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95–128 PS 2005

AGING WATER SUPPLY

INFRASTRUCTURE

(108–63)

HEARING

BEFORE THE

SUBCOMMITTEE ON

WATER RESOURCES AND ENVIRONMENT

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

APRIL 28, 2004

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

JACK QUINN, New York

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

JIM DEMINT, South Carolina

JOHNNY ISAKSON, Georgia

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

SHELLEY MOORE CAPITO, West Virginia

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

DENNIS R. REHBERG, Montana

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

CHRIS CHOCOLA, Indiana

BOB BEAUPREZ, Colorado

MICHAEL C. BURGESS, Texas

MAX BURNS, Georgia

STEVAN PEARCE, New Mexico

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

RODNEY ALEXANDER, Louisiana

VACANCY

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

WILLIAM O. LIPINSKI, Illinois

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

ROBERT MENENDEZ, New Jersey

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

NICK LAMPSON, Texas

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

BRAD CARSON, Oklahoma

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

JOSEPH M. HOEFFEL, Pennsylvania

MIKE THOMPSON, California

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

(II)
SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

JOHN J. DUNCAN, JR., Tennessee, Chairman

SHERWOOD L. BOEHLERT, New York

WAYNE T. GILCHREST, Maryland

VERNON J. EHLERS, Michigan

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

GARY G. MILLER, California

JOHNNY ISAKSON, Georgia

ROBIN HAYES, North Carolina

HENRY E. BROWN, JR., South Carolina

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

CHRIS CHOCOLA, Indiana

STEVAN PEARCE, New Mexico, Vice-Chair

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

RODNEY ALEXANDER, Louisiana

DON YOUNG, Alaska

(Ex Officio)

JERRY F. COSTELLO, Illinois

ROBERT MENENDEZ, New Jersey

GENE TAYLOR, Mississippi

NICK LAMPSON, Texas

BRIAN BAIRD, Washington

JOSEPH M. HOEFFEL, Pennsylvania

MIKE THOMPSON, California

TIMOTHY H. BISHOP, New York

LINCOLN DAVIS, Tennessee

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

EDDIE BERNICE JOHNSON, Texas

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Johnson, Jerry N., General Manager, District of Columbia Water and Sewer

Authority on behalf of the Association of Metropolitan Water Agencies ......... 9

McCarter, Ralph, General Manager, First Utility District of Knox County

on behalf of the National Rural Water Association .......................................... 9

Neukrug, Howard, Director, Office of Watersheds, Philadelphia Water Department on behalf of the American Water Works Association .............................. 9

Wallace, Hon. David G., Mayor, Sugar Land, Texas, on behalf of the U.S.

Conference of Mayors’ Urban Water Council ..................................................... 9

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Blumenauer, Hon. Earl, of Oregon ......................................................................... 30

Hoeffel, Hon. Joseph M., of Pennsylvania ............................................................. 31

Johnson, Hon. Eddie Bernice, of Texas .................................................................. 33

Pearce, Hon. Steven, of New Mexico ...................................................................... 65

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Johnson, Jerry N ..................................................................................................... 37

McCarter, Ralph ...................................................................................................... 42

Neukrug, Howard .................................................................................................... 57

Wallace, Hon. David G. ........................................................................................... 67

ADDITIONS TO THE RECORD

American Society of Civil Engineers, Charles V. Dinges, Managing Director,

External Affairs, statement ................................................................................. 71

National Association of Water Companies, statement ......................................... 74

(1)

AGING WATER SUPPLY INFRASTRUCTURE

Wednesday, April 28, 2004

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, SUBCOMMITTEE ON

WATER RESOURCES AND ENVIRONMENT, WASHINGTON,

D.C.

The subcommittee met, pursuant to call, at 2:00 p.m. in room

2167, Rayburn House Office Building, Hon. John J. Duncan, Jr.

[chairman of the subcommittee] presiding.

Mr. DUNCAN. I want to welcome everyone to our hearing today

on aging water supply infrastructure. Certainly as we have said before, there is nothing that the people of this country take for granted like our great supply of clean water, both our drinking water

and our wastewater that has so many benefits for all of us.

Recently we have heard reports of water main breaks, lead pipes

and elevated lead levels in drinking water in the Washington, D.C.

area. These events have heightened concerns and have been a

wakeup call about the condition of our water supply infrastructure,

not only locally but nationally as well.

We have had other hearings in this subcommittee on this and

this is a continuation of work we have previously done. We have

passed legislation in this regard such as the Water Quality Financing Act and various other things.

We know that our Nation’s water supply infrastructure is getting

very old but in many instances we do not really know exactly what

condition it is in. It is common in older systems to find pipes that

were laid as far back as the 1800s. For example, Buffalo, New York

reportedly uses 150-year-old cast iron distribution pipes. Westmoreland County near Pittsburgh, Pennsylvania has pipes as old as 150

years. In one community, they found ‘‘pipe’’ that was actually hallow wood, coated with tar and bound together with a metal strap.

More than half of Duluth, Minnesota’s water pipes were installed

before the 1930s, some are 115 years old or more and only five percent of Duluth’s system is newer than 1990.

I could go on and on and on with examples like these but those

sort of set the tone for this hearing and the need to look further

into this issue. The life expectancies of these pipes are being approached and exceeded in many cities and towns. As a result, we

are starting to see the effects of their old age in many individual

communities around the country. As these pipes age, they are corroding and deteriorating, resulting in an epidemic of water leakage

and burst water mains in communities all around the Nation.

In most water systems, a large percentage of water is lost in

transit from treatment plants to the customers. The amount of
2

water lost is typically 20 to 30 percent of production. Some systems, especially the older ones may lose as much as 50 percent.

This can amount to billions of gallons of water lost from one system

alone each year due to leaks.

It is common for some cities to have hundreds of water main

breaks each year. Philadelphia reportedly has an average of 788

ruptures per year and New York has an average of 550 annual

breaks. Last year, there were 1190 reported water main breaks in

the Baltimore and Maryland system.

This is more than three times per day on average. There were

1140 breaks in 2002. This lost water is a waste of a precious natural resource. Some communities like Santa Fe, New Mexico are recognizing the value of lost water and are replacing leaking pipes to

help conserve water in the middle of a drought.

Water main breaks also cause millions of dollars in economic

losses to communities each year when businesses and schools are

forced to close, property is damaged and traffic sometimes is

snarled. For example, Cleveland, Ohio has experienced a series of

major water main breaks, flooding downtown streets, stranding

cars, closing many businesses and schools and leaving 100,000 people without water for a few days.

Aging infrastructure also can result in increased risk to public

health. Leaky pipes allow pathogens to get into the water system.

Some older systems still have service lines made of lead which

could add lead to the drinking water, as we have seen recently here

in Washington. A number of communities are taking steps to address these problems and better manage their water systems but

others still need to get a better handle on the condition of their

water system assets.

An important first step is for those communities to inventory and

collect key data about their water systems so they can determine

where they have lead pipes, corroding iron pipes, or maybe even

some old wooden pipes.

Armed with this information, communities then can set goals

and priorities for maintenance, rehabilitation and replacement of

old pipes and other equipment in need of repair and hopefully

avoid these kinds of problems in the future.

Let me thank all the witnesses for being here today. I would now

like to turn to my good friend, the Ranking Member of the subcommittee, Mr. Costello, for any opening remarks he wishes to

make.

Mr. COSTELLO. Thank you and thank you for calling this hearing

today.

This afternoon we meet to receive testimony on America’s aging

water infrastructure. While this committee does not have jurisdiction over the Safe Drinking Water Act, the underlying statute that

determines health standards for drinking water, aging infrastructure itself increases a health hazard irrespective of any regulatory

program.

Too often we take water for granted. Most Americans simply

turn on the faucet for their drinking water with little thought of

the effort it takes to provide clean water. We rarely consider the

amount of water we consume. The U.S. is water rich and the relative abundance of water in the United States allows for one half
3

of the water that leaves the treatment plant to never be put to its

intended use. Old leaking pipes and inadvertent waste account for

the rest. The Nation and the environment cannot afford such shortsighted extravagance.

Some look upon water as an endless resource. However, the facts

tell a different story, percent of the world’s water is contained. The

salt waters oceans and less than 1 percent of the earth’s water is

available for human use. Every second hospital bed in the world is

occupied by someone who became ill because of polluted water and

6,000 children die every day of illness caused by the lack of sanitary facilities.

The significant health impacts associated with the lack of a safe,

dependable water supply due to aging infrastructure is well documented. Here in the District of Columbia as you noted Mr. Chairman, thousands of citizens continue to be adversely affected by lead

contamination associated with old water service lines. The pipes

continue to be used in part because of the perceived greater need

for other public investment.

