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29–796 PDF 2018

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR 

AMERICA: WATER STAKEHOLDERS’ PERSPECTIVES 

(115–25) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON TRANSPORTATION 

AND INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 26, 2017 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: https://www.govinfo.gov/committee/house-transportation?path=/ 

browsecommittee/chamber/house/committee/transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

GARRET GRAVES, Louisiana 

BARBARA COMSTOCK, Virginia 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

BRUCE WESTERMAN, Arkansas 

LLOYD SMUCKER, Pennsylvania 

PAUL MITCHELL, Michigan 

JOHN J. FASO, New York 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida 

JASON LEWIS, Minnesota 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

JOHN GARAMENDI, California 

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

ANDRE ́ CARSON, Indiana 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut, Vice 

Ranking Member 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

FREDERICA S. WILSON, Florida 

DONALD M. PAYNE, JR., New Jersey 

ALAN S. LOWENTHAL, California 

BRENDA L. LAWRENCE, Michigan 

MARK DESAULNIER, California 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

GARRET GRAVES, Louisiana, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

THOMAS MASSIE, Kentucky 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida, Vice Chair 

BILL SHUSTER, Pennsylvania (Ex Officio) 

GRACE F. NAPOLITANO, California 

LOIS FRANKEL, Florida 

FREDERICA S. WILSON, Florida 

JARED HUFFMAN, California 

ALAN S. LOWENTHAL, California 

EDDIE BERNICE JOHNSON, Texas 

JOHN GARAMENDI, California 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

CHERI BUSTOS, ILLINOIS 

JULIA BROWNLEY, California 

BRENDA L. LAWRENCE, Michigan 

PETER A. DEFAZIO, Oregon (Ex Officio) 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Hon. Joy Cooper, Mayor, City of Hallandale Beach, Florida, on behalf of 

the U.S. Conference of Mayors ............................................................................ 5 

James M. Proctor II, Senior Vice President and General Counsel, McWane, 

Inc. ......................................................................................................................... 5

David Pedersen, General Manager, Las Virgenes Municipal Water District, 

on behalf of the Association of California Water Agencies and the California 

Association of Sanitation Agencies ..................................................................... 5 

David St. Pierre, Executive Director, Metropolitan Water Reclamation District 

of Greater Chicago, on behalf of the National Association of Clean Water 

Agencies ................................................................................................................ 5 

Hector Gonzalez, Government Affairs Manager, El Paso Water Utilities, on 

behalf of the Association of Regional Water Organizations ............................. 5 

Christopher Franklin, President and CEO, Aqua America, on behalf of the 

National Association of Water Companies ......................................................... 5 

Lawrence M. Levine, Senior Attorney, Natural Resources Defense Council ...... 5 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Joy Cooper ....................................................................................................... 45 

James M. Proctor II ................................................................................................. 52 

David Pedersen ........................................................................................................ 67 

David St. Pierre ....................................................................................................... 79 

Hector Gonzalez ....................................................................................................... 84 

Christopher Franklin .............................................................................................. 91 

Lawrence M. Levine ................................................................................................ 98 

SUBMISSIONS FOR THE RECORD 

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

Letter of September 26, 2017, from Diane VanDe Hei, Chief Executive 

Officer, Association of Metropolitan Water Agencies, to Hon. Garret 

Graves, Chairman, and Hon. Grace F. Napolitano, Ranking Member, 

Subcommittee on Water Resources and Environment ............................... 122 

Written statement of the American Public Works Association .................... 126 

Letter of September 26, 2017, from American Rivers et al., to Hon. 

Garret Graves, Chairman, and Hon. Grace F. Napolitano, Ranking 

Member, Subcommittee on Water Resources and Environment ............... 131 

Letter of September 25, 2017, from Elizabeth Hyman, Executive Vice 

President, Computing Technology Industry Association et al., to Hon. 

Garret Graves, Chairman, and Hon. Grace F. Napolitano, Ranking 

Member, Subcommittee on Water Resources and Environment ............... 137 

Letter of September 26, 2017, from Kim Glas, Executive Director, 

BlueGreen Alliance, to Hon. Garret Graves, Chairman, and Hon. Grace 

F. Napolitano, Ranking Member, Subcommittee on Water Resources 

and Environment .......................................................................................... 138 

Adam D. Link, Director of Government Affairs, California Association of 

Sanitation Agencies, supplement to hearing testimony .................................... 141 

Lawrence M. Levine, Senior Attorney, Natural Resources Defense Council, 

supplement to hearing testimony ....................................................................... 144 

ADDITIONS TO THE RECORD 

Written statement of the National League of Cities ............................................ 147 

Page

VI 

Written statement of Piedmont Municipal Power Agency ................................... 156 

Written statement of Ben Cote, Vice President, Sanexen Environmental Services, Inc. ................................................................................................................ 157 

Written statement of Bruce Hollands, Executive Director, Uni-Bell PVC Pipe 

Association ............................................................................................................ 163 

Written statement of WateReuse Association ....................................................... 166 

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(1) 

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: WATER STAKEHOLDERS’ PERSPECTIVES 

TUESDAY, SEPTEMBER 26, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON WATER RESOURCES AND

ENVIRONMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:03 a.m., in room 

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

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

Good morning and thank you all for being here. I want to welcome everyone to our hearing today on ‘‘Building a 21st-Century 

Infrastructure for America: Water Stakeholders’ Perspectives.’’ 

But before we begin, I would like to extend our thoughts and 

prayers to victims of Hurricane Irma, Hurricane Harvey, and Hurricane Maria. I know that we have millions of Americans that are 

continuing to suffer and struggle through recovery efforts across 

the United States. 

And I also know that there has been extraordinary generosity 

from members of the public across the United States and across the 

world, reaching out and offering resources and help, and many donations and services to a lot of our victims. But I ask that we all 

continue to keep the victims in our thoughts and prayers. And 

Mexico. Thank you very much. 

As the chairman of the subcommittee with oversight over the 

Army Corps of Engineers and the Environmental Protection Agency, I can assure everyone that we are working closely with our Federal agencies to ensure a speedy recovery for the States and communities that have been impacted by these awful storms. 

Since the subcommittee’s first hearing in March, we have explored a variety of potential ideas for inclusion in an infrastructure 

package, and of course our water needs. Water and wastewater are 

an important component of that. But I am happy that today we 

have a diverse panel that is very well-invested into water and 

wastewater infrastructure to help inform some of our efforts moving forward. 

We are all well aware of the needs for communities to address 

water and wastewater infrastructure, that they are substantial, 

and that these needs are going to continue to grow moving forward. 

In many communities, the water and wastewater infrastructure is 

2 

long past its design life, its intended service life. It is in need of 

urgent repair, replacement, and upgrading. 

As a result, leaks and blockages are all too familiar an experience across the United States and represent a massive waste of 

vital, and sometimes scarce, resources. We have many needs in regard to combined sewer overflows, sanitary sewer overflows, and 

other challenges that are affecting the performance and environmental impacts and of course, ultimately, the impacts on the end 

user of many of these systems. 

Shrinking municipal budgets, insufficient independent financing 

capabilities, and increasingly burdensome regulations without commensurate Federal support have compounded these problems and 

the communities’ efforts to address them across the United States. 

According to the EPA, the documented needs for sustainable 

wastewater infrastructure, CSO [combined sewer overflow] and 

SSO [sanitary sewer overflow] correction, and stormwater management are over $270 billion over the next 20 years, an extraordinary 

figure. I will say that again. The needs over the next 20 years are 

estimated to be approximately $270 billion. The needs for drinking 

water infrastructure drive this figure to over $600 billion. And 

these are very conservative estimates. 

So with talk of a major infrastructure package, today we ask the 

not-so-simple question: What can we do? We ask the question: 

What should we do? What is the role of the Federal Government 

in these infrastructure investments moving forward? And how do 

we best invest these scarce resources to efficiently achieve the objectives that we all share in regard to water and wastewater infrastructure? 

I believe it is going to take an all-hands-on-deck approach to reverse the decline of our Nation’s infrastructure. Federal, State, and 

local investment will be necessary but cannot be relied upon to 

solve all our problems. 

Instead, we need to move away from business as usual and utilize every tool that is in our toolbox. This means searching for new 

sources of funding. This means increasing collaboration between 

public and private entities. This means doing a better job more efficiently investing the scarce resources that we have available. 

Earlier this year we had a hearing on improving water quality 

through integrated planning, talking about opportunities for efficiency there, and ensuring that we are actually investing dollars to 

achieve the problems rather than spending dollars on process. 

We need smarter asset management and increased efficiencies in 

our water systems, and to do so, we need to incentivize the adoption of new and innovative technologies that will cut costs and improve water quality. 

And as Hurricanes Harvey, Irma, and Maria showed us this past 

month, we need to build resiliently. Treatment plants in Texas, 

Louisiana, Florida, and elsewhere have been unable to cope with 

the influx from Harvey, Irma, and Maria, causing poorly treated 

wastewater and raw sewage to flow into city streets and nearby 

waterways. This has not only caused numerous public health and 

environmental concerns, but also challenges our national security. 

We need to carefully prioritize our investments in water infrastructure to ensure that we are adequately protecting the public 

3 

health, promoting the economic growth of our communities, and 

preventing the degradation of the environment. 

I look forward to hearing thoughts from our witnesses today. And 

I now recognize Ranking Member Napolitano for an opening statement. 

Mrs. NAPOLITANO. Thank you, Mr. Chairman Graves, because 

you are highlighting this critical need to address all of our drinking 

water-related infrastructure. 

Next month is the 45th anniversary of the enactment of the 

Clean Water Act, the main reason why our Nation’s waterways experienced historic improvements in water quality even as the population increased by over 50 percent. To a large degree, the success 

of that act resulted from a strong Federal commitment to invest in 

its wastewater infrastructure improvements around the country. 

In recent years, States and communities have started to question 

whether the Federal commitment to invest in our water and wastewater continues or whether Congress now believes, as former Presidents Nixon and Reagan highlighted in their vetoes of prior clean 

water bills, that the construction of wastewater infrastructure is 

‘‘properly the responsibility of States and local governments.’’ 

Today trends on the Federal investment in the Nation’s waterrelated infrastructure are, in my opinion, going the wrong direction. Recently the Congressional Budget Office issued a report 

highlighting how the Federal contribution towards addressing our 

Nation’s infrastructure was declining, and how State and local governments are forced, where possible, to make up the difference. 

This trend on a decreasing Federal commitment to addressing 

our water infrastructure challenges reflects the trend on how the 

Federal Government provides its contribution to address these 

challenges. 

For example, in 1972 the Clean Water Act Construction Grants 

Program covered 75 percent of the cost of constructing water infrastructure for all our needs. However, when President Reagan proposed to substitute the Construction Grants Program for the Clean 

Water State Revolving Fund Program, the result was that the Federal contribution towards individual projects was reduced. This 

again compelled local communities to shoulder a greater share of 

the costs of individual projects. 

More recently, when Congress created another financial mechanism, the Water Infrastructure Finance and Innovation Act, 

WIFIA, again the Federal contributions toward the construction of 

individual projects was further reduced and communities were 

again forced to look elsewhere to make up the difference. 

To be clear, each of these mechanisms for infrastructure investment grants, SRF loans and federally leveraged private capital, 

have a place in solving our water-related infrastructure crisis. Yet 

I spot a trend and make this point: As the administration and Congress continue to discuss potential mechanisms to address our 

crumbling infrastructure, we recognize that the Federal Government already is contributing less towards the cost of individual 

projects today than just a few decades ago. 

Yet there is no free lunch when it comes to solving our infrastructure crisis. When the Federal Government contributes less to 

the cost of these projects, somebody has to pick up the difference, 

4 

and often that somebody is local government or municipality or the 

individual ratepayer that is already struggling to make ends meet. 

If we are serious about closing our water infrastructure needs 

gap, we must recognize the unique challenges facing all our individual communities. For those communities with financial capability to use the WIFIA program or private capital, that may be the 

appropriate mechanism of addressing their local needs. 

However, we know that other communities continue to rely on 

mechanisms such as the Clean Water State Revolving Fund to obtain the financial assistance. To that end, the committee should 

quickly approve the legislation such as the bipartisan Water Quality Protection and Job Creation Act, which I cosponsor with Ranking Member DeFazio and Mr. Duncan of Tennessee, to reauthorize 

increased funding levels for this important program. 

For those communities that still have the affordability challenges 

using these existing mechanisms, we need to explore ways to target 

Federal assistance to the neighborhoods or households least able to 

afford water and wastewater services. This will help communities 

meet their local infrastructure challenges in a way that does not 

disproportionately impact those least able to afford the cost. 

In addition, I am concerned that any forthcoming infrastructure 

proposal from this administration will be light on real infrastructure spending and heavy on gimmicks such as environmental 

streamlining that would do nothing to solve our infrastructure 

needs. That would be a significant missed opportunity. 

We will not be able to address our local water infrastructure with 

slogans that may sound like we are doing something but in fact we 

are not. Without question, our communities expect and demand 

safe and desirable water resources for their consumption, use, and 

enjoyment. It is our responsibility to ensure that these communities have adequate, affordable resources to address these needs, 

and that is that. 

Thank you, Mr. Chair. 

Mr. GRAVES OF LOUISIANA. Thank you, Mrs. Napolitano. 

Before I begin introducing our witnesses this morning, allow me 

to dispense with some unanimous consent requests. 

I ask unanimous consent the written testimony submitted on behalf of the following be included in the hearing’s record: the Association of Metropolitan Water Agencies; the American Public Works 

Association; a letter from the American Rivers and other conservation organizations; a joint letter from Computing Technology Industry Association, Smart Cities Council, and Smart Waters Network 

Forum; and a letter from BlueGreen Alliance. Is there any objection? 

[No response.] 

Mr. GRAVES OF LOUISIANA. Without objection, so ordered. 

[The aforementioned letters are on pages 122–140.] 

I ask unanimous consent the record remain open 15 days for additional comments and information submitted by Members or witnesses to be included in the record of today’s hearing. Is there any 

objection? 

[No response.] 

Mr. GRAVES OF LOUISIANA. Without objection, so ordered. 

5 

I ask unanimous consent that the record of today’s hearing remain open until such time as the witnesses have provided answers 

to any questions that may be submitted to them in writing. Without objection, so ordered. 

I am going to have to leave this hearing early today and I have 

asked the vice chair, Mr. Mast, to take over the chair at some 

point. I want to apologize to you for that. We have some conflicting 

committee business today. But I want to thank you all very much 

for being here. 

