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S. HRG. 112–958 

LOCAL GOVERNMENT PERSPECTIVES 

ON WATER INFRASTRUCTURE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON WATER AND WILDLIFE 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 28, 2012 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.fdsys.gov 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

JAMES M. INHOFE, Oklahoma 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

MIKE CRAPO, Idaho 

LAMAR ALEXANDER, Tennessee 

MIKE JOHANNS, Nebraska 

JOHN BOOZMAN, Arkansas 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 

SUBCOMMITTEE ON WATER AND WILDLIFE

BENJAMIN L. CARDIN, Maryland, Chairman 

MAX BAUCUS, Montana 

FRANK R. LAUTENBERG, New Jersey 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

KIRSTEN GILLIBRAND, New York 

BARBARA BOXER, California (ex officio) 

JEFF SESSIONS, Alabama 

JOHN BARRASSO, Wyoming 

DAVID VITTER, Louisiana 

MIKE CRAPO, Idaho 

LAMAR ALEXANDER, Tennessee 

JAMES M. INHOFE, Oklahoma (ex officio) 

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C O N T E N T S 

Page 

FEBRUARY 28, 2012 

OPENING STATEMENTS 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 1 

Sessions, Hon. Jeff, U.S. Senator from the State of Alabama ............................. 3 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, prepared 

statement .............................................................................................................. 81 

WITNESSES 

Rawlings-Blake, Hon. Stephanie, Mayor, City of Baltimore, Maryland ............. 6 

Prepared statement .......................................................................................... 10 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 21 

Senator Inhofe ........................................................................................... 22 

Senator Sessions ........................................................................................ 24 

Johnson, Jerry N., General Manager/CEO, Washington Suburban Sanitary 

Commission ........................................................................................................... 27 

Prepared statement .......................................................................................... 30 

Horne, Kathy, Executive Director, Alabama Rural Water Association ............... 41 

Prepared statement .......................................................................................... 43 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 62 

Senator Inhofe ........................................................................................... 63 

Senator Sessions ........................................................................................ 66 

ADDITIONAL MATERIAL 

Photo of an un-lined cast iron pipe ........................................................................ 83 

Photo of a galvanized steel pipe ............................................................................. 84 

(1) 

LOCAL GOVERNMENT PERSPECTIVES ON 

WATER INFRASTRUCTURE 

TUESDAY, FEBRUARY 28, 2012 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, SUBCOMMITTEE ON WATER AND WILDLIFE, Washington, DC. 

The Subcommittee met, pursuant to notice, at 10 a.m. in room 

406, Dirksen Senate Office Building, Hon. Benjamin L. Cardin 

(Chairman of the Subcommittee), presiding. 

Present: Senators Cardin and Sessions. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Good morning, everyone. Let me welcome you to 

the Subcommittee on Water and Wildlife of the Environment and 

Public Works Committee. 

Senator Sessions will be joining us shortly. He is balancing two 

committees; he is the ranking Republican member of the Budget 

Committee, which is also meeting at this time with Secretary Panetta on the Department of Defense budget. So he will be joining 

us and will most likely not be able to stay for the entire hearing, 

but I thank him for his cooperation in arranging this morning’s 

Subcommittee hearing. 

I also want to thank Chairman Boxer and Ranking Member 

Inhofe of the full Committee for authorizing us to have a series of 

hearings dealing with our water needs. And I want to thank our 

witnesses for being here. 

There is a public expectation that when they turn their faucets 

on and when they drink the water that we have in front of us that 

it is safe and that it is clean. There is also an expectation that our 

wastewater will be treated in a way that will not cause us harm 

from public health. The realities are that we have an aged system 

and that it is very vulnerable and that we need to pay attention 

to make sure that in fact the public expectations are realized. 

Every year we have 54,000 episodes of our septic systems overflowing, causing a concern as to whether we have a public health 

risk. Excuse me, I gave you the wrong number, there’s actually 

75,000 sanitation sewage overflows every year, causing as many as 

5,500 illnesses due to storage contamination of our beaches, our 

streams, and our lakes. There are 54,000 community drinking 

water systems in America that serve 250 million Americans. 

Every year the wastewater treatment plans treat billions of tons 

of pollutants from reaching our rivers, our lakes, and our coastVerDate Aug 31 2005 13:27 May 02, 2017 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25022.TXT SONYA
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lines. And we are at risk, as I said, as a result of the aged system. 

The needs are great. 

I could give you many examples of breaches in our water mains 

in our country. But let me just talk a little bit about my own State 

of Maryland. Mayor Stephanie Rawlings-Blake is here, and she recalls that we have—it seems like too frequently—water main compromises in our city and in our State. Every day we hear of more 

examples of water mains that have broken and caused problems. 

We had a major break in Baltimore that caused the flooding of our 

downtown community. Our Mayor responded to that. But when you 

are dealing with pipes that are over 100 years old, it is challenging. 

And the amount of maintenance and replacement is beyond the capacity of any municipality. 

In Prince Georges County we had a major break recently that 

caused us to close the Beltway around Washington. And we all recall when River Road in Montgomery County, Maryland, became a 

river and required actually an air rescue in order to deal with 

stranded motorists. Those types of episodes are occurring all too 

frequently in our communities. 

One of the challenges that we have with our water infrastructure 

that, unlike the roads and the bridges and the transit systems that 

people see every day, and they can tell when there is a need for 

a change, they see the congestion on the roads, or they see the failure of a bridge, they can visually see and demand that we deal 

with our transportation infrastructure. The same is not true for the 

underground pipes that supply us with the drinking water and 

treat our wastewater. 

We need to do a more effective job so the public understands just 

how critically important it is that we maintain our water infrastructure. Our water infrastructure is equally important to our 

transportation infrastructure for America’s growth. 

The needs are rather immense. The Mayor’s Water Council reported that in 2008, in order to meet mandates of Clean Water, the 

annual cost was about $93 billion. That is estimated to increase. 

That is estimated to increase by 2028 to somewhere between $189 

billion to $421 billion. Now, again, the major responsibility for this 

rests with local governments. 

In the best of times, they would have a challenge meeting these 

needs. But in these economically challenging times it is just impossible to expect our municipalities to be able to handle this without 

the partnership from the Federal Government. The partnership 

from the Federal Government has taken on many forms. The State 

Revolving Funds are, of course, one of the principal areas. And we 

are pleased—if you look at the last 3 years, there has been some 

significant increase in funding in the State Revolving Funds, in the 

operational budgets as well as in the recovery funds. But as we 

look at the current budget year there is an inadequate amount of 

money being made available to deal with the State Revolving Fund, 

and we need to deal with this. 

The issues here are not just health-related issues, and there are 

health-related issues. There are also energy issues that are involved. We have a very inefficient system for delivering our water, 

causing us to use more energy than we should. 

3 

It is an environmental issue. We waste a lot of water. Water is 

a precious resource. A significant amount of our water is wasted 

every day because of leakages from the pipes that transport that 

water. 

And we also have an economic issue here. The United States 

Conference of Mayors said for every dollar we spend on water infrastructure, we get back over six times in our economy in the 

GDP. The National Association of Utility Contractors estimates for 

every billion dollars that is spent on water infrastructure, it will 

create 26,000 jobs. 

Today we have witnesses that really understand these issues, 

and I want to thank our three witnesses for being here. I am going 

to introduce two, Senator Sessions is going to introduce the witness 

from the State of Alabama. 

But before I do that, let me turn to Senator Sessions for any introductory comments that he would like to make. 

OPENING STATEMENT OF HON. JEFF SESSIONS, 

U.S. SENATOR FROM THE STATE OF ALABAMA 

Senator SESSIONS. Thank you very much, Mr. Chairman. 

As you know, I am Ranking on the Budget Committee, and we 

have the Secretary of Defense in today talking about his budget, 

how much it is going to be cut and where else we can find the savings in our Government to put us on a path of sustainability. And 

we are not on a sustainable path right now, we are just not, and 

it is not going to be pleasant. And sometimes you just have to not 

spend what you don’t have, the money you don’t have. The Governor of Alabama, Governor Bentley, said the other day we are 

going to spend the money we have. 

Well, we are not doing that here. We are spending 40 percent 

more than we take in. So this is our difficulty, and it impacts the 

good goals that we have for each of you. 

