructing the kinds of projects and making sure that the number 

of days that locks and dams are out of service due to maintenance 

and delays goes down. 

Mr. STINE. Mr. Chairman, I am just going to speak to one project 

that I am familiar with in my role on the Great Lakes Commission, 

which is the replacement of the Soo locks, which is a critical piece 

of infrastructure, vital to the economy of the Great Lakes. Our harbor of Duluth and Superior in Minnesota/Wisconsin is a key piece 

of the national infrastructure, creates a vulnerability in our processing of goods and services across the Great Lakes, St. Lawrence 

Seaway, and that is one critical project that the Great Lakes Commission has passed resolutions supporting and has spoken up clearly on. 

So that is in a different hat that I wear on a different day. I will 

be back next week on behalf of that organization. 

Mrs. BUSTOS. Anybody else have anything to add on that topic? 

[No response.] 

28 

Mrs. BUSTOS. All right. So this one I will address, Mr. Stine, to 

you. And then also, Mayor McCarthy. You guys had mentioned the 

State revolving funds in your testimony. It has been really important to my congressional district. The Clean Water State Revolving 

Loan Fund has been an invaluable resource in our area. We have 

got—including an $11 million sewer improvement project that 

wrapped up last year in a town called Rock Island, Illinois. 

Also, in a community called Galesburg, in my congressional district, incredibly important to replace about 2,000 solid lead lines 

that are going to people’s homes from the water main. And so very 

important. 

Wondering if you have thoughts about the demand for these revolving loans, and whether the demand is outpacing what Congress 

provides annually in appropriations for that fund. 

Mr. STINE. Mr. Chair, Mrs. Bustos, yes, the demand far outstrips 

the available funding. States apply various approaches to leverage 

those dollars through their own resources. But the need is somewhere in the area of a couple hundred billion dollars over the next 

5 years. Just for drinking water systems alone, it is probably $300 

billion over the next 15 years. And as for clean water and wastewater infrastructure, the appropriations through the revolving 

funds are a significant source of revenue for States and local communities to meet those needs. 

Mrs. BUSTOS. Mayor McCarthy? 

Mr. MCCARTHY. Thank you. It is really critical for a lot of municipalities, and also smaller levels of Government, where the revolving loan funds—you know, New York you also have a set of expertise from that side, where they are doing unique projects that 

are in water and wastewater, so that they add a little bit of value 

to the community. And the no-interest and low-interest loans are, 

again, sometimes deal-makers in terms of allowing communities to 

go ahead with the projects, to meet the regulatory requirements 

that we are all dealing with. 

So I would encourage Members to look at funding those at levels 

that provide adequate resources for the local governments. 

Mrs. BUSTOS. All right, thank you. And I have used up my time. 

I yield back, thank you. 

Mr. GRAVES OF LOUISIANA. Thank you. And I am going to turn 

to the former chairman of this subcommittee and mentor, Mr. 

Gibbs from Ohio, for 5 minutes. 

Mr. GIBBS. Thank you, and I want to congratulate Chairman 

Graves on your new position. I look forward to working with you 

in the majority. 

Anyways, Mr. Ellig, it is really refreshing to hear somebody talking about challenges we have with regulations. And your comment 

about the—some of our agencies using research to support their 

agenda, and then also using the media or social media—I can think 

of one example, and that was the United States rule that was 

pushed through I think was biased. Would you agree that that was 

an example of research that—to drive an agenda, a political agenda? And the—— 

Mr. ELLIG. Oh, yes. I am aware of that example, and it was highly controversial. I think, from my perspective, the bigger problem 

is when you have agencies that are supposed to be doing objective 

29 

analysis, and then that gets turned into something that is supposed to be used for advocacy, rather than something that is supposed to inform decisions. 

Mr. GIBBS. Mayor McCarthy, thank you for referencing my integrated planning permitting bill. I really appreciate the support 

from the Conference of Mayors. 

Can you elaborate a little bit on your consent decrees? You know, 

this permitting planning bill, you know, it is really to develop a 

long-term plan and set benchmarks on goals. But when you are on 

a consent decree and under the restrictions of the permit, how is 

that—on hindering—is it—on the cost side, what would this bill— 

how would it really help you on the cost side? 

Mr. MCCARTHY. Our—some quick background on the overflow 

that we are dealing with is a valve in the city of Schenectady that 

we—— 

Mr. SHUSTER. Can you pull the mic closer? Pull the mic closer 

to you a little bit—— 

Mr. MCCARTHY. I am sorry. It is a valve in the city of Schenectady that we would open two or three times a year for hours during 

the day to handle high-water events. And that is the decree that 

we had to enter into. It is, you know, $14 million that we are addressing to remediate that. 

We want to stop the outflow. But again, the cost and then the 

criteria where you have the 4-to-1 offset, it is very frustrating. We 

are taking an old, industrial city, we have got a lot of good things 

happening, we are seeing new investment, we are seeing people 

view the community differently. It is the birthplace of GE celebrating its 125th anniversary as a company. They are looking at 

opportunities within the community. And the 4-to-1 is, again, extremely restrictive. 

And where we have met all the other criteria—we have taken— 

we are permitted at 18.5 million gallons a day. We are only running about 11.8 million. And the last 4 years, through management, we are reducing the I&I inflow into the system. We have reduced that by about 4 million gallons a day. And if I would be able 

to—— 

Mr. GIBBS. Yes, but having a longer framework than 5 years— 

the permit is 5 years, I believe, that—you know, set benchmarks 

that reach that. 

Are you under—being fined in this consent decree, or not? 

Mr. MCCARTHY. We have not—well, there is always the threat of 

being fined. But we are, again, working in a manner where we 

have entered into the consent decree. We have negotiated with it, 

and trying to remediate the issue and again move forward so it is 

in everybody’s best interest, even though the terms are frustrating 

to try and manage a city on a daily basis. 

Mr. GIBBS. Mr. DeGood, you brought up Cleveland and their 

challenges of having—I am from Ohio. The integrated planning 

permitting bill, how would that—in your instance, you brought up 

Cleveland. Would that be a benefit to them? Can you expound on 

that? 

Mr. DEGOOD. Well, I think it is important to note that, in the 

Cleveland example, they signed on to that consent decree in 2011. 

