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THE FEDERAL ROLE IN KEEPING WATER AND 

WASTEWATER INFRASTRUCTURE AFFORDABLE 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

APRIL 7, 2016 

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

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JAMES M. INHOFE, Oklahoma, Chairman 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

SHELLEY MOORE CAPITO, West Virginia 

MIKE CRAPO, Idaho 

JOHN BOOZMAN, Arkansas 

JEFF SESSIONS, Alabama 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

MIKE ROUNDS, South Dakota 

DAN SULLIVAN, Alaska 

BARBARA BOXER, California 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

RYAN JACKSON, Majority Staff Director 

BETTINA POIRIER, Democratic Staff Director 
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C O N T E N T S 

Page 

APRIL 7, 2016 

OPENING STATEMENTS 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 1 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 4 

WITNESSES 

Berger, David, Mayor, Lima, Ohio, on behalf of the U.S. Conference of Mayors .......................................................................................................................... 6

Prepared statement .......................................................................................... 8 

Chow, Rudolph S., P.E., Director, Department of Public Works, Baltimore, 

Maryland, on behalf of the Water Environment Federation ............................ 85 

Prepared statement .......................................................................................... 87 

Moore, Robert, General Manager, Marshall County Water Corporation, 

Madill, Oklahoma, on behalf of the National Rural Water Association .......... 105 

Prepared statement .......................................................................................... 107 

Arndt, Aurel, former Executive Officer, Lehigh County Authority, Pennsylvania, on behalf of the American Water Works Association ............................ 136 

Prepared statement .......................................................................................... 139 

Gysel, Joe, President, Epcor Water (USA), Inc., Phoenix, Arizona, on behalf 

of the National Association of Water Companies .............................................. 145 

Prepared statement .......................................................................................... 147 

Olson, Erik, Director, Health Program, Natural Resources Defense Council .... 159 

Prepared statement .......................................................................................... 161 

ADDITIONAL MATERIAL 

Statement of the Associated General Contractors of America ............................. 198 

Letter to Senators Inhofe and Boxer from the Association of Metropolitan 

Water Agencies, April 7, 2016 ............................................................................. 203 

Statement of the National Association of Clean Water Agencies ........................ 207 

Testimony of Commissioner Todd Portune, Board of County Commissioners, 

Hamilton County, Ohio, on behalf of the ‘‘Perfect Storm’’ Communities 

Coalition ................................................................................................................ 211 

Statement by the Unitarian Universalist Service Committee ............................. 217 

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THE FEDERAL ROLE IN KEEPING WATER AND 

WASTEWATER INFRASTRUCTURE AFFORDABLE 

THURSDAY, APRIL 7, 2016 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The committee met, pursuant to notice, at 10:01 a.m. in room 

406, Dirksen Senate Office Building, Hon. James M. Inhofe (chairman of the committee) presiding. 

Present: Senators Inhofe, Boxer, Barrasso, Capito, Crapo, 

Boozman, Wicker, Fischer, Sullivan, Carper, Cardin, Whitehouse, 

Gillibrand, Booker, and Markey. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Well, the EPA has identified $384 billion in 

drinking water needs and $271 billion in wastewater needs over 

the next 20 years based on capital improvement plans developed by 

local utilities. According to the U.S. Conference of Mayors, which 

I really enjoyed visiting with the U.S. Conference of Mayors, and 

I am glad to have you here to represent them. That was, what, 3 

weeks ago or so. Anyway, it is your meeting. It is nice to see some 

of the people are still in the U.S. Conference of Mayors that were 

there when I was a Mayor, a long time ago. 

But according to the U.S. Conference of Mayors, through 2013, local governments have invested over $2 trillion in water and 

sewer infrastructure and continue to spend $17 billion a year. Now, 

these local expenditures represent over 98 percent, 98 percent of 

the cost of providing services and investing in infrastructure. These 

costs are paid by you and by me and by our ratepayers, and as a 

general rule this is an appropriate thing to have users pay. 

But water and wastewater is funded by the taxpayers who receive these services. That is fine. Unfortunately, however, we are 

no longer just paying for services; we are also paying for unfunded 

Federal mandates, as I mentioned. And as Federal mandates pile 

up, the bills paid by individual homeowners get bigger and are becoming unaffordable for many Americans. 

Federal mandates also force local communities to change their 

priorities. In the water and sewer world, this pushes basic repair 

and replacement to the bottom of the list. When we force communities to chase mandates that may have very small incremental 

health and environmental benefits, we risk losing both basic public 
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health protections and the economic foundations of our communities. 