So I want to thank Senator Cardin for having this hearing, to receive this testimony. Importantly, more than 90 percent of the Nation’s community water systems serve populations under 10,000 

people, in mostly rural areas. Where I grew up, that is so. They 

have a water system now. We had an artesian well across the road, 

a pipe ran and served two or three houses. But now people there 

who have been struggling for water can have it at a reasonable 

price. And it pays for itself through the payments. 

America’s water infrastructure is vast, 800,000 miles of pipes 

and 600,000 miles of sewer lines, much of which is at a point that 

it needs to be replaced. In fact many rural systems lose a quarter— 

as you said, Mr. Chairman—to one-third of their water through 

leaks. That is an energy cost; that is an environmental difficulty. 

It is also true that America is on an unsustainable debt path. And we are running the fourth consecutive deficit of over $1 trillion. Debt like that will lead to the most predictable economic crisis 

in our Nation’s history, as the Debt Committee Chairmen Bowles 

and Simpson told us. 

So we need to look for ways to improve. Unfortunately the $800 

billion stimulus that the President pushed through in 2009, which 

was sold on the idea of fixing crumbling infrastructure, spent only 

a tiny fraction on water infrastructure, a really small amount on 

4 

roads, about 4 percent on crumbling bridges and highways. In the 

wake of the largest single borrow and spend in our history, we still 

have not invested the money we need in infrastructure programs. 

And the reason I tend to favor infrastructure spending is it creates American jobs, it creates an infrastructure improvement that 

is not here today and gone tomorrow, but will be here for decades 

to come. 

So Mr. Chairman, thank you for having the hearing. I will need 

to go back and forth to a hearing. I would say how pleased I am 

to have Kathy Horne here. Kathy, nice to see you. Thank you for 

the leadership you have given to our State for many years. 

And just to give a bit of a bio, if I could at this time, a little bit 

out of order, she has had more than 25 years of experience on rural 

water issues. Currently she serves as Executive Director of the Alabama Rural Water Association, a position she has held for more 

than 9 years. As Executive Director, she directs several programs 

in Alabama through the USDA Rural Development Agency and the 

U.S. Environmental Protection Agency as well as numerous Statefunded programs. 

She is a member of the American Water Works Association, the 

Alabama Water Pollution Control Association, the Society of Water 

Professionals, the National Rural Water Association, and serves on 

various boards and committees. In 2001 Kathy was elected by her 

peers to receive the Executive Director of the Year award for the 

National Rural Water Association, and in 2004 she received the 

USDA Rural Development Leadership Award. 

She is the mother of four children and active in local school, 

church, and community activities, an outstanding citizen of Alabama. I am proud that she will be able to provide important testimony today. 

I also would note that she has with her Mr. Randolph Hall, General Manager of South Bullock County Water Authority, and William Snyder, Manager of the Monroeville Water Works Board. 

Monroeville is my home county, the county of Harper Lee and To 

Kill a Mockingbird and a lot of other wonderful folks there. So we 

are glad to have them here. 

Mr. Chairman, we are dealing with a very important issue. Anything we can do to use our money more effectively, help these people accomplish their goal more effectively is a good challenge for us 

all. 

Thank you. 

[The prepared statement of Senator Sessions follows:] 

STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE STATE OF ALABAMA

At this Subcommittee’s last hearing we heard testimony about the condition of 

America’s water infrastructure from a variety of perspectives—States, pipe makers, 

civil engineers, and others. I want to thank Senator Cardin for calling today’s follow 

up hearing to receive testimony specifically from municipalities and rural communities. Importantly, most of the Nation’s community water systems serve populations under 10,000 people in primarily rural areas. So I am really pleased that 

Alabamian Kathy Horne is here. She is the Executive Director of the Alabama Rural 

Water Association. I know we will benefit greatly from Kathy’s testimony about the 

challenges facing rural water utilities. 

America’s water infrastructure is vast, with at least 800,000 miles of water pipes 

and 600,000 miles of sewer lines—much of which needs to be replaced. In fact many 

rural systems lose one-quarter to one-third of their water through leaks. There are 

5 

billions of dollars in needed investment to upgrade these systems. It’s also true 

America is on an unsustainable fiscal path. This year, we will run the fourth consecutive deficit over $1 trillion. Debt like that will lead to the most predictable economic crisis in our Nation’s history. So, in this era of tight Federal budgets we need 

to look for ways to leverage additional investment in water infrastructure without 

adding more debt. 

Unfortunately, President Obama’s $800 billion stimulus in 2009, which was sold 

on the idea of fixing our crumbling infrastructure, spent only a tiny fraction on 

water infrastructure. Ironically, in the wake of the single largest borrow and spend 

program in the Nation’s history, we are now struggling to find the money to keep 

existing infrastructure programs at near current levels. For instance the President’s 

budget proposes to cut the State Revolving Loan Fund program by more than $350 

million. We cannot just dismiss cuts like that out of hand, but I know those cuts 

are troubling to rural utilities. The stimulus was touted as the way to fix our Nation’s infrastructure, but in the end it was one of the biggest bait and switch 

schemes of all time. It left us with even more debt but little new infrastructure to 

show for it. 

So, how can the Federal Government alleviate this situation without adding to the 

debt? First, we must keep in mind that energy costs are the single greatest expense 

for rural water utilities. We need to keep electricity rates as low as possible. Regrettably, this Administration has issued a wave of new rules—like the Utility MACT 

issued in December—that will add billions in energy costs to the U.S. economy. 

Second, we need to reduce regulatory burdens and ensure that rural communities 

have the flexibility to resolve water quality issues in a cost-effective manner. 

Third, when cities and counties are sued for water or sewer problems, we need 

to be sure that only reasonable, cost-effective, and achievable obligations and 

timelines are imposed. 

Fourth, while water infrastructure is primarily a State and local obligation, we 

need to reauthorize and improve Federal programs, like the State Revolving Loan 

Fund Program, that help rural and municipal utilities. 

Fifth, we should lift the volume caps on private activity bonds issued for water 

infrastructure projects. This is one way to facilitate more investment in water infrastructure. As long as the costs associated with this proposal are appropriately offset 

and do not grow the national debt, I would vote for it. 

There are certainly other ways we can address these challenges. I look forward 

to hearing from our panel today. 

Thank you. 

Senator CARDIN. Senator Sessions, thank you for your opening 

comments and thank you for your leadership on the Budget Committee. I know that you are busy on that committee today. 

We need a game plan for our budget. And Senator Sessions is 

one of our key players in trying to bring us together to develop a 

responsible, credible plan to get our deficit under control. It will require sacrifices at all levels of government and a more efficient government at all levels of government. Clearly, the Department of 

Defense, our largest single agency, needs to be in the forefront of 

those efforts. So I know how important today’s hearing is up in the 

Budget Committee, and I thank you for taking time to come down 

and visit with us on this subject, which is extremely important 

also. We appreciate that. 

Let me invite our witnesses to the table. First I am going to introduce my good friend and colleague, Mayor Stephanie RawlingsBlake, who currently serves as the 49th Mayor of Baltimore. She 

has dedicated many years of work to strengthening Baltimore’s 

neighborhoods, which includes ensuring that her constituents have 

access to clean, safe water. 

Prior to being elected Mayor of Baltimore she was President of 

the City Council of Baltimore. Mayor Rawlings also serves in a 

leadership position on the U.S. Conference of Mayors. She is CoChair of the Mayors’ Water Council where she assists local governVerDate Aug 31 2005 13:27 May 02, 2017 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25022.TXT SONYA
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ment in providing high quality water resources in a cost-effective 

manner. 

Mayor Rawlings-Blake has been an innovator for us in Baltimore. Being a mayor of a major city is a very difficult task. The 

Federal Government pushes some of its problems off on the counties. The counties push some of their problems off on our municipalities. There is no place for a mayor to turn to push off issues. 

She has to confront them directly, and our Mayor of Baltimore City 

does exactly that. 

So we are looking forward to your testimony and to your suggestions as to how we can find creative ways in order to help you in 

your task of helping the people of Baltimore. 