And the program of projects that they put forward that the EPA 

30 

agreed to includes a combination of gray and green infrastructure. 

So I think we are supportive, broadly, of the concept of integrated 

planning. But it is not necessary for that legislation to be passed 

for people to be able to use green infrastructure as part of a consent decree. 

I think our only concern with the legislation as is currently drafted is that some of the language comes precariously close to allowing affordability to be a mechanism by which we actually are reducing or weakening the limitations that we would normally put 

into our NPDES permitting processes. And I think, for us, that is 

probably a break point. 

Mr. GIBBS. My intent is really for the EPA and the local entities, 

districts to work together to come up with a long-term solution. Because the problem you have, they can’t charge the ratepayers 

enough, they can’t always do everything at once, and give them 

that flexibility. But if you—a long, multiyear, long-term plan and 

set benchmarks, and you can get there. 

Mr. DEGOOD. Sure. 

Mr. GIBBS. I think that—— 

Mr. DEGOOD. In the Cleveland example, they signed a 25-year 

agreement. So I think, you know, the EPA was cognizant of the 

fact that Cleveland had financial restrictions, and that the level of 

improvements that they were asking for were substantial enough 

that they went ahead and gave them what, at the time, was one 

of the longest consent decree implementation windows that had 

been ever given. So I think the EPA is aware of those challenges 

that local districts face. 

Mr. GIBBS. Thank you, Chairman. Time is up. 

Mr. GRAVES OF LOUISIANA. Thank you. I recognize Mrs. Lawrence for 5 minutes. 

Mrs. LAWRENCE. Thank you, Chairman and Ranking Member, for 

this opportunity. Thank you all so much, panel. 

I am—I represent the—a part of Michigan. And so the Flint 

water situation was something that was extremely emotional, and 

something that has reconfirmed my commitment to clean water in 

America, and protecting our families and our health through water. 

Months after warning signs, the water in Flint, Michigan, as you 

know, did not meet the levels of—in lead that would be healthy for 

children in a city that depended on that. A man-made disaster is 

a tragic outcome. 

We have found that in September 2016 the U.S. GAO released 

its study of water infrastructure for selected mid-sized and large 

cities with declining population, and it was alarming, what they 

found. They found many of them have lost a substantial percent of 

their population, as you mentioned, Mayor. And, because of that, 

they are seeing declining revenues, which makes it difficult to address the infrastructure needs. And in our investigation of Flint we 

found the finance and revenue of maintaining a water system was 

part of the equation that was used to make a very unfortunate decision. 

So my question is to you, Mayor McCarthy. In your written statement you talk about how your city is not atypical. It is older, it is 

industrial. I know a thing or two about that, being a mayor, myself. 

31 

Can you talk about the water and infrastructure challenges in cities? Because you hear, as—U.S. Conference of Mayors. 

And if any other member wants to talk about that, because it is 

important that, as we move forward with the matches that we are 

talking about, that is the challenge—that we are very clear on investment in water infrastructure is not a luxury or a pretty thing, 

it is a necessity. 

So, Mayor, please. 

Mr. MCCARTHY. Thank you. The water in wastewater systems 

are key, in terms of basic quality of life, and then also, trying to 

rejuvenate and reinvigorate older communities. You want to be 

able to attract people there, you want to attract business, and you 

have to have those systems in place. We want them to maintain 

and be able to produce the highest quality water, treat wastewater. 

But the numbers, to be able to finance those systems, are a lot 

of times a burden on the community, and it comes a point where 

businesses, families, individuals choose to live in other places, as 

opposed to the older urban areas that you have some of the infrastructure in place that really just needs to be upgraded and modernized. 

Mrs. LAWRENCE. So I know in Flint—and you are seeing it, too— 

is economics. It is housing, and it is also—builds a community or— 

but most of all, it is a health component. Some people say quality 

of life. It is a necessity. 

Mr. MCCARTHY. Absolutely. 

Mrs. LAWRENCE. OK. Anyone else want to comment on that? 

[No response.] 

Mrs. LAWRENCE. Mr. DeGood, in your written statement you talk 

about the need for sound regulations such as the Clean Water Act, 

which restores and maintain the chemical and physical integrity. 

Are the regulations the reason we have a crisis in our water infrastructure in America today? 

Mr. DEGOOD. I think the answer to that is a resounding no. I 

think we have a crisis of underinvestment that is, in some cases, 

a shared burden for locals in the Federal Government. 

There are certainly places where we can point to where water 

services are underpriced. And I think, rather than trying to point 

to the regulations that we ask EPA and our State partners to enforce as being the problem, what we need to do is put some additional money on the table. 

I think what the construction grants program—from the original 

1972 Clean Water Act—demonstrates for us is that when the Federal Government shows up with resources, often times local elected 

officials find the courage to raise money themselves. That is not always the case. There are certainly communities that are so economically challenged that you need to have different matching requirements and an understanding and a sensitivity to that. 

But those initial construction grants were, for the most part, a 

55/45 Federal/local match. So our local communities stepped up 

and did what was asked of them. But I think, when you are faced 

with a bill and somebody is telling you it is all on you, go ahead 

and borrow the money, go ahead and do a P3, that is really not the 

answer. 

32 

Mrs. LAWRENCE. Thank you. I want to close with this. In America we are going to start seeing water affordability being an issue 

in our cities, because we have to fund them, we have to provide 

safe, clean water. And when cities step up to make those investments, they have to get the revenue. And water affordability is 

going to be a issue we are going to talk about. 

Thank you. I will yield back. 

Mr. GRAVES OF LOUISIANA. Thank you. Next is the gentleman 

from Pennsylvania, Mr. Smucker. Five minutes. 

Mr. SMUCKER. Thank you, Mr. Chairman. As a member of the 

Transportation and Infrastructure Committee, but not a member of 

this subcommittee, I appreciate the opportunity to be here this 

morning. Thank you for allowing me to do that. 

I specifically want to highlight an issue that is important in the 

district that I represent in Pennsylvania, the Chesapeake Bay watershed. 

Mr. Ellig, this was brought up earlier by Mr. Gibbs. And I appreciated, as well, your testimony in regards to the—some of the problems with our regulatory process which produces undesirable results at times. And specifically for our community, the interpretation of the EPA in regards to wOTUS, Waters of the U.S., and the 

extension of what is considered waters of the U.S., is a major problem. 