The first witness today is the Honorable Joy Cooper, the mayor 

of the city of Hallandale Beach, Florida. Mayor Cooper, I am going 

to break, I am sure, rules, protocol, and everything else. I just want 

to ask you very quickly, could you just give a quick update on how 

things are in your community from the impacts of Hurricane Irma? 

Ms. COOPER. Thank you very much, Mr. Chair. Thankfully, Hallandale Beach is 98 percent recovered. We were very, very fortunate. We were on the brink on flooding, but were not, and we are 

very fortunate, unlike Brickell. The Keys will be hopefully up and 

running for business, believe it or not, in November. And we are 

recovering. 

Certainly many communities still need assistance. You are right 

on point. Thank you very much for kind comments to those that 

are suffering. 

Mr. GRAVES OF LOUISIANA. You bet. Look, I think I speak on behalf of every member of this committee on both sides when I say 

that we all stand ready to continue assisting to find ways to help 

improve the efficiency of recovery efforts, and certainly continuing 

to keep your community and many others in our thoughts and 

prayers. 

But with that, please move forward with your testimony. 

TESTIMONY OF HON. JOY COOPER, MAYOR, CITY OF HALLANDALE BEACH, FLORIDA, ON BEHALF OF THE U.S. CONFERENCE OF MAYORS; JAMES M. PROCTOR II, SENIOR VICE 

PRESIDENT AND GENERAL COUNSEL, MCWANE, INC.; DAVID 

PEDERSEN, GENERAL MANAGER, LAS VIRGENES MUNICIPAL 

WATER DISTRICT, ON BEHALF OF THE ASSOCIATION OF 

CALIFORNIA WATER AGENCIES AND THE CALIFORNIA ASSOCIATION OF SANITATION AGENCIES; DAVID ST. PIERRE, EXECUTIVE DIRECTOR, METROPOLITAN WATER RECLAMATION 

DISTRICT OF GREATER CHICAGO, ON BEHALF OF THE NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES; HECTOR GONZALEZ, GOVERNMENT AFFAIRS MANAGER, EL PASO 

WATER UTILITIES, ON BEHALF OF THE ASSOCIATION OF REGIONAL WATER ORGANIZATIONS; CHRISTOPHER FRANKLIN, 

PRESIDENT AND CEO, AQUA AMERICA, ON BEHALF OF THE 

NATIONAL ASSOCIATION OF WATER COMPANIES; AND LAWRENCE M. LEVINE, SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL 

Ms. COOPER. Thank you. Good morning, Chairman Graves and 

Ranking Member Napolitano and members of this committee. My 

name is Mayor Joy Cooper. I am the mayor of Hallandale Beach. 

I would like to thank you for having this hearing today and inviting me to provide you with my city’s perspective, as well as recVerDate Aug 31 2005 11:14 Apr 23, 2018 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\2017\9-26-2~1\29796.TXT JEAN
6 

ommendations of the U.S. Conference of Mayors, on rebuilding our 

water infrastructure. 

Hallandale Beach is a 90-year-old community in southeast Florida. We are 4.4 square miles, with a population of 38,000 that 

swells to 50,000 during our winter season. Our annual budget is 

$110 million, with a general fund of $70 million. 

A full evaluation of our infrastructure needs was constructed in 

2014. That included underground and aboveground infrastructure. 

The price tag is well over $200 million. We have committed over 

$12 million in our water supply and treatment systems, $30 million 

in the next 5 years on our sanitary sewers, and we plan on spending approximately $1 million per year to deal with sea level rise 

and associated flooding. 

The proposed city budget has increased various service fees from 

10 to 51 percent to cover projected expenditures. In the case of 

stormwater management, the increase is 220 percent. With a median income of $24,000 and 15 percent of our residents living on 

$15,000 a year, the rising fees are difficult to afford. And there is 

a growing concern that those households unable to make payments 

will place a significantly greater burden on those that can. 

While we are committed to invest substantial amounts on public 

water and sewer services, we have a glaring need to invest in resiliency measures. Hurricane Wilma-related floods impacted numerous main roads in our community and resulted in damages to many 

homes. 

In response, an extensive pumping system for two targeted areas 

with repetitive flood-related losses had to be designed and constructed at a cost of more than $25 million. We are currently constructing phase 2 of the project. To complete the project and maintain it required the 220-percent increase in fees I mentioned earlier. 

This project would not have been possible without the help of 

FEMA both in financial and technical consultation. This is the type 

of model of intergovernmental partnership that works best. 

Overall, local governments in Florida have invested over $88 billion in water and sewer from 2000 to 2014, $7.1 billion in 2014 

alone. This amounts to investing $19.5 million every day. Sewer 

revenues increased 116 percent from 2000 to 2013, and water revenues increased 80 percent over the same time period. 

I just described my city and Florida’s experiences and investments. In my written testimony, there is an outline of national 

needs, along with how they should be determined, along with specific actions that would boost spending. But a majority point is— 

the major point, pardon me—is for local governments, by far the 

main investments in water and sewer, around 95 to 97 percent. 

We are trying to do our part, but it is clear that we are not— 

but clearly it is not adequate to meet our Nation’s infrastructure 

needs without unduly burdening our citizens. We need a more robust infrastructure plan with more resources and tools. The Conference of Mayors has recently released a framework for addressing 

the Nation’s local infrastructure needs. 

We ask you to do the following: 

Prevent any efforts to cap or limit tax-exempt municipal bonds; 

7 

Allocate resources directly to cities and counties for priority 

water and sewer infrastructure projects that will support low- and 

moderate-income neighborhoods; 

Support the use of public-private partnerships; 

Amend the Internal Revenue Code to remove the State volume 

caps for private activity bonds used to finance public purpose water 

and sewer facilities; 

Direct at least $5 billion in additional funding to low- or no-interest grants, to State Revolving Funds; 

Codify integrated planning and affordability legislation in Mr. 

Gibbs’ bill, H.R. 465; 

Build infrastructure that increases resiliency; and 

Increase Army Corps of Engineers funding and spend the full 

amount of the annual Harbor Maintenance Trust Fund on its intended use. 

I again want to commend this committee for addressing this important issue, and I hope you are successful in passing a comprehensive infrastructure bill. Thank you. 

Mr. GRAVES OF LOUISIANA. Thank you, Ms. Mayor. 

The next witness is James Proctor, from McWane, Incorporated. 

Mr. Proctor? 

Mr. PROCTOR. Chairman Graves, Ranking Member Napolitano, 

and members of the subcommittee, good morning. My name is Jim 

Proctor with McWane, and thank you for the opportunity to testify 

about an issue vital to our Nation’s health, economy, and security. 

Water is our most precious resource, one that is essential to 

human health and life. Access to water depends upon a reliable 

water infrastructure system that preserves, treats, and delivers 

safe drinking water to our Nation’s communities. For almost 200 

years, our team members at McWane have proudly provided the 

building blocks for our Nation’s water infrastructure, supplying 

products that transport clean water to communities and homes 

across the country. 

Despite its obvious importance, ‘‘out of sight, out of mind’’ best 

describes the Nation’s attitude toward water infrastructure. But 

the reality is that much of America’s wastewater and water infrastructure is nearing the end of its useful life, and over $1 trillion 

is needed over the next 20 years to rebuild and rehabilitate these 

systems. 

However, our water infrastructure challenges cannot be solved 

simply by providing more Federal funding. Rather, a fundamental 

shift away from the traditional approaches must occur, through a 

combination of new sources of funding, greater accountability, and 

improved governance. 

For the past 9 months, an inclusive group of prominent associations in the water infrastructure sector have been working together 

to discuss and develop a set of ideas that can provide this positive 

and transformative change. The participants in these discussions 

include the spectrum of publicly and privately owned systems, 

rural and urban communities, and drinking and wastewater systems. 

This package of ideas the group has discussed is broadly organized around three themes: first, removing barriers to investment 

8 

and better management; second, funding; and third, innovation. I 

will discuss each of these in turn. 

Removing investment barriers: Water and wastewater services in 

the United States are delivered by more than 70,000 entities, over 

80 percent of which serve fewer than 10,000 customers. In fact, 50 

percent serve fewer than 500 customers. These small operators 

sometimes struggle to achieve the scale of operations and expertise 

necessary to meet the challenges that they face. 

Voluntary partnerships with other entities can help them scale 

up to develop the necessary financial, operational, and technical capacity to solve this problem. There are many paths to such 

partnering arrangements, including public to public, public to private, private to private, and private to public partnerships, as well 

as concessions, operating agreements, or even the consolidation of 

assets or services. 

But let me emphasize, nothing I say today should be construed 

as favoring one path over another. Rather, all paths should remain 

available at the discretion of the local entity. 

Such partnerships should be encouraged by, among other things, 

more financial incentives, a regulatory safe harbor, removing the 

defeasance penalty, encouraging effective utility management and 

best practices, including requiring full-cost accounting, and empowering local decisionmaking. 

Congress should also increase Federal funding for the water sector. Since the recession, annual appropriations for water infrastructure have been decreasing while the funding need has been increasing. 

To correct that unfortunate trend, Congress should extend WIFIA and increase its funding to $45 million, increase funding to 

the State SRFs to $3 billion for each program, provide more technical assistance to small and rural systems, remove the volume cap 

on private activity bonds for water projects, retain tax exemptions 

for municipal bonds, and expand eligibility for SRF loans to private 

water providers. 

In addition to funding, Congress should help increase innovation 

by authorizing and funding the creation of a national water infrastructure test bed network, and establish a national program for 

collaboration in the sharing of best practices among utilities. Congress should also task the Department of Labor with developing a 

workforce development program for water and wastewater systems 

of tomorrow. 

These ideas have all been discussed by the various water constituencies mentioned above, and in concept they all enjoy the 

unanimous support of the group, subject to agreement on the actual legislative language. But I should point out that the consensus 

is a product of compromises that balance diverse perspectives and 

the resulting premise that all the various components are linked. 

These are only a few of the issues and solutions that merit discussion. The key takeaway, however, is that the scope and scale of 

America’s water infrastructure needs require a forward-looking and 

creative response. Reform and reauthorization of the Clean Water 

Act programs like the SRFs and WIFIA are crucial to that effort, 

and we at McWane are glad to have the opportunity to contribute 

to that process. 

9 

Thank you very much. 

Mr. GRAVES OF LOUISIANA. Great. Thank you. 

Our next witness is David Pedersen from Las Virgenes Municipal 

Water District. 

Mr. Pedersen. 

Mr. PEDERSEN. Good morning, Chairman Graves, Ranking Member Napolitano, and members of the subcommittee. My name is 

David Pedersen, general manager of Las Virgenes Municipal Water 

District in Calabasas, California. We are a municipal water/wastewater agency that serves about 100,000 people in western Los Angeles County. 

Thank you for the opportunity to testify on behalf of the California Association of Sanitation Agencies and the Association of 

California Water Agencies. CASA and ACWA represent hundreds 

of local agencies in California on water quality issues and drinking 

water needs. Today I will summarize four important issues that 

are described in more detail in my written testimony, which I ask 

be accepted for the record. 

First, CASA and ACWA ask the subcommittee to support a robust infrastructure funding partnership between the Federal Government and local communities, including both grants and loans. 

California and much of the Nation face deteriorating infrastructure, increased regulatory compliance costs, unpredictable weather 

conditions, and general population growth. 

The U.S. EPA State revolving loan fund program right now is 

currently the most important and effective water infrastructure financing program available to local agencies. In fact, projects that 

were constructed with SRF funds, including and especially those 

for water recycling, were key and instrumental in reducing the impact of the statewide drought that we experienced in California. 

In addition to robust funding, we recommend that the subcommittee update the formula that is used to allocate those limited 

funds to States. 

Moving to our second issue, we ask that the subcommittee extend 

National Pollutant Discharge Elimination System permit terms 

from 5 to 10 years. We believe this change would provide significant benefits to States and to the local public and wastewater 

agencies. 

In the 45 years that the program has been in place, NPDES permits have become increasingly complex, and the treatment technologies have become substantially more expensive and time-intensive to implement. As a result, many local agencies are faced with 

negotiating the terms for a new permit while they are still working 

to implement the improvements for their current permit. 

The 5-year term that was established in 1972 no longer reflects 

today’s clean water challenges, and it is an obstacle for long-term 

planning. My agency is a prime example of the advantages of a 10- 

year permit. In July of 2013, the U.S. EPA established a TMDL for 

our watershed that created some of the toughest nutrient standards in the country. Upgrades to our treatment plant were estimated to be in the neighborhood of $160 million. 

Through a stakeholder-driven process, we developed the Pure 

Water Project Las Virgenes-Triunfo, a surface water augmentation 

project that provides a new source of drinking water for us and also 

10 

meets our regulatory needs. The $95 million project is estimated to 

take 131⁄2 years to complete, yet we will be faced with renewing our 

NPDES permit every 5 years during that process. Sacramento Regional County Sanitation District experienced a similar challenge 

in that they were making over $1 billion in improvements to their 

treatment facilities when they were faced with a 5-year permit renewal. 

Ten-year permit terms would give local water and wastewater 

agencies adequate time to comply with their existing regulatory requirements before new ones are imposed, and also States could direct their resources to higher priority issues. Importantly, the new 

10-year permits would include the existing permit reopener provisions that allow new conditions to be addressed into the permit 

during the term of the permit. 

Third, CASA and ACWA support integrated planning as an effective means for public agencies to address multiple Clean Water Act 

requirements. We support proposals recognizing the value of integrated plans, particularly those that are developed by our colleagues at NACWA [National Association of Clean Water Agencies] 

and in collaboration with the EPA. Integrated plans promote more 

comprehensive water planning while stretching limited local resources. 

And as our final request, we ask that Congress avoid proposals 

that include consolidation or reorganization of local water and 

wastewater agencies as a criterion for Federal funding or to rank 

projects for Federal funding. Consolidation may be appropriate in 

certain instances, but we believe these decisions are best left to the 

policymakers at the local level. 

In summary, we urge the subcommittee to maintain robust funding for the vital SRF program, extend NPDES permit terms to 10 

years, support the use of integrated plans, and avoid consolidation 

or reorganization as a criterion for Federal funding. 

Thank you for your consideration. 

Mr. GRAVES OF LOUISIANA. Thank you. Our next witness is David 

St. Pierre from the Metropolitan Reclamation District of Greater 

Chicago. 

Mr. St. Pierre. 

Mr. ST. PIERRE. Chairman Graves, Ranking Member Napolitano, 

and members of the subcommittee, thank you for the opportunity 

to appear before you today. My name is David St. Pierre, and I am 

the executive director of the Metropolitan Reclamation District of 

Greater Chicago. I also serve as vice president of the National Association of Clean Water Agencies, which is a not-for-profit trade 

association that represents the interests of public clean water agencies nationwide. 