We are also joined by Mr. Jerry Johnson, who currently serves 

as the General Manager of the Washington Suburban Sanitary 

Commission. The Commission provides water and wastewater services to 1.8 million residents in Prince Georges County and Montgomery County in my home State of Maryland. As General Manager, Mr. Johnson is employing cutting edge technologies in an effort to find cost-effective solutions to his customers’ water infrastructure needs. 

I am very impressed with what you have been able to do in innovation and creativity, trying to do more with the limited amount 

of funds that are available. 

And Ms. Kathy Horne, your Senator has already introduced you. 

But I thank you for what you do for the people of Alabama, but 

also to bring to this panel the perspective from the rural communities. Maryland is a State that has two major urban centers, but 

we do have rural communities that depend upon the water facilities that are different in its nature. I was at Smith Island not too 

long ago, which is a pretty isolated community in Maryland. Their 

water needs were of paramount concern, and we have to work a 

different type of solution for rural American than we do for our 

urban centers. 

So I thank all three of you for being here today. 

We will start with Mayor Stephanie Rawlings-Blake. 

STATEMENT OF HON. STEPHANIE RAWLINGS-BLAKE, 

MAYOR, CITY OF BALTIMORE, MARYLAND 

Ms. RAWLINGS-BLAKE. Thank you very much, Mr. Chairman, and 

thank you for your leadership on this issue. I certainly appreciate 

the partnerships that we have had over the years. 

My name is Stephanie Rawlings-Blake, and I am the Mayor of 

the city of Baltimore, Maryland. I want to thank you for the opportunity to speak to you about the challenges that cities such as Baltimore face in operating and managing water and wastewater systems. These challenges are especially difficult in today’s climate of 

unfunded Federal mandates, as well as a struggling economy. 

In Baltimore we have a regional water and wastewater system 

that serves almost 2 million people living and working in the city 

and surrounding counties. Baltimore’s water and wastewater utilities are about a $400 million business, with more than 1,700 employees and a $1.8 billion 6-year capital improvement program. So 

when it comes to financial pressures of running a water, wasteVerDate Aug 31 2005 13:27 May 02, 2017 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25022.TXT SONYA
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water, and stormwater system, Baltimore is not alone. But as you 

mentioned, we are on our own. 

Over the next 20 years an estimated $4 trillion will be spent nationally for water and wastewater projects. Ninety percent—90 percent—will be funded locally. Even with our large capital program 

Baltimore has about a $4 billion gap in funding over the next 6 

years. And that figure does not include the $2 billion needed to replace existing stormwater pipes. 

Having to direct our investment toward meeting our Federal 

mandates has had dire consequences on the condition of our water 

infrastructure. Deferred maintenance and capital investment have 

resulted in the loss of finished water of over 20 percent every day. 

So if you are a Baltimorean, Mr. Chairman, it would be just about 

the equivalent of turning our World Trade Center upside down and 

filling it up with water every day. That is about the amount that 

we are losing. 

Major water breaks and emergencies create lengthy service disruptions, damage and loss to property, increase sediment loads to 

streams and the harbor. It is hard to convince your citizens and 

your ratepayers to accept an annual increase in water and sewer 

rates to comply with Federal mandates when basic infrastructure 

needs continue to crumble. 

To meet these challenges we employ a multitude of strategies to 

finance our water needs. With an enterprise fund, we are able to 

sell water and wastewater revenue bonds to fund our capital programs. While revenue bonds are an excellent source of funds, the 

capital demands of our system have doubled our water and wastewater debt from fiscal year 2004 to fiscal year 2011. To leverage 

our capital dollars, we have competed for and received State Revolving Loan Funds. These low and no-interest funds have helped 

us with our financing. 

But the size of our system makes for very large and costly 

projects. Declining Federal funding for the State Revolving Loan 

Fund has only increased the competition for these limited dollars. 

We hope that Congress will continue to recognize the importance 

of this program by ensuring that it continues the funding at a 

meaningful level. 

Baltimore may also need to introduce a fee on all impervious 

areas within the city to fund our stormwater program, in order to 

comply with our MS4 permit. As you can imagine, a new fee will 

be difficult for our citizens and businesses to absorb in this economy. But without a stable source of funding we will not be able to 

meet our environmental obligations. 

We are not just looking to our ratepayers to fill in the gap of our 

funding needs. We are also looking for ways to reduce our costs as 

well as our energy. And it is certainly one area where we have 

been successful. We have reduced energy costs with methane harvesting as well as solar installations. 

Cities like Baltimore are looking for new and innovative funding 

options to help expand the opportunities to assist with our fiscal 

challenges. For example, the creation of a loan guarantee program 

that provides low-cost capital for water infrastructure modeled 

after the TIFIA program. A WIFIA program could provide secured 

direct loans and loan guarantees, a standby line of credit for infraVerDate Aug 31 2005 13:27 May 02, 2017 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25022.TXT SONYA
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structure and an annual Federal funding to budget for credit defaults. 

Federal credit can make a project more attractive for private capital and lower interest rates on private lending. And credit available on Treasury borrowing rates can reduce borrowing costs by up 

to 20 percent. 

Since water utilities have existing revenue streams which they 

can use to repay Federal credit assistance an investment of this nature is even more financially sound than a widely supported TIFIA 

program. Another example is the creation of a clean water trust 

fund. The fund could be supported by national dedicated user fees 

that are low rate and broadly based on a range of products sold in 

interstate commerce. This trust fund could provide a long-term and 

sustainable national funding source for water and wastewater investment. It could fund research and development of advanced 

treatment technology. It could support expansion of State Revolving Funds as well as provide grant assistance for watershed, urban, 

stormwater, and rural non-point source management. 

A source of sustainable national funding is essential to the recovery of our Nation’s water infrastructure and our environment. 

Local governments cannot carry the financial burdens by themselves. Increased funding is only one side, however, of the coin, in 

improving our water infrastructure. Cities need more flexibility in 

meeting the requirements of the Clean Water Act and the Safe 

Drinking Water Act. We must meet our responsibilities, our environmental responsibilities. I don’t think you will find one mayor in 

this country that thinks our environmental obligations are not serious. We want to meet those responsibilities. It is important to the 

health and the welfare of all our communities. But our resources 

are finite. 

I am happy to report to the distinguished members of this Subcommittee that the EPA has heard our message, and they have acknowledged the strain that municipalities are under. They are willing to work with us to develop a more flexible and tailored program 

to achieve a cleaner environment without bankrupting cities in the 

process. EPA headquarters has been working hard to develop these 

ideas into a concept called integrated planning. Integrated planning is a big change in the way EPA approaches enforcement, and 

it could not have come at a better time for cities across the country. 

In the past EPA enforced compliance with Federal environmental 

laws through a series of unfunded mandates. Each mandate was 

pursued individually and with the same sense of urgency. 

Through integrated planning, we will be able to look at all of our 

environmental projects holistically to determine the environmental, 

social, and health benefits of each one of them so we can place 

projects with the greatest benefits to the top of our capital plan and 

address the less effective projects later. 

In January EPA released a draft framework for integrated planning which outlines the overarching principles that should guide 

the development of an integrated plan. My city is already developing its own integrated plan. We are in the process of looking at 

all of our responsibilities under the Clean Water Act and the Safe 

Drinking Water Act, our operations and maintenance requirements, as well as our future capital investment needs and ranking 

9 

each project based on its overall benefit. After extensive stakeholder consultation and outreach we will develop a long-term plan 

for effective management of our utilities. 

You will notice that I mentioned Baltimore’s Safe Drinking 

Water Act responsibilities as an element of our integrated plan. 

Right now EPA only wants Clean Water Act mandates included in 

the integrated plan. But Baltimore, like many other cities, is responsible for metropolitan drinking water and wastewater systems 

as well as stormwater controls and treatment within our borders. 

Our citizens and ratepayers pay for these systems, and all three 

utilities run under the same streets. An integrated plan for Baltimore must address all three systems. 

While EPA has not agreed to including drinking water, they have 

left the door open for further negotiation on this issue. And I am 

confident that we will reach a solution that protects human health 

as well as the environment. 

One challenge to implementing integrated planning will be to establish a legal framework for the resulting plans. In my opinion 

there can be no one size fits all approach to this challenge. Each 

municipality will have to reach an agreement with EPA and its 

State regulators that is unique to its resources and its unique challenges. 