This was also briefly mentioned by Mr. Kernion. I was a contractor, as well, and so I understand the impact on development 

projects of interpretation of that law. 

But the Pennsylvania Farm Bureau president, Rick Ebert, noted 

after President Trump’s Executive order that virtually all of Pennsylvania’s land mass can be claimed by EPA officials as regulated 

water, subjecting land owners and communities to extreme and 

needless Federal permitting requirements and land use restrictions. 

These farming groups have also claimed that if they were to dig 

a drainage ditch on their property, it would potentially become a 

United States waterway under the WOTUS provisions. This is an 

example that I think—some of what you were describing—of an 

overreach of regulations. 

So, Mr. Ellig, I just—you know, how is it, if we have a regulation 

like that in place, how could groups go about trying to find a better 

balance between the goal that we want to achieve and that overreach? 

Mr. ELLIG. Well, yes. I understand why this is a difficulty for development. Also, for farmers in Lancaster County. I think we have 

to go back to basics and insist that our discussions of regulation 

be based on actual fact, and investigation of whether regulations 

really are likely to create the intended benefits, and whether they 

actually do, after they have been implemented, create the intended 

benefits. 

Because, unfortunately, an awful lot of the debate over regulation, particularly environmental regulation, has become kind of a 

holy war, where everybody argues on the basis of their intentions, 

rather than what actually happens as a result of the regulation. 

Mr. SMUCKER. Thank you—— 

33 

Mr. ELLIG. So I would say, first things first, let’s get back to factual investigation of what the actual likely results and the actual—— 

Mr. SMUCKER. Thank you—— 

Mr. ELLIG [continuing]. Results of regulation—— 

Mr. SMUCKER [continuing]. Thank you, and completely agree. 

One of the other points you made, which I thought was very good, 

you said regulatory agents often act as if enforcement is more important than compliance or achievement of regulatory outcomes. 

And just recently, farmers in the Chesapeake Bay watershed did 

a voluntary study and highlighted some of the actions that have already been taken, for which they are not recognized. So, for instance, 475,800 acres of nutrient manure management; 97,562 

acres of enhanced nutrient management; 2,164 animal waste storage units; 2,106 barnyard runoff control systems. You can go on 

and on. 

And the point I want to make is what farmers in my area want 

to see is more collaboration and less enforcement. Why can we not 

see that occurring by some of our agencies? 

Mr. ELLIG. Well, you would get that if agencies were rewarded— 

individual agencies were rewarded for actually achieving results, 

rather than for achieving outputs or activities that are measurable—that may or may not produce results. 

Mr. SMUCKER. And again, additional point to make is farmers, 

builders, contractors, the municipalities in my area want to see 

clean water. They all enjoy clean waters on their farms. They want 

the Chesapeake to be clean. But again, they want to see more of 

that collaboration, which, I think, is sorely missing. 

So I—again, I appreciate your comments. I know we have taken 

the first step in this regard with the President’s Executive order. 

And I know that this is of concern to the chairman of this subcommittee, as well, and I look forward to us continuing to work on 

this issue. Thank you. 

Mr. ELLIG. Thank you. 

Mr. GRAVES OF LOUISIANA. Thank you. We are going to go to the 

gentleman from California, Mr. Lowenthal, for 5 minutes. 

Dr. LOWENTHAL. Thank you, Mr. Chair and Ranking Member 

Napolitano. I am honored to join you as a new member of the 

Transportation and Infrastructure Committee, and the Water Resources and Environmental Subcommittee. I look forward to working together to improve the work of the Army Corps, to protect the 

Clean Water Act, and to build upon its successes, and that we craft 

a robust and equitable Water Resources Development Act. I want 

to thank you for convening this hearing, and for the people on the 

panel, for highlighting the importance of water resources and the 

relevant Federal agencies and the role they play in our Nation’s infrastructure. 

First question I have is for Mr. DeGood. Recent reports—and certainly not—we are not clear yet, but they seem to indicate that 

President Trump plans to propose devastating cuts to the EPA’s 

funding and staff levels. Several of its most important programs 

may face elimination all together. Your testimony, and the written 

testimony, highlighted the importance, the enormous importance of 

34 

the EPA to communities across the country, from protecting clean 

water infrastructure to safeguarding public health. 

What do you think that these cuts that we have been at least 

hearing about to EPA would mean for the Federal Government’s efforts to maintain and improve clean water infrastructure? 

Mr. DEGOOD. So I think I would make three points to that question. 

One, we have had a lot of talk already this morning about frustrations that people have—I think often legitimate—with the 

length of permitting processes. I think when you are talking about 

potentially a 30-percent or greater cut to EPA’s budget, you are 

talking about eliminating many of the positions, many of the people 

whose job it is to try to review these applications and to provide 

timely determinations. So, if our goal here is to give people greater 

certainty and to speed those processes up, I don’t see how cutting 

Federal staff and Federal budgets are going to do that. 

But I think, more importantly, we really undermine our longterm productivity and long-term community health. As just one example, the section 106 grants program provides money directly to 

States to allow them to do the very implementation work of things 

like the Clean Water Act, right. This is monitoring and assessing 

water qualities, developing water quality standards, determining 

total maximum daily loads, ensuring compliance, taking enforcement actions. This is really the core of laws like the Clean Water 

Act. We hand off to States to do that work. And when we take 

money away through EPA budget cuts, we take away their ability 

to enforce those laws. 

And the last thing I will note is about the brownfields program. 

These are very productive dollars. And it comes down to a question 

of efficiency, and it comes down to linear infrastructure. If you 

allow a parcel that has been polluted over time through a prior industrial use to sit idle, and you go out and you have to build new 

infrastructure—that is water, that is sewer, that is roads, stop 

lights, all the things that go along with that—to try to attract new 

housing or new commercial development, you are creating additional facilities that you are going to have to try to maintain for 

decades into the future. 

When we remediate parcels that have existing pollution, what we 

are really doing is creating a pathway for future economic development at that site that will generate tax revenue on top of existing 

infrastructure. It is not something we have to go out and build 

new. So we are really cutting off our nose to spite our face when 

we talk about zeroing out the brownfields program. 

Dr. LOWENTHAL. Thank you. Next question I want to clarify 

something that I am not really clear on. 