The need for greater investment in our Nation’s infrastructure, 

including water, is well-known. Nationally, our Nation’s clean 

water infrastructure has received a D-plus grade from the American Society of Civil Engineers, and the EPA calculates national investment needs to fully comply with the Clean Water Act under 

current conditions at approximately $271 billion over the next 20 

years. 

Those of us who work in this sector understand that the true investment needs are likely much higher. And while local clean water 

11 

investments are often driven by Federal statute or enforcement actions, over 90 percent of water investment in the U.S. is funded by 

local dollars. 

Earlier this year, then-President-elect Trump called for a tripling 

of Federal funding to the State Revolving Funds to help address 

water infrastructure investment needs. NACWA applauds this recognition of the important and successful role of the State Revolving 

Funds. 

We are grateful for the work the subcommittee has done to support strong SRFs. As discussions advance regarding Federal infrastructure investment, it is imperative that the SRFs play a prominent role and that real investment dollars for water are on the 

table to ensure clean water gains continue to be made. 

Private investments facilitated by the Clean Water SRF may be 

appropriate in certain situations but should not come at the expense of financing for publicly owned systems which serve the overwhelming majority of the U.S. sewered population. 

Another very timely area of interest to NACWA and its members 

is the potential for regionalization, public-public, and public-private 

water utility partnerships to help advance clean water, particularly 

in areas where there are opportunities for economies of scale or 

sharing of resources and expertise. 

In the Chicago region, our agency provides technical and financial support to 125 communities in Cook County to address infrastructure needs and build resilient communities. These efforts have 

encouraged local community investment and collaboration and increased efficiency in addressing infrastructure needs. These regional efforts allow solutions to problems in local communities and 

decrease State and Federal liabilities. 

Another element of sustainable long-term financial footing is 

moving toward full-cost accounting. But given the complex and dynamic nature of this calculation, we do not support it as a barrier 

to the SRFs. Municipalities face enormous pressure to maintain 

rates based on the abilities of low-income households to pay, which 

can inhibit charging the full cost of the service provided, or lead to 

deferred investments. A safety net for the lowest income households would better position utilities to charge rates that fully reflect the true cost of service and address the infrastructure investment gap. 

In addition, utilities need flexibility to address today’s challenges. These challenges underlie why the clean water sector is encouraged by the U.S. EPA’s integrated planning framework. The integrated planning approach provides communities an opportunity 

to consider their clean water obligations holistically, to develop 

compliance schedules that can maximize each ratepayer dollar, focused first on the investments that are of top priority for the community and environment, and ensure the greatest possible net environmental benefit is achieved. 

We greatly appreciate the work that the subcommittee has done 

today on integrated planning and to address affordability concerns. 

We recognize Representative Gibbs, former chairman of the subcommittee, who sponsored H.R. 465, the Water Quality Improvement Act. 

12 

Similarly, we recognize several members of the Transportation 

and Infrastructure Committee, including subcommittee Ranking 

Member Napolitano, Representative Bustos, and Representative 

Smucker, cosponsors of H.R. 2355, the Water Infrastructure Flexibility Act. These efforts signify nothing less than trying to bring 

the Clean Water Act into the 21st century. 

In closing, I would like to thank the subcommittee, Congress, 

and the administration for their focus on clean water infrastructure 

investment. I believe that investment in water is a nonpartisan 

issue which protects public health and the environment, creates 

jobs, and is essential for economic development. As Congress looks 

to advance the 21st-century infrastructure for America, clean and 

safe water must be a top investment priority supported by a true 

local, State, and Federal partnership. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. St. Pierre. I think 

you ended right at 5 minutes. Perfect timing. 

Our next witness is Mr. Hector Gonzalez, El Paso Water Utilities. 

Mr. Gonzalez. 

Mr. GONZALEZ. Good morning, Chairman Graves and members of 

the subcommittee. My name is Hector Gonzalez. I am here representing El Paso Water. El Paso Water provides water, wastewater, reclaimed water, and stormwater services for the residents 

of El Paso and some of the surrounding areas. 

I am also on the board of directors of the Association of Regional 

Water Organizations, which supports policies and infrastructure 

funding programs that will help regional water and wastewater 

systems in unserved and underserved communities. 

Thank you for the opportunity to share my thoughts on key priorities for infrastructure legislation. The first of the priorities deals 

with how the Association of Regional Water Organizations is focused on how best to help rural water systems in unincorporated 

areas receive better service at a lower cost. Outside of the city limits of El Paso, approximately 35,000 people are not connected to a 

public wastewater system. An estimated $500 million is required to 

provide the needed connections. 

Laws prohibit our utility from spending ratepayer money outside 

the service area, but we have loaned expertise and partnered to 

identify Federal funding and manage projects. Various Federal 

agencies have helped extend potable water service, but without 

wastewater connections, homes often have failing septic systems, 

which pose a public health hazard. 

There are thousands of similar stories across rural America, 

where communities are underserved and must rely on inadequate 

septic systems. There are an estimated 50,000 community water 

systems across the country, and all but the largest have a difficult 

time accessing capital, which prevents major infrastructure improvements from moving forward. 

These are challenges that need attention in the new infrastructure bill. Programs with Federal matching grant funding are needed to fill these gaps. The Association of Regional Water Organizations sees regionalization through both private-public partnerships 

and public-public partnerships as the best solution to improve 

water resource planning and increase access to capital. Through 

13 

partnerships, we can fill the gaps and execute major capital investments and deliver results. 

The second priority that I would like to focus on is water reuse. 

With the frequency of drought and growing challenges from declining freshwater resources, more and more communities are turning 

to impaired groundwater, wastewater, and stormwater to meet 

their future needs. 

El Paso Water is active with the WateReuse Association, which 

represents various communities and effectively advocates for policies and funding to increase water reuse. They emphasize the value 

of water reuse as a safe, reliable, locally controlled water supply 

that protects the environment, sustains economic growth, and provides a high quality of life. 

Several decades ago, El Paso Water faced water scarcity fears. 

Yet, because of our pioneering efforts in reuse and conservation, we 

are now considered a leader in water resource innovation. But we, 

and many communities throughout the arid West, will need to expand the reuse of water resources to ensure freshwater supplies for 

the future. 

I will share two water reuse examples from my home city. El 

Paso Water owns and operates the Kay Bailey Hutchison Desalination Plant. This is the largest inland desalination plant in the 

world. It provides a drought-proof supply for our city, and also 

sometimes serves the needs of Fort Bliss. We will need to significantly expand this plant in the future. 

In another reuse project, El Paso plans to build an advanced 

water purification facility that will transform wastewater into highquality drinking water and send it directly to our customers. Both 

of these water reuse projects are expensive, at about $100 million 

apiece. Both projects are essential to our future water supply. 

Many other communities face similar challenges, and with Federal funding opportunities, these types of projects can move forward, spur innovation, and ultimately bring down the cost for 

water reuse overall. 

I would like to mention a couple of considerations as you take up 

the infrastructure bill. El Paso has partnered with the U.S. Army 

Corps of Engineers in various stormwater projects. Infrastructure 

legislation should expand Corps funding for dams and flood control 

systems. New focus areas should include the capture and treatment 

of stormwater for reuse. 

Military base partnerships with local water utilities deserve attention. El Paso Water provides 100 percent of the wastewater 

service to Fort Bliss, and infrastructure at times serves municipal 

and military base purposes and would benefit from Federal funding 

program opportunities. 

Finally, I would encourage streamlining of regulatory requirements, especially related to water reuse, and simplifying the Federal funding application process. Excessive delays could be removed 

with a new one-stop approach of prequalification based on a master 

application and a single comprehensive review. 

In closing, continued utility innovation success depends on partnership with Federal Government agencies and the ability to obtain funding assistance for innovation projects. Thank you for the 

opportunity to be here today. 

14 

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

Our next witness is Mr. Christopher Franklin from Aqua America. 

Mr. Franklin. 

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

Napolitano, and members of the subcommittee. I am Chris Franklin, and I am president and CEO of Aqua America and presidentelect of the National Association of Water Companies, on whose behalf I speak today. 

The NAWC is the association that represents the regulated 

water and wastewater industry. In many ways, our companies operate water utilities in the same ways that large gas and electric 

utilities operate. NAWC members are located throughout the Nation, and range in size from multibillion-dollar companies to some 

smaller and more localized water utilities. 

The company I lead is called Aqua America, and it is a water and 

wastewater utility that serves about 3 million people in 8 States 

across the country. In fact, we have operations in at least seven 

members’ districts of this subcommittee. I would like to focus my 

time today on the actions the Federal Government can take to unleash solutions to meet the Nation’s significant water and wastewater infrastructure needs. 

Now, as a result of our size and our management strategies, regulated water utilities are able to take advantage of economies of 

scale. Spreading the cost of infrastructure improvements, operating 

costs, and billing and customer service over more people creates a 

benefit for customers. 

Now, on a typical 3-year cycle, Aqua America spends over a $1 

billion in capital replacing water and wastewater pipe. Over the 

last decade, we replaced an average of 130 miles of water main 

each year. Due to the large amount of pipe we purchase, we can 

buy pipe at bulk prices considerably lower than many other utilities. And by the way, all of this work has dropped the frequency 

of our main breaks to far less than the national average. 

Now, you know very well the challenges faced by small and midsized city mayors. Public safety, human services, streets—for a 

mayor, finding capital dollars to replace water and wastewater 

mains underground where nobody will take notice is a challenge. 

We understand these political and financial challenges facing elected officials. And frankly, it is one of the reasons we believe that 

NAWC can be part of the solution. 

Today the annual appropriation for the clean water and drinking 

water State revolving loan funds are approximately $2 billion. Importantly, the six largest members of our association collectively 

are spending $2.7 billion every year on their systems. So for the 

committee’s consideration, I would like to talk about two policies 

that would lead to more efficiencies. 

The first recommendation is the Federal Government should 

incentivize partnerships in the water sector. Let’s face it, there are 

more than 50,000 water systems in the country and 16,000 different wastewater systems. I have been an executive and a board 

member of water and electric utilities now for more than two decades, and I can tell you that without economies of scale, it is tough 

to be viable in the utility business for any length of time. 

15 

That is one of the reasons why most environmental agencies and 

public utility commissions have long ago adopted policies to encourage consolidation of water and wastewater systems. Incentivizing 

partnerships and consolidation is the partnership we recommend to 

you today. 

I want to acknowledge my colleagues on the panel and across the 

municipal sector for the fine work they do. There are many wellrun municipal systems, particularly in larger towns and cities 

where economies of scale are apparent. But within those 65,000 

water and wastewater systems, there are also many smaller systems that continue to struggle. 

Now, the second recommendation that we will make is that the 

Federal Government mandate effective utility management and require financial viability and accountability for performance. Noncompliant water and wastewater systems not only create a growing 

financial burden, but they pose significant risks to public health 

and the environment. 

According to the EPA, there are presently thousands of domestic 

wastewater systems that are in significant noncompliance. These 

failing systems should not be subsidized with Federal dollars without demonstrating a path toward long-term financial and operational viability. 

We recommend that all applicants for public dollars demonstrate 

that they have fully accounted for the long-term costs of their 

projects, including any risks inherent in construction, operations, 

and maintenance costs. 

I appreciate the invitation to appear before the subcommittee 

today, and at the appropriate time, will be happy to answer questions. 

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

Our last witness is Mr. Lawrence Levine from the Natural Resources Defense Council. 

Mr. Levine, thank you for being here. You are recognized for 5 

minutes. 

Mr. LEVINE. Thank you. Good morning, Chairman Graves, Ranking Member Napolitano, and members of the subcommittee. I am 

Lawrence Levine, a senior attorney with Natural Resources Defense Council. I appreciate the opportunity to testify today. 

First-class infrastructure to protect clean water and public health 

is among our most basic and most important needs as a Nation. 

Yet in much of the country, our aging infrastructure is simply not 

up to the twin tasks of providing everyone with access to the safe 

water and sewer services they need, and keeping our waterways 

free of harmful pollution. 

In too many communities, both large and small, urban and rural, 

the public is still drinking water with contaminants that pose serious health risks from systems that leak a substantial portion of the 

water they produce. Meanwhile, sewage and polluted runoff make 

our waters both unsafe for human use and too degraded to support 

the fisheries and natural habitat we need for sustenance, recreation, and natural flood mitigation. 

The effects of climate change, droughts, floods, storms, sea level 

rise, all threaten to degrade or damage our water infrastructure 

16 

even further, as the devastation caused by Hurricanes Harvey, 

Irma, and Maria over the last month so drastically illustrates. 

To protect our communities and our natural environment, there 

is a critical need for major new investments in water, wastewater, 

and stormwater infrastructure. Critically, the scale of the need is 

so vast that without a large and lasting commitment of new funds 

from the Federal Government, leveraged with additional funds 

from the States, our communities simply will not be able to fund 

the investment they need so badly to bring their water systems 

into the 21st century. 

Major new Federal investments, like all of our Nation’s infrastructure investments, can be deployed to simultaneously deliver 

economic, social, and environmental benefits, spur innovation in 

clean and efficient water and energy systems, invest in climate-resilient infrastructure projects and smart technology, ensure accountability for every dollar, allocate flexible funding for local and 

regional planning, and create good, forward-looking jobs beyond the 

construction phase of infrastructure projects. 

For water, wastewater, and stormwater infrastructure funding 

specifically, NRDC also urges Congress to embrace a number of key 

principles, including the following: 

Expand the State Revolving Funds and leverage additional investment by States and local governments; 

Direct new funds to natural and nature-based infrastructure solutions; 

Ensure that projects are designed, sited, and built with the full 

consideration of the future impacts of climate change; 

Ensure that communities and families in the greatest need are 

not left behind; 

Amplify benefits to the economy by incorporating ‘‘buy American’’ 

domestic sourcing requirements, prevailing wage provisions, and 

green job opportunities. 

Based on these overarching points, NRDC offers the following 

specific priority recommendations to Congress. 

First, increase funding and improve use of existing funding. Increase the current annual appropriations to the SRFs to $6 billion, 

which would mark a return to a similar level, adjusted for inflation, as was appropriated under President Reagan for the Clean 

Water SRF alone, and it would be the level the President promised 

during last year’s campaign. 

Direct the additional funds to water use efficiency, green infrastructure, stormwater capture and reuse, hardship communities, 

source water protection, nutrient reduction, lead service line replacement, water loss control, and climate resilience. 