I am very proud that my city is at the forefront of the integrated 

planning effort. I believe that this program presents an excellent 

opportunity for each city and utility to comprehensively assess 

their water, wastewater, and stormwater programs and to plan in 

a way that produces the best results for both people and the environment. 

I am pleased that the EPA agrees and is willing to partner with 

us in developing a new and more productive approach to meeting 

our environmental obligations. 

Again, Mr. Chairman, I thank you for your kind attention and 

will be happy to answer any questions, either now or at the end 

of the panel. 

[The prepared statement of Ms. Rawlings-Blake follows:] 

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Senator CARDIN. Thank you very much. 

We will hear from the panelists, then we will have some questions. 

Mr. Johnson. 

STATEMENT OF JERRY N. JOHNSON, GENERAL MANAGER/CEO, 

WASHINGTON SUBURBAN SANITARY COMMISSION 

Mr. JOHNSON. Good morning, Mr. Chairman. 

I am Jerry Johnson, General Manager and CEO of the Washington Suburban Sanitary Commission. We provide water and 

wastewater services to 1.8 million residents of Prince Georges and 

Montgomery County, as you mentioned earlier, which border on the 

Nation’s capital. WSSC has a combined operating capital budget for 

fiscal year 2012 of $1.2 billion. 

It is an honor to be here today, and I thank you for inviting me 

to join you on this relatively balmy morning. We are enjoying the 

warm weather. But it is particularly significant to our utility operators, for warm temperatures have meant fewer water main breaks 

to WSSC customers, employees and to our bottom line. Water main 

breaks in our service area also affect many Federal facilities that 

we serve and even the region’s economy. 

We had only 336 breaks in the month of January, and in all of 

last year our customers only had 1,600 breaks. But it is counter to 

the long-term trend of upward numbers and upward count of water 

main breaks. Our yearly average is over 1,700, and our fear is that 

if we don’t act quickly enough, one day in the not too distant future 

the number of breaks will reach a tipping point where we are unable to keep up with repairs. 

You may have heard about the study released yesterday by the 

American Water Works Association, which estimates that nationwide, to replace our aging underground water infrastructure as 

well as to add new pipes for the growing population, the cost will 

be well over $1 trillion over the next 25 years. Much of that is unplanned and currently not budgeted. Sitting in the national capital 

area, WSSC represents a microcosm of the conditions described in 

that report. With nearly 5,600 miles of underground water pipes 

fed by two water filtration plants, approximately 1,500 miles of 

those pipes—or 26 percent—are well over 50 years old. Several 

years ago, we embarked on an aggressive program to address this 

issue. 

During the current fiscal year, we plan to replace 41 miles of 

water pipe. By 2015, the number will top out at 5,500 miles of 

water pipe, assuming that we can afford to keep up that pace. In 

today’s dollars the cost to replace a mile of pipe is approximately 

$1.4 million. Over the next 6 years, the price of replacing underground water pipes will cost our ratepayers an estimated threequarters of a billion dollars, and we will need to keep that pace up 

forever. It is kind of like painting a bridge, when you get to one 

end of it and you are finished, you have to go back to the beginning 

of it and start over again. 

Our biggest challenge is funding. Ninety-five percent of our revenue comes from our customers. For 6 years WSSC has had no rate 

increases, followed by 3 years of increases that were below the inflation rate. For the last 5 years, however, even in this troubled 

28 

economy, our county councils have recognized the pressing issues 

and have approved rate increases between 6 percent and 9 percent. 

Unfortunately, more increases will be needed, even though our recent increases are lower than those in many parts of the country. 

So what are we doing about this challenge at WSSC? We have 

undertaken a comprehensive multi-year asset management program. When completed it will provide a road map for the optimum 

schedule for either repair, refurbishment, or replacement of every 

single WSSC asset. Our goal is to use technology to most effectively 

manage our customers’ resources. 

WSSC has chartered an infrastructure funding working group, 

made up of WSSC and county stakeholders, to study various ways 

to fund infrastructure replacement while attempting to reduce 

some of the burden on our ratepayers. We look at every avenue to 

control and reduce costs. 

For example, energy is among our highest annual operating expenditures. For the last 4 years, we have been purchasing wind 

power as a direct purchaser from a wind farm in Pennsylvania. 

Now wind power provides about one-third of the electric power 

needed for our operations and saves our customers about $800,000 

per year. 

We have also substantially reduced greenhouse gases as a result, 

in the equivalent of taking 20,000 cars off of the Washington Beltway on an annual basis. 

With help from Federal grants we are also studying anaerobic digestion, which could allow us to use methane to provide power for 

some of our energy needs. We are extending the life of our large 

transmission mains—those between 36 and 96 inches in diameter— 

by installing acoustic fiber or optic fiber. This system of cables installed in the pipes allows us to listen for potential snapping of 

support wires embedded in the concrete walls of the pipe, allowing 

us to monitor conditions with a computer 24 hours, 7 days a week. 

Along with a regular inspection regime this will prevent another 

incident like the near-tragedy that you mentioned earlier that occurred on River Road as well as the one in 2010, which shut down 

the interstate for several hours. 

But at this point I have really given you only half of the story, 

the drinking water side of the story. WSSC also has 5,400 miles 

of underground sewer pipes and seven wastewater treatment 

plants. Like many urban communities in this country, including 

DC and Baltimore, we are under a consent decree to repair and improve the sewage collection system. And we and our customers are 

also contributing $18.5 million annually to the Maryland State 

fund used to help clean up the Chesapeake Bay. 

But there are other costs that we incur as well. For example, 

there are three-quarters of a billion dollars for sewer pipe maintenance and replacement over the next 6 years. And again, these 

costs will continue into the future. We are in the process of adding 

enhanced nutrient removal to our five largest wastewater treatment plants as a part of the Bay program. These projects, when 

completed in 2015, will cost $61.4 million, of which we expect to 

get $56 million in construction grants from the Chesapeake Bay 

fund, which is levied by the State. 

29 

WSSC ratepayers must also spend 46 percent of the cost for E&R 

for the Blue Plains wastewater treatment plant in the District of 

Columbia, with estimated construction costs of $311 million, with 

only $227 million of that being reimbursed by the Fund. 

Along with the practical problems of rebuilding this massive infrastructure, we face another challenge. Unlike roads and bridges 

and even railroads, they are out of sight and out of mind. By and 

large, we deliver 24 hours a day, 7 days a week, 365 days a year 

on a demand basis. You turn on the handle, the water flows; you 

press the button, the wastewater goes away. 

These functions, water and wastewater, are not optional. And 

they rely on systems of national infrastructure no less critical than 

the roads, bridges, and airports. They are absolutely necessary for 

the health and the well-being of our citizens here and across the 

country. These systems prevent diseases, provided for fire protection, and are absolutely essential for the economic growth of the 

United States. 

We are out of sight and out of mind; however, we have projects 

that are shovel-ready. We are providing jobs for workers across a 

range of skills, and we can provide more, and we can do it quickly. 

We have customers who continue to carry the major part of the 

burden and who need the relief most of all. 

With the exception of some of our policymakers, like those—like 

yourself and those who are members of this Committee here today, 

underground infrastructure has been a relatively low priority. The 

levels of Federal funding for this critical national infrastructure 

have been falling in numbers over the years. Water infrastructure 

should be a larger part of the ongoing national conversation because these challenges are not unique to WSSC and the Washington Metropolitan area, nor Baltimore. 

I hope this thumbnail sketch of the challenges we face as a local 

utility have been helpful. I again want to thank you for the opportunity to appear before you here today. Let’s hope that the rest of 

March will be as mild as the earlier part of the winter, so that we 

don’t experience quite as many water main breaks. Thank you for 

your tolerance with the timing. 

[The prepared statement of Mr. Johnson follows:] 

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Senator CARDIN. Thank you very much for your testimony. 

Ms. Horne. 

STATEMENT OF KATHY HORNE, EXECUTIVE DIRECTOR, 

ALABAMA RURAL WATER ASSOCIATION 

Ms. HORNE. Thank you, Chairman Cardin, and Ranking Member 

Sessions, for the opportunity to testify here today. 

I am Kathy Horne, the Executive Director of the Alabama Rural 

Water Association, representing 550 public water utilities in the 

State of Alabama, serving 3.7 million people. I am also proud to 

represent the National Rural Water Association, which has over 

28,000 small and rural community members. 