Mr. Kernion, you brought up the issue of funding for Federal 

water agencies. And we have heard already of the backlog the 

Army Corps has for authorized but unconstructed projects, which— 

where the valuing is estimated at over $56 billion. 

Now you talked about—in your written testimony, especially— 

that environmental review processes have played a major role in 

some of the backlog, or holding up the process. But we also heard 

from the opening statement from Ranking Member DeFazio that 

the Corps budget cannot deal with the backlog. It is not only—or 

35 

it is not really the burdensome regulations that are leading to the 

backlog, but the lack of funding for the Army Corps. 

Could you kind of deal with this relationship and where you see 

this relationship between the funding and also the regulations? 

Mr. KERNION. Personally, I have seen both. And I am just speaking offhand. I have worked for—as a contractor for the Corps of Engineers now for over 30 years. And I have seen quite a bit of the 

both take place. In waiting on funding, I have seen projects shut 

down because they didn’t have funding, where they have actually 

gone to contractors and said, ‘‘Look, in order to keep going, you 

have to finance your project, or stop and take the brunt of it until 

we get more money appropriated for the project.’’ 

I have also seen the environmental things which I alluded to 

when I spoke about before. One of the biggest things that I have 

seen personally it wetlands issues. Now maybe EPA issues in other 

States—of course, where we are, it just seems like it is more wetlands. 

Congressman here talked about diverting water. Every time you 

divert water, it is not opening up another waterway, but, uh-oh, is 

that water going to go to an area that is now going to become a 

wetlands, and it is not dry—it is now dry, but you run water 

through it, it might be wet, and then you can’t use the land again. 

And so, I have seen, actually, both of them. I don’t know if I am 

answering your question right, but that is my personal experience 

with it. 

Dr. LOWENTHAL. Thank you, and I yield back. 

Mr. GRAVES OF LOUISIANA. Thank you. Next we are going to go 

to a gentleman from Illinois, Mr. Davis. 

Mr. DAVIS. Thank you, Chairman Graves. Congratulations. I had 

a quick question for you that—you know, I kind of injured my finger on the chair, scooting my chair in earlier. Do you think the 

Corps could use some investigations money in their account to help 

me get to the bottom of why you have tried a conspiracy in your 

first hearing to attack my finger? I mean this is just outrageous. 

Mr. GRAVES OF LOUISIANA. I think the Corps would love to investigate that. 

Mr. DAVIS. First off, it is great to have Chairman Graves and the 

Water Resources and Environment Subcommittee here, and I appreciate all of the testimony. We are all in the same boat. We all 

want to see infrastructure built in this country. 

Mr. Stine, you mentioned that the Mississippi River starts in 

Minnesota and ends in Louisiana. Well, you know what? It digests 

through Illinois. And our navigation system and the infrastructure 

that it needs to continue to keep our navigation system moving 

from north to south and south to north is right in my district. So 

it is imperative that we see action. 

And that is what we haven’t seen. Twenty years ago I saw which 

plan the Corps was going to use to update the locks and dams in 

the Illinois and Upper Miss systems, and we have seen nothing 

since then, except the plan that they wanted to use. We see no investment. And we have seen, from the last administration, since 

2010, that we have invested nothing in NESP to try and upgrade 

those antiquated systems. So we have got to have the progress in 

36 

the middle of your area and his area to ensure that our products 

get from point A to point B and out into the global marketplace. 

That being said, Mr. Kernion, great to see you again. We met 

last night. One of the things that I proposed in the last WRDA 

[Water Resources Development Act] bill was to require a GAO 

study to study alternative models for management of the Inland 

Waterways Trust Fund, including a possible not-for-profit corporation or Government-owned corporation that would actually put us 

on a path to have a continuous funding source for doing what the 

Corps of Engineers should do, and has done well in the past. That 

is to build infrastructure and design infrastructure. Seems pretty 

simple to me. Seems like sometimes over the last few years they 

may have lost their mission. 

That being said, you are a builder. What would more certainty, 

faster project delivery of navigation projects for someone like you, 

what would that mean to your employees? And what would it mean 

if we had a continuous funding source that industry could utilize 

to actually do what the Corps should be doing, build things? 

Mr. KERNION. Well, I am going to answer it like this. I think the 

Mississippi River, if you look at it, is probably—and you compare 

it to a human body, it is one of the largest arteries, or the largest 

artery in the body. And at that point I believe you have to do everything you can to keep that river flowing, keep it from overflowing, and keep commerce up and down that river, because commerce is as important as anything. 

One of the things talked about is dredging the river deeper to get 

the Panamax ships into the river. If that was done, we would actually get—more commerce going up and down the river would flow, 

and it would be a different way to run, you know, goods through 

that artery. 

At the same time, the river is treacherous and is deadly. I have 

seen the river do some devastating things. I didn’t realize water 

was as dangerous as it could be until I had a levee break years 

ago—I tried to stop it—after a hurricane, and it is brutal, what it 

can do and the damage it can do to people. 

But also, and what you had alluded to last night, was getting the 

projects funded for up there. For us, of course, we are 100 percent 

behind that. We would love to see it happen. The more projects up 

and down the river, we are happy. I was last year’s president of 

Mississippi Valley—Mississippi River Valley’s Associated General 

Contractors, and a lot of the contractors in our district work on 

that river, and they depend on getting the funding to build that infrastructure. 

Mr. DAVIS. Well, a lot of the contractors in my district work on 

that river. And you are absolutely right, we have got to have some 

movement. 

And I don’t have much time left, and I know the chairman, he 

is not going to give me any extra time. So I want to make sure 

you—the witnesses know my opinion. You know, I think a body resembling the inland waterway users board and including other key 

stakeholders like many of you at this table, including Government 

representation, like the Corps of Engineers, would do a much more 

efficient job of identifying a project schedule and making expendiVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
37 

tures to priority projects that have already received approval from 

Congress. 

After all, you guys are the people paying for the projects, right? 

Let’s actually make sure they get done. 

And, with that, I have got about 2 seconds left, and I am going 

to yield it back, Mr. Chairman. 

Mr. GRAVES OF LOUISIANA. That is impressive efficiency. Thank 

you, Mr. Davis. 

With that, we are going to yield to the gentlewoman from Connecticut, Ms. Esty. 