There is a Federal interest in maintaining these health protections and economic benefits, and there are a variety of ways we can 

help. I want to list four here. 

First, we have to continue to support the clean water and drinking water State revolving funds that provide low cost loans for infrastructure improvements. The President’s fiscal year 2017 budget 

proposed cutting the clean water fund by $414 million and providing a $197 million increase in the drinking water fund. Now, 

this is robbing Peter to pay Paul, so it really doesn’t make that difference; the net is a loss. 

Second, we have to find new ways to increase investment in infrastructure. In 2014, we took action by adding the Water Infrastructure Financing and Innovation Act, WIFIA, to the WRDA bill. 

EPA is finally requesting funding to startup the WIFIA program, 

although they are only requesting $15 million. In our proposal to 

help Flint and other communities around the country, we are planning to provide around $70 million, not $15 million, but $70 million 

to capitalize WIFIA. 

Third, we need to look for ways to encourage even more private 

investment in water and wastewater infrastructure. WIFIA loans 

provide only 49 percent of the project costs, so where does the funding for the other 51 percent? So it is a 50-50 thing. If we can’t be 

raised through municipal bonds, where is it going to come from? 

Fourth, we need to increase support for small rural communities 

who simply can’t afford the investment that EPA wants them to 

make and need technical support to keep up with all the Federal 

mandates. Mr. Robert Moore of Madill, Oklahoma, will offer testimony on this. 

Finally, we have to make sure that Federal mandates don’t force 

communities to spend hundreds of millions of dollars for projects 

that may have little impact on water quality while delaying other 

critical programs. The U.S. Conference of Mayors has spent a lot 

of time trying to work with the EPA on this issue. Despite the 

EPA’s rhetoric on integrated planning and flexibility, communities 

are still being threatened with penalties even as they are trying to 

negotiate with the EPA. 

I strongly believe that investment in infrastructure expands our 

economy. The U.S. Conference of Mayors reports that each public 

dollar invested in water infrastructure increases private long-term 

gross domestic product by $6.35. To date, the Joint Tax Committee 

has not been persuaded by these numbers. The Joint Tax Committee assumes that these programs increase the use of tax-exempt 

bonds, creating a loss to the Treasury that we need to offset. 

This is exactly a barrier to increasing funding authority for the 

State revolving funds and loan programs, and WIFIA also. The 

Water Environment Federation, represented here today, has conducted a new study to measure the increases in personal and corporate income taxes paid into the U.S. Treasury attributable to 

water infrastructure investment. In other words, more money is 

coming into the Treasury as a result of this type of investment. 

This hearing is laying the foundation for legislation on water and 

wastewater infrastructure, and I hope to be ready to move it at the 
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same time our Water Resources Development Act, or WRDA, is 

taking place. 

Senator Boxer. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

EPA has identified $384 billion in drinking water needs and $271 billion in wastewater needs over the next 20 years based on capital improvement plans developed 

by local utilities. According to the U.S. Conference of Mayors, through 2013 local 

governments have invested over $2 trillion in water and sewer infrastructure, including $117 billion in 2013 alone. 

These local expenditures represent over 98 percent of the cost of providing services and investing in infrastructure. These costs are paid by you, me and our neighbors when we pay our water and sewer bills. 

As a general rule, this is appropriate. Water and wastewater are funded by the 

ratepayers who receive these services. Unfortunately, however, we are no longer just 

paying for services. We also are paying for unfunded Federal mandates. And as Federal mandates pile up the bills paid by individual homeowners get bigger and are 

becoming unaffordable for many Americans. 

Federal mandates also force local communities to change their priorities. In the 

water and sewer world, this pushes basic repair and replacement to the bottom of 

the list. When we force communities to chase mandates that may have very small 

incremental health or environmental benefits, we risk losing both basic public 

health protections and the economic foundation of our communities. 

There is a Federal interest in maintaining these health protections and economic 

benefits, and there are a variety of ways we can help. 

First, we have to continue to support the clean water and drinking water State 

revolving loan funds that provide low cost loans for infrastructure improvements. 

The President’s fiscal year 2017 budget proposed cutting the clean water fund by 

$414 million and provided a $197 million increase in the drinking water fund. 

Second, we have to find new ways to increase investment in infrastructure. In 

2014 we took action by adding the Water Infrastructure Financing and Innovation 

Act to the WRDA bill. EPA is finally requesting funding to start up the WIFIA program, although they are only requesting $15 million. In our proposal to help Flint 

and other communities around the country, we are planning to provide $70 million 

to capitalize WIFIA. 