There is an article in the Washington Post today that indicates

that high lead has been found in the Boston water supply. However, the issues with lead pipes are not new. A recent news story

on National Public Radio cited a Washington Post article that

warned for the need to substitute the lead pipes, citing the potential menace to the health of the people from lead poisoning. Unfortunately that recent article cited an article that ran on June 9,

1893. Problems with safe drinking water have occurred in Milwaukee, killing 104 people and making hundreds of thousands of people ill. Communities such as Newark and Portland have also identified lead contamination issues from old pipes. Cities such as Las

Vegas and San Diego face issues with petruate, a chemical used to

manufacture rocket fuel. Again, old style processes do not address

the modern day problems of today. The Nation can and must do

better. Far too many communities rely upon leaking systems or old

outdated technologies. The District of Columbia and parts of Virginia receive their water from the Washington Aqueduct operated

by the Corps of Engineers. Components of that facility predate the

Civil War. The basic treatment technology dates back to biblical

times.

We have an obligation to assist communities in moving to modern technology such as ultraviolet treatment, high tech membranes

or whatever it takes to ensure public health and safety.

Mr. Chairman, again, thank you for holding this hearing today

highlighting the need for significant new investment in the Nation’s aging infrastructure. While recent events involving lead in

DC’s drinking water have heightened public awareness to this

issue, I believe the problems are national in scope and that it is

the responsibility of this committee and the Congress to develop a

comprehensive national strategy to remedy these problems.

Thank you for calling the hearing.

Mr. DUNCAN. Thank you very much.

Mr. Gilchrest?

Mr. GILCHREST. Thank you for the hearing, Mr. Chairman. I

have an issue that is a bit off the mark on clean drinking water

but the hearing is right on the mark. A lot of our urban areas have
4

aging infrastructure, massive problems and we need to be a key

player in the funding sources for being smart enough to know how

to fix that at the least cost but the best bang for our buck.

I represent a relatively rural area and most people have wells.

Those who do have drinking water, periodically have problems

mainly because the local towns don’t clean out those water tanks

often enough and some slight residue gets in there.

I would ask as you go back to the National Council of Mayors

that you raise the issue of knowledge and understanding about how

their local water system works is key. Even if you get a new

Mayor, the first thing he ought to do is take a tour of the water

plant and a tour of the sewage treatment plant. Many local elected

officials, not saying this as one of the aristocrats here in Washington, God knows all the brains do not reside in Washington, but I

see it in my little towns and district. Local elected officials grab

them by the throat, take them to the water treatment facility and

tell them what it takes to run that so they know the second day

on the job if not the first and then walk them through the wastewater plant.

In my district right now there are any one of a number of places

where the aging wastewater treatment plant is over capacity, there

is more flow going through than it can handle, it is getting into the

creeks and streams and is not being treated properly. In one little

town, the new wastewater treatment facility, the sewage plant,

that will come on line in September is already over capacity because the local town issued too many building permits before they

understood there was such a thing as over capacity.

So don’t just assume that anybody who gets elected knows all

this information by osmosis. Tell all your members across the country, take those local elected officials, State elected officials, Federal

elected officials and give them a tour of that aging plant, the aging

water problems. Do it every six months or so to keep it on their

minds.

You don’t need a lecture from me, that is for sure. That is why

we came to listen to all of your.

Thank you.

Mr. DUNCAN. Thank you, Mr. Gilchrest.

Mr. Baird?

Mr. BAIRD. Thank you for your leadership on this, a very timely

topic.

When the folks back home heard there was a lot of lead in drinking water and that drinking leaden water could cause neurological

deficits actually thought this explained an awful lot about what

happens back here in Congress.

I appreciate your being here and want to raise three issues I

hope you will address. One relates to what Mr. Gilchrest said. As

we look at growth in communities, it is a lot easier to issue a building permit than it is to say we don’t necessarily have the infrastructure to meet that building permit’s needs. I wonder if you

might address that.

Secondly, I was reading in your testimony and I see it is estimated we will have a $535 billion gap between current spending

and projected needs for water and wastewater infrastructure over

20 years. We have already this year what I believe is over $650 bil-
5

lion fiscal deficit and it seems to me we are adding that deficit to

our children’s future. I wonder how those costs will change. In

other words, the longer we delay meeting these needs, what happens to the urgency and the cost of that?

The third question would be I have talked to a number of industries, especially high tech industries, that while we are focusing on

drinking water, the lack of clean water is becoming increasingly

the limiting factor for a number of industries. In other words, people tell me we could expand our plant, create new jobs, et cetera,

we just don’t have access to the clean water front end or adequate

wastewater treatment on the other end. I wonder if you have any

estimates of the impedance of potential economic growth that is

caused currently by lack of adequate water.

Finally, many of us serve also on the Highways and Transit

Committee and we have seen estimates of around 47,000 jobs created for every $1 billion spent on highway construction. At a time

when we have millions of Americans unemployed, I am wondering

what kind of jobs could be created in short order if we were to invest in our infrastructure, if there is some kind of parallel metric

of so many jobs per $1 billion expended.

I would say it is popular rhetoric to say the American people

know how to spend their money better than the Government. Very

few people come to me in my capacity and say, I really think you

should spend my taxpayer dollars on fresh water and wastewater

treatment. That is our job in Government, to suck it up, tell the

people this is what it is going to need, spend the money responsibly

but levy the taxes occasionally to pay for that. I think this is an

area where the people don’t necessarily realize how much it is

going to cost to make sure they have the resources they need.

Thank you, Mr. Chairman, for holding this important hearing.

Mr. DUNCAN. Thank you very much.

Mr. Pearce?

Mr. PEARCE. Thank you, Mr. Chairman.

I will submit a full statement and just take excerpts from that.

This is a very, very needed hearing and a very important issue.

Basically, there are civilizations in our State that seem to have

failed over the lack of water. I think we must contemplate what we

are doing as far as reinvesting in our infrastructure. In New Mexico we have irrigation ditches that are at least 400 years old in the

same position conducting water along through our communities,

civilization along the Rio Grande developed and flourished because

the Pueblo tribes built and maintained irrigation and water supply

infrastructure. Inadequate water supply has changed civilization

patterns. The ancient Ashkenazi Indians may have disappeared because of the inadequate water supplies due to a drought that lasted

at least 21 years.

We have examples of these long, extended droughts in the west

and especially in New Mexico and we must do something about

reusing and reclaiming water that is currently being disposed of.

Today, New Mexico faces an estimated $5 billion shortfall and critical need for water and wastewater infrastructure. Many of the

communities in my district do not have the ability to pay for treatment plants mandated by the EPA. For example, the EPA implemented a 10 ppb standard for arsenic without having the tech-
6

nology to remove the arsenic and without any thought of the cost

to small communities. They don’t have the answer to technical

questions such as how to dispose of our arsenic once it is removed.

The failure of Congress to really discipline itself ends up with us

having these very critical needs in water and wastewater unmet

while we are funding such programs as mood arousal and sexual

risk taking, a study on the sexual habits of older men, which

maybe shouldn’t have taken more than half a day to talk about; a

study on San Francisco’s Asian prostitute masseurs was receiving

funds while we failed to fund critical wastewater treatment facilities and finally the study on American Indian transgender research

trumped some of the needs we find in water and wastewater.

Mr. Chairman, I would recommend we do a deep look at how

much funding is set aside for water and wastewater and would

work with you on seeing that we begin to realign our priorities and

see that these needed infrastructure expenditures are made before

some of the less important needs.

Thank you, Mr. Chairman.

Mr. DUNCAN. Thank you very much.

Ms. Johnson?

Ms. EDDIE BERNICE JOHNSON OF TEXAS. I want to thank you for

holding this hearing.

I would like to welcome a fellow Texan, David Wallace, Mayor of

Sugar Land, who is here on behalf of the U.S. Conference of Mayors and the Urban Water Council. I worked extensively with the

Conference of Mayors and I look forward to his testimony.

Public water facilities are the first line of defense for public

health and I would like to echo the sentiments of others on this

committee that our Nation faces a growing need to repair and replace aging water infrastructure. When you include the new security concerns and the post-September 11 environment, the costs

grow exponentially.

My office recently met with water utility managers from Houston, Austin and Dallas, who expressed serious concerns about the

security vulnerability of the physical water supply and they are

concerned that these security costs are essentially an unfunded

mandate. The Dallas Water Utility which services my constituents,

provides drinking water to 2 million people in the City of Dallas

and the surrounding suburbs. While Dallas has younger water infrastructure than many cities in the northeast or on the west coast,

it has an aging system with half of all the pipeline infrastructure

over 50 years old. Due to the age of this infrastructure, Dallas has

more water main leaks per mile in pipeline than any other large

drinking water system in the country. In fact, they average 2,500

water main leaks per year. The utility has set a target of replacing

half of the system’s pipeline infrastructure over the next 30 years

at a cost of approximately $90 million a year.

This year, Dallas will replace 60 miles of pipe at a cost of approximately $38-$48 million. In addition, the utility currently is

spending $100 million to expand and upgrade the Botman Lake

Drinking Water Treatment Plant, the city’s oldest, increasing its

capacity from 120 million gallons per day to 150 million gallons per

day and adding ozone disinfection equipment to bring the plant

into compliance with the Safe Drinking Water Act.
7

In addition to the cost of modernizing infrastructure, the utility

has just completed its vulnerability assessment for water and

wastewater and needs to substantially upgrade security to protect

against natural disasters and terrorism.

I look forward to working with the subcommittee to find some

ways to assist in repairing and replacing water infrastructure in

my district and throughout the Nation. There is an urgent need to

address this issue because it threatens our public health, our economy and our security.