Ms. ESTY. Thank you, Chairman Graves and Ranking Member 

Napolitano. And thank you to the entire panel. Many of us are 

bouncing between committees. I have got all three of mine going 

simultaneously at this hour. 

A couple of quick comments. To Mr. Stine, greetings from my 

husband, former commissioner of DEEP in Connecticut, and thanks 

for the good work ECOS does, in having grown up, in part, in Winona. 

To Mr. Kernion, father and grandfather, both AGC contractors, 

and my grandfather built locks and dams on the Mississippi River. 

So some experience with that. 

To Mr. Inamine, I grew up in northern California, in part. Very 

familiar with the Feather River and challenges there. 

So, to Mr. Ellig, I want you to know that there is support on both 

sides of the aisle for focusing on technology and outcomes. And I 

think it is vitally important, with constrained budgets, having been 

a local town council member, State representative, and now in Congress, we have got to figure out how to be faster and more efficient. 

And I appreciate you flagging time as a real cost. And that is something we really need to focus on, and I think we need to streamline 

our systems and get better outcomes with less time, and free up 

those resources to actually be spent on getting the outcomes. 

I wanted to turn to the issue of brownfields. And I think Mr. 

Katko is going to join me on that. We have legislation we are putting back in in this Congress. We need funding and to really focus 

on the vital importance of that, and rebuilding communities. 

And it is actually related to some of the issues Ms. Pape raised, 

too. If we don’t get the funding in those communities—and I represent Connecticut, I have got cities like Waterbury, Connecticut, 

which has major parcels of land right in the middle of downtown. 

If we don’t rehab those, we are not going to be able to create jobs, 

we are not—we are going to be chewing up farmland elsewhere. So 

it is bad for the ecology of other communities. And, frankly, we are 

not going to have the jobs. 

So I would like, if you could, Mayor, if you can talk a little bit 

about how important brownfields are for revitalization of our communities, and which of the grants that are most important to you. 

Because, again, if we are looking at a 25-percent or anything like 

that kind of cut, we are going to be really challenged in figuring 

out how to work through that backlog on brownfields. 

Mr. MCCARTHY. Thank you. Brownfields, as you point out, they 

are underutilized, they are a negative influence on communities. 

And they have, largely, a proud history. There was something there 

at one time that added value. For whatever reason, it is no longer 

38 

there. And so you have to have the tenacity and the systematic approach to work through whatever the problems may be. 

And a lot of times people will—they think that you can’t solve 

the problem. But you can. And it is—requires the partnership that 

State, local, Federal-level, the private sector to come up, to do the 

evaluation, to look at the opportunities that are there, to create 

real value, and so that the funding from the Federal level is key 

in driving that overall discussion and the partnerships that can 

form if the funding mechanism is in place. 

Ms. ESTY. We would love to cycle back with you on some specific 

proposals we were looking at to include P3s and other ways of 

leveraging those resources, whether it is for parks, which are part 

of creating that quality of life, or repurposed industrial sites, or 

shopping malls, or whatever it may be. We are trying to put some 

urban greenhouses in one of ours to bring food back into the city, 

cap those sites, but then actually repurpose them for use. 

Mr. DeGood, you talked a little bit about that. Can you speak 

both about brownfields and the importance of that, and also return 

a little bit to the importance of leveraging that Federal funding? 

Because I saw it at the local level. If communities don’t have those 

match for water systems, they can’t get the goodwill of local residents to raise the property tax to pay for those projects. 

Mr. DEGOOD. I think that is absolutely right. I think one of the 

hardest things, as an elected official, is when somebody tells you 

that it is your responsibility, and your responsibility alone. And it 

is a hard thing to go out into your community, even if you passionately believe in the value of something like the Clean Water Act 

or the flood control standards that the Army Corps has, even if you 

want to try to engage in redevelopment, if you are saying, ‘‘We are 

on our own here.’’ 

And so, that is why, when we start hearing stories about the 

kinds of budget cuts that this administration is contemplating for 

the Environmental Protection Agency, it is disheartening because 

we know that, ultimately, for an administration that has spent so 

much time talking about jobs, taking these dollars out are actually 

going to do just the opposite. It is going to take the stick out of 

local elected officials’ hands and make them unable to deliver for 

their communities. 

Ms. ESTY. I see my time is expiring, so I am going to yield back 

my 5 seconds. Thank you. 

Mr. GRAVES OF LOUISIANA. Thank you, Ms. Esty. With that we 

are going to turn to the gentleman from New York, Mr. Katko, for 

5 minutes. 

Mr. KATKO. Thank you, Mr. Chairman, and congratulations on 

your chairmanship. I look forward to working on this committee. 

Mr. McCarthy, welcome, and I appreciate your testimony thus 

far. As you may or may not know, I am from upstate New York, 

in Syracuse, and spent a lot of time in Schenectady. And in so 

doing, I led—it led me to the conclusion that Schenectady is very 

much in this same boat of all the upstate New York cities. We have 

lost tremendous amounts of manufacturing and tremendous 

amounts of tax base over the last several decades, and that has led 

to profound infrastructure problems, which I am not quite certain 

39 

that this—we have delved into it with enough detail. That is what 

I want to do for the next few minutes. 

As you may or may not know, in Syracuse we still have—we 

have such a profound problem with our water infrastructure that 

some of the pipes we use in the city of Syracuse are still wooden 

from, like, the late 1800s, early 1900s, which is unbelievable to me. 

Last year we had well over 100 water main breaks in the city of 

Syracuse. And some of the really up-and-coming areas, like Armory 

Square were often peppered with back hoes digging up lines and 

fixing them and water problems, and it just seems, in this day and 

age, that is crazy. 

So, with that as a backdrop, if you could describe for me, you 

know, the state of your water infrastructure, and then I have some 

followup questions from there. 

Mr. MCCARTHY. Schenectady is fortunate for its water supply. 

We get that from the Great Flats aquifer, the recharge—it is the 

Mohawk River. And so we have a high quality, really, low-cost 

source of water. 

Mr. KATKO. Same in Syracuse, yes. 

Mr. MCCARTHY. Again, it is one of the great things about upstate 

New York. And at the same time, as you point out, we have infrastructure that was put in 100 years ago, 125 years ago, sometimes 

longer. And it just has a realistic life span. 