Third, we need to look for ways to encourage even more private investment in 

water and wastewater infrastructure. WIFIA loans provide only 49 percent of 

project costs, so where does the funding come from if the remaining 51 percent cannot be raised through municipal bonds? 

Fourth, we need increased support for small rural communities who simply can’t 

afford the investments that EPA wants them to make and need technical support 

to keep up with all the Federal mandates. Mr. Robert Moore of Madill, Oklahoma, 

will offer testimony on this. 

Finally, we have to make sure that Federal mandates don’t force communities to 

spend hundreds of millions of dollars for projects that may have little impact on 

water quality, while delaying other critical programs. The U.S. Conference of Mayors has spent a lot of time trying to work with EPA on this last issue. Despite EPA’s 

rhetoric on integrated planning and flexibility, communities are still being threatened with penalties even as they are trying to negotiate with EPA. 

I strongly believe that investment in infrastructure expands our economy. The 

U.S. Conference of Mayors reports that each public dollar invested in water infrastructure increases private long-term gross domestic product output by $6.35. To 

date, the Joint Tax Committee has not been persuaded by these numbers. The Joint 

Tax Committee assumes that these programs increase the use of tax exempt bonds, 

creating a loss to the Treasury that we need to offset. This is actually a barrier to 

increasing funding authority for the SRF loan programs and WIFIA. So the Water 

Environment Federation has conducted a new study to measure the increases in 

personal and corporate income taxes paid into the U.S. Treasury attributable to 

water infrastructure investment. 

This hearing is laying the foundation for legislation on water and wastewater infrastructure, which I hope to be ready to move at the same time as we move our 

Water Resources Development Act legislation later this month. 
4 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. Thank you so much. 

I am very pleased that we are having this hearing, and I think 

it is important to look at this issue of mandates, where the parties 

do have some significant differences. 

To me, useless mandates are ridiculous. They make zero sense. 

But common sense mandates based on science are critical. For example, yesterday we had a hearing on nuclear power plants. We 

could say, let’s not spend any money worrying about the safety, but 

then we would have more problems, like we had at Three Mile Island or God forbid, Fukushima. Well, we are not going to have that 

because we have a law that says we are going to set standards and 

regulate these power plants. 

Now, Senator Inhofe and I may have a disagreement on how far 

that should go. That is fair. But the fact is we do something important for the American people, it is called protecting them, and that 

is critical. So as we discuss the Federal role in supporting our 

water infrastructure, safety should be prominent in our minds. 

Aging drinking water pipes and waste treatment systems are a nationwide problem, and the Society of Civil Engineers—and they are 

not Republicans or Democrats, they are everything—they give us 

a D, a D for our drinking water and wastewater infrastructure. It 

is unacceptable. 

Now, it doesn’t mean that throwing a ton of money at it is going 

to change it. We have to be very smart the way we do it, but we 

have to do it, and I believe it is a national problem. I don’t think 

it is fair that in one city in the country, you know, our kids are 

getting poisoned water, and we have that, examples of that all 

over, including in my State, because we have had some disposal of 

dangerous lead. We have it in Mississippi in a certain part; we 

have it in Flint, Michigan; we have it in Ohio. It is not fair that 

the child born there, just by circumstances of their birth, has less 

of a right to clean water. So the American people have a right. 

Now, these minimum standards also extend to, of course, our 

water infrastructure. I was so proud to join with my colleague, Senator Inhofe, in a rare moment of comity on the environment where 

we said there is too much lead in faucets and those facilities that 

deliver our water, and we changed that lead requirement based on 

science. 

Now, millions of homes across America receive water from pipes 

that date to an era before scientists and public health officials understood the harm caused by lead exposure. I am so happy to see 

Eric Olson, who used to be on my staff, Senator. I don’t know if 

you recall, but Eric is an expert in protecting kids from dangerous 

toxins, and we worked on these. And we know now, from the American Water Works Association, that 7 percent of homes, this is a 

new study, 7 percent of homes, that is 15 million to 22 million 

Americans, have lead service lines. Now, it doesn’t mean that that 

lead is leaching, but some of it could be, and a lot of it could be 

in the future. 

As parents in Flint know, there is no safe level of lead in children. It affects their brains, their nervous systems in the fetuses. 
5 

The children poisoned in Flint will be dealing with these harmful 

consequences all their lives. So we have a long way to go. 