Provide incentives to States to leverage Federal funds and invest 

more State dollars in water infrastructure by allowing States that 

exceed the minimum required match for Federal SRF capitalization 

grants to distribute a larger share of their SRF funding as grants 

rather than loans. 

Reauthorize and improve the sewer overflow control grant program under Clean Water Act section 122. 

Improve implementation of existing requirements, which Congress enacted in 2014, that promote the use of water efficiency, recapture, and reuse strategies in Clean Water SRF-funded projects. 

17 

Second, ensure water and sewer service remains affordable for 

low-income households even as utilities generate additional local 

revenue to meet clean water needs. This includes: 

Prioritizing disadvantaged communities in water infrastructure 

grant programs; 

Creating a Federal low-income water and sewer assistance program, analogous to LIHEAP [Low Income Home Energy Assistance 

Program] for energy, to help maintain affordable costs at the 

household level, and using Federal policy to spur creation of complementary State and local assistance programs to promote more 

equitable water and sewer rate structures; 

And to increase utilities’ use of asset management, green infrastructure, and water efficiency strategies that reduce costs for all 

customers. 

Third, reinstate the Federal Flood Risk Management Standard to 

protect the value of Federal water infrastructure investments by 

reducing the risk of severe damage and flooding disasters, as S. 

1798 would do, introduced 2 weeks ago. 

Fourth, support tools for effective prioritization of pipe replacement and leakage control, as in title 3 of H.R. 3275. 

And finally, preserve and strengthen source water protections, 

including the Clean Water Rule, to protect health and reduce treatment costs. 

Thank you. 

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

I have a couple of quick questions and Mr. Mast and I are going 

to switch up here. I am curious. We can sit here and talk for hours 

about the need for Federal resource needs in water and wastewater, and it seems as though the Federal Government’s role has 

continued to grow and evolve over time. 

As we focus on building a new infrastructure package, a new infrastructure approach at the Federal level, one of the things that 

I believe we need to do is we need to determine what the Federal 

objectives of this infrastructure package is. What are the Federal 

priorities? And then to develop effective criteria or metrics for us 

to advance those and actually complete those objectives, as opposed 

to taking a shotgun-type approach where we throw a nickel at 

every $10 problem across the country. 

I am curious if—Mayor Cooper, could you reflect a little bit on 

what you view the Federal Government’s role is in water and 

wastewater infrastructure? 

Ms. COOPER. Thank you, Mr. Chair. Over the past 10 years in 

working with integrated planning and looking at what we can do, 

I believe that in my testimony, in my written testimony, in the suggestions that we can move forward is really work on the SRF funds 

and free up some more money as far as grants. We have been focused on that as well. I think that would help offset a lot of the 

affordability. 

Also, as far as integrated planning, give the timeframes that 

many of the members have suggested here. And many times it is 

about integrated planning, fair and equitable distribution of the 

funds, and the SRF plan that we are asking to fund, and the other 

list of recommendations from the U.S. Conference of Mayors. 

18 

Mr. GRAVES OF LOUISIANA. Anyone else care to quickly comment 

on that, on what you see the Federal Government’s role being in 

water and wastewater investment? Mr. Franklin? 

Mr. FRANKLIN. Mr. Chairman, I would suggest, as well as you 

could, encourage partnerships—partnerships within municipals, 

partnerships between municipal and investor-owned regulated utilities. The more we can bring economies of scale to bear where we 

can handle these heavy, heavy costs over more people and spread 

that cost more widely, I think long term we get rate stability. 

And certainly there is a role for Federal dollars. Certainly there 

is a role for the Federal Government. But the encouragement of 

these partnerships I believe is critical. 

Mr. GRAVES OF LOUISIANA. Thank you. Being a recovering nonFederal sponsor with many water projects in south Louisiana, one 

of the challenges we had was the Federal Government would say, 

OK, here is an area where we can participate, but the certainty associated with their funding stream was always very unpredictable. 

And so, my two cents, it seems as though if we can move in a 

direction of better prioritizing what the Federal Government’s role 

is and improving predictability of certainty of the funding, that is 

going to provide a much better situation for folks trying to implement water and wastewater projects at the State and local level. 

Mr. Levine, I want to ask you a question. Toward the end, you 

made reference to the Federal Flood Risk Management Standard. 

That is something I struggled with. 

If you are going to tell communities that they cannot rebuild— 

for example, Mayor Cooper’s State—that they cannot rebuild or invest any Federal funds unless they meet a 500-year standard or 

the alternatives that were in place, yet FEMA is not allowed to 

compensate you for that higher or more resilient standard, how do 

you recover a community that is already challenged with recovery, 

with perhaps, in the case of Florida, billions and billions of dollars 

in recovery, loss of taxes, loss of property values, and things along 

those lines? 

It seems like you are actually throwing a curve ball to a community that is already undermined. And this is not a curve ball question. I really am curious about this because I have struggled with 

this question for over a year now. 

Mr. LEVINE. Sure. Thanks for the question. In our view, it is 

really a commonsense approach. Right? If we are going to—it goes 

to your question, really, of prioritization and how we are going to 

spend Federal dollars in the most effective way. Right? 

If we are putting Federal dollars towards projects that are likely 

to see the same damage over and over again from floods, from larger storms that, as we all know, are more likely to occur more frequently over the future, and we have already been seeing that, if 

we put Federal dollars towards that and do not design those 

projects in a way that is resilient to minimize or avoid that flood 

risk damage, that flood risk, it is not a wise use of Federal funds. 

And so there is simply a need to find the right projects built in 

the right way to serve those local needs. But it does not serve either the needs of the Federal Government or the needs of the local 

community if things are rebuilt in ways that are not going to be 

19 

resilient and be continually able to function and provide those basic 

local services. 

Mr. GRAVES OF LOUISIANA. Thank you. My point—I mean, everyone, I think, supports resilience. The problem is that without the 

corresponding resources for a community that is already dealing 

with recovery, then you are going to be unable to rebuild your community. 

If you are requiring that rebuilding occur at a higher standard, 

you are going to be unable to rebuild your community without the 

corresponding resources. So I am just concerned. I am not a town, 

but I am just concerned about the relationship there, and I think 

we need to think through this a little bit more. 

But with that, I want to thank you all very much. I have some 

other questions we are going to submit in writing to you and would 

appreciate your responses there. But I am going to recognize Mrs. 

Napolitano and am going to switch with Mr. Mast. So thank you 

very much for being here. 

Mrs. NAPOLITANO. Thank you, Mr. Chair. 

In my opening statement, I did express some concern about recent trends on how Congress provides Federal assistance to wastewater infrastructure projects. Several of you noted, rightfully, that 

the Federal share of individual projects has been decreasing over 

time to a point that, some of you noted, the Government invests 

less than 10 percent of annual water and sewer capital costs. 

Several of you also note that the current mix of federally subsidized loans and leveraged Federal financing does not work for 

every community. Is it time for Congress to rethink the trend, as 

my colleague has stated, envision a renewed Federal water and 

wastewater program, to address the infrastructure needs of communities facing affordability concerns, such as those with lower income populations or smaller or rural communities? 

Also, the Federal Government played a significant role in financing the first generation of water and wastewater systems immediately following the enactment of the Clean Water Act. Is it time 

for us to renew the role for certain communities to implement in 

the next generation of projects? Mr. Pedersen? 

Mr. PEDERSEN. Thank you, Ranking Member Napolitano. Good 

question, and in California we certainly support efforts to look at 

affordability for water and also affordability and investment in disadvantaged and economically challenged areas. 

We believe that there is a great need for grant programs to continue. We recognize that the funding landscape has changed dramatically, and loans are actually a very valuable tool, the SRF program. But in addition, grants for those economically challenged 

areas, we think, are very helpful to both fund their capital needs, 

and perhaps in the future, O&M needs. 

With regard to the Safe Drinking and Clean Water State Revolving Fund, as my colleagues on the panel have urged the subcommittee, increased levels of funding are very important. We are 

really on our third, perhaps even our fourth, cycle of improvement 

since the adoption of the Clean Water Act, and those improvements 

are becoming more expensive and more time-intensive to implement. And so that funding is vital to support our local agencies. 

Mrs. NAPOLITANO. Mr. St. Pierre? 

20 

Mr. ST. PIERRE. So I think lower income concerns are a major 

issue and a barrier to charging the full price for water services. I 

think at the Federal level, it really would be helpful for some kind 

of a program, whether it is a water ratepayer assistance program, 

to make water affordable. 

I think that, at the local level if we could charge full-cost pricing, 

a lot of these things become a lot more affordable. But that is the 

issue. It is lower income affordability concerns that really keep 

water from that full-cost price. 

Also, I do believe in partnerships with other communities. Chicago, we do provide grant programs for disadvantaged communities. The economy of scale issue, I have 5 million customers; I 

certainly can afford a lot more than a system that has 100,000 customers. So I can afford that kind of help. 

I think that the economy of scale issue needs to be looked at, and 

the regionalization of water needs to be considered in a variety of 

venues. 

Mrs. NAPOLITANO. Ms. Cooper? 

Ms. COOPER. Thank you, Ranking Member Napolitano. I believe 

there is a place for public-private partnerships as far as—the one 

thing that it needs to be looked at is community by community. 

That is why we have been focused on this integrated planning. 

For example, in Florida, we actually share a municipal service 

with a municipal service district with five other communities, but 

our water is independent. So when you are looking at this, we have 

been looking at at least being granted the ability to address it on 

a local demand need. 

As far as affordability, again going back to my statements in the 

presentation on evaluation, we do not want to displace those costs 

on the people that can afford. I believe that ties into a grant system, that we should go back to the original, so wisely put in your 

presentation and your questions, in regards to going back to a mix 

of grants and State Revolving Fund increases. I do not think there 

is another way to avoid the displacement of some of those costs 

without some kind of program, such as you are recommending. 

Mrs. NAPOLITANO. Mr. Franklin? 

Mr. FRANKLIN. Thank you, Ranking Member Napolitano. I guess 

I would make one point. I would like to see access to the State revolving loan fund for clean water available to all. A lot of people 

are under the misconception that companies like mine, utilities, 

can make money on low interest. And that is a fallacy. 

The reality is public utility commissions only allow us to pass 

through interest. And since all Federal taxpayers pay into these 

through their taxes, we should allow all Federal taxpayers, including the customers of utilities, to access these low-interest funds. 

Mrs. NAPOLITANO. Thank you, Mr. Chair. 

Mr. MAST [presiding]. Now we are going to go to my friend and 

fellow bomb technician, Representative Crawford. 

Mr. CRAWFORD. Thank you, Mr. Chairman. Appreciate it. 

I have a couple of unique challenges. They are not necessarily 

unique to my district, but it is unique to rural geographies. And 

that is small towns, rural communities, remote areas, where it is 

difficult to fund wastewater treatment systems and things of that 

nature. 

21 

I have suggested sort of working collectively with small communities in a given area, and just would like to get some feedback 

from you on the panel, if anybody wants to weigh in on this. In a 

municipal area, obviously, a metropolitan area, you have a funding 

mechanism that exists. 

How do we drive funding for a scenario that I just described 

along the lines of what a metropolitan area has, given the population challenges that we have? I certainly think that consolidation 

is one approach. But does anybody want to address the funding in 

the consolidation? Mr. St. Pierre, you look like you have something 

on your mind. 

Mr. ST. PIERRE. Yes. One of the things we are working with U.S. 

EPA on is a peer-to-peer network for smaller communities. And instead of an enforcement type program with the States, for small 

communities being able to bring in technical support from larger 

utilities that can help those utilities really put together a plan for 

their infrastructure. 

Also, be able to access SRF funds, which really, for smaller communities, if they do not have technical expertise, can be quite difficult; and really help put them on a platform. We have a meeting 

with a lot of utility leaders next Sunday and U.S. EPA to really 

look at this model and see if there can be a support service that 

is supported from a national level, created at a State level, where 

we can provide value to rural communities. 

Mr. CRAWFORD. Mr. Gonzalez? 

Mr. GONZALEZ. Yes. In the case of El Paso, we have some funding challenges to deal with. During the next 10 years, we expect 

to spend $1 billion, estimated, in order to serve the residents within the city. 

We also have some challenges in trying to help many of the small 

communities that are located outside the city. We have got a long 

history of working with various Federal agencies. Many times, 

some of the regulations that are in place prohibit us from being 

able to apply directly for funds for some of these small communities. 

We have got one specific example that comes to mind, an area 

that has about 1200 connections or so. The area already receives 

water service, but has a lot of failing systems. The cost to be able 

to serve this particular area is well over $30 million or so. 

It is impossible for the residents to be able to pay for the needed 

service. The utility cannot provide the service and the Federal Government is saying that because of the regulations, we are not able 

to directly apply for funding and serve them. And so they are kind 

of caught in the middle. 

Being able to address those kinds of regulations, and to be able 

to capitalize, if you will, on utilities such as ours that have a willingness to go out and spend some of our own resources in terms 

of management and identifying funds and applying for funds, 

would go a long ways. 

Mr. CRAWFORD. Let me ask you this. The population of El Paso, 

roughly? 

Mr. GONZALEZ. We have got about 800,000. 

Mr. CRAWFORD. 800,000? 

Mr. GONZALEZ. That is within the county. 

22 

Mr. CRAWFORD. How far out are you reaching into some of those 

outlying areas that is reasonably accessible logistically? 

Mr. GONZALEZ. Well, we are designated as the regional planner 

and provider of service, and so we come within a couple of miles 

from the State line to New Mexico, I would say 5 to 7 miles from 

the State line. We provide retail service and also have some wholesale accounts. 

But those areas that kind of fall, like I said, in between, not 

being organized and not having the resources, we are willing to 

help. But again, in dealing with some of the Federal agencies, our 

hands are tied because we do not qualify for getting the assistance. 

Mr. CRAWFORD. What would it take for you to expand that range 

to 50 miles, 60 miles? Is that possible, logistically feasible? Can you 

do that? 

Mr. GONZALEZ. I do not know if it is feasible going that far. But 

we are looking at much closer areas, like I said. The area I just 

mentioned is only probably 5 miles or so from the closest line, and 

yet we are in need of $30 million or so just to be able to serve this 

very area. 

Overall, like I said, just in wastewater needs, the majority of the 

funds that are needed are for rehabilitation, with some new infrastructure in place. 

Mr. CRAWFORD. So the challenge, I guess, that we face in my district in particular is that many of the small towns, 200 population, 

less than 1,000, most of the time of the year there are going to be 

boil orders that are issued just for drinking water, just for use in 

the home. And it is a quality of life issue, and it is a challenge for 

us going forward. 