Thank you, Mr. Chairman, and I will go with you to see where

we can dig up some money.

Mr. DUNCAN. Thank you very much.

Mr. Davis?

Mr. DAVIS. Mr. Duncan and Ranking Member Costello, thanks

for having the hearings we are having today. It is good to see someone from Tennessee here and the area of Knoxville, the district I

represent is very close to there having Campbell County as well as

Morgan, Scott and Rome counties in east Tennessee as a part.

I have been Mayor of a small town called Birdstown, Tennessee,

proud that I worked with an agency called the Farmers Home Administration which is the rural development agency today that provides sizable grants and loans to rural areas that I represent. Tennessee has 40,000 square miles, I represent 10,000 of those and in

doing that, I realize that in many of our rural areas, there are

those who live beyond my home, three or four miles up the river

and only eight or ten homes but yet the water is almost

undrinkable that comes from springs or wells that have been

drilled.

As Mayor of Birdstown, I had a phone call one day after a rain

and this fellow said, how does my water get muddy, I have been

on the city water line for years. My does my water always get

muddy, how is water getting into the water line? I tried to explain

to him that with pressure, there is no way it could be taking water

in. In researching it, we had a two inch metal line and added the

oxygenation of it and every time there was a rain and the earth

shook a little, it would disrupt those lines and muddy water would

flow through the lines to people who actually lived in the City of

Birdtown.

Do we need to upgrade our water system? You bet we do. Can

many rural areas and cities afford that on their own? Absolutely

not without it being beyond the ability of working men and women

who work at the factories and in many cases in the area I represent at minimum wage jobs, cannot afford to pay the additional

cost. So I think it is imperative that this committee and this country realize one of the most important things we can do for our people living wherever they may be, whether in the urban areas or

metropolitan areas, or in the rural areas I represent, is to be sure

that an adequate water supply that is drinkable is available for

those of us who live in this Nation.

I applaud the efforts of this committee and certainly those who

will give testimony to enlighten us and to give information that

may drive us to be more supportive to be sure adequate funding

is provided.

I yield back my time and thank you, Mr. Chairman.
8

Mr. DUNCAN. Thank you, Mr. Davis.

Paul Craig Roberts who was one of President Reagan’s highest

ranking Treasury Department officials and who has for many years

been a nationally syndicated columnist, wrote a column and he

said, ‘‘Before we can reconstruct the rest of the world, we need to

stop deconstructing the United States.’’ I think that is a good point.

I spent most of my opening statement talking about the aging

water supply infrastructure and it is aging, especially in many of

our older, bigger cities but we shouldn’t scare people or give people

the wrong impression because I think there also is a good story to

tell out there because in many communities the water officials have

been doing and are doing really good things. In many, many communities around this country, the water that comes out of the taps

in the homes is cleaner and safer than some of the water that people buy in their bottled water at the store. So there is a good side

here too.

Even where the officials have been trying to do the right thing,

major investments are needed. I mentioned the Water Quality Financing Act we passed out of this subcommittee that got held up

because of some Davis-Bacon problems and we need to continue

working on that. There are two sides to this story and we need to

hear both. There are two sides even in the same community. They

have done some good things but need to do other good things as

well. That is what this is about.

We have four outstanding witnesses here today. Our witnesses

today representing the U.S. Conference of Mayors’ Urban Water

Council, is the Honorable David G. Wallace, Mayor of Sugar Land,

Texas; representing the Association of Metropolitan Water Agencies is Mr. Jerry N. Johnson, General Manager of the District of

Columbia Water and Sewer Authority; representing the American

Water Works Association is Mr. Harry Neukrug, Director, Office of

Watersheds of the Philadelphia Water Department; and talking

about good stories, I understand there was a $250 million referendum on the ballot yesterday in Pennsylvania and it passed I am

told by a pretty good margin. Is that correct, Mr. Neukrug?

Mr. NEUKRUG. That is correct. That was passed overwhelmingly.

Mr. DUNCAN. What was the percentage, do you know?

Mr. NEUKRUG. I don’t know. I was on the train this morning

coming down here but it passed overwhelmingly, specifically for

funding for water and sewer works.

Mr. DUNCAN. I think sometimes while Mr. Baird is correct in

saying not many people come to us and urge us to spend money

in this way, when this is called to peoples’ attention they do understand we need to make some progress in this area.

Finally, I am very pleased and honored to have a long time

friend of mine, Mr. Ralph McCarter here representing the National

Rural Water Association. He has been very active in that association and is a nationally recognized leader in this field. He is the

General Manager of the First Utility District of Knox County, he

is from Knoxville. I send checks to his agency ever month, I am one

of his customers and they do an outstanding job. I am very pleased

to have one of my bosses here today, Mr. Ralph McCarter.

We always proceed in the order the witnesses are listed in the

call of the hearing, so that means Mayor Wallace, we will start
9

with you. Your full statements will be placed in the record. We tell

witnesses to limit their statements to five minutes. We let you go

about six minutes if you need but we ask that you not go longer

than that in consideration of the other witnesses.

Mr. BAIRD. Mr. Chairman, would you yield for one second?

Mr. DUNCAN. Yes, I sure would.

Mr. BAIRD. Upon learning that your water head is here, I must

say my comment earlier about the lead in Washington, D.C.’s water

must not apply to our distinguished Chairman’s district because he

suffers no such deficits that we sometimes see here.

Mr. DUNCAN. Thank you, Mr. Baird.

Mayor Wallace?

TESTIMONY OF HON. DAVID G. WALLACE, MAYOR, SUGAR

LAND, TEXAS, ON BEHALF OF THE U.S. CONFERENCE OF

MAYORS’ URBAN WATER COUNCIL; JERRY N. JOHNSON, GENERAL MANAGER, DISTRICT OF COLUMBIA WATER AND

SEWER AUTHORITY ON BEHALF OF THE ASSOCIATION OF

METROPOLITAN WATER AGENCIES; HOWARD NEUKRUG, DIRECTOR, OFFICE OF WATERSHEDS, PHILADELPHIA WATER

DEPARTMENT ON BEHALF OF THE AMERICAN WATER

WORKS ASSOCIATION; AND RALPH MCCARTER, GENERAL

MANAGER, FIRST UTILITY DISTRICT OF KNOX COUNTY ON

BEHALF OF THE NATIONAL RURAL WATER ASSOCIATION

Mayor WALLACE. Mr. Chairman and members of the committee,

it is a pleasure to be here, a true honor.

Ms. Johnson, thank you for your kind words.

I thank all of you for the opportunity to provide comments today

on behalf of the U.S. Conference of Mayors and the Urban Water

Council. I presently am the Co-Chair of the Urban Water Council.

The Council itself is a task force on behalf of the U.S. Conference

of Mayors and provides a forum for mayors to basically get together

and join in a national discussion concerning water policy. In that

capacity, I have traveled throughout the United States and met

with other mayors. I have learned firsthand some of the problems

taking place within some of the cities as a result of aging water infrastructure.

My purpose here today is to add the voice of the U.S. Conference

of Mayors to the chorus of all the other public interest groups that

are urging Congress to fully appreciate in the urging of investing

in the rehabilitation of aging infrastructure and water infrastructure. Last year, the Urban Water Council had a summit in Chicago. Mr. Chairman, you talked about Cleveland, and we actually

had Mayor Campbell there and we saw a video that showed three

news stories where the lead story was actually water mains that

had broken on three different occasions within a very short period

of time. You can imagine the despair of a mayor watching the news

and seeing the lead story of all this water rushing through their

streets shutting down businesses and things of that nature.

We also learned following that, after Mayor Campbell was elected, she has had three additional water main breaks in the downtown area which obviously causes considerable flooding and considerable economic impact. The economic impact itself is very hard to

gauge as to how many millions of dollars it does cost but it is a
10

loss of unmetered water, street and road repair, disruption in

transportation, closure of institutions, of retail businesses, commercial establishment, wage losses and tax receipts and a number of

other areas.

The EPA, as you well know, and other organizations, have estimated the need for water infrastructure investment over the next

20 years ranging from somewhere in the neighborhood of $500 billion to $1 trillion. The EPA also says that the annual investment

in water infrastructure will fall short to the tune of $23 billion per

year.

The Urban Water Council has testified a number of times before

this committee on the need for changes in law to help cities renew

their water infrastructure. Some of the proposals that have been

discussed deal with greater levels of Federal contributions to the

State Revolving Loan Fund, others have suggested a Federal tax

on users in the establishment of a Water Trust Fund. Both of these

ideas may have merit. Unfortunately, if these proposals were

adopted by Congress, the sad fact is that the money involved would

still not satisfy the need for investment.

The Urban Water Council has identified three basic approaches

to help cities finance the water and wastewater infrastructure development necessary to comply with clean and safe drinking water

laws. These include grants, 30 year, no interest loans, and greater

use of private activity bonds. In our opinion, these approaches are

the best means to meet our water infrastructure needs. The use of

private activity bonds to finance water infrastructure projects today

is severely limited to the State volume caps in conjunction with

highly competitive need for financing schools, housing programs

and public safety facilities.