Alabama Rural Water has been in service since 1977. Our purpose is to assist and work with drinking water and wastewater systems in providing free localized training and onsite technical assistance. Many of the rural and small town water systems were constructed in Alabama during the 1950s and 1960s. The vast majority of water suppliers serve a population of less than 10,000, which 

is equivalent to 3,333 customers. 

While most of the water systems in Alabama are managed successfully, very little net revenue is realized beyond the routine 

operational and maintenance cost. This makes it very difficult for 

small systems to meet the needs of financial reserves and system 

improvement funds while also properly maintaining the operation. 

I would like to highlight two areas of concern for community 

water systems and urge the Subcommittee to consider assisting in 

future Federal funding and policy. First is the problem of high unaccounted for water, and second is the lack of training resources for 

the governing body or board members of community water systems. 

Both of these challenges illustrate the critical need for increased 

funding to help in upgrading and expanding existing water system 

infrastructure. 

In Alabama 15 percent water loss is considered normal for firefighting, flushing, and routine line breaks. Last year Alabama 

Rural Water conducted 23 leak surveys free of charge, with an average water loss of 37 percent. 

On a national perspective, studies have estimated that 20 percent to 25 percent of the treated water flowing within the distribution system is lost through leakage. I will give you an example. 

Last October, Alabama Rural Water conducted a leak detection 

survey for Centerville Water and Sewer Board in Bibb County. 

Centerville serves 1,945 customers. The survey resulted in the detection of a 6-inch main line that had blown apart at the coupling 

and was leaking 100 gallons per minute. Upon repair, this system 

saved approximately $6,480 monthly in service fees. 

This not only wastes the water supply but also the energy and 

the electrical costs associated with pumping and treating it. Energy 

bills are the highest expense for water utilities and correlate to a 

tremendous energy demand nationwide. 

My second concern is the lack of training resources for the governing board members of small water systems. In most all of the 

approximately 50,000 small community water systems, board members volunteer their time to make decisions on behalf of the citizens 

in their community regarding one of the most critical resources 

42 

available to man: water. Many small water systems are lacking in 

essential resources like system maps, standard operating plans, et 

cetera. These are all very essential to identifying infrastructure 

conditions. 

As a part of this overall process, we urge Members of Congress, 

in addition to funding for tangible water infrastructure projects, to 

consider strengthening the capacity of local governments in providing additional resources in the investment of water and wastewater utility management. This would ensure the most effective 

use of State and Federal dollars invested in infrastructure projects. 

Federal funding sources have experienced drastic reductions in 

their most recent budgets, causing insufficient funding to address 

overdue improvement projects. With the shortfall the utilities are 

still expected to continue full service for the citizens, industry, economic growth and comply with all Federal and State regulatory requirements. Investing in the future of water infrastructure not only 

improves the quality of life for American citizens but also provides 

for future economic recovery, growth, and stability. It provides a 

natural resources that no one can live without. 

In summary, I respectfully urge Congress to consider the unique 

infrastructure needs and concerns facing our rural and small town 

water systems and incorporate these as priorities in future Federal 

water funding programs and policies. 

Thank you all for your service, and thank you for this opportunity. 

[The prepared statement of Ms. Horne follows:] 

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Senator CARDIN. Thank you very much. 

Let me thank all our witnesses for their testimony. This is very 

important. 

Mr. Johnson, you mentioned the relatively low priority of these 

issues because of visibility, which I also pointed out in my opening 

statement. One of the reasons we are having these series of hearings is to establish the record which we hope will be for a greater 

commitment for the Federal Government in partnership on water 

infrastructure, but also a lasting commitment. We have made a lot 

of progress in the last 3 years, we really have. We increased dramatically the funding levels on the State Revolving Funds in the 

last 3 years. The budgets are higher. 

We see a dip this year, which has us greatly concerned. I plan 

to take some action on that and expect that some of my colleagues 

will be joining us in that regard. 

When it came to the use of recovery funds, we were able to get 

a significant amount of recovery funds dedicated to water projects. 

That was for two reasons: one because of the need, second the reason you just said, you were shovel-ready, which was something that 

we—unfortunately we have too many projects ready to go and not 

enough money to deal with those projects. 

Madam Mayor, let me ask you, I am very encouraged by your 

testimony in regard to your integrated plans with EPA. That is exactly what we want to see, a tailored program to deal with each 

of the communities. It is encouraging to hear your comments about 

EPA’s willingness to try to tailor a program to meet your needs. 

Storm runoff is a challenge. Storm runoff could very well be a 

water quality issue from the point of view of the Clean Water Act, 

there is no question about it. We have a challenge in the Chesapeake Bay watershed as the largest single growth of pollutants 

going into the Bay are coming from the storm runoff issues. 

We also have a problem in managing the water treatment facility 

plants based upon the volume of storm runoff. We have that particular problem in Blue Plains, which has a major commitment to 

try to deal with storm runoff. 

I guess my question is—you mentioned that the EPA was having 

some difficulty in putting together the drinking water, safe drinking water with wastewater treatment, even though both come 

under basically their supervision. Are you having luck in dealing 

with the storm runoff with the wastewater treatment issues in an 

integrated plan with EPA? Are they willing to consider the challenges that you have in dealing with the infrastructure necessary 

to deal with storm runoff? We really have not had a great deal of 

Federal support in dealing with that part of the environmental 

challenge. 

Ms. RAWLINGS-BLAKE. I am encouraged. I have been mayor for 

just a little over 2 years. And in that time I have seen a lot of 

progress in the way that the conversation with EPA is going. So 

I know that the door is still open. Are we there yet? No. But the 

conversations, the fact that they are using the language of integrated planning, that they are talking about the possibility of a 

pilot city, I have one to recommend. 

I know that they are open to the common sense realities of what 

we face. I think what has been happening is a long tradition of 

68 

dealing with all of these systems in segments. Our economies are 

forcing people to get out of that siloed thinking more than ever. To 

me, this is no exception. I believe that we can head that way, we 

can head that way in the future. 

So storm water is included, we are trying the drinking water included. 

Senator CARDIN. Good. I appreciate that, because I think all 

three parts are important. If you can have an integrated plan, it 

makes a great deal of sense, rather than just stovepiping because 

of the funding source. And the funding source presents the challenge. So I am very pleased that EPA is willing to consider some 

flexibility. 

We do need to look at new avenues for partnership. I like your 

clean water trust fund; I think that makes a good deal of sense for 

us to consider that. To the extent that we can leverage the lower 

interest rates the Federal Government can obtain, to the extent 

that you can leverage the tax status, it gives us the possibility of 

leveraging more money. There is a lot of discussion here about infrastructure banks. And I have promoted that in any infrastructure 

bank, let’s include water projects, not just the traditional thoughts 

of transportation or energy or education, which are the other areas 

that tend to get a lot of attention. We want to make sure that 

water is included in those areas. 

But I really applaud you, and the mayors collectively, for coming 

forward with creative sources. I think we should push for some 

form of a clean water trust account that could leverage the dollars 

that are available more effectively than we are doing today. 

Ms. RAWLINGS-BLAKE. Mr. Chairman, I agree, and I think we 

have a unique opportunity. There are not many national issues 

where rural areas and urban areas are dealing with an issue with 

the same amount of urgency. To me that provides an opportunity 

for partnership across the aisle and in ways that we haven’t seen 

before. We are facing the same problems but in different ways. I 

really think we could all work together, rural areas, metropolitan 

areas, in the issue of water infrastructure funding, to create a solution that would help all across the country. 

Senator CARDIN. I agree. I think there is bipartisan support here, 

as Senator Sessions indicated in his opening comments. Senator 

Inhofe has been a strong proponent of moving forward with water 

infrastructure as has Senator Boxer. 

Ms. Horne, I was concerned and impressed by your statements 

that talk about the challenges a rural community in getting the 

technical help that they need in order to be able to properly manage a water system. I must tell you, I visited many of the small 

water facilities that we have in Maryland, treatment facilities. I 

am impressed by the community sort of coming together to manage 

that. They don’t have the same type of professional management 

that you would see in a large urban center. 

We do provide some technical help through the funds that are 

available nationally. But could you just go into the challenges that 

you see in the ability to manage a rural water plant that the Federal Government should be sensitive to trying to provide some— 

meeting some of those challenges? 