So I appreciate your insights and I look forward to working with 

you in the future with some more ideas how we can address that 

need. And I yield back. Thank you, Chairman. 

Mr. MAST. Thank you, Mr. Crawford. 

Ms. Esty, the floor is yours. 

Ms. ESTY. Thank you, Mr. Chairman. I want to thank the chairman and ranking member for holding today’s important hearing. 

Three topics I really wanted to touch on today, one of which I 

added because of the enlightening conversation between Mr. Levine 

and the chairman. And that has to do with resiliency of water infrastructure. My State of Connecticut was hit very hard with 

Superstorm Sandy. 

We expended considerable resources in rebuilding and learning 

about more resilient infrastructure, about how to absorb fast-flowing water, work done in part at the‘ institution that Mr. Levine attended, where he was one of my husband’s students at the Yale 

School of Forestry and Environmental Studies. And that does cost 

money, and my State spent that money to do so. And so did New 

York. 

And so I think in the interest of saving lives and saving dollars, 

it is incumbent on us to do that because it is not only a misuse of 

dollars, but much more importantly, it is not using the best learning about how we save lives and save property going forward. 

So I would just say that I think we have to find a way to do that. 

And it would be wrong for the folks in Texas and in Florida and 

in Puerto Rico and in the Virgin Islands not to take best practices 

23 

forward. And we are just going to have to figure out a way to do 

it. And we should not lower standards and put people’s lives at risk 

and their property. 

So I think that is not only being stewards of the Federal tax dollars, but recognizing other States have figured out a way to do that 

and did not get extra support. We did it because it is the right 

thing to do. 

The two topics I really wanted to touch on were about public 

drinking water and about brownfields. On public drinking water, 

my State is one of the many in the country that has found we have 

unacceptable lead levels in our schools, in condominiums, in apartment buildings, in State offices buildings. As you may know, we 

found recently in the Cannon House Office Building that we had 

unacceptable lead levels and had to shut down all of the water 

fountains there. 

So this is a problem we are going to need to address. And it costs 

real money, and with aging infrastructure it has to happen. We 

saw it in Flint. We saw it in Toledo. And as a cochair of the Corrosion Prevention Caucus, I would urge us to look at that. 

And I will ask a couple of you specifically about that because 

there just is too much at stake. We cannot afford to poison our people, especially not our children, and too many of these in our 

schools, and we will never recoup their lost ability. And it is just 

wrong. We need to figure out how to do that. 

And the other is on brownfields, which is part of this portfolio 

as well. I want to thank the ranking member and Chairman 

Graves, who we have been working hard on a bill, have one that 

passed unanimously out of committee, and we are hoping to get it 

to the floor soon. 

But nearly one-third of the projects do not get funded because 

EPA does not have sufficient funding. Two of those projects were 

in my district, and they are important projects. There are 533 that 

did not make the cut last time, not because they did not qualify, 

not because they were not good projects, but because, simply, we 

did not have enough money. 

So sometimes, unfortunately, it does take money. We are making 

some improvements to Mr. Franklin’s point and to Mayor Cooper’s 

point about trying to do P3s, public-private partnerships, where appropriate. We have learned from practices, working with the 

League of Cities and with the mayors to improve the bill. And we 

would urge your support, and try to get this through to the floor 

soon. But again, we would like to see more robust funding for EPA 

for these programs, and then we can leverage the private dollars. 

So maybe, Mr. Pedersen, you talked a little bit about—if you can 

opine both on brownfields with some additional funding, recognizing that every one of those dollars leverages a lot—and on lead, 

what you are seeing in our water systems on lead. Thanks very 

much. 

Mr. PEDERSEN. Sure, absolutely. Good questions. Lead is a major 

challenge across the country. Fortunately, on the west coast, we do 

not have as severe a lead problem because a lot of our pipelines 

are not lead-based pipes. But I think, absolutely, you are exactly 

right. We cannot be having lead levels exceeding standards, especially in our schools. 

24 

California has been very proactive in this. In fact, the legislature 

just passed a bill that actually increased the current Federal standards for lead and copper testing whereby community water systems 

would actually pay to do testing of schools, which is not currently 

a requirement. 

The other thing is corrosion control. It is very effective. It is costeffective. It does not require necessarily replacement of all the lead 

pipes, but if you can control corrosion and ensure that you are 

building that layer of deposit on the pipes and not leaching out 

lead. 

And with regard to the funding, I agree 100 percent. We need 

more robust funding. The funding can be leveraged at the local 

level. It should be. 

And then with regard to resiliency, in California it is an issue 

that we are very aware of. We have situations where we face both 

drought emergencies and flood emergencies simultaneously, and so 

we need to be thinking of both. And we frequently focus on 

drought, but flood is also an issue that we need to be very aware 

of and prepare for. And we are doing that, but we need to do more. 

Ms. ESTY. I see my time is expired. Thank you, and I yield back. 

Mr. MAST. Thank you, Ms. Esty. 

Going to Texas. Mr. Babin, the questioning is yours. 

Dr. BABIN. Yes, sir. Thank you, Mr. Chairman. Appreciate it. 

I want to thank all the witnesses for being here as well. Water 

issues are a huge issue. In Texas, it is an enormous issue. And as 

you know, countless communities across our country, and in my 

district in particular, nine counties that I represent in southeast 

Texas, from Houston to Louisiana, have been impacted by devastating hurricane-force winds. And it is not just my district. We 

had 39 counties impacted, not just my 9. But just to give you a little perspective, Hurricane Harvey set a new continental U.S. rainfall record of 51.88 inches in Crosby, Texas, in Harris County just 

a few weeks ago. 

Can you explain what practices and methods that you all have 

learned in your collective experiences, especially since Hurricanes 

Katrina and Rita in 2005, to ensure that our drinking water infrastructure maintains its reliability after the storms like the ones we 

have just seen where, literally, trillions of gallons of water inundate our communities in just a matter of a few days? 

And I would just like to open it up to the entire panel. Mr. Proctor? 

Mr. PROCTOR. Yes, sir. Thank you. One of the first things that 

needs to happen is something I alluded to in my testimony—lifecycle costing and full-cost accounting. Many of the groups that are 

represented here today joined in something called the ‘‘Effective 

Utility Management Practices Book,’’ which talks about the need to 

understand what is your full life-cycle cost as you operate a utility. 

And once you understand those costs, then you can make investment decisions about how best to preserve those assets and make 

certain that they will serve for a long period of time. 

And when you talk about resiliency in the context of storm 

events and so forth, that is one of the factors that needs to be 

taken into account. You need to look forward and try and anticipate what the frequency of storms might be, what the impacts 

25 

might be, and include that in your cost calculation in designing the 

infrastructure that you build, and then make certain that when 

you build that infrastructure, that you build with the most resilient 

designs, resilient materials, and everything else so that they will 

withstand those sorts of events. 

Dr. BABIN. Thank you very much. Anyone else like to—Mr. 

Franklin? 

Mr. FRANKLIN. Congressman, this is a critical issue and a lot of 

learnings. We had a lot of customers in your district. Many were 

on boiled water most recently. And I think there are several things 

that can be done, especially in serving rural communities, which is 

largely what we serve in Texas and North Carolina and other 

States. 

But number one, a monitoring system should be installed on as 

many of these systems as possible so you know when they are 

down remotely. 

Secondly, staging of generators, prestorm work. Right? Generators should be staged to make sure that those wells, those community water systems and wastewater systems are operational as long 

as possible, even though they are remote and difficult to get to 

many times. 

And third, as many mutual aid discussions that we can have 

with other utilities to back each other up. The electrics have had 

it for many years. We do not have quite the same system in place 

for water and wastewater. But those mutual aid discussions are 

really important. 

I will give you one example, Beaumont, Texas. We sent a team 

down there, and we were in Beaumont, and that was a very difficult situation. But we were able to put our expertise—— 

Dr. BABIN. That is my home town. That is where I grew up. 

Mr. FRANKLIN. Yes, sir. They had real trouble. Right? One hundred eighteen thousand people out of water. 

Dr. BABIN. Absolutely. And many—we lost power and water in 

many of our communities. And when you talk to folks, they will tell 

you, ‘‘If I had to choose, I would rather lose my electricity than lose 

my water.’’ And I can agree with that because we experienced that. 

Thank you, Mr. Franklin. Anybody else like to add to that? Yes, 

ma’am? 

Ms. COOPER. If I may, I did not get a chance to add, because I 

did not go back as far, about 10 years ago we actually built a water 

plant for about $25 million. We have water independence in our 

city. It was one thing that I was steadfast against. We support, as 

U.S. Conference of Mayors, all our public-private partnerships. 

And I should have started with—I am sorry for your struggles 

and your losses there. 

Dr. BABIN. Thank you. 

Ms. COOPER. It is not an easy situation, especially if you are not 

familiar with it. But there is a lot of lessons learned. As U.S. Conference of Mayors, I assure you we have been working with your 

mayors, and look forward to working with you if you have any 

questions on resiliency and building out equipment. Being from 

Florida, we have a lot of experience in it as well. And our president, Mitch Landrieu, of course, is here to help as well. 

Dr. BABIN. Absolutely. Thank you very much. 

26 

Mr. Chairman, I think I will yield back the balance of my time. 

And I want to thank every one of you for your experiences and your 

advice. 

Mr. MAST. Thank you, Mr. Babin. 

Mr. Lowenthal, the floor is yours. 

Dr. LOWENTHAL. Thank you, Mr. Chair. And first I want to echo 

the comments of Ranking Member Napolitano and many of the 

panelists also—and I want to thank the panelists for being here— 

about how important the Clean Water State Revolving Fund is to 

water agencies, especially water agencies in California and across. 

And I think, as my own two cents, that we should be moving legislation, like H.R. 2510, to reauthorize the vital program and provide direct investment in wastewater infrastructure. But I want to 

follow up on some things that the panelists said for my own understanding about what are the benefits and maybe some of the problems. 

And Mr. Pedersen, I am going to start with you. You advocated 

in your testimony an amendment to the Clean Water Act to allow 

for the 10-year permit under the NPDES, I think it was. And you 

talked about how—some of the rationale why Aqua would like to 

have it. I would like to hear a little bit more. 

But I want to also hear—are there any down sides? I mean, you 

promoted the up side of why it would be better for investment. But 

what would be—are there any issues involved that we should be 

addressing if we go from 5 years to 10 years in those permits? Are 

there problems that we—are there unintended consequences? 

Mr. PEDERSEN. We have looked at that issue. We do not believe 

that there are, and we have not heard those. And we are open to 

listening. But we think, really, there are three key benefits of doing 

this. 

One is the longer terms promote, we think, a more efficient regulatory process while recognizing and preserving the water quality 

protections under the Clean Water Act, which is important. We 

also believe it encourages longer term planning and thinking, 

which is something we all need to do now, and every panelist has 

spoken about that. 

And then third, it better aligns the investments that we are making in the 21st century in infrastructure with the timeframes that 

are needed. And so we think it accomplishes those three things and 

actually helps to make the process more efficient. 

Dr. LOWENTHAL. I am going to follow up with Mr. Levine on that. 

NRDC has used the NPDES permit system to urge enforcement of 

the Clean Water Act, to guard against contamination. Talking 

about that, how would a longer timeframe affect enforcement and 

contamination safeguards? Because we have to balance these kinds 

of issues. 

Mr. LEVINE. Yes. Thank you for the question. There are some serious down sides, and we very much oppose changing that 5-year 

term of permits, which has always been a core part of the act, and 

look back to the legislative history of when the act was first passed, 

was highlighted by the sponsors by floor statements as really a key 

thing. 

And the reason for that is that standards and technologies and 

water quality needs do in fact change over timeframes much shortVerDate Aug 31 2005 11:14 Apr 23, 2018 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\2017\9-26-2~1\29796.TXT JEAN
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er than 10 years. The entire scheme of the NPDES permitting program, not only for wastewater treatment plants but for all dischargers, was to recognize and to have EPA focusing on improvements in technology and ensuring that the best pollution control 

measures are used and that we do not have a 10-year gap between 

when a permit is written and catching up to the next best technology. 

And similarly, our knowledge of water quality, impairments of 

our water bodies, changes over a period of 10 years. And the plans 

that we develop to clean up those water bodies changes over a period of 10 years. 

So, for example, development of total maximum daily loads under 

section 303(d) of the Clean Water Act, those are basically pollution 

diets that identify how much reduction is needed from different 

pollution sources to a water body. Right? And those plans have consequences for permitting. They require permits to then meet those 

pollution diets, those pollution load reductions. And if those permit 

cycles get extended to 10 years, we are going to see substantial 

delay in making those water quality improvements we needed. 

Now, I will add, if I can, just two quick related points. It has 

been suggested that by allowing for reopeners of permits, that 

would solve this problem. We do not think that that really solves 

the problem. If the default is you have got 10 years on a permit 

and there is no action-forcing mechanism to revisit that permit for 

10 years, you are cutting out the public and you are cutting out 

EPA and undermining EPA’s authority. 

So whenever there is a permit renewal, the public has an opportunity to come in and seek further protections, which they do not 

have—the public cannot do a reopener. Right? The State permitting 

authority has the sole power to do a reopener. 

Similarly, EPA cannot come in in the way that they exercise 

their oversight responsibilities. When a State has a draft permit, 

EPA has a role and a responsibility to review it, see if it complies 

with the act, and the authority to object and ensure the State 

strengthens it. 

So if you put these things off for 10 years, you are taking those 

key safeguards, checks and balances, out of the process. 

Dr. LOWENTHAL. Thank you. And I yield back. 

Mr. MAST. Thank you, Mr. Lowenthal. 

Mr. Weber, the floor is yours. 

Mr. WEBER. Thank you, Mr. Chair. 

Mayor Cooper, I want to visit with you for a second. I was on 

city council for 6 years in the little town of Pearland back then, 

which had like 26,000 people. We had 20 police officers, by the 

way, and I knew them all. Now Pearland has grown to about 

110,000, has 160 police officers, and I do not think anybody knows 

them all. 

But anyway, I have been through that growth spurt. So you are 

mayor of Hallandale Beach, Florida. I want to come back to your 

discussion, I think, with Dr. Babin. If I understood you correctly, 

you said that you all went for water independence 10 years ago and 

it cost $25 million, and you said you were against that. Did I hear 

that correctly? 

Ms. COOPER. No. I was in full support of it. 

28 

Mr. WEBER. You were supporting it. OK. You were for that. Well, 

I am sorry. I misunderstood that. And how long have you been 

mayor? 

Ms. COOPER. I have been mayor 14 years. 

Mr. WEBER. Fourteen years. So you started when you were like 

in sixth grade? 

[Laughter.] 