And so, you have to be able to manage those resources. And 

without—you know, you hope that those pipes are going to last another 50 years. The reality is they are not going to. And the ability 

to predict when something happens is unfortunate—it is just that 

element of randomness, so that you are dealing with a major break 

in a water line or sewer line, and it is always occurring at 2 o’clock 

in the morning on a weekend, and you are having to mobilize crews 

that would be normally doing other things. 

But if we can get ahead of that problem, those cities in upstate 

New York—and mirrored across the country—have long, distinguished histories of significant economic outputs, centers of innovation, technology, and you want to have that water and sewer system in place so that we can position the communities for, really, 

that next generation of innovation and evolution of urban life. 

Mr. KATKO. Right. And I totally agree with you. And from an industry standpoint, I can only note that we really have a limitless 

supply of water between Lake Ontario, the Finger Lakes—it is just 

amazing, in upstate New York, that the quality of water that we 

have is consistently some of the best in the country, and we don’t 

have systems to deliver it. 

So how do you, in your mind, assess the adequacy of the funding 

to replace these—to fix these projects? And what would you suggest 

we try to do, from a legislative standpoint? 

Mr. MCCARTHY. In Schenectady, we have largely dealt with it 

ourselves, even though we have had some assistance from the 

State, some assistance from—some Federal money in the funding 

streams. But Schenectady gets referenced continually as having 

one of the highest tax rates, not only in New York State, but in 

the country. And it is because we are paying for those things. And 

it is not only water and sewer, but it is other—roads, school district—other community assets. 

40 

And you get to the point where, even though you are trying to 

keep up and keep ahead of the curve, it creates a negative influence where it, in fact, deters our ability to attract residents, to attract business, to plan the assets of the water and other natural 

resources that exist not only within Schenectady, but in upstate 

New York. 

Mr. KATKO. All right, so how would you—I understand the problem, but how would you fix it? What would you think we need to 

do? 

Mr. MCCARTHY. I would like a funding formula that has participation at all levels, so that you have Federal money, there is State 

money, there is local money. Some of the highway and bridge 

money, it is a good formula, it is 80 percent Federal, 15 percent 

State, and then 5 percent local. 

Mr. KATKO. Well, how about the Clean Water State Revolving 

Fund? Is that a fund you can access? And, if you can, is that adequate for the job? 

Mr. MCCARTHY. We have found it adequate, because, again, we 

have had low cost for our water source. I am not sure that is 

shared by other communities across the country, and I don’t have 

some of that information directly available, but we will have it forwarded to you at the conclusion of today’s hearing. 

Mr. KATKO. I appreciate it. Thank you. I yield back my time. 

Thank you, Mr. Chairman. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Katko. And, with 

that, we are going to recognize the gentleman from California, Mr. 

Garamendi, for 5 minutes. 

Mr. GARAMENDI. Chairman Graves, thank you—congratulations—Ranking Member Napolitano, and what is left of the committee. 

Just a couple of comments before I ask a question. Mike Inamine 

is here. He faced a most difficult situation over the last month, 

when the floods occurred in California when the Oroville Dam spillway failed and—releasing an extraordinary amount of water down 

the Feather River through his responsible area on the west side of 

the Feather River and the community of Yuba City, causing—the 

failure of the spillway caused a massive evacuation of over—almost 

200,000 people, of which about 100,000 of those were in the community that he was trying to protect by flood-fighting. 

An extraordinary piece of work, fighting a flood while everybody 

was leaving town. And I know you and your crews did not leave 

town, you stayed there and fought the flood, even though you 

might have been under 20 feet of water had that spillway actually 

failed. That is the emergency spillway actually failed. Within 7 

hours you would be under 20 feet of water. Courageous, necessary. 

One of the major—as I understand it, Mr. Inamine, is that the— 

one of the significant flood fight areas—that is a levee that was 

failing—was to become a part of a Corps of Engineers project, but 

had not yet been designated in the New Start programs that we 

receive occasionally from the Corps of Engineers. 

My point here is that if that particular 1-mile stretch of the 

levee—I think there was two, two stretches, actually—had been 

designated in the 2017 work plan, would you have been fighting 

floods? 

41 

Mr. INAMINE. There are really two parts to respond to that question. And it gets back to my earlier comments about how flood control projects are repaired or improved. And it is that we collaborate 

with Corps of Engineers to get New Start designations, new 

projects constructed by the Corps. And, in fact, that reach of critically deficient levee has been a source of a couple of failures, protects 20,000 people, just by itself, was part of the Federal project 

authorized by Congress in 2014. 

But through the State of California, we—for these critically damaged sites, we can’t wait. And so we applied, while we were working with the Corps on the civil works process, we worked through 

the Corps of Engineers under the 408 process, and used our own 

money, and just do it ahead of time. 

Well, under that circumstance, in fact, we had applied to repair 

that reach of levee, or a portion of that critically damaged reach 

of levee, last year. We were lined up to do it last year. And because 

of some cultural resource issues, we had to go through another— 

a second 45-day review period through the 408 process. Rather extraordinary. As a result, killed our construction season. 

Fast forward to last month. We are flood-fighting that reach that 

would have normally have been repaired under a normal construction season. That is money out of our pockets. We are hopeful that 

the State will reimburse us at the end of the day. And that was 

work that could have been done in a normal construction season. 

Mr. GARAMENDI. I think the point I want to make here is that 

there are all kinds of projects. There are the nice-to-do projects, 

there are the necessary projects, and then there are those projects 

upon which human life depends. And in this case, these levee improvements, they are known levee weaknesses. It is not just in my 

district, although I have 1,100 miles of levees, but around the Nation. 

There are known weaknesses in levees upon which human life is 

at risk. And we ought to be prioritizing, you know, nice to, necessary, economic development or whatever, and then life threatening. And we should urge the Corps of Engineers, in the process 

that we have now established, where they come to us with their 

proposed projects, that we keep in mind the life-threatening 

projects. 

And so, we have more than enough in my district, but I suspect 

that the Members of Congress, some of whom are still at this committee hearing, have similar necessary-to-preserve-human-life 

projects. 