Changing the tax code and exempting water and sewage facilities

from the State volume cap for private activity bonds could be one

of the most fruitful financial incentives that Congress can provide.

The Urban Water Council estimates that removing the State volume cap which spark as much as $10-$12 billion of direct water infrastructure investment over the next ten years. That is without

any Federal dollars. Such a policy change would provide more clean

water and improve compliance with the clean water laws and

would also provide economic stimulus of local economies including

new jobs. For every dollar of direct infrastructure investment, there

will be between $4 and $7 of direct, indirect and induced demand

for local and regional inputs.

Representative Jim Davis of Florida has sponsored H.R. 3410

which would remove the State volume cap for water and sewer

projects using private activity bonds. The Urban Water Council

strongly supports this legislative proposal. Recent similar legislation was scored by the Joint Tax Committee who estimated that

the loss to Treasury would be less than $150 million. I think it was

$147 million. The public benefits in terms of environmental protection and economic stimulus far outweighs this ten year loss to the

Treasury in this instance.

Mr. Chairman and members of the committee, I would like to

ask two questions for the benefit of my mayoral colleagues. The

first is why is the Congress spending a great deal of time with the

State Revolving Fund for wastewater that only provides about 10
11

percent of the overall water infrastructure investment when local

government is struggling to provide nearly 90 percent of the annual investment?

The second question is can Congress makes the needs of American citizens and our Nation’s cities for clean and adequate water

supply a top legislative priority and not let wage/rate debate prevent change?

I look forward to working with you to find an acceptable solution

to the problems we all face in renewing the aging water infrastructure.

Thank you once again for this opportunity to provide comments

to the committee. Of course we will be available to answer questions.

Mr. DUNCAN. You ended exactly on five minutes, right on the

second.

Mayor WALLACE. I timed it well.

Mr. DUNCAN. Mr. Johnson?

Mr. JOHNSON. Good afternoon, Chairman Duncan, members of

the committee.

My name is Jerry Johnson. I am General Manager of the District

of Columbia Water and Sewer Authority and a member of the

Board of Directors for the Association of Metropolitan Water Agencies on whose behalf I speak today.

Thank you for inviting us to testify and for the interest in water

and wastewater infrastructure. The subcommittee has been very

active in moving legislation to increase infrastructure funding and

certainly it is much appreciated.

DCWSA provides drinking water and wastewater services to

nearly 2 million people in the Washington metropolitan area.

AMWA is a nonprofit organization of the largest publicly owned

drinking water systems in the United States collectively serving

over 110 million people.

As you know, the infrastructure needs confronting the Nation’s

drinking water and wastewater systems are enormous. In addition

to estimates by the Water Infrastructure Network and other

sources, EPA estimates that drinking water systems will need to

spend $154-$446 billion through 2019 and wastewater systems will

have to spend an additional $321-$450 billion over the same period

of time and many are the same organizations having to spend

these dollars.

In Washington, D.C., we have increased capital spending in the

years following DCWSA’s creation from $38 million in 1996 to more

than $200 million per year today. The Authority’s ten year capital

improvement program plans to spend a total of $1.8 billion. Furthermore, DC will be required to spend an additional $1.265 billion

in 2001 dollars for its CSO Control Overflow Program.

Many American cities are similarly situated to Washington, D.C.

Aging infrastructure is the primary reason we are confronted with

such high estimates of spending needs. Much of the infrastructure

built over the last several decades has reached or exceeded its useful life and water systems are more often experiencing main breaks

and water loss.

The AWWA Research Foundation estimates there are approximately 258,000 water main breaks each year and on average, sys-
12

tems water loss is about 10 percent of the treated drinking water.

Regulatory mandates are another reason for such high infrastructure spending needs. New drinking water and clean water regulations will better protect public health and the environment but

they come at enormous cost that must be paid.

Another infrastructure cost item facing water systems is the replacement of lead service lines which are smaller pipes running

from the water main to a customer’s home. According to AWWF

Research Foundation, there are 2.3-5.1 million lead service lines in

the United States. The estimated national cost to replace lead service lines under control of both public utilities and the homeowner

is more than $10 billion. Here in DC, the estimated cost for replacing lead service lines in the public space, just the portion the District is responsible for, ranges from $300-$350 million. Our estimate of the cost for replacing the lines under control of the homeowner is somewhere around $60-$80 million.

Compounding these financial burdens are the loaming investments local systems will be forced to spend to protect their facilities and customers from potential terrorist acts. Security consultants in the water sector estimate that water systems in the United

States that serve 100,000 or more people will have to spend approximately $1.2 billion to harden facilities against the possible attacks. Ms. Johnson, I certainly appreciate your pointing out that

fact.

Most Federal drinking water assistance is reserved for smaller

systems and we encourage Congress to increase its assistance to

metropolitan systems. Metropolitan systems have received only 5

percent of SRF assistance since the program started even though

these systems account for 20 percent of the estimated needs, 30

States do not provide any assistance to metropolitan systems at all.

Safe drinking water’s first line of defense from many diseases

and adequate infrastructure is a key component for that effort.

With increased funding, water systems will endure fewer breaks,

safer water and cleaner water sources. Water rates are increasing

all over the country and publicly owned utilities are becoming more

efficient but these measures won’t solve the problem. Significant

investment must come from the muscle of the nationwide economy

through long term funding sources, expanding national commitment to be able to take into account external costs currently assumed by utilities such as the cost of treatment of non-point source

agricultural pollution, MTBEs and the pre-chlorinate from defense

facilities. Not only will increased Federal assistance help protect

water system health and the environment but it will also increase

jobs, about 47,500 jobs for every $100 billion of infrastructure investment.

We appreciate your attention to this serious matter of drinking

water and the wastewater infrastructure and hope that you and

your colleagues in the House and the Senate can help develop a

mutually acceptable proposal for the sake of safe drinking water,

clean rivers, lakes and beaches and American jobs.

Thank you for the opportunity to testify and I look forward to

any questions you might have.

Mr. DUNCAN. Thank you very much, Mr. Johnson.

Mr. Neukrug?
13

Mr. NEUKRUG. Good afternoon and thank you very much, Mr.

Chairman.

My name is Howard Neukrug and I am the Director of the Office

of Watersheds for the City of Philadelphia. I am here today on behalf of the American Water Works Association which provides

drinking water to 80 percent of the Nation.

Philadelphia Water is a combined drinking water, wastewater,

storm water utility providing services to over 2 million people in

the Philadelphia area. I am very pleased to hear that almost everyone here in this room understands the trillion dollar costs that are

confronting us and EPA’s estimate I have heard a few times of

$535 billion gap remains.

I would like to address three questions in my testimony. The first

is why now the tremendous need? The second question is are we

facing a pending health crisis and the third one which I hear very

often is why should there be a Federal share?

In terms of the tremendous needs, why now, there is something

going on, a convergence happening now between demographics and

construction materials. We had boom times, housing booms that

happened in the 1880s, again in the 1920s, again after World War

II. I live in a house that was built in 1878 and I go down to my

basement and look at the joists and I see joists that are 4 inches

x 12 inches, huge. If you go to some relative’s house, you see much

smaller, 2 inch x 6 inch joists from the 1950s construction.

The same thing happened with water pipes. Water pipes built in

the 1880s to serve that first line of housing boom that occurred

during that time had a pipe life of about 120 years. In the 1920s,

the pipe had a little less life, we got a little smarter in how to build

this pipe. The pipe only lasted 100 years. In the 1950s and late

1940s, the expected life was about 75 years. Those convergences

are very important to understand why today we are facing the crisis that we are.

In addition, I have heard others speak about the increased regulatory pressures, something I call arsenic and old lead, big costs associated with that. Disinfection byproducts, UV, ozone, new things

that are needed in drinking water treatment.

On the wastewater side, the Combined Sewer Overflow Program,

the SSO Program where the environment becomes the driver and

the end point becomes affordability, not the environment because

we all know there is not enough money to bring the environment

back to fishable, swimmable which is called for in the Clean Water

Act. Right there you understand there is not enough money.

The new security threats, $1.6 billion now and plenty more that

will come down the pike in future years.

A question I hear often is why lump the water and wastewater

utilities together. Jerry Johnson and myself both represent utilities

that are both combined water and wastewater. We are shared utilities. Even where there aren’t shared utilities, you find there is a

shared customer base, there is shared financing caps and shared

water resources. Combining the two is a very good thing in our

minds.

Are we facing a health crisis today? I have to answer that as no.

The industry is expending. In the City of Philadelphia, the Water

Department is expending $125 million a year, twice the capital pro-
14

grams office for the entire city, monies being spent for swimming

pools, firehouses and things like that.

The provision of safe water and health protection is always our

number one concern. Today in the U.S. drinking water is safe. It

is as safe today as it is anywhere in the world at any time in history. The crisis is not necessarily a health crisis that we are facing

today, it is a crisis of priorities. It is a crisis of urgency and what

we are leaving is huge costs for the next generation. It is about extending our environmental solutions which we see in front of us beyond 20 years, 30 years and 40 years from now and it is losing the

efficiency of our operations and the quality of life in terms of what

I heard before about things like main breaks.