69 

Ms. HORNE. Some of the challenges that we see in the State of 

Alabama include, in working with members of management it is 

just the lack of opportunity that these individuals have for specific 

training that would help them to make better decisions regarding 

the management of that public water utility. 

They do have a lot of challenges that they deal with because 

their customer base is very small. And the regulatory requirements 

have not been reduced, of course; through EPA and the State regulatory agencies they have been increased. Many of those regulations impose some high costs, of course, for these utilities. And 

with small customer bases it is very difficult for management to be 

able to spread those costs throughout the customer base and to be 

able to maintain reasonable rates at the same time. 

So we primarily work with these utilities through governmental 

funding opportunities. And in doing so, that has provided a tremendous, a tremendous opportunity to assist those utilities with the infrastructure problems that they are facing. Yet there is so much, 

of course, that we have discussed today that still needs to be done 

that we haven’t reached. 

I think that with the support from the Subcommittee to help us 

with resources that would allow the board members of these small 

public water utilities to have an opportunity to learn more about 

what resources are available to them and what others, even in 

larger municipalities, are doing to help in their particular cities, 

which may or may not be relevant to a small, rural community. It 

is still an opportunity for that person to become better informed 

and to make better decisions regarding that particular operation. 

Senator CARDIN. Thank you. 

Let me yield to Senator Sessions. 

Senator SESSIONS. Thank you. 

Mr. Chairman, I would offer for the record a statement from the 

Birmingham Water Works Board. 

Senator CARDIN. Without objection, it will be included. 

[The referenced statement follows:] 

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Senator SESSIONS. It deals with issues that we are talking about 

and the challenges that this older city system faces. 

Ms. Horne, Alabama Rural Water Association’s purpose is to improve the quality of life for Rural Alabamians. Can you describe 

some recent situations where new water infrastructure has helped 

a rural community with economic growth and development? 

Ms. HORNE. Sure. Most of the water systems in Alabama started, 

as I mentioned, back in the 1950s and the 1960s. Those were primarily funded through USDA loans and grants. 

I do know—what comes to mind is Millport, the water utility in 

Millport, that serves a little over 400 customers, a very small customer base. And a USDA loan and grant was made available to 

this utility to provide infrastructure improvements to allow 

Millport in Lamar County to be able to provide capacity to a recycling plant that was interested in locating there. 

Without this Federal support through funding, it would not have 

happened. It has worked very well; they did create this commercial 

user. And that is always really important in a rural community, to 

have an inviting environment where they can meet the demands of 

those particular industries or manufacturing plants that would 

even consider locating in those rural communities to be able to find 

the funding to improve their infrastructure to provide the service 

needed and meet the demands that are requested. 

Senator SESSIONS. You talked about the importance of the State 

Revolving Loan Fund, which provides low interest loans to communities so they can comply with the water standards that they need 

to meet and that the Federal Government requires. I understand 

that this program is due for reauthorization. It is a good example 

of a cooperative program between Federal and State governments 

that has helped meet our Nation’s infrastructure needs. I think 

that is plain. 

The President’s budget proposes some deep cuts, and we are facing deep cuts in a lot of different areas. We should respect that and 

just not immediately reject the budget that has been proposed. But 

could you explain why the SRF program is important to communities and how you think it is valuable and should be maintained? 

Ms. HORNE. The State Revolving Fund is certainly valuable to all 

of our States. It provides a tremendous financial revenue source for 

our public water utilities and wastewater utilities through the 

Clean Water Revolving Fund. I think that with the State Revolving 

Fund, if more discretion could be given to the people in each State 

regarding the decisions that they make about the projects that are 

being approved, looking at priorities for those projects and determining whether or not the utility, for example, is in compliance or 

if they are having compliance issues. 

If that utility could be given some priority in the approval process and allow the discretion of those type decisions to be made at 

the State level. Who better knows the needs of that State than the 

people in the State? As we identify these areas of concern and the 

projects that are most needed with the public water systems that 

we work with, we partner in working with our regulatory agencies, 

USDA and others, to help identify these problems and then support 

the priority funding that is needed to correct the issue at hand. 

Senator SESSIONS. Well, thank you. 

75 

Mr. Johnson, Ms. Rawlings-Blake, would you have any comment 

on that? 

Ms. RAWLINGS-BLAKE. I certainly agree that the Revolving Fund 

is important. My hope is that we can get the funding up to a meaningful level. The needs are great, and the Revolving Loan Fund, 

while it is important, does not come near to meeting the State’s 

needs. 

We have very unique needs, rural communities, urban communities. If you take a look at the infrastructure improvements that 

are needed to meet the Federal mandates, that expense cannot be 

borne by ratepayers alone. We need to be able to leverage funds; 

we need access to cheaper capital money so we can make the improvements that we need. 

So we need the Revolving Fund as well as some other innovative 

financing options so we can work in partnership to create a safe 

environment for all of us. 

Senator SESSIONS. Mr. Johnson, would you have any comments 

on that, and maybe a question of increased flexibility? 

Mr. JOHNSON. I certainly agree with both speakers, with everything they have had to say. In particular the point of additional 

flexibility at the State level. What we found is that with the current affordability guidance, it makes it rather difficult for us to attract some of those moneys in the two counties that we serve. And 

if there were greater flexibility, I think those dollars would go a 

longer way. 

One of the things I think you have to understand is in an urbanized community like the two counties that we serve, Montgomery 

and Prince Georges, there are still areas and pockets of the community where there are unserved and under-served residents who 

are still living with septic tanks and wells that are currently failing 

and going bad. We are now struggling to try to determine how we 

extend the modern system to many of those residents. We are talking about subdivisions of 40 houses here and 20 or 30 houses there, 

and sometimes single residents in some of the far reaches of the 

two counties. 

So I really empathize and understand and can very much relate 

to some of the things that are happening in the rural areas as well, 

although we are in a very urbanized area. So I think the notion of 

flexibility and certainly additional funding would do well to serve 

us in the State of Maryland. 

Senator SESSIONS. Mr. Chairman, as I think about water, my 

three rural grandparents’ homes, all three, when I was a kid, still 

had a well, bucket well, shallow well where you got water from. All 

three had attempted with various degrees of success to drill a well, 

but some had too much iron, some sand would cave in, and it 

would be in trouble. 

In my mother’s family home they liked the water from an artesian well. We would go periodically with jars and fill up with 

water, and so did my father’s home place. So these are the kinds 

of things people have lived with for years and years. 

But a water system is relatively inexpensive. It is amazing to me 

how low the rates can be for people out on the road, with a new 

system, the plastic piping can rush out there and put a water tower 

up, and it works. So it becomes economically feasible and realistic, 

76 

providing a reliable source of water, which also can attract business. And without it, you won’t be able to attain business development. 

So I think it is a good infrastructure investment. We don’t have 

near as much as we would like to have. I understand the difficulties with the budget. But I sure hope that we can figure out a way 

not to lose momentum in being able to expand the water systems 

in our country. 

Senator CARDIN. Senator Sessions, thank you very much. I am 

going to follow up on some of your economic issues here because 

I think you are absolutely correct. If a business is going to be able 

to locate they have to have access to water. It is just a fact. They 

are not going to be able to do what your grandparents did in order 

to deal with their business needs. They are going to locate where 

they can get a reliable source of clean water. 

And as we look at where population trends are taking place, and 

when you try to have proper planning for economic growth, the 

availability of water through a system is critical. So it is absolutely 

directly involved in economic issues. 

But you raise a very important point. And that is, people are sort 

of accustomed to being able to get water at a rather reasonable, 

some would say cheap rate. And perhaps we are not doing an effective enough job in pointing out to the public what is involved in 

getting safe drinking water to their homes so that we can have revenue options that are currently not available through the rate increases to be able to get the continuation of reliable service in a 

more efficient manner, without all those leaks. Any suggestions 

here of how we can get a more realistic expectation from the users 

as to what the costs of these systems are involved? 

Mr. JOHNSON. Senator, I think that there are a number of elements that relate to that question. One is straightforward education, education, education. And it is making our customers more 

aware of what it takes to get water. And there are a variety of different things, from exposing them to our facilities and offering 

tours and opportunities for them to see what we are doing, taking 

them to our various work sites and the like. 