Ms. COOPER. Well, thank you for that kind remark. 

Mr. WEBER. Sure. We instituted what is known as an impact fee 

for people moving into Pearland—we are south of Houston, I am 

not there now, but that is where I grew up, in that area—at a 

rapid rate. 

Pearland was one of the fastest growing cities in the country. So 

we realized that the people coming to our little sleepy neighborhood 

town were going to have an impact on sewer systems, on our water 

system, on infrastructure—fire, police, EMS, and so on and so on. 

Do you all use an impact fee? 

Ms. COOPER. Well, you are a smart mayor for doing that, and 

we—— 

Mr. WEBER. Well, I never said I was mayor. I was city council. 

Yes, sure. 

Ms. COOPER. Oh, I am sorry. Oh, council. Well, we are all equal. 

We just—I run a meeting, so—— 

Mr. WEBER. Right. 

Ms. COOPER. But we do have impact fees, and we do—any new 

development pays their fair share of the impacts that they are putting on our community. We are actually in the process—I run a 

tight ship, so we just did our full evaluation of our basis of design 

report, which is that $200 million price tag. So if you are going to 

come up and do business, we want you to be a community partner, 

and you will be paying your fair share into our community. 

Mr. WEBER. I noticed, according to Wikipedia—and you know if 

it is on Wikipedia or on Facebook, you know it is true—— 

[Laughter.] 

Mr. WEBER [continuing]. But your 2010 census was 37,113 people. Their estimate of 2016 was 39,500 people. So you have grown 

by just a couple thousand people in the last 6 years. Is that accurate? 

Ms. COOPER. Yes. Yes. 

Mr. WEBER. OK. Does the State play a role in you all’s development in the State of Florida? 

Ms. COOPER. We actually have a robust comprehensive plan 

through the Broward County district. We have a county seat that 

does planning. And we actually are very involved. I actually put all 

our growth management tools in the toolbox about 10 years ago, so 

we are pretty independent when it comes to approving development 

now. 

Mr. WEBER. OK. 

Mr. LEVINE. Could I speak to that question about the impact fees 

real briefly? 

Mr. WEBER. Yes, sir. Feel free. 

Mr. LEVINE. Thanks. It really speaks to a broader issue about equitable rate structures, right, for the reasons you said. If you have 

29 

got folks coming in, development coming in, they should be paying 

their fair share into that. 

The question of affordability of water and sewer service for residential customers, we have got the assistance, the low-income assistance, approach which is necessary, like the LIHEAP type approach, right, that we have talked about that, Federal assistance 

for that, State assistance for that, to help reduce bills directly. 

But you have also got the underlying rate structure. Right? So 

if you are giving somebody a credit or a voucher to help pay their 

bill, what was the bill to begin with, right, and what was the rate 

structure that resulted in that bill? 

Mr. WEBER. And who pays that difference? 

Mr. LEVINE. Sure. That is right. And that is providing the assistance. Right? But if the rate structure itself is equitable, that is 

going to mitigate the amount of outside assistance that is needed. 

And so just to take an example, what I mean by that, so if you 

have got tiered rates for water, right, inclining block rates, where 

those who use enough for their basic needs are paying a relatively 

lower per-gallon price and those who are profligate water users are 

paying a higher per-gallon price for those higher increments, that 

is going to support folks of modest means who use modest amounts 

of water, and lower their bill simply by changing the way the rate 

is structured in the first instance. 

And you see the same dynamic with the use of stormwater fees, 

for example, based on impervious area, where you get people paying in corresponding to the contribution of runoff they have into a 

system. And that will help residential customers quite often. 

Mr. WEBER. So it is safe to say, and I am running out of time, 

that that calculation, that formula, does not take into account two 

things, perhaps: old, outdated equipment, lead pipes or others, 

whatever happens; and then, also, disasters like hurricanes and 

stuff. Is that safe to say? 

Mr. LEVINE. Sure. Well, that gets to the full-cost pricing, full-cost 

accounting issue, right, is making sure that whatever the rate 

structure is, that it is applied in a way that generates the total 

amount of revenue needed for the utility. And that in turn links 

with how much outside assistance the utility is getting for those 

capital costs, which underscores the need for Federal and State investment. 

So it is a set of puzzle pieces that all fit together. Right? The 

utility needs to be able to generate revenue for its share. It needs 

to be able to do it in an equitable way. But that share also needs 

to be not so outsized that it is impossible to do that. And the way 

to keep it from getting so outsized is to make sure that the financial assistance is coming in from the Federal and State level where 

it is needed. 

Mr. WEBER. Well, we will have that discussion later. Mr. Chair, 

I will yield back. 

Mr. MAST. Thank you, Mr. Weber. 

Mrs. Lawrence? It is all you. 

Mrs. LAWRENCE. Thank you so much. 

As a former mayor, I just really want to say we should listen to 

our mayors, who are dealing with this issue every day. It is amazing. When there are crises, you always see the mayor as the goVerDate Aug 31 2005 11:14 Apr 23, 2018 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\2017\9-26-2~1\29796.TXT JEAN
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to person to deal with the crisis. Let’s get the mayors involved and 

make sure their voices are heard to prevent some of these disasters. 

So let’s talk about the data that we should. We heard my former 

colleague, Mayor Cooper, talk about the basis of design support. To 

be able us to truly address the issue of water infrastructure in our 

country, we need data. It should be mandatory that every city conducts this type of review of their water infrastructure. 

So many of us will—as we talk about investment in our infrastructure, water should be a priority. Ladies and gentlemen, I represent Michigan, and what we went through with Flint and across 

the country, it was a shock to us to understand that water is not 

a luxury. It is a need to live. And it is not something that should 

be predicated upon the wealth of your community. 

So there are some things that I think we really need to have on 

point. Water main breaks: People used to ask me as the mayor, 

‘‘What keeps you awake at night?’’ It was not things that you think 

about. Potholes—yes, I did not like the potholes and I got beat up 

a lot about it. But water main breaks—when you flush your toilet, 

when it rained was it going to back up in your basement, those 

things kept me awake at night. It is a quality of life issue. 

We have 240,000 water main breaks. And what we are doing, we 

are wasting 2 trillion gallons of treated drinking water. And there 

are communities who are struggling right today in America to get 

clean drinking water, going through the conservation issues that 

you talked about, Mr. Gonzalez, to just survive and have water 

quality. And we are wasting it every single day. The Army Corps of Engineers has a backlog of $56 billion. And 

what does that include? The levees and the dams that are breaking 

every time we have these natural disasters, and coastal inlets. 

These are issues that we must make water infrastructure—so Mr. 

Levine, I am going to ask you this question, Mr. Levine. 

Across the country we are now dealing with this water issue, affordability with low-income communities. How do we create a 21stcentury water infrastructure that ensures that we are, in America—as we talk about healthcare and tax structure, that the basic 

human need of water is being addressed? 

Mr. LEVINE. Thanks. So there are many legs to the stool. Right? 

It is a combination. What we really need in order to make sure 

that at the level of an individual household, of every individual 

household, that there is that access to affordable water and sewer 

and stormwater service. Right? Is to make sure that the cost that 

is borne locally is a cost that the utility can fairly collect from those 

who are served. Right? 

And so that is a function of knowing what the cost is, identifying 

what the needs are, what the priority spending is, things like water 

loss, water—— 

Mrs. LAWRENCE. Can you include in that, how does encouraging 

or incentivizing these communities to consolidate? Because while as 

mayor I loved to have everything on my own, but then a poor community a couple miles down the road, they cannot afford water. 

But I am doing well. Can you put that in your statement as well? 

Mr. LEVINE. Sure. Yes. No, there is absolutely a place for that, 

and as other witnesses have talked about, you can have literal conVerDate Aug 31 2005 11:14 Apr 23, 2018 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\WR\2017\9-26-2~1\29796.TXT JEAN
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solidation of the physical plant of different utilities when they are 

close enough to each other and when that makes sense. 

You can also have regionalization in ways that allow utilities to 

share management expertise and purchasing power to get economies of scale. And those are absolutely important things to look at. 

They do not by themselves solve the problem, but they help. 

And so solving the problem, as I said, there is the Federal money 

and the State money to make sure that the amount that needs to 

be spent locally is manageable. There are efficiencies and strategies 

at the local level to reduce the costs of providing the service. And 

there is assistance to individual households, equitable—— 

Mrs. LAWRENCE. Mr. Proctor, before my time runs out, I am a 

strong, strong proponent of skilled trades. And your company talks 

all about the jobs that will be created through this investment in 

our infrastructure, especially water. Can you please, in the time remaining, talk about that? 

Mr. PROCTOR. Well, every $1 billion of water infrastructure investment produces about 28,000 jobs, I think the statistics show. 

So when we invest in our water, not only are we providing something essential for the health of our communities, but we are also 

helping those communities get off the ground by providing goodpaying jobs that they can then put back into those communities. 

Mrs. LAWRENCE. It is a win/win. I close with this. We are looking 

at our tax structure tomorrow, I understand. We cannot take away 

those tax-exempt municipal bonds. It is critical that we keep that. 

Thank you so much, and I yield back. 

Mr. MAST. Thank you very much. 

And the floor is for Mr. LaMalfa. 

Mr. LAMALFA. Thank you, Mr. Chairman. Thank you, panelists, 

for assembling here today. 

In California, the State Water Resources Control Board recently 

released their annual compliance report, and it found that in 2016, 

nearly 5 million people were affected by their definition of water 

violations, which is triple the amount affected in 2015. 

In my district alone, the First District of northeast California, 

there were 800 of these what they are defining as violations in that 

new year, which shows a lot of work to be done to fix these issues 

and ensure the water is clean and safe, as defined. 

Fixing these violations can be quite a challenge in the absence 

of funding. Again, in NorCal there is a large amount of very small 

and unincorporated communities that do not have the tax base, do 

not have the prospering industries that they once had, and so the 

challenges are huge. 

And raising the funds for a project in the short term and maintaining these projects in the long term, it is a great strain on these 

small towns and unincorporated areas, these villages that do not 

have the budgets that they once had, even countywide. 

When they are able to raise the funds, ensuring that each project 

that they come forward with, that they comply with a long list, Mr. 

Chairman, of regulations and redtape from both the Federal level 

and California’s crushing State regulations can be darn near impossible for these small towns. 

And the questions I want to pose, Mayor Cooper, and to also Mr. 

Pedersen: Given the uncertainty of increased Federal funding, 

32 

what we are dealing with around here, what are some of the regulatory burdens and other structural issues and problems that this 

committee could be tackling in order to help the dollars go farther 

in small, unincorporated communities or counties where, again, industry has been basically run off—to stretch these dollars farther? 

So would both of you like to take a run at that? 

Ms. COOPER. Thank you very, very much for the question. I want 

to go back to two issues, first address yours. 

The regulatory process is something we have been working on as 

U.S. mayors for the past 10 years. And I do believe that we should 

go back to address some of the questions. I know Mr. Lowenthal 

had asked about the 10-year process. I think that is critically important. 

We are all stewards of our water. We have come a long way over 

the past 40 years and the Clean Water Act. So I believe science as 

well as social equity needs to also be looked at, and that we have 

to be looking at these regulations as they evolved. 

So the 10-year period, I think, is critical so we can implement 

plans over the time period that we have been working on with Mr. 

Gibbs’ bill. As far as what we—— 

Mr. LAMALFA. Let me also allow time for Mr. Pedersen, too, 

so—— 

Ms. COOPER. I know. I am sorry. And then as far as the monetary, that goes back, I believe, to the grants and a lot of distressed 

areas. Right now we can borrow money, and some cities have better borrowing capacity than others. In these distressed areas, we 

will continue to ask for grants and flexibility as far as implementing our plans for the best and most effective utilization of both 

our financial resources as well as boots on the ground doing the 

projects. 

Mr. LAMALFA. OK. Thank you. 

Ms. COOPER. Sorry, sir, for too much time. 

Mr. LAMALFA. That is OK. Thank you. 

And then please speak a little more to the structural problems 

that the regulatory burden is causing. Now, in California, again, 

we have our own problems with the resource control board. There 

seems to be further definition of these rules, of these laws that are 

changing and making the burden even higher. As I mentioned in 

my comments, 2015, the number tripled in 2016 to what they allege are violations. 

In the remaining time, please. What should we be doing to help 

address that? 

Mr. PEDERSEN. Thank you, Congressman. Quickly, this is a challenge we face. It is probably the number one challenge following 

the aging infrastructure issue. As we better understand the science 

of water, naturally there will be new regulations that we need to 

meet. 

We need to be smart about how we comply with those regulations, looking at things like integrated planning, where we can look 

at complying with multiple regulations—— 

Mr. LAMALFA. How you comply. But how reasonable are the regulations to begin with as they evolve? 

Mr. PEDERSEN. And that speaks to the public process. As agencies, we need to all weigh in. We do that. And we need additional 

33 

opportunities to give our input and feedback and share the science 

on both sides of the issue so that we develop balanced regulations. 

Mr. LAMALFA. I do not believe the public knows what it is paying 

for as these regulations morph on and on. And I think if they really 

understood, they would be more up in arms about what it is costing 

them, to not have this new infrastructure they should have. 

So Mr. Chair, I will yield back. Thank you. 

Mr. MAST. Thank you, Mr. LaMalfa. 

Mr. Garamendi, we are up to you. It is your turn. 

Mr. GARAMENDI. Thank you. 

There has been a lot of discussion here about what to do with 

the various hurricanes and the rebuilding of systems. And I note 

that in August, the President revoked the Flood Risk Management 

Program. It seems to me that it might be useful to keep that in 

mind. Much discussion from the witnesses about how to be resilient 

in the face of floods. 

But I guess the Federal Government is not going to require that 

in funding programs, that we do not pay any attention any longer 

to flood risk management. It seems to be a rather stupid thing to 

do, but we ought to pay attention to that. So that ought to go back 

onto the agenda. And if the President does not want to reinstate 

that, then perhaps we ought to. Otherwise, we are wasting a lot 

of money. 

Secondly, every one of the witnesses has asked for more money. 

Correct? Is there any one of you that did not ask for more money? 

No. All of you did. And we need more money. Tomorrow the Republicans in this House are going to hold a half-day seminar on how 

to reduce Federal revenues. Now, tell me how that is going to work 

if you want more money. 

I think we ought to keep in mind the totality of the issues that 

come before us and the way in which they interact. We can do all 

kinds of tax reduction policy, which is what I am sure will come 

out of tomorrow’s meeting. And you want more money for water 

systems, for wastewater management, for flood systems, for highways, for new nuclear weapons, on and on. 