Finally, in terms of fair share, we all must recognize that we are

in very dire economic times right now. In Philadelphia, the City

Council and the Mayor’s office are trying to cut $225 million from

an already very tight budget. We are looking at closing recreation

areas, swimming pools and even fire stations. At the same time,

the Philadelphia Water Department has a 43 percent rate increase

we are looking at for the next four years. In Pennsylvania as the Chairman noted, there was a $250 million bond issue, so the State is doing plenty of things to try to support and understand the needs for infrastructure both from a water

and wastewater perspective.

From Congress, today I am really hoping that we move forward and see the full $5.2 billion that is in the SRF funding come

through. I think it is really important to understand that SRF

funding is not a grant, it is a revolving loan and it is money we

are putting in the bank for our future.

Thank you very much.

Mr. DUNCAN. Thank you very much, Mr. Neukrug.

Mr. McCarter?

Mr. MCCARTER. Thank you, Mr. Chairman and members of the

subcommittee for this opportunity to testify today.

I am Ralph McCarter, General Manager, First Utility District of

Knox County, Tennessee. I am also the President of the Tennessee

Association of Utility Districts. I am here representing my own

community, my State Rural Water Association and the National

Rural Water Association.

Nationally, we represent about 23,000 small and community

water systems. I would like to address the committee today basically from a small utility standpoint. Our needs are much different

from the municipals and certainly we appreciate the magnitude of

what is before us across the Nation.

Let me give you a little background about my own district. First

Utility was chartered in 1954, we are celebrating our 50th anniversary this year. We started with 700 accounts in a sleepy little rural

community. Today, we serve approximately 28,000 water and sewer

customers and that has grown very well. In fact, in the 1970s and

1980s, we benefitted from some SRF and EPA loans and grants

that helped us become a very viable and sustainable utility today.

If you compare us with most of the community systems, we

would be considered large and yet if we are compared with the municipals, we are considered very small because more than 90 percent of the community utilities in our Nation, about 54,000 strong,
15

are less than 10,000 accounts. Even though that is small, we all

have to live by the same rules. EPA doesn’t cut us an slack.

Perhaps the most important point policy makers should make in

considering water funding programs is that suppliers need assistance in dealing with the country’s regulatory and funding programs

due to lack of resources. Small systems often pay higher water

rates, they have higher regulatory costs of compliance per household and yet we still have to comply with every regulation that everybody else does.

To address the challenges facing small communities, we urge you

to include provisions in both water and wastewater funding legislation that would ensure communities with the greatest public health

and economic need that they would receive priority in the funding

programs. As my written testimony details, my immediate community currently needs funding for a number of projects. We are in

a very rapidly growing area of our particular part of the county.

We are seeing maybe 39 percent of the total building permits in 13

percent of the county’s area. We need to expand a water plan, we

need to add additional capacity to wastewater plants, we need upgrades in our sewer collection system to keep from having sewer

overflows. Those of us familiar with the Knoxville area know some

of the problems in the City of Knoxville go with the aging infrastructure there where stormwater permitting is now in place and

the KUB, the local utility agent, is fighting INI. We are currently seeking about $50 million in commercial and

Federal funding to address these needs; 60 percent of this would

be because we are growing and 40 percent of it would be to rehab

aging infrastructure and yet we have to keep in mind, we are only

50 years old.

Mr. Chairman, there are probably three points I would like to

communicate. Aging infrastructure would be the first. Small communities are experiencing water problems due to aging infrastructure just as the large ones. We commonly see failing pipes. Much

of this is due to the fact that some of the material used today are

just out of date. Galvanized lines and you have seen a good bit in

the news here about asbestos. There is still an awful lot of asbestos

cement out there in use and I just keep my fingers crossed and

wait for the day when somebody says that needs to go. Anytime

you have leaks, this results in higher operating costs and threats

to the public health and the environment.

Probably the biggest problem facing us as utilities whether small

or large is the sewer INI problems where stormwater comes into

the system and once it displaces sanitary sewer, it overflows and

it is an EPA violation. We are not a combined storm and sewer but

we serve both water and sewer with our customers. That is probably very effective.

The beauty we have in our system in Knoxville is we are not an

attachment of a city, so we get to set our own budget, set our own

rates and raise the money it takes and therefore we are able to

control our own destiny.

Each time we violate an EPA permit, we are subject to fines.

Just by the blessing of them standing off and looking if we are

doing something do we keep from having to pay fines. Last year,

rural water associations throughout the country assisted over 6,000
16

communities with problems of aging infrastructure. These were directly related to water loss or INI.

The second point I would summarize is how do we determine the

Federal contributions? My colleagues have given some very large

figures for the amount of shortfall we have in the funding. Certainly we know it is a staggering figure. Funding from EPA, the

SRFs and the U.S. water programs are not meeting the current

needs. The USDA program which is the core funding program for

small water and wastewater projects is currently experiencing at

least a $3.2 billion backlog. This is our gauge of the most accurate

indicator of needs because these systems have already qualified for

USDA funding and have met those requirements. There may be

some others out there that aren’t identified because they haven’t

applied but at least this much is the shortfall.

According to USDA, as many as 8 million people have critical or

serious water quality problems. For communities who manage economic growth, this is where we say who puts in the money. Certainly growth should pay for growth and we see that in our community but if you have a small system that is stagnant in growth, the

pipes still get older, regulations still come and they don’t have any

excess revenue to handle those problems. They need some Federal

help.

In addition, we must deal with security issues as my colleagues

mentioned. Many of us have been through the vulnerability assessment process and have put into place our emergency response

plans and all those are necessary to keep our water safe and to

keep our water flowing. We often think that we live in America and

terrorist attack or something like that won’t happen to us, but September 15, 2002 in our community you can recall there was a train

wreck, certainly unsuspected, unlikely. This train wreck consisted

of 25 cars, one of which was a 10,000 gallon sulfuric acid tanker.

Sunday afternoon through Tuesday morning, there were 500 families or more evacuated from this scene. The railroad track passes

immediately by both our water and wastewater plants. The accident was a half mile west of our tank. We had to abandon this

treatment plant for a while but we were able to put into place our

emergency response plan and work with the local authorities and

help abate this serious problem of sulfuric acid fumes going into

the atmosphere. In fact, we contributed some 150 tons of lime we

had on our wastewater site for biosolids treatment to neutralize the

acid. In this case, our advance planning for emergency situations

paid off and everything stayed safe.

Thirdly some of the solutions we often think of as small systems

funding is through consolidation and privatization. Consolidation

and privatization are rarely cost effective for small communities.

Rural water supports this idea of consolidation where it makes

good sense, where it is the best for the consumer. Often we see in

the case of private utilities their mission is for profit and those of

us in the public sector are in it for our customers, so we believe

the SRF funds should remain eligible for public utilities and not for

private utilities.

In closing, I thank you for your continued assistance to small and

rural communities and reiterate our point that small communities
17

need special attention when it comes to funding legislation for the

special needs we have across our Nation.

Thank you.

Mr. DUNCAN. Thank you very much, Mr. McCarter. I do well remember that train wreck because our family was one of the 500

that we were just barely in that section but we happened to have

to go to the motel and stay for a while, so I do remember that well.

I am going to go first for questions to Mr. Gilchrest.

Mr. GILCHREST. I wasn’t expecting the questions right away and

I am not sure I have any specific questions other than we will be

as diligent as we can with the myriad of problems that each of your

respective witnesses share, whether it is with combined stormwater

overflow which I have in my district and we are trying to resolve

those issues, to the small community that is viable economically because it is likely a farming community but they do have aging infrastructure needs as well.

One town I live in there are 68 homes on a wastewater treatment plant that was built in the early 1980s when just about everything was paid for but now it needs to come up to speed with

the new Clean Water Act provisions and the infrastructure isn’t

quite there. The community is not going to change, it is not going

to grow very much in order to accommodate that cost. We recognize

all those areas and we will do what we can here to be innovative

and ingenuous in our funding mechanisms.

Thanks for giving us your testimony.

Mr. DUNCAN. Thank you.

Mr. Costello?

Mr. COSTELLO. Let me make reference to a statement that I

think you made and Mr. Neukrug that there is not a health crisis

today in the United States when it comes to safe drinking water.

I would agree with that at the national level but certainly if you

live in the District of Columbia, Mr. Johnson probably has heard

from many constituents in the District that they are concerned

about the lead levels in their drinking water. Certainly with the

Washington Post article of today, 2.5 million customers in the Boston region have found lead levels are higher than the acceptable

national level, that they have to be concerned for their children. I

agree it is not a health problem level on the national level but we

certainly have challenges that face us in the District, Boston and

I wouldn’t be surprised to hear about other regions in the country

in the not too distant future.

My concern isn’t so much today but it is our lack of investment

for the future. I wonder if you might address that. If in fact we do

not make the investments in the future, we are going to continue

to see potential health problems in other parts of the United States

other than the District and Boston. I wonder if you would comment.

Mr. NEUKRUG. Again, from a national perspective, we are not in

any kind of health crisis at all and I don’t believe we are in a

health crisis in many if any smaller locations either. Will we be if

we do not invest in the future? Certainly if money does not continue to fund infrastructure improvements, crises will occur. I cannot believe, however, that in the drinking water and wastewater

industry we will not continue to make the investments necessary
18

to ensure adequate and healthy drinking water for the years to

come.