I am going to be out of time in 6 seconds, but I want to really 

congratulate, Mike, you and the work you have done. You have 

taken more than 40 miles of levee, you have upgraded those 40 

miles of levee in a very rapid process. Had you not done that, surely, even without the failure of the emergency spillway, there would 

have been lives lost, had you not been on top of these projects over 

the last several years. Congratulations to you and thank you for 

that effort. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Garamendi. Next we 

are going to go to the vice chair of the subcommittee, Mr. Mast 

from Florida. You are recognized for 5 minutes. 

42 

Mr. MAST. Thank you, Chairman, and each of you for your testimony today. I really appreciate it. I enjoyed reading them. 

You know, number one, you know, I live in one of those areas. 

Very similar issues as so many here, issues with the Corps of Engineers, issues with the infrastructure that is going on in my community. Personally, it is regularly plagued by massively harmful discharges coming out of Lake Okeechobee, and going out towards the 

east coast and west coast of Florida. They are implemented by the 

Corps of Engineers. Sometimes these discharges are—freshwater 

into our saltwater estuaries are as high as 7 million gallons a 

minute at their peak flows. It is very devastating. We get just absolutely devastating algae blooms. 

And again, probably the most disconcerting part to me is that 

these are imposed by the Federal Government on us. But they are 

not cleaned up by the Federal Government, and that is one of the 

worst things that I can say about them. 

Now, one of the other things that we could say about this is this 

is just freshwater that is simply lost out to sea. And, as we look 

at each of our areas across the country, where we see people—some 

people that don’t have enough water—and, as was said before, 

some of us that have way too much water—it can become very 

troublesome and very frustrating to all of us. And that is just as 

an aside here. 

Now, from my vantage point, one of the best ways to ensure that 

water is utilized in a beneficial way, instead of being wastefully 

discharged, is for the Corps of Engineers, in many of these cases, 

to marry their flood control efforts and that mission with their ecological restoration mission that they have in so many places. 

For my area it is mirroring the flood control of the dikes surrounding Lake Okeechobee with the ecological restoration that is 

south of Lake Okeechobee that feeds into the Florida Bay and the 

Florida Everglades. And that means, in order for them to get this 

done in a timely way—which hasn’t happened in my area—tackling 

what we are talking about today, these burdensome regulatory 

problems, construction issues, funding delays that are just slowing 

the Corps of Engineers from completing projects. In my area the 

Herbert Hoover dike rehabilitation, 60-plus projects. When they 

don’t get done, it really adds up. 

So what I really want to ask you all, this kind of, to me, is Exhibit A of how there can be otherwise well-intentioned rules and 

regulations that exist out there, but they actually end up hurting 

our communities and impeding environmental protection and impeding the progress of infrastructure. 

So, with that in mind, I was particularly struck by your testimony, Mr. Kernion, when you said a couple of things. One, in order 

to build a 21st-century infrastructure, we have to build it some 

time this century. And I think that is a very important thing to 

say. But more specifically, when you talked about the Port of Savannah going through a 14-year environmental review process—14 

years—and a 30-year-to-completion process. 

So, in that being your testimony, I wanted to ask you two specific 

things. One, can you pinpoint one specific thing, the biggest bang 

for your buck, ‘‘This is what we do to enable this infrastructure to 

be completed to’’—you know, which piece of it do we get out of the 

43 

way? What is your number-one piece to enabling this to get things 

done? 

Mr. GRAVES OF LOUISIANA. Make sure your microphone is on, 

please. 

Mr. KERNION. I said this earlier. The biggest thing that I have 

seen is the—lack of a better way to say it, red tape with the environmental procedures and approvals to get projects moving forward. 

Mr. MAST. Now, you listed in your testimony a number of—you 

know, you listed wildlife, EPA, NOAA, and a number of others. 

Can you point to one specifically? 

Mr. KERNION. Yes. Well, there is a lot of things. And I will give 

you an example. If we are building a levee, and there is a tree in 

the way and it has got an eagle in the top of the tree, that levee 

is going to be moved to buy houses, something is going to happen. 

Don’t have anything against eagles, I think they are great. But it 

costs a lot of dollars to move it, you know, rather to go ask the guy 

if he could find another tree. 

But—and I am not trying to be funny about it, but I will see 

some things that are—really get to be, like, major impacts to what 

we do, that is all. And it is the environmental things, more so than 

anything. Indecisiveness? Yes, big issue there. But a lot of the environmental red tape on some things that are really—you know, they 

shouldn’t happen, that is all. 

Mr. MAST. OK. I have another question for you—I got a couple 

more seconds here—and that is this. I get an answer often from the 

Corps of Engineers when I talk about timelines for getting things 

done that there is simply not enough manpower, not enough qualified crews to go out there and get some of the projects done, specifically in my area, around Lake Okeechobee, that the Corps of Engineers is conducting. 

Can you speak to whether you think that is an accurate assessment? Is there enough crews out there to go out there and complete 

things in a faster way? Do you guys have the manpower, as general 

contractors, construction contractors? 

Mr. KERNION. Do the contractors, or does the Corps? 

Mr. MAST. The contractors. 

Mr. KERNION. The Corps of Engineers—General Van Antwerp, 

years ago, asked us after Katrina if the contractors had the manpower to put it in place, all of the restoration efforts. And contractors stepped up to the plate and got it done. Corps of Engineers 

stepped up to the plate and got it done, also. 

One of the things that I do not know is—I have never worked 

personally with that district around Lake Okeechobee. I have 

heard some rumors about guys that have worked with them, and 

I will refrain from comment on that, what I have heard, but it is 

a different district. And when you work for the Corps of Engineers 

in different districts, they operate totally different. 

You know, we did FEMA trailers on a Corps contract after this 

most recent flood up in—around Baton Rouge, Louisiana. And dealing—they had one of the district—I think it was the northern Alabama—came down. Totally different ballgame than working with 

the New Orleans district. I mean totally different. Some of it was 

shocking, what we have to go through, be quite honest with you. 

44 

But I don’t—I have never worked with the people in your area 

to be able to comment on that that much, as far as the Corps, then. 

But the contractors, I think contractors are—can come up to the 

plate and make it happen. 

Mr. MAST. OK. My time has expired, so I thank you for your 

comments. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Mast. I am going to 

go to the ranking member, Mrs. Napolitano, for 5 minutes. 

Mrs. NAPOLITANO. Just last one before we let you go. Mr. 