Just tell me how we are going to do all of that when we are reducing Federal tax revenue. Who would like to answer the question? 

Mr. FRANKLIN. Congressman, if I could, let me just give you the 

art of the possible. 

When I joined our company in 1992, we took the amount of pipe 

that we were replacing every year against the total amount of pipe 

that we had in the ground. We would have had went on a 900-year 

replacement cycle. Far from sustainable. Right? It is not going to 

last that long. 

In the 20 years or so that I have been at the company, we have 

taken that from 900 years down to 90 years. Our main breaks are 

half of the national standard, AWWA, and we have done it without 

Federal money. And we have done it on our rates. Our monthly 

rates are about $50 per month per customer. 

That is the art of the possible. It can be done, but it has to be 

done over larger groups of people. We have 450,000 customers in 

that particular division. But it can be done. 

Mr. GARAMENDI. Excuse me. Was that pipe American-made? 

34 

Mr. FRANKLIN. That pipe is American-made by one of the people 

sitting at the table here. 

Mr. GARAMENDI. But you did ask for access to Federal dollars, 

did you not? Right? 

Mr. FRANKLIN. Yes, sir. If we—— 

Mr. GARAMENDI. Now, my question was not about how you could 

be more efficient, which is meritorious. But my question was about 

how do we get more Federal dollars to meet the needs that all of 

you have when we are actually reducing Federal revenues, or there 

are many who want to reduce Federal revenues? 

Ms. COOPER. If I may? 

Mr. GARAMENDI. Yes, please. 

Ms. COOPER. Thank you. And I do not want to repeat my whole 

testimony today. But I believe, really, what municipalities have 

been focusing on is not just money—and we face money issues, our 

balanced-budget city, on a daily basis—but really, the encouragement of integrated planning, flexibility, support of public-private 

partnerships, the bill that is being presented by one of the Members, Mr. Gibbs. 

So there are other opportunities. Money is important, the flexibility in the existing funds in the State Revolving Fund. 

Mr. GARAMENDI. Excuse me. Excuse me, but you are dancing 

around the fundamental issue that I have raised. Every one of you 

have asked for more Federal money for a variety of purposes, all 

good. And at the same time, the Congress of the United States is 

in the next—tomorrow and the days following, setting out to reduce 

Federal revenues. 

So how do we deal—and the larger infrastructure issue, a trillion-dollar infrastructure issue. Are you suggesting it does not require Federal money? It can all be done in public-private partnerships? Yes, sir? 

Mr. PROCTOR. I am certainly not going to suggest that everything 

can be done with public-private partnerships. But I think there are 

three things that could be done that would leverage what we do 

have. 

Number one, when we invest in water infrastructure, that is not 

a static development. Every dollar of water infrastructure spending 

generates economic activity, I think another $6 in GDP, that in 

turn generates additional tax revenues that could help offset that. 

Number two—— 

Mr. GARAMENDI. Excuse me. Are we talking chicken and egg 

here? Which comes first, the Federal revenue or the growth that 

occurs without the Federal revenue? 

Mr. PROCTOR. Most certainly the growth will—the growth in 

spending will sustain the growth in tax revenues. So there is perhaps an element of that. But there two other ways to get that, perhaps, that avoids that conundrum. 

One is the expansion of the WIFIA program. Right now WIFIA 

provides a leveraging opportunity through the use of credit insurance that would enable the few Federal dollars that we do have to 

greatly leverage into additional spending through private sector investment as well, which in turn would generate that economic activity, which would then in turn generate additional revenues. 

35 

And then the last thing I would mention is lifting the cap on private activity bonds. The estimates are there—I think the last CBO 

estimate was—— 

Mr. GARAMENDI. I am going to interrupt you, sir. But do any of 

those meet the needs of the infrastructure, water infrastructure? 

They are a piece of the puzzle. But by themselves, they are totally 

insufficient. 

Mr. PROCTOR. I would agree that none of those things by themselves solves the problem. 

Mr. GARAMENDI. That brings me back to the point that I am really raising here, in that we talk about a trillion-dollar infrastructure 

program. We talk about water, drinking water and clean water and 

on and on and on. 

At the end of the day, it requires Federal resources, which are 

going to shrink if the current policies being enunciated by the 

President and by my colleagues on the Republican side, are able to 

go forward. 

Thank you for the extra time. Mr. Mast. 

Mr. MAST. Thank you, Mr. Garamendi. 

We are going to move to Mr. Gibbs. 

Mr. GIBBS. Thank you, Mr. Chairman. I want to apologize for 

being late. I had another commitment. 

First of all, I got a response for my good friend from California. 

He says we are meeting to reduce Federal revenues. No. We are 

trying to put policies in place, a tax plan in place, that will create 

economic growth. 

If you believe that reducing the rates will reduce Federal revenues over the long term, then, my friend, we ought to just increase 

the rates. In that philosophy, the revenue is going to go up then. 

And I think most of us can agree increasing the tax rates will 

not bring in more revenue, but to get the economic growth instead 

of having the new normal 1 percent, 11⁄2 percent GDP growth, let’s 

get that up to 3 or 4 percent growth by having a tax policy that 

works for our American families and businesses. And that is where 

my friend from California is a little misunderstood. 

I want to move into my questions here. First of all, Mayor Cooper, I enjoyed working with the Conference of Mayors, and all the 

kudos—it is the most kudos I have ever gotten in my life from 

today, I think, on my integrated planning bill. I really appreciate 

that. And I appreciate the mayor’s council support, and also in 

their written statement, the American Public Works Association. 

Mayor, can you maybe elaborate a little bit, if this integrated 

planning bill goes through, how that will help your community on 

flexibility? Can you maybe emphasize that a little bit, the flexibility and how it impacts you? 

Ms. COOPER. Well, when we are looking at resiliency measures 

and we are looking at green infrastructure measures, this will give 

us an opportunity to prioritize the investments of what little dollars that we do have. And I know I hear that through the water 

council continually across the Nation and the Nation’s mayors that 

are represented on our board. 

So going back to the discussion, it is not just about money. 

Money is important. Investment breeds return on dollars and helps 

some of the most needy in our community. But your bill and that 

36 

process, after working on it for 10 years, and the timeframes, and 

the flexibility, I think will bring a new era in partnership, in intergovernmental partnerships, to work together to address this need. 

Mr. GIBBS. Would you agree—I heard earlier this question from 

the gentleman, Mr. Levine. The 5-year. My bill keeps the 5-year 

permitting. It would have been easier to write a 10-year permitting 

bill for this, it stays at 5 years, and I like to think of it as adaptive 

management or fine-tuning. 

When that 5 years comes up, we can fine-tune it to reach the 

goals that our local municipalities need to reach in work with the 

EPA. Would you concur? 

Ms. COOPER. Yes. I have been fortunate not to be under consent 

decrees and not being on the enforcement end of water issues. And 

those become quite arduous, and what happens is you are paying 

and spending more money after addressing something that might 

be not necessarily fundamentally scientific in nature. 

And I am certainly not a technician, and I have to at least yield 

that, that my understanding and working knowledge of water 

issues, that sometimes they are arduous. 

Mr. GIBBS. I agree. I got to move on because my time. 

Mr. Proctor, good to see you again. Can you talk—I got a couple 

points in testimony. Can you explain encouraging full-cost accounting leads to water systems being more efficiently run and help compliance with the Clean Water Act? Can you elaborate on the fullcost accounting? 

Mr. PROCTOR. Yes. Good to see you as well. Like any economic 

activity, understanding your full cost is essential in making certain 

that you make the smartest decisions possible. And full-cost accounting would go a long way toward doing that. 

It would not only perhaps help utilities better price their product, 

which is something that we have talked a little about here today, 

but also to find the areas that are driving those costs so they can 

try and reduce those costs to do more with less. 

And so whether you get to full-cost pricing down the road, you 

may not actually get there, but at least full-cost accounting is an 

essential first step. And just to state it philosophically, none of us 

can get a loan from a bank either to buy a car or buy a house or 

fund a business unless we have a good understanding of what our 

expenses and costs are. And the taxpayers really deserve the same 

thing as the lenders in this process. 

Mr. GIBBS. I have a theory on this, at least on the public side. 

We kind of live on depreciation. We do not count for depreciation, 

where on the private water side they probably are to stay in business. Would you concur that is part of the problem? We do not account for depreciation on the public side? 

Mr. PROCTOR. I think, in large part, a lot of utilities do not account for depreciation, which is another word for the future cost of 

investment in future infrastructure to sustain itself over the long 

term. That is where life-cycle costing, which is an element of fullcost accounting, would provide a great service to taxpayers, so they 

understand what it costs to provide this service over the long term. 

Mr. GIBBS. My time is expired. I yield back. 

Mr. MAST. Thank you, Mr. Gibbs, and also for your insight on 

decreasing burden as we increase revenue. I think, unquestionably, 

37 

one of the biggest things we need to avoid in this institution is the 

notion that somehow our grade goes up, our grade on the report 

card goes up, solely based on what we spend; that if we spend one 

extra dollar, we somehow get a better ranking. 

That cannot be the way that this institution functions, especially 

when we consider it is the fruits of other people’s labor that we 

deal with here. And in that, I want to move to Ms. Brownley. The 

floor is yours. 

Ms. BROWNLEY. Thank you, Mr. Chairman. And Mr. Chairman 

and Ranking Member, I just wanted to give a little bit of a shoutout to Mr. Pedersen and the Las Virgenes Municipal Water District. They have been recycling water since 1972, and I consider 

them one of California’s pioneers. So thank you for all of your good 

work. 

I had three questions, and I think Mr. Lowenthal really asked 

the first one. But I do want to comment, and I heard Mr. Levine’s 

response to Mr. Lowenthal’s question as well. But I think this notion of an extension of 5 years to 10 years for the NPDES permit 

is an interesting idea, and I think it is worth exploring to see if 

we can find a happy medium here in a win/win process, understanding that not every situation is exactly the same across the 

country. So I certainly would encourage continuing that conversation. 

The second question that I have goes back to recycled water. And 

Mr. Pedersen, you had mentioned in your testimony—you talked 

about a new project in your district with the Triunfo Sanitation 

District that would create up to, I think, 5,000 acre-feet of droughtresistant water supplies. 

So I wanted to ask you, in putting together the financing package for this, can you tell us which Federal programs you have 

found to be most helpful and whether you have any suggestions for 

Congress on how to augment or improve those programs to help 

spur more of these types of projects? 

Mr. PEDERSEN. Sure. Thank you, Congresswoman. The project 

that you are referring to is our Pure Water Project Las VirgenesTriunfo. It will ultimately develop 5,000 acre-feet of new droughtresilient water through reservoir augmentation. It is one of only 

three projects of its type in California. 

Certainly we have built up some reserves, to the tune of about 

$20 million locally to pay for that project, recognizing that local 

monies need to be dedicated to these projects. But in terms of the 

Federal framework for infrastructure financing, the SRF program 

is essential and very important to us. 

Granted, it is a loan program. But the low-interest loan provides 

great value to us and the ability to finance those improvements, 

which are about $100 million, for an agency that is relatively 

small, a rate base of about 20,000 customers or, combined with our 

partner, Triunfo Sanitation District, about 35,000 customers. 

The WIFIA program that was recently initiated is a fantastic 

program. We were 1 of 40-some applicants that submitted a letter 

of interest. There were many CASA and ACWA members who were 

invited back to submit full applications, and we think it is a valuable program and will be helpful. 

38 

And then of course, the Bureau of Reclamation title 16 program 

and a variety of research programs and programs for demonstration projects are very helpful for projects of this type. We really 

think water recycling is the future for resiliency in California, 

along with other local projects. 

Ms. BROWNLEY. Thank you very much, and I will just add that 

in this particular water district, there is no local water source at 

all. And now Las Virgenes actually provides 20 percent of the region’s demand with recycled water. 

The other question, Mr. Pedersen, I wanted to ask, too, is in 

2014, our committee requested a report on the Clean Water State 

Revolving Fund allocation formulas. The report was just finalized 

earlier this year, and can you comment on the report and the recommendations in it? 

Mr. PEDERSEN. Yes, absolutely. So the report—this was a report 

requested by the subcommittee. It is included as an exhibit to my 

written testimony. An excellent report, prepared by the U.S. EPA. 

It is an impartial report that uses data to analyze the distribution 

of Federal SRF funds to States. 

And what the report essentially found, in short, is that those formulas are dated and that they require updating. And the main reason is that those formulas were established based on 1987 data, 

both for population and demographics of all the States, and also 

the clean water needs of those States. And we know both of those 

issues, both of those figures, have changed dramatically in that 

time, and there is really a need to take a look at updating them. 

The report includes a number of options, and any one of those 

options would be a big step forward. And we would encourage the 

subcommittee to take a look at that report and to work with the 

EPA on bringing forward those recommendations for action. 

[‘‘Review of the Allotment of the Clean Water State Revolving Fund 

(CWSRF)’’ Report to Congress issued by the U.S. EPA in May 2016 is available at the EPA’s website at https://www.epa.gov/sites/production/files/2016- 

05/documents/reviewloflthelallotmentloflthelcwrsflreport.pdf] 

Mr. LEVINE. Could I speak very quickly to two of your questions? 

Ms. BROWNLEY. Yes, please. 

Mr. LEVINE. On the 10-year extensions, I will not rehash the concerns I raised earlier, but I do believe that they are very valid. 

The underlying issue, it seems, of the reasons that this 10-year 

extension and the integrated planning issue are being raised, is a 

desire for flexibility in prioritizing and recognizing the time that it 

takes to implement expensive capital improvements. Right? And 

that general principle is not something that I think is controversial. 

There is a letter submitted, signed not only by NRDC but by a 

number of other environmental organizations, before this hearing 

pointing out the values, the virtues of integrated planning as per 

EPA’s framework that was issued a few years ago. 

As far as the role of Congress and this committee, what is important, I think, to understand is that the existing Clean Water Act 

provides that flexibility, and the EPA framework document lays 

that out. 

39 

The issue of the length of compliance schedules is something that 

Congress has asked the National Academy of Public Administration to look into the financial capability assessment guidance that 

EPA has that governs negotiations around those compliance schedules. The academy is due out with that study this month. That provides an opportunity for EPA to consider those findings and revisit 

the guidance. 

On WRRDA and recycled water I will just point out, and it is 

mentioned in my testimony, Congress in 2014 inserted provisions 

requiring that Clean Water SRF-funded projects used to the maximum extent that they can in a cost-effective way—water reuse, 

water efficiency—it is not being implemented particularly well. And 

I urge the committee to support EPA, push EPA to implement that 

better. 