And when we are going into neighborhoods and doing pipe replacement, explaining to them the level of effort that it takes, the 

kind of equipment that it takes, the dollars that it takes to do that 

kind of work. Replacement of a mile of standard line, ductal line 

pipe, is about $1.4 million today. In addition to that replacement, 

we have to do extensions and other kinds of work. 

So I think that a good bit of it has to do with education. Truly, 

I believe that people are getting a real bargain with water supply 

and water service. When you compare the water bill to other utility 

costs and look at the essential nature of water service, it is a real 

bargain. 

But understand that in our urban areas communities can’t function without fire protection. Hospitals can’t operate without a 

clean, safe supply of water. Not all of the water, obviously, is used 

for consumptive purposes. There are many other uses of water. I 

think making people aware that they do have options for other utilization of re-used water and the like I think is also very important 

to our customers. 

77 

And getting them to get behind certain other initiatives that we 

might be undertaking, things like the Mayor mentioned, the trust 

fund. If customers understood the nature of a trust fund and how 

something like that could work to benefit them and not to reduce 

the cost but to hold the trajectory of costs down, I think would be 

very important to them. 

And also looking at our assets and how we might be able to leverage them for more resources. 

Senator CARDIN. Madam Mayor. 

Ms. RAWLINGS-BLAKE. Yes, thank you very much, Mr. Chairman. 

I have certainly worked diligently on the education effort. Because we have had to raise the rates—the water rates—annually 

for the past few years. And with the clear understanding at the 

time that we started the roll out of the increases that it would go 

on for some time in the foreseeable future. 

So in Baltimore the relative cheapness or inexpense of water is 

going away. And people are feeling the squeeze. And it is becoming 

increasingly difficult when we know that we have inefficiencies and 

we know that we have daily water loss that costs us more money 

to be able to produce that water, when we know that because of 

an inefficiency in the way that we must deal with our capital 

projects, because we are not at the point where we have this integrated plan or this holistic plan means that we can’t really deal 

with the aging infrastructure issue in a pace where we think would 

be helpful to keep the costs down, because we have to meet these 

other Federal mandates. 

So it is more expensive; it requires education. But at a point— 

at least in Baltimore—people are going to want to see evidence of 

more cooperation on providing the efficiencies and the autonomy 

that is needed to be able to save the ratepayer money. So the 

money that we are charging we know is going to create the most 

efficient and effective system possible. 

Senator CARDIN. Just one last question on the economics here of 

moving forward, Mr. Johnson, you mentioned 1,700 breaks a year. 

That is an unbelievable number. If my math is right, that is four 

or five a day that you get every day of the year. And Mayor Stephanie Rawlings-Blake, you mentioned the number of leaks that you 

are having in Baltimore, and Ms. Horne, you mentioned 20 or 25 

percent leakage. That is an unbelievable number of how much 

water is wasted. 

That is a huge cost. I can’t imagine how much it costs you just 

to investigate each leak and try to deal with it before it becomes 

a major problem for a break that can cause a major disruption to 

a community, loss of water. In Dundalk we had people for days had 

to boil their water. They couldn’t get water. And that is in Baltimore. 

So that is a huge cost. Can you quantitate that at all? 

Mr. JOHNSON. I can in just a minute. I can get that information 

back to you. 

Senator CARDIN. I think it would be helpful for us to have if you 

could, quantitate the cost of inaction, the leakage plus the breaks 

plus all the repair work that you have to do. If deferred maintenance catches up with you, and that is what is happening in AmerVerDate Aug 31 2005 13:27 May 02, 2017 Jkt 000000 PO 00000 Frm 00081 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25022.TXT SONYA
78 

ica, your analogy of painting a bridge is absolutely right. The problem is we haven’t completed it the first time. 

Mr. JOHNSON. You are right. 

Senator CARDIN. And it is already peeling at the back end. And 

we have to catch up in a much more aggressive way. 

Let me turn it over to Senator Sessions, and I will come back and 

give you all an opportunity. 

Senator SESSIONS. Mayor Rawlings-Blake, I offered for the record 

a statement from the Birmingham Water Works Board, which I 

think is doing very well. But I am sure you are probably aware 

that Jefferson County, which is also part of the Birmingham area 

water works system, declared bankruptcy, one of the largest bankruptcies, and what an embarrassing, difficult time that has been. 

The rates surged for the consumers to a point they couldn’t be sustained. 

I was attorney general at a point when the EPA filed a complaint against the system. It was supposed to cost $1 billion to fix the 

problems; it ended up costing about $4 billion. And it was those 

bonds and the floating of that and some unwise decisions they 

made about how to finance it that led to this bankruptcy. I understand you had a recent settlement of $250 million with 

EPA. More than that? OK. 

Ms. RAWLINGS-BLAKE. I think the consent decree is around $1.2 

billion settlement. 

Senator SESSIONS. Yes. I believe Mr. Johnson had a smaller one. 

I guess the question is, do you think you can stay on those numbers? Are you afraid that they will go out of control and not be able 

to accomplish everything you are mandated to accomplish? What 

kind of risk does that place you in? 

Ms. RAWLINGS-BLAKE. If you were to come to one of our Water 

Council meetings and see mayors from across the country, small 

cities, large cities, Republican, Democrat, deal with the fiscal reality of trying to meet these mandates, you will see a frustration 

beyond belief. Because every single one of us wants a safe water 

system. We want a safe environment. 

But we can’t do it just on the backs of the ratepayers. We are 

all at risk. We don’t want to see another story of a bankrupt city, 

another one, another one, when we know that there are other options out there. It requires us to think differently and smarter 

about these financing options so we can use the resources that we 

have. 

The ratepayers, I think the rate of default for these water bonds 

is one of the lowest out of any of it. You have the regular ratepayers paying the water bill. But we need to be able to leverage 

that to get a more efficient system quicker. 

Senator SESSIONS. Well, as I understand the EPA law, and I 

think it controls what they do, they are not able to say, well, your 

sewer system overflows, and you have to stop it, but you can do it 

over a period of time, which they do. But fundamentally they are 

required to end it immediately. If it creates a risk they are not supposed to consider particularly how you pay for it and what kind of 

system of repair over a period of years would be the most efficient 

way to achieve that goal. They push for rapid completion of these 

problem areas almost immediately. It can be a great cost. 

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I sensed—when I observed the settlement of $1 billion in Alabama, I thought the city couldn’t afford that. But before it was over 

it was about $4 billion. And it took them down. 

Mr. Johnson, you had a settlement also. Do you find that the 

EPA legal requirements are such that it makes it difficult to work 

out a cost-effective way to improve your systems? 

Mr. JOHNSON. I would assume, I think that is a relative question. 

It depends on the nature of the problem and the issues that you 

are dealing with. I have had the experience of doing this in several 

different cities and in the community that I am in now. And it is 

a heavy burden. And the burden comes on top of all of the other 

things that you know you have to do just as good management and 

good operating practices. 

The question that the Senator asked me just a minute ago about 

the cost of maintenance of the water and sewer pipes, just that 

maintenance alone is $21.6 million a year. So if you take that as 

a given, then recognize that you now have to take on a regulatory 

responsibility that has to be completed within a specified period of 

time, it does put a strain on the system, and you have to make 

some tough choices. Do you continue to replace these water mains 

and the other systems that you know are going to go bad, or do you 

let them languish while you go forward and focus on the other 

parts of the system that you are being required to do because of 

an EPA order? 

Those are very difficult. And you have to do it within a finite 

number of dollars and resources that you have available. This is 

not unique to our utility. As the Mayor indicates, this happens 

across the country and creates a very vexing kind of dilemma for 

the various organizations that have to undertake it. 

Senator SESSIONS. Thank you. 

Mr. JOHNSON. However, the comments that the Mayor made earlier about this integrated planning approach has great potential 

and has great opportunity to begin to save the ratepayers and the 

communities dollars. Because if we look at these issues in an integrated fashion and recognize, as an example, that sewer flow and 

stormwater flow are both water-related issues, and all of it has to 

be dealt with through a wastewater plant or certain other facilities, 

and we begin to look at that planning effort on an integrated basis, 

that becomes method of saving money when we come out of that 

stovepipe. 

Senator CARDIN. I have one more observation and one question, 

then we may have some additional questions for the record. 