DeGood, if the President were to put forward a proposal that 

privatized leverage private equity capital as the primary Federal 

role in addressing water infrastructure projects, what would be the 

likely impact to communities like mine, or anybody else’s, where 

local ratepayers already having a difficult time making ends meet 

in addressing the water quality in their area? 

And the second question—and I will make it—I want to get over 

it—you described a recent trend for local communities to take on 

more debt to address local water challenges. Yet often the communities have insufficient tax and user fee revenues to cover these 

debts. I strongly believe they want clean water, just like anybody 

else, but often have competing needs for municipal service, fire, 

and police that need to be addressed. And the solutions for this 

change would be what? How can the Federal Government play in 

this? 

Mr. DEGOOD. Right. I think it is important to understand that 

private equity, even with the presence of the tax credits that President Trump and some of his team have talked about, would have 

very little value for many communities. If you are already struggling to find the financial resources to repay municipal bonds at 3 

percent or 3.5 percent, it is unlikely that you are going to magically 

have the resources to be able to cover the return on private equity 

that can be anywhere from 10 to 18 percent, depending on the 

project. 

And again, even with the presence of tax credits bringing down 

the cost of that equity somewhat, it is still going to be a stretch 

for communities. And I think one of the things that I have found 

that is troubling about some of the public-private partnerships that 

have happened in recent years is the extent to which local communities are paying the premium price that goes along with a P3, but 

not receiving some of the benefits that we normally associate with 

this form of procurement. Specifically, if we compare this to the 

transportation side, we see that there is more of an opportunity for 

true risk transference, especially for projects that may exceed $1 

billion or $1.5 billion. 

But when we are talking about smaller systems, where the only 

infrastructure upgrades that are contemplated as part of these capital improvement programs are basic repairs and rehabilitation— 

replacing pump stations, we can’t really honestly say that that private-sector contractor is taking on this risk payment because of the 

complexity of the work. 

Again, some of these contracts have the public maintaining complete liability for any environmental discharges that violate Federal or State laws. They have the public on the hook for any rate 

increases for the water deliveries they may take for regional drinkVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
45 

ing water providers. They have the public on the hook for any cost 

overruns in the infrastructure projects that they have in their capital plan. 

So, to my mind, it is troubling for us to say to local communities, 

‘‘Don’t worry, you can always go out, take equity capital, take these 

tax credits from the Trump administration, and that is going to 

solve your problem.’’ It just really isn’t. 

Mrs. NAPOLITANO. Anybody else? 

[No response.] 

Mrs. NAPOLITANO. Thank you, Mr. Chair. 

Mr. GRAVES OF LOUISIANA. Ms. Pape, I am curious if you would 

care to respond to Mr. DeGood’s comments. 

Ms. PAPE. I would. I can’t speak to a leased form of private equity investment, but I can speak to acquisition of assets by private 

entity. And in that case, in many instances, we can spread those 

costs, because we have a larger base. It is a very capital-intensive 

industry. 

We also take on all risk. We don’t leave risk with the community. 

We take it on, not only for the assets that we are buying, but for 

upgrading. And asset renewal is an ongoing effort. It is not a once 

and done, it is every day, every year, you are continually looking 

at what needs to be replaced, what condition do you have. 

So, in terms of the private companies that buy assets, we do assume the risk, and we are able to spread out the cost, as well. So 

the impact on the customers is not as great. 

Mr. GRAVES OF LOUISIANA. Great, thank you. I will tell you I 

have a number of other questions for all of you. You have been patiently sitting there for 2 hours, and we are most appreciative. We 

are going to have, I think, a number of questions for the record for 

each of you. 

I just want to say, in closing, I am going to go back to home, and 

Mr. Kernion is from Louisiana. He made mention in his testimony 

about a situation at home where we have an eroding coast. We 

have lost approximately 2,000 square miles of our coast, wetlands. 

And we are all familiar with how important wetlands are, and we 

are familiar with the Clean Water Act, and 404 permits, and things 

along those lines. 

Well, the primary cause of this wetlands loss in the State of Louisiana is actually the U.S. Army Corps of Engineers. And it is interesting to see this—kind of the irony in the regulatory program, 

in that they are making everyone else protect wetlands and restore 

wetlands and mitigate wetlands, yet in the case when their own actions cause loss, they literally are doing nothing. And, not only 

doing nothing, but in fact, impeding efforts, as was noted, by the 

State and others, in some cases, to actually restore wetlands. 

And so, look, this isn’t a partisan issue, this isn’t—this is something that all of us need to be working very closely together on. 

Make note. The administration, again, announced that they intend 

to pursue a $1 trillion infrastructure package. 

We have a project in south Louisiana called the Gulf Hurricane 

Protection Project that has been in the study phase since 1992. The 

Federal Government has not stuck a shovel in the ground. We have 

a hurricane protection project in Louisiana called the West Shore 

project. The project just came out of the study phase, and, thankVerDate Aug 31 2005 11:56 Jun 30, 2017 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\3-9-20~1\24656.TXT JEAN
46 

fully, the committee authorized the project in the WRDA bill, but 

it was in the study phase for approximately 42 years before—I 

want to be clear—before a project recommendation was made, 

right? So not a single thing has been done, just a project recommendation. 

We heard Mr. Inamine note that in his case, when he carried out 

the project on his own, that he was able to do it for approximately 

half the cost. 

So this isn’t anything to beat up on anyone, this isn’t a partisan 

issue. This is all about the fact that we have limited resources. And 

many of you, in your testimony, talked about the need for greater 

investment. Well, one of the ways you get greater investment is by 

stretching your dollar, by ensuring that you are most efficiently 

using the resources that you have. If you can carry out a project 

for half the cost, you can do two of them. 

It is a simple concept, and something that I think we need to be 

paying careful attention to, the amount of money that we are 

spending on administrative, on regulatory compliance, and on 

project implementation to ensure that we can sit here and tell taxpayers that we are maximizing the limited resources that are available. 

So, with that, I again want to thank all the witnesses. You can 

expect questions for the record that we will be submitting, and ask 

for your response to those. And thanks again. It has been very 

helpful. And if no other Members have anything to add, the subcommittee stands adjourned. 

[Whereupon, at 12:17 p.m., the subcommittee was adjourned.] 

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