Mr. COSTELLO. My point is the funds are not available to make

those investments today. We have heard that in the testimony of

the four witnesses, yourself and the other three, today. We have

heard that previously in hearings. There is a huge gap between the

current funding level and what is needed today.

The next question is the study done by the AWWA conducted to how much money will be needed. Your testimony is $3 billion over

the current expenditures to keep up with repairs and replacement.

Also you made reference to an earlier report done by the Association that gives an estimate of the cost of treated water lost due to

aging and leaking water infrastructure. That is estimated in the

earlier report done by your association that somewhere the lost

water is between 2.8-3.5 billion annually.

Is it fair to say that the large portion of the cost of repairing

leaking water infrastructure could be recovered through the savings from avoiding the leakage of treated water?

Mr. NEUKRUG. Quite a bit of that is happening today but yes,

you are correct. I want to make it clear I don’t believe there is a

current health crisis. There is a funding crisis and there is $23 billion a year being spent by our industry to improve and replace infrastructure. I believe we can move forward and still be protective

of human health with the current funding.

However, additional funding is certainly needed in order to protect ourselves and our infrastructure and our society for the next

20, 30, 50 years.

Mr. COSTELLO. In your association, there are different estimates

as to the funding gap between what currently is available and

what is needed. What does your association estimate the gap to be?

I know EPA has estimated and I think your association has as

well.

Mr. NEUKRUG. I have three numbers listed here. One is the win

number, the trillion dollar cost that is out there, the EPA number

which is a $535 billion gap and AWWA over 30 years estimates a

need of $250-$300 billion over 30 years. Those are all numbers

done by different groups with slightly different sets of constants

but the bottom line is it is a lot of money. You are correct about

that.

Mr. COSTELLO. Mr. Johnson, I wonder if you might want to have

the opportunity to comment concerning recent reports in the District of Columbia and the concern about high lead levels in drinking water?

Mr. JOHNSON. I appreciate that opportunity, Mr. Costello. The

District of Columbia has experienced over the last year or so an uptick in the leaching of lead from service lines that serve homes in

the District of Columbia. We have estimated those service lines to

be some 23,000 at this point but due to poor recordkeeping historically in the District of Columbia, there are another 21,000 lines

that we aren’t certain of the lead service components. We believe

less than a quarter of those are lead but that is still a large number of service lines serving customers in the District.

We have taken a number of steps to correct this problem with

the overly aggressive water system, working along with EPA and
19

the Washington Aqueduct to change the chemistry of the water as

it leaves the Washington Aqueduct and is utilized in the system,

those changes will take place beginning in May of this year on a

very limited basis in an isolated part of the District of Columbia

followed by full scale implementation which will occur sometime

around September. We are very optimistic that will begin to

passivate those pipes once again and create the kind of film inside

that will cause the water to not be quite as aggressive in leaching

lead into the system.

We are working very diligently to resolve this problem and appreciate the attention that has been given to this issue by you and

your colleagues.

Mr. COSTELLO. Final question at this part, Mr. McCarter, the

First Utility District of Knox County, you made reference to your

board and boards of water districts throughout the country and

their ability to raise rates. I am wondering is your board in Knox

County an elected board or an appointed board?

Mr. MCCARTER. It is an appointed board.

Mr. COSTELLO. The members are appointed by?

Mr. MCCARTER. The county mayor. We are a State chartered

agency under the 1937 Utility Act in the State of Tennessee and

we are governed by a board of three commissioners. Those commissioners are appointed by the local county mayor.

Mr. COSTELLO. How long has it been since there has been a rate

increase for your users?

Mr. MCCARTER. February 2003 but we had the benefit from December of 1994 until February 2003 before we had an increase. We

do enjoy very favorable rates in our area but part of that is facilitated by the fact that our area has grown rapidly. When I talked

about pace for growth, we are 95 percent residential, if a new subdivision comes in, that developer who is going to earn a return on

his investment pays for that infrastructure and then in turn dedicates it to us for use and maintenance in the future. That leaves

us with the burden of providing adequate capacity at our water

treatment plant, sometimes extending bigger lines out to different

areas within the service area, and also expanding our wastewater

treatment plant to handle the capacity.

Mr. COSTELLO. Would you agree that one of the reasons why you

have reasonable rates is because you have a good congressman?

Mr. MCCARTER. Oh, yes. Very definitely.

[Laughter.]

Mr. DUNCAN. You weren’t hinting that he should raise my water

rates, were you?

[Laughter.]

Mr. MCCARTER. I would like to point out a number I heard I believe last week. Hilda Legg from Rural Utility Services—I was at

a conference and she gave us a number. She said for each $1 invested in water and sewer infrastructure, there was $14 added to

the local tax base. There was another $15 of private investment.

All of those things go into local jobs. That tells me if you can get

a 14 to 1 or a 29 to 1 return on your investment, this is a good

investment. Whatever we can spare to put into our water and

sewer or any kind of infrastructure in the water industry is a good

investment.
20

Mr. DUNCAN. Thank you very much.

Dr. Boozman is next, I believe.

Dr. BOOZMAN. In the testimony, it was mentioned that one of the

ways to prevent the lead from leaching was to introduce phosphorous and somehow that coats the pipes and helps out.

I come from the Third District of Arkansas and we have a tremendous problem with phosphorous in our point sources. We have

streams flowing into neighboring States and have worked very,

very hard to try and eliminate the phosphorous problem. It really

is a problem environmentally.

My question is are we creating another problem by introducing

phosphorous in this situation? Is there a better way to do it? Is

there a different way to do it as opposed to the phosphorous solution?

Mr. JOHNSON. That is an extremely good question and a very

timely one given the fact we are discussing infrastructure improvements and costs thereof here today. As you know, the Potomac is

a tributary to the Chesapeake Bay. There have recently been a

number of discussions and in fact proposed rules that talk about

limiting nitrogen in the Bay and one of those is to get as much

phosphate out as possible. This will add an additional challenge

and an additional cost to the treatment of water at Blue Plains

WasteWater Treatment Plant which is the largest advanced wastewater treatment plant in the world. We have a four stage treatment process and we have an advanced nitrogen and nutrient removal system located there but if we are saddled with that additional rule to remove an additional level of nutrients from the Bay,

we are talking about something that will be in excess of hundreds

of millions of dollars for improvements that will have to be made

for the benefit of the District of Columbia, Montgomery, Prince

Georges Counties and Fairfax in order to address that particular

problem.

Yes, we are compounding an existing problem. We found this was

the most expeditious and most tried and proven route to take so

we could get something done immediately but we have pledged to

continue a very high level of research that would be shouldered between the USEPA, Washington Aqueduct and the District of Columbia Water and Sewer Authority to determine if there are more

effective methods than using the zinc orthophosphates.

Mr. NEUKRUG. I think you have a pretty complete answer there

but let me also point out it is a very big balancing act you need

to do and it is very difficult. Mr. Johnson mentioned zinc

orthophosphate. Philadelphia is using zinc orthophospate also and

have to not only be concerned about the phosphate, you have to be

concerned about the zinc. So there are many different things you

need to think about when you make changes to your treatment or

optimize your control.

Dr. BOOZMAN. Thank you.

Mr. DUNCAN. Dr. Ehlers?

Dr. EHLERS. Thank you. I am sorry I missed the testimony. I was

tied up with another meeting.

I just wanted to comment and some of you have heard this lament before. That is simply that Americans as a whole do not appreciate our infrastructure, do not understand it and therefore are
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generally not willing to invest in it as they should. The problem of

aging water supply is a tremendous problem in this country. I am

worried that too many communities and citizens are automatically

turning to the Federal Government and saying, hey, this is a huge

problem, send us money so we can fix this.

Water supplies have always been the responsibility of local government, area or regional agencies formed by local governments. I

think the burden will continue to lie with them. The Federal Government can help to a certain extent through the Revolving Loan

Fund but I think we need a mammoth education program. I

shouldn’t use that word, program, that implies money, but all of us

together have to work very hard in educating the American public

in how important these infrastructure issues are. It is not just

water, it is also sewers, it is roads, highways, bridges and we have

a constant problem that everyone wants everything fixed perfectly

but they don’t want to pay for it. We really have to make it clear,

these things are good, good for society, good for the economy, they

help everyone but they do cost money. So maybe you have to get

along with a 32 inch TV instead of a 36 inch TV but you have to

put your priorities in order and recognize infrastructure is truly

that, it is infrastructure. It is the base of everything. We have to

get that across to the American people. It is there, it is important,

they absolutely have to have it and they have to be willing to pay

for it.

That is the end of my sermon, Mr. Chairman. Thank you for the

time.

Mr. DUNCAN. Thank you very much.

I started off this hearing by saying that there is almost nothing

people take for granted as much as they do their water supply.