Let me just point out, what Senator Sessions is saying about coordination, and Mayor Rawlings-Blake said about integrated plans, 

it takes me back—the problems in Baltimore pre-date our mayor, 

and pre-dates your service even as a city councilwoman. We have 

been in legal issues for a long time concerning compliance with 

Federal regulation in our water. 

We had an issue with the Army Corps with the Patapsco River 

restoration, where a lot of the pipes are laid, as to when they are 

doing the restoration work, why couldn’t they at the same time do 

some of the water work and count it all as one project. And we had 

the hardest time getting them to do two things at one time, two 

different agencies. 

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So I think Senator Sessions’ point is a very valid point. I really 

am encouraged by what the Mayor is saying in your conversations 

with EPA, of looking at three different sources and putting them 

together as a coordinated plan. I know you are not quite there yet. 

But we are going to be interested in following that and trying to 

help you get through the administrative bureaucratic issues so that 

we can look at results. 

And we might want to bring in the programs, such as what the 

Army Corps does on restoration and say, look, that may be a source 

that we can also get some help, as we do some of our restoration 

work, also look at storm management and issues like that, that 

make your job a little bit easier, so that we sort of coordinate all 

this at one time. 

I am looking at the transportation bill as an opportunity to deal 

with storm runoff. We can use that as a way, again, to make your 

job just a little bit easier. 

But my last question deals with green technology. Mr. Johnson, 

you have been an innovator in looking at innovative ways to deal 

with water issues. Can you just briefly tell us the promise for green 

technology as you deal with managing the water issues as to how 

much promise that holds for not only being gentler to our environment but also more economically efficient? 

Mr. JOHNSON. As I mentioned in my earlier presentation, we 

have bought into a wind farm in Pennsylvania that is now saving 

our customers about $800,000 a year and reducing traffic on 495 

or the Beltway by about 20,000 cars per year. So that is one innovation. We are also looking at how we go about re-using much of 

what we do at the wastewater treatment plant. Are there ways 

that we can approach the digestion system at the plant, as an example, to recapture methane gas and re-use that for offsetting 

some of our energy needs. Are there ways that we can use solar 

power. We have fairly large land holdings. I think that presents 

some opportunities for us to do some of those kinds of activities. 

But the private sector investment also needs initiative. I think 

that some of the tax credits that have been provided by the Federal 

Government for some of those energy initiatives is something that 

could help us as well. Because then we can incent the private sector folks to come in and do the photovoltaic kinds of projects and 

other things that would allow us to function much better. 

We are also looking at better ways of eliminating biosolids and 

methods of re-using that in a more effective way, as we know that 

land application is not going to be the way of the future. So we 

have to look down the road at ways of dealing with that as well. 

So we look at the whole operation: can we reduce chemical use, 

and our carbon footprint to ensure that we have resources available 

for our children and their children’s children in the future. 

Senator CARDIN. Thank you. 

Do either of the other two witnesses want to comment on this 

issue? 

Ms. RAWLINGS-BLAKE. We are certainly looking, Mr. Chair, at 

uses of green technology in our holistic approach, our integrated 

planning proposal. 

Senator CARDIN. Thank you. 

81 

Let me thank all three of you for being here and just tell you 

some of the things that we are going to be looking at. Senator Sessions mentioned that the State Revolving Fund reauthorization is 

an issue that enjoys bipartisan support. This Committee has a history of working together on those issues. As we look at the future 

of the State Revolving Funds, I think the comment that Ms. Horne 

made is accurate, we are looking at ways of giving you more flexibility as we move forward with the Federal partnerships. So we 

will continue to do that. 

We also believe the funding levels have to be maintained. Senator Sessions raised a very valid point about our budget challenges. 

We all need to be mindful that we have to have a sustainable Federal budget. Infrastructure is a critically important priority for this 

country, and we want to make sure that water, along with our 

other transportation, our transportation priorities and energy priorities, are included at a high level. So we will continue to fight for 

that. 

We will look for creative ways to provide additional opportunities. I think the testimony of Mayor Rawlings-Blake helps us in 

thinking about additional avenues that we can look at to provide 

additional partnerships. 

But I really thought the point that all of you raised about coordination is important here. We have multiple goals. The easier we 

can work on those multiple goals and have the Federal Government helpful rather than just giving you mandates without an avenue to meet those needs in a more cost-effective way, which is what 

I think we all are trying to do with the Federal partnerships. 

So this hearing will be extremely valuable to our Committee in 

coming up with a strategy to try to help you, as your partner, to 

help meet the expectations of our public for safe and clean water. 

Thank you very much for your testimony. 

We will stand adjourned. 

[Whereupon, at 11:21 a.m., the Committee was adjourned.] 

[An additional statement submitted for the record follows:] 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA

I appreciate that Senator Cardin and Senator Sessions have called another hearing on water infrastructure needs in our country. I have often said that the best 

way to ensure we are providing safe drinking water and clean water is to improve 

water infrastructure. I look forward to working with them and other members of 

the Committee this year on this vital issue. 

It is clear that the United States’ water infrastructure is in dire need of repair. 

In the American Society of Civil Engineers’ most recent report card for United 

States’ infrastructure, they gave the wastewater and drinking water infrastructure 

a grade of a D¥. At our last hearing, Mr. Gregory E. DiLoreto, president-elect of 

ASCE, testified that if current infrastructure investment trends persist, by 2020 the 

anticipated capital funding gap will be $84 billion. He noted that ‘‘Even with the 

increased use of sustainable practices and cost-effective development of other efficiency methods, the growing gap between capital needs to maintain drinking water 

and wastewater treatment infrastructure and investments to meet those needs will 

likely result in unreliable water service and inadequate wastewater treatment.’’ Yesterday the American Water Works Association released a report showing that the 

United States will need to spend $1 trillion in the next 25 years to maintain the 

current level of drinking water service and accommodate economic growth. 

A nationwide investment in improving the aging water infrastructure will create 

jobs and protect public health and the environment. Public investment in improving 

the aging water infrastructure, according to the Department of Commerce, yields 

significant economic benefits estimating that $1 invested in water infrastructure 

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generates more than $2 in economic output in other industries and that each job 

created in the local water and sewer industry creates nearly 4 jobs in the national 

economy. The U.S. Conference of Mayors notes that each public dollar invested in 

water infrastructure increases private long-term GDP output by more than $6. 

Given the incredible need, the incredible benefits from investment, I was extremely disappointed to see that EPA’s fiscal year 2013 budget requested a decrease 

in funding for the Drinking Water and Clean Water State Revolving Fund programs 

for the second year in a row. Every Federal dollar that EPA directs away from addressing the primary goal of the SRF programs reduces the capacity of a State to 

leverage Federal funding and address infrastructure needs. One million in Federal 

funds from these programs is leveraged into $3 million in capacity for funding additional infrastructure projects. As Joe Freeman, Chief Financial Assistance Division, 

from the Oklahoma Water Resources Board testified before this Subcommittee in 

December, ‘‘In the past two decades few federally authorized programs have proven 

as effective in realizing their intended goals as the SRF programs.’’ 

I am looking forward to hearing about the challenges facing water systems, both 

small and large. I continue to believe that the most successful approaches to helping 

water systems meet their individual water quality needs are developed at the local 

level. Because water challenges differ from State to State and city to city we must 

promote solutions that are flexible and provide solutions for both small and large 

systems. 

I am especially pleased to have Kathy Horne, Executive Director of the Alabama 

Rural Water Association, here to share her perspectives on issues affecting rural 

water systems. As you know, Oklahoma has a large number of rural water systems. 

Rural systems often lack the financing and engineering resources of many larger 

systems yet still are tasked with providing safe drinking water to the people they 

serve. Ensuring that treatment technologies are cost effective is critical for these 

systems since they serve fewer people often over large geographical areas, and costs 

are shared between fewer people than urban drinking water systems. Rural populations often must pay more money to receive the same water service, which is not 

affordable for many rural Americans who live on fixed incomes. 

Considering the importance of water infrastructure to the well being of the American people and our economy, I will continue to support investment in water infrastructure and am looking forward to hearing the testimony of our witnesses on the 

important issues facing both rural and urban water systems. 

Thank you. 

[Additional material submitted for the record follows:] 

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