Ms. BROWNLEY. Thank you. And my time is up. Thank you, Mr. 

Chairman. 

Mr. MAST. Thank you very much. 

And I just want to open with a couple of questions for the entire 

panel. Everybody is anticipating a large infrastructure package. It 

is something we are all waiting for. We are excited about. I see the 

smiles that it puts on your faces as we even mention it because it 

is exciting. So that is where I want to get a little bit into the public-private partnerships. 

Give me your view. What is your go-to on this? Where do you see 

it? And it is open to the entire panel. And from there, if you want 

to, give me what is your favorite? What is your go-to for any sort 

of consolidation that you see between public and private, and the 

number one program that you would want to work towards? By all 

means. Mr. Pedersen. 

Mr. PEDERSEN. Thank you. Two important issues to us. We do 

believe that there is value in public-private partnerships, although 

we do not believe in any way they are a panacea for infrastructure 

financing. As a public agency, we have engaged in P3s. We found 

them to be effective in certain areas of our business—renewable energy, solar, where there are tax credits that the private companies 

can take advantage of. 

But we do not believe that for big infrastructure projects like our 

recycling project that we can generate more value for our ratepayers and lower rates through public-private partnerships, 

uncategorically. 

With regard to consolidation and regionalization, we do have 

some concerns with both of those issues. Again, we do think there 

are circumstances that warrant agency consolidation, and we think 

that that is currently happening, and we see that happening in 

California. And there are incentives to do that already. 

But we do not think a Federal policy, especially a broad-based 

Federal policy to push for consolidation, is a good thing. We think 

that these issues are better handled at the local level where local 

folks are familiar with some of the nuances involving geography, 

hydrology, climate differences that really govern these decisions. 

And so we would recommend that the committee keep that at the 

local level. 

Mr. MAST. Anybody else? Carte blanche. Yes, sir, Mr. Franklin. 

40 

Mr. FRANKLIN. I would agree that a lot of these things should be 

handled at the State and local levels. Often, what we serve, and 

the million customers or so that we serve, it is small local level, 

small community well systems, community wastewater systems. But I will underscore that the $1 billion-plus that we spend 

every 3 years does not have a single Federal dollar in it. And the 

expertise we put out there, and the results that we put out there, 

are put in our proxy, our proxy statement required by the SEC, 

that would underscore the connection we have made for also payfor-performance—in other words, how our high standards are what 

we pay our people for. That is what they are incented to do. 

And I guess, in terms of Federal dollars, all I would say from the 

NAWC standpoint, the access that we would like is access to the 

existing SRF funds for wastewater. We are not asking for additional, but the existing. Thank you. 

Mr. MAST. Yes, ma’am? 

Ms. COOPER. Public-private partnerships, I believe, and I do not 

want to be repetitive, are important, but I do not think there 

should be a mandate for any public partnership tied to these programs. They are not a one-size-fits-all, and different private-public 

partnerships fit different circumstances. 

In a municipality, we can do it for wastewater. We do have an 

intergovernmental municipal partnership. Water, we do not. We 

build buildings; a lot of them are shared public-private. So our 

main concern is we are learning lessons learned of this new era of 

public-private partnerships. 

But to tie them to mandates also impacts the ability to create 

local jobs. And that was one of the concerns we faced in Florida 

this year, even through the State mandates, that they wanted to 

tie it to—they wanted to tie into our contracts to mandate hiring. 

And we want to create local jobs as well as regional jobs, so it 

is—— 

Mr. MAST. Yes. By all means. Mr. Proctor. And do not worry 

about being repetitive; this is Congress. 

[Laughter.] 

Ms. COOPER. I am sorry. I am so sorry. 

Mr. MAST. Everything has been said, but not everybody has said 

it yet. 

[Laughter.] 

Ms. COOPER. Thank you very much. 

Mr. PROCTOR. Our working group very much believes that this 

decision is a local one, and a voluntary one as well. But there is 

a difference. One of the things I think we all ought to focus on is, 

it is one thing to talk about incentives. But it is also another thing 

to talk about disincentives. 

Presently there are some barriers in place that prevent local municipalities and other utilities from even considering partnerships 

where they would like to—for example, the defeasance penalty if 

you go into a concession; and also just simply the cost associated 

with planning, negotiating, then implementing a P3. For a small utility of 500 people, a legal bill of $50,000, $75,000 

may be an actual impediment to even having the conversation 

about whether a P3 is in their best interest. Now, the Clean Drinking Water SRF does allow some funding for that sort of activity. 

41 

But it is perhaps less so on the clean water side. But my point is, 

make certain that we do not create disincentives as we go through 

this process. 

And then one other thing I would like to mention is this, that 

we have not really touched on in much detail, and that is nonfinancial partnerships. I mentioned it in my written testimony. 

The opportunities for collaboration among large utilities and 

small utilities for the implementation of technology that can save 

money, make the administration and management of these utilities 

more effective, preserve human health and the environment, are 

incredible. And there are a lot of things that can be done to help 

make that happen that fall way short of consolidation or regionalization. They could really move the needle. 

Mr. MAST. Thank you. Thank you for those responses. 

Mr. LEVINE. If I can? 

Mr. MAST. We are actually going to move into a second round of 

questioning. So I am going to go to Ranking Member Napolitano 

here, and if we get back to you for an opportunity to respond to 

that, so be it. 

Mrs. NAPOLITANO. Well, you could have gone ahead because we 

are just you and me and Mr. Gibbs. 

It is difficult for me to make sense of how the administration believes the best to address our Nation’s water-related infrastructure 

because as a candidate, he proposed tripling the requests for Clean 

and Drinking Water State Revolving Funds. But that did not materialize in his budget. It sure did not come through in his fiscal year 

2018 budget. 

And now we hear that the majority of his forthcoming infrastructure investment proposal will involve leveraged private sector financing rather than infusion of additional Federal capital into the 

State Revolving Fund programs. In my view, the model leaves behind many mid-sized and small communities, and rural, of course, 

that may be unable to compete with larger cities and unable to afford the costs of leveraged private capital. 

In your view, all of you, if the plan is heavily dependent on leveraged private capital, would this miss the mark in addressing infrastructure needs of many mid-sized and small communities? And if 

you were to make recommendations to Congress on the appropriate 

mechanisms to address these needs, what programs would you recommend to fund and what levels? Anybody? Everybody? 

Mr. LEVINE. Ranking Member? So yes. As the—— 

Mrs. NAPOLITANO. A short answer, please. 

Mr. LEVINE. Yes, certainly. As others have said, private money 

is not a panacea, and the bottom line on it is that when private 

money comes in to invest in a system, there has to still be a revenue stream to pay back that private investment. 

And so it ultimately comes down to whether the community, 

whether the ratepayers, can afford that expense without financial 

assistance, especially in the form of grants, from the Federal Government and from State government. So private money is simply 

not a panacea. 

Mr. MAST. Go ahead, Ms. Cooper. 

42 

Ms. COOPER. Thank you. Definitely, the recommendation for the 

Internal Revenue Code to remove the State volume caps for private 

activity bonds as well as preserving our muni bonds. 

Mrs. NAPOLITANO. That would help. 

Ms. COOPER. Yes. Definitely. 

Mrs. NAPOLITANO. Mr. Proctor? 

Mr. PROCTOR. And going back to the WIFIA program, right now that program is set up for the most part to deal with $20 million 

projects, $5 million in a smaller setting. But as it is currently 

structured, it does tend to favor projects that are probably financed 

OK to begin with. 

If there is a way that program can be tweaked and tap into its 

leveraging feature so that it could help out more distressed utilities, that would be a positive thing. 

Mrs. NAPOLITANO. Mr. Pedersen? 

Mr. PEDERSEN. Thank you. I think certainly there is value to leverage private capital. But I think we cannot overlook the importance of continuing to capitalize the SRF program. And we support 

your bill and your recommendation, and look at even enhancing 

that program to the $3 billion to $4 billion range. 

Mrs. NAPOLITANO. Mr. St. Pierre. 

Mr. ST. PIERRE. I will just repeat that. When you are loaning 

money for 1.75 percent versus 3 percent or 6 percent, what you are 

doing is you are reducing the amount of work that you can do. Obviously, there is a lot of work to do. A full support of SRF funding 

is critical. 

Mrs. NAPOLITANO. Mr. Gonzalez? 

Mr. GONZALEZ. Yes. We have got a history of working with Corps 

of Engineers, the Bureau of Reclamation, the SRF, and so forth. 

And most of these funds have dried up. We are looking at pretty 

significant increases in rates to be able to accommodate some of 

these projects. 

And as I mentioned, the projects we are looking at are in excess of $100 million. And so when you look to a Federal agency and all 

they can provide is $20 million over a 3- to 4-year timeframe because they are having to compete with other entities, it is not even 

close to saying it is not going to have a significant impact on ratepayers. 

Mrs. NAPOLITANO. OK. Mr. Franklin. 

Mr. FRANKLIN. Thank you. Whether municipal or regulated utility, I think there are a myriad of answers to this, not a single bullet. And I think we have all come to that conclusion. 

I will say, though, that probably half of the customers we service 

are in small rural areas. And it is the economies of scale, whether 

municipal or not, that really come to bear. Even if these systems 

are not interconnected, they are the same people so they can share 

employees, share knowledge. And so that ability to reduce this 

50,000 water systems in the country to some manageable number 

that really allows us to bring economies of scale will make us all 

long term more viable. 

Mrs. NAPOLITANO. Thank you very much. And I would ask that 

if you have those recommendations, please put them in writing so 

this committee can look at them and take them into consideration. 

There are lots of impacts to the business community that if you do 

43 

not have clean water, you do not have an economy. So it is important for them, too. 

Thank you, Mr. Chair. 

Mr. MAST. Thank you, Ranking Member Napolitano. 

And Mr. Gibbs? 

Mr. GIBBS. Thank you, Mr. Chairman. 

I just want to elaborate a little bit on the private-public partnerships. If we cannot do it in this area, I do not know where we can 

do it. I am so hopeful. And I understand what you said about the 

13⁄4 percent and 3 percent. We just got to figure this out. 

Now, one thing, Mr. Proctor, you talked about the WIFIA program. I am pleased that the EPA is going to expect the issue in 

the first round of grants. And I guess can you—to all, but Mr. Proctor I want to start—how can we improve the WIFIA, and the SRF 

program, for that matter, considering a larger infrastructure package to make this work? 

And I would include the private-public partnerships in here because you always can do a blending thing. You get capped off in 

the money you get from SRF and stuff and you still need more, 

maybe blend that interest rate to make this thing work. 

But my big concern is if we cannot come up with public-private 

partnerships in this area where we have ratepayers, where you 

have a stream of revenue coming in, I do not know how you would 

do it anywhere else in Government. 

And so I will just open it up. What suggestions? And maybe we 

might have to put those in writing and offer them to the committee 

to get more detail. But just kind of generalize right now. 

Mr. PROCTOR. Yes, sir. Thank you. Well, with respect to WIFIA, 

one of the first things Congress could do would be to extend it. I 

think it expires as a pilot in 2018. Is that right? So extending it 

at least another 5 years, but even better, making it permanent so 

that the markets can react and know what they are going to deal 

with over the long term would be important. 

Obviously, increased funding. I have alluded to it several times 

over the course of my testimony. But the leveraging feature 

through credit insurance as a way to bring in private capital is extremely powerful. You can leverage every Federal dollar that goes 

into the program by almost $65 by utilizing the funds that go into 

WIFIA for credit insurance as opposed to loans or other grants and 

that sort of thing. And that is a pretty hefty return on your dollar 

there. 

Mr. LEVINE. Can I speak to that leveraging issue? 

Mr. GIBBS. Yes. Go ahead. 

Mr. LEVINE. The SRFs as well provide an opportunity for 

leveraging, which most States do not take advantage of as much 

as they could. In my written testimony, I get into some extensive 

detail about a proposal that we offer that would incentivize States 

to leverage to a greater extent by allowing them to raise the cap 

on what is called additional subsidization, meaning the use of SRF 

funds as grants. 

To the extent that they leverage and put more State money into 

their SRF, under our proposal that would allow the States to use 

more SRF funding as grant funds rather than loan funds. We illustrate how that would work to help States that have already been 

44 

investing their own funds and how it would incentivize more States 

to do so and take advantage of those leveraging opportunities they 

already have. 

Mr. GIBBS. Yes. Mr. Pedersen? 

Mr. PEDERSEN. One other quick suggestion. The EPA has done 

a phenomenal job kicking off the WIFIA program. Kudos to them 

and their staff. But we think there could be value in coordinating 

the SRF program that is handled at the State level with the EPA 

WIFIA program. And there is some interest in the EPA in doing 

that, and I think that would help local communities. 

Mr. GIBBS. Yes. The intent was WIFIA to help supplement the 

SRF. I know a lot of people are getting heartache thinking that it 

is going to eliminate SRF. That is not the intent at all of the 

WIFIA program, to make that clear. 

Yes, Mr. Franklin? 

Mr. FRANKLIN. Congressman, I would just use as an example, 

say, for the 300,000 people that we serve water to and wastewater 

to in Ohio, they are all Federal taxpayers. And to be excluded from 

the ability to lower the cost of debt for those customers, since we 

do not have access to the Clean Water SRF, is really a disadvantage to those customers. 

So my strong recommendation would be that even the regulated 

utilities like ours get access to that same so that we could keep 

that cost down for customers, whether they are municipal or they 

are investor-owned. 

Mr. GIBBS. Yes. Mr. St. Pierre? 

Mr. ST. PIERRE. I would just speak to the P3 partnership. I 

would not discount public-to-public partnerships. The issue here is 

there is a revenue stream. It is a set revenue stream. And it is 

economies of scale, and it is efficiencies. 

And so you have 75,000 utilities across the country. That model 

is not working well in rural areas. There is a need to consolidate. 

There is a need for regionalization, whether that is public-public or 

public-private. That economy of scale provides a margin and an investment that is needed in communities that cannot support it on 

their own. 

Mr. GIBBS. Well, that is helpful. And if you want to submit any 

more stuff in writing, examples, we can do that. Because hopefully 

we will get to infrastructure bill, and this could be a key component because there are so many jobs created and there is so much 

need out there because this infrastructure, we know, is 80 years 

old, on average. So we have got to fix it. 

So thank you, Mr. Chairman. 

Mr. MAST. Thank you, Mr. Gibbs. 

If there are no further questions, I would just like to thank each 

and every one of you for your very thoughtful testimony this morning. It was very informative, very helpful. And without anything 

else to add, this committee stands adjourned. 

[Whereupon, at 12:19 p.m., the subcommittee was adjourned.] 

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