Mayor Wallace, you are here representing the Mayors from across

the country. I am wondering how much concern is there and recognition among the Mayors across the country--is this a really high

priority problem with them? Mr. Baird in his opening statement

said we get very few people who come to us expressing concern

about the water infrastructure in this country. It may be because

most of the water agencies around the country have done a pretty

doggoned good job and maybe it is like Dr. Ehlers just said, I am

sure we don’t appreciate it enough but do the Mayors consider this

a very high priority situation? What do you say about that?

Mayor WALLACE. I think that is a very good question and the response is this is one of the highest priorities the mayors really

focus on, water and wastewater infrastructure. I know Mr. Baird

asked the question earlier today about wanting to make sure we

stay ahead of the power curve with growth. In my city of Sugar

Land, we have grown by a factor of five population in the last ten

years alone.

Mr. DUNCAN. I knew you had one of the fastest growing communities. You are a suburb of Houston, correct?

Mayor WALLACE. Actually I think Houston is a suburb of Sugar

Land.

Mr. DUNCAN. Oh, excuse me.

Mayor WALLACE. Houston is a small, tiny suburb to our northeast but when I first moved to Sugar Land ten years ago, our population was around 22,000 and that included within our city limits
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and our extra territorial jurisdiction areas that we could annex.

Today we have over 120,000 people in that area. So we are growing

quite rapidly. I would say this is one of the most important, critical

factors we are having to deal with, making sure we have the infrastructure in place so we don’t have log jams and things of that nature for streets, water, wastewater and I know many of the mayors

that serve in the U.S. Conference of Mayors feel exactly the same

way. That is one of the reasons why we are taking such a proactive

look on the private activity bond side of things. I know Mr.

McCarter made the comment earlier about public/private relationships and he is exactly right. There are some situations where it

just doesn’t make sense to do that. However, in the Urban Water

Council we have a number of best practices that we are constantly

looking at where we have the private sector coming to the table,

showing ways in which we can become more efficient, how we can

use our capital in a much more prudent, much more efficient manner. So we continue to focus on those types of issues and public/

private relationships where the cities still retain ownership, the cities still retain pricing controls, things of that nature, so we don’t

lose that control. However, as we continue to move forward and understand those practices, it is my belief the investment through the

private activity bond area would continue to grow as time goes by.

Mr. DUNCAN. Thank you very much.

Mr. Johnson, I will ask you, and the others may comment if they

wish, we have heard in this committee before, that the cost of

water to users across the country in general does not accurately reflect the full cost of providing water to the users. Do you think that

is true and how much are your rates covering of what you need

done? Is there a big shortfall there?

Mr. JOHNSON. In the case of the District of Columbia, we had a

period of about 10 years where there were no rate increases. During that ten years of no rate increases, there was serious disinvestment in the infrastructure and the system. So while the system

was collecting enough money to cover the cost of doing what it

needed to do, it was not covering the cost of things it really needed

to do.

We operate basically large production facilities that operate 24

hours a day, 7 days a week and they require constant investment

in order to sustain themselves. In the case of the District of Columbia and in Richmond where I worked before coming here, and other

utilities with which I am familiar, they operate on an enterprise

fund basis and the only source of funds are from the ratepayers.

With respect to the District of Columbia, we do receive some Federal grant money through the Safe Drinking Water Act and the

SRF for clean water. Beyond that, everything must come from the

ratepayer. So we have to cover our total costs of operation through

that rate base.

One of the first actions undertaken by the District of Columbia

Water and Sewer Authority was to increase rates by 42 percent at

a single swoop back in 1996 when it was created. Since that time,

rates have gone up on an annual basis at somewhere around 3 to

5 percent per year.

Mr. DUNCAN. What are your rates for residential users now?
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Mr. JOHNSON. The average expenditure is about $42 a month for

the average residential user. We are now considering a 5 percent

rate increase to support other infrastructure improvements we

have to do. To put that in some context, our budget this year on

the operating side goes up by about $16 million to $264 million,

$11 million of that increase is solely for support of debt service for

our capital program, $11 million of $16 million on a $264 million

budget all going to debt service. So it is truly capital intensive and

that is where the bulk of our money goes.

Mr. DUNCAN. Let me ask you this and I would like to hear from

some of the others. You are all here representing various national

organizations or associations. I don’t know the answer to this but

how much do rates vary across the country? Do they vary widely,

Mr. Neukrug? Do you have any knowledge about that?

Mr. NEUKRUG. Yes, rates vary very widely across the country.

Mr. DUNCAN. I thought they did.

Mr. NEUKRUG. Across the country and even across the river. A

lot depends on when the facilities were built and what kind of monies were used to build those facilities and what type of operation.

There are a lot of different factors, including whether you need a

pump station, is your water supply uphill or downhill from where

your community is, how far away is the water supply, how protected is the water supply?

Mr. DUNCAN. What is the lowest rate you have heard of and

what is the highest rate or do you have any knowledge?

Mr. NEUKRUG. I believe you will find that some of the lower rates

are urban northeastern cities and that is because the facilities were

built with monies from the 1950s and 1960s versus the newer suburban growth areas where it is all much newer facilities.

Mr. DUNCAN. But those areas are where they have some of the

biggest needs also because some of their infrastructure is so old, is

that not correct?

Mr. NEUKRUG. Yes, that is very much true. I heard someone talk

earlier today about smart growth and sustainable development. I

think those are things that more and more you are hearing suburbanites as well as city dwellers talk in unison and I think it is

really the way to the future to make sure costs for everyone reach

a more even keel.

Mr. DUNCAN. Mayor Wallace?

Mayor WALLACE. Mr. Neukrug made the comment about lift stations and things of that nature. One of the issues we are having

to deal with in the State of Texas is subsidence which means the

water is being pulled out of the aquifer at a faster rate than it is

being recharged. What is happening is many people who live in

those subsidence districts are having to convert from groundwater

to surface water. You may have two operations that are very efficiently run. However, one where you are pulling groundwater out

that has zero cost for procuring the water, you still have to process

it and another where you are having to convert from groundwater

to surface water where you have to buy the water rights, plus having to build infrastructure for the conveyance of the surface water.

Again, it really does vary a great degree from municipality to municipality.
24

Mr. DUNCAN. Mr. Neukrug, we talked about there aren’t a lot of

people who come to us about this but I mentioned and you also the

bond issue just passed in Pennsylvania. Everybody is in favor of

clean water, they want the water to be as clean as possible. Was

it difficult or easy to pass it, or was there much of a campaign or

just something people put on the ballot and they saw the words

clean water and decided to vote for it?

Mr. NEUKRUG. It is something that has been worked on through

the State and Governor Randal since he took office about a year

ago looking for a total of $2 billion in funding, partially coming

from the legislature and partially from this bond initiative. I think

it is a combination of different things and yes, I think it took a little bit of effort but if your point is that people see this, do they recognize this is a real need and are willing to pay for it, I think you

are absolutely correct.

Mr. DUNCAN. A lot of bond issues have been difficult to pass

across the country. They have been defeating bond issues for increased spending on education. I think it was in Miami they just

defeated a move to spend more money on a new stadium. So I commend you for that or commend the people of Pennsylvania.

Mr. McCarter, what is your most difficult problem? Is it handling

all the growth occurring in your service area? Is it your problem

with your INI?

Mr. MCCARTER. We are a young enough system now that we are

trying to stay ahead of the curve as far as INI but it is a serious

problem. Unfortunately by the time you have made the circuit in

your system and you are back to your starting point, it is time to

start over again. I think in some respect this may be time for the

engineers, and I am an engineer by education, to take a look at different kinds of materials. We looked at the 1970s and 1980s when

they were using concrete pipe. Yes, it is strong and you think it

will last a long time but as the earth shifts, you pull the joints

apart or you may get cracks due to lateral stresses as it rains and

dries out, or even in some cases clay pipe was used in the systems

at that point. That is not satisfactory. Even the later materials that

are used, PACS used in many gravity type systems today see the

same cracking and embrittlement you get when the earth moves

and we don’t know you have a leak until the water runs out unfortunately.

We are blessed with the fact that a water system is under pressure and you know it pretty quickly and can go repair it. It is pressurized internally. With wastewater, you know it when it comes

the 100 year flood or the 50 year rain event or a heavy rainfall and

then we see the stormwater coming in and it has to come out somewhere else and you are in violation.

Because we have been an area that has grown very rapidly, it

has been an assist in some cases but our biggest area has been to

keep up with the treatment plants. We are small compared to the

bigger municipals, we understand that, but at the same time, we

have had to go back and we did a water treatment plant with a

ten year plan before the next upgrade. We are at seven years and

we already have a design project to expand that.

Wastewater plants, biologically, we are in good shape. We had a

ten year plan there and now at the eight year period, we have to
25

increase some capacity to handle the hydraulic load. That is the

storm water, the INI. We can’t ignore the INI, we have to go work

on it but we know we can’t fix the INI quickly enough to handle

it and stay in compliance with the plant with EPA.

Mr. DUNCAN. Let me ask the same question from a little different direction. You run a district that has had tremendous

growth, a very popular area to move into and so forth. You mentioned 90 percent or more of the water districts or agencies around

the country have fewer than 10,000 customers.

Mr. MCCARTER. That is correct.

Mr. DUNCAN. In those very small districts, what would they tell

me are their biggest needs or problems or concerns?

Mr. MCCARTER. I think their biggest needs are going to be to address any change and in many cases, you find a small community

like the Congressman talked about where there are 68 customers

there. That is the only source. If they were close enough to another

town or utility where they could join, that would be wonderful and

they would do that immediately but they have had to do their own

in order to have appropriate environmental safety.

When they get the new regulation or their system gets older, this

has to be repaired. There is no additional funds for that repair.

Their biggest challenge is to deal with any change that comes. If

it is a treatment process that requires added infrastructure, then

okay, they have to come up with money. If they have to replace a

line because it is old, they haven’t had any excess revenue and

raising the rates gets to be a real problem in small communities.

I also sit on a governor-appointed board for the State of Tennessee that we call the Water and Waste Water Finance Board.

This is the board that when the municipals turn in their financial

statement to the State, if they had a negative retained earnings or

a loss two years in succession, they are reported to us and we have

the power to say take some action to correct the problem. We have

staff who deal with those problems and sometimes it is a small

town that just won’t change because we have fixed income people.

The politicians won’t change but if the government says or the Governor’s board appointed group says raise the rates and it does take

some large changes sometimes, 20, 25 and 30 percent three years

in a row to get them back on a viable path. The other option is at

some point they won’t be there. They have to operate at a level

where they can be sustaining. If there is no grant money to help

improve that infrastructure, certainly they have none from operations.

Mr. DUNCAN. Mr. Johnson, I was conferring at times when you

were responding particularly to Mr. Costello’s question about the

great concern about the lead in the water here. How long is it

going to take do you think to correct that problem? You said there

are 23,000 homes or hook-ups that still have the lead pipes and

21,000 others that may have it. Is that correct?

Mr. JOHNSON. That is correct, 21,000 of unknown material and

we believe perhaps as many as a quarter of those may have lead

service lines.

Mr. DUNCAN. How long is it going to take you to straighten out

this?
26

Mr. JOHNSON. It depends on the approaches taken, Mr. Duncan.

One suggestion advanced by the Board of Directors for the Authority is a full lead service line replacement in public space and having that completed by 2010. That is a very, very aggressive schedule. It would probably cost somewhere in the neighborhood of $350

million to complete but at that, you have not taken care of the lead

service line problem in the District of Columbia.

We have been into lead service line replacement once in the early

1990s. There was some service line replacement done in recent

years but that lead service line replacement effort has been undertaken in public space. That leaves the individual homeowner with

still a portion of lead service line that is in his property. If indeed

we consider the lead service line as being the culprit and the major

problem here, we still have not addressed the full scope of that

problem. We believe that could cost another $80 million to take

care of that problem and the private portion of the service line.

That assumes that it is only the 23,000 and not the ones we have

replaced a portion of in the public space and left some of it in the

private space which would drive the cost up probably around

$5,000 per unit for each of those we find. So it is a tremendous

problem.

We are very optimistic that the addition of the zinc

orthophosphate will create the kind of film or biofilm within those

pipes that will coat them from having direct contact with the water

but we still don’t know that and we would expect that would take

some time for that passivation to occur within the system.

Mr. DUNCAN. Do you say to the majority of the people here that

they shouldn’t have any concern? I assume you drink the water

yourself and not bottled water?

Mr. JOHNSON. That is correct. I am a District resident, I drink

the water every day and I certainly would not say that people

should not have a concern. I think any lead that is in the environment should be of some concern. However, I don’t know we have

a health crisis if you will because the contribution of lead in drinking water to the overall lead in the environment and lead that impacts health is probably pretty minimal.

The problem we are seeing and the research we have done with

blood lead testing in concert with the water testing we have done

has not shown a direct correlation between lead in drinking water

and elevated lead levels in the at risk populations which we consider to be children under six, nursing mothers and pregnant

women in the District of Columbia.

We have found some elevated lead levels but those have been directly tied to the additional step we have taken which has been to

go in and look at the environment the person is living in, the environment they work in and in all cases, we have found there has

been either lead based paint in the home or lead in the environment someplace where they have been working or lead dust or lead

in the soil around those properties.

Mr. DUNCAN. There are a lot of other sources.

Mr. JOHNSON. Yes, and those are the primary sources for elevated lead levels.

Mr. DUNCAN. Dr. Ehlers, do you have anything else?

Dr. EHLERS. No.
27

Mr. DUNCAN. Mr. Costello?

Mr. COSTELLO. Just one question and then I would like to address an issue Mayor Wallace brought up.

Let me say Dr. Ehlers pointed out as I did in my opening statement that we all have a challenge before us to make the public

aware of what it takes to address the issue of clean water, that

water consumption is not endless, we don’t have unlimited supply.

I want to compliment, as did the Chairman, the people of Philadelphia for recognizing that and stepping up to the plate.

There was a GAO report that came out, and I would direct this

to Mr. Neukrug and ask any of the other panelists if they want to

address it as well, which says that by asset management, there

ought to be a way to save significant money. Also the EPA in their

budget call for an emphasis on conservation which I agree with.

Yet in the President’s budget because all of the other budget concerns we have, the deficit that we are running, the President calls

for a proposed cut of about 30 percent in the Clean Water SRF and

also the elimination of earmarks.

I wonder if you and the other panelists believe that there is significant savings that can be achieved through both asset management and conservation or enough savings to make up the cut in

what this budget is calling for?

Mr. NEUKRUG. I don’t have enough information to tell you whether there is a balance between those two but I can tell you asset

management and water conservation are two key elements that the

American Water Works Association and the City of Philadelphia

believe in very strongly and are very supportive of. I think the City

of Philadelphia can be a poster child for how asset management

can be put into place and have improvements. If you care to come

up to Philadelphia, I would be glad to take you around and show

you what we have done.

Best practices is critically important. Taking those things and

making them balance with the GAO report, I do not have enough

information for me to do that.

Mr. COSTELLO. On the issue of conservation, in your experience

in Philadelphia or elsewhere, do you see any major conservation

plan being adopted in any particular region of the country?

Mr. NEUKRUG. In the water rich northeast, the water conservation plan is in place. I believe in the west is probably where you

have a better answer for your question. I don’t have the data to

show that.

Mr. COSTELLO. Mayor?

Mayor WALLACE. Actually this morning at the Urban Water

Council I was meeting with Mayor Chavez from Albuquerque, New

Mexico. They have instituted some water conservation programs

that have been very, very successful to the point of over a ten year

period of time working on about 30 percent conservation which has

been significant.

To your point as to do you see savings, something he was bemoaning today is you have all this fixed infrastructure so you have

cost out there and now that cost is having to be passed along to

the ratepayers, so they are using less water but because they are

using less water, the price per gallon is actually going up. So it is
28

a two-edged sword but they are definitely making a lot of progress

in conservation in Albuquerque.

Mr. COSTELLO. Mayor, you mentioned in your testimony you had

two issues I think you addressed openly to the Congress and one

was to not let the wage rate debates prevent change. I would just

comment to you that the wage rate debate preventing change

through this committee and through the Congress for a number of

years, there has been great support, substantial support in the

Congress for Davis-Bacon and prevailing wage laws. The vast majority of the States have passed prevailing wage laws through the

State legislature. Most of the major cities have prevailing wage

laws in place as well.

I would suggest to you that there is strong support on the committee and in this Congress for prevailing wage laws and there is

a very minority of people in this Congress blocking us from taking

up legislation over the issue of the prevailing wage laws. Prevailing

wage has a majority support in the Congress and it should not prevent progress. Hopefully it will not and we can get back to the bipartisan support that action in legislation passed out of this committee brought to the floor of the House. Hopefully we can get back

to that bipartisan support and not let just a few hold up major

pieces of legislation over issues that have strong support in the

Congress and throughout the country.

Mr. DUNCAN. Mr. McCarter, let me just ask you the rate increase

in February, is the rate I am paying you a high or low rate compared to the rest of the country?

Mr. MCCARTER. We abide by our board and you know each of

them for sure, Congressman. Let me tell you, in this particular rate

increase, what you will pay for your daily or monthly usage probably did not change because when we analyzed our need for a rate

increase, we found two particular areas that were creating a demand for expansion. One was new housing starts and the other

was irrigation. As you know, we live in a community where there

are upper income homes and you don’t build a home today without

having irrigation systems.

We had a rate increase above the normal level of monthly consumption on irrigation only. Your basic rate for water stayed the

same, no change in sewer and we changed the connection fees

which directly go to new housing starts. The water connection fee

and the sewer connection fee increased. So in your regular bill, unless you irrigate above 8,000 gallons a month, you should not see

any change.

Mr. DUNCAN. I don’t. You know I am one of your supporters. You

may remember my first client when I started practicing law was

the Northeast Knox Public Utility District, a small water district,

and I was very proud they stayed as a client of mine the whole

time I was in law practice. I used to come to your water district

meetings in Nashville and other places, so I know the job you do

and I think you do a great job.

I want to say I appreciate all four of you for taking time out of

your busy schedules to be here today. You have been very helpful

and very informative witnesses. We appreciate it very much.

That will conclude this hearing.
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[Whereupon, at 3:42 p.m., the subcommittee was adjourned, to

reconvene at the call of the Chair.]
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