We also have cities across the U.S. with sewer systems that discharge raw, untreated sewage to waterways where our children 

swim. Despite enormous successes since the passage of the Clean 

Water Act, there is much more to do. So we know the tragedy in 

Flint was due in part to the decision to switch to the polluted and 

highly corrosive Flint River as a source of drinking water, but the 

Flint River is not alone. Just last month EPA released a report 

showing nearly half of U.S. waterways are in poor condition, and 

one in four have levels of bacteria that fail to meet human health 

standards. 

Now, I know some testifying today have expressed concerns 

about the affordability of meeting the standards for protecting their 

own people. I understand the concerns. I was a county supervisor. 

Like many of us, I started there, and I dealt with those mandates. 

But what we have to do is hear you. If you think something is 

totally useless and won’t have a benefit, tell us. But if it is going 

to have a benefit, we have to work together and make it easier for 

you to protect your people. You want to do that as much as any 

one of us. 

So we need increased investment. It is very, very clear. We 

should fund existing financing programs such as the State Revolving Fund. And I think there is broad agreement on that one, at 

least there used to be. We should update these programs to target 

those investments where it is needed most, which you will help us 

with. When we invest in water infrastructure, we support jobs and 

the economy. The Clean Water Council estimates that $1 billion invested in water and wastewater infrastructure can create up to 

27,000 jobs, and jobs are important to all of us. 

Mr. Chairman, I will finish in 15 seconds. 

So I believe there is broad bipartisan support for the need for 

Federal investment in water infrastructure, and the next WRDA, 

which I am very excited about working with my colleagues on both 

sides, we have an opportunity to address our aging drinking water 

infrastructure and our wastewater infrastructure. The health and 

safety of our children and families depend on a modern infrastructure that provides safe drinking water and assures clean rivers and 

streams. 

I certainly looking forward to our panel. 

And Mr. Chairman, can I put my full statement in the record? 

Senator INHOFE. Sure. Without objection. 

[The prepared statement of Senator Boxer was not received at 

time of print.] 

Senator INHOFE. Thank you, Senator Boxer. 

Now, what we are going to do, we normally don’t have this many 

people on a panel, so we are going to be trying to keep within the 

5-minute limit that we have. We will start with David Berger, who 

is the Mayor of the city of Lima, Ohio. 

Mr. Berger. 
6 

STATEMENT OF DAVID BERGER, MAYOR, LIMA, OHIO, 

ON BEHALF OF THE U.S. CONFERENCE OF MAYORS 

Mr. BERGER. Well, good morning, Chairman Inhofe and Ranking 

Member Boxer and members of the committee. Thank you for the 

invitation to give mine and the Conference of Mayors’ perspective 

on the Nation’s water and wastewater issues. 

My name is David Berger, and I am in my 27th year as the 

Mayor of Lima, Ohio. I spent nearly 20 years in negotiations with 

Ohio EPA and U.S. EPA over long-term control plans and also participated in over 5 years of discussions with EPA concerning integrated planning, green infrastructure, and affordability. This, I believe, makes me a reluctant expert in the field. 

Local government, not the Federal Government, is where the job 

of providing water and wastewater services gets done and is paid 

for. Local government has invested over $2 trillion in water and 

sewer infrastructure and services since the early 1970s, and $117 

billion in 2013 alone. 

At the Conference we have unanimously adopted policies dealing 

with this issue. One is a simple message to the Congress and the 

Administration: give us money or give us relief. The Mayors of this 

Nation would be happy to implement any rule or regulation you or 

EPA comes up with, but you have to provide at least half the resources. And I am talking real money, not authorization levels that 

never get funded. I am talking about grants, not loans that must 

be paid back. 

The cost for unfunded Federal mandates are ultimately paid for 

by our customers, our citizens, many of whom are residential 

households. And the cumulative costs of these mandates have now 

reached or exceeded thresholds of clear economic burden on lowand fixed-income households. Let me give you a few examples. 

In Lima, more than a third of my residents live under the poverty threshold. EPA demanded that I spend $150 million to fix 

combined sewer overflows for a community which has only 38,000 

residents. The projected average annual sewer bill will be over 

$870 a year. This means that 46 percent of Lima households will 

be spending more than 4 percent of their household incomes on just 

their sewer bills, with nearly 14 percent of my residents spending 

nearly 9 percent of their household income on their sewer bill. 

In the Conference of Mayors study of just 33 California cities, 24 

cities report that more than 10 percent of their households are now 

paying more than 4.5 percent of their income on water, sewer, and 

flood control costs, with 10 of those cities having more than 20 percent of their households spending 4.5 percent. 

Please keep in mind that many of these cities have not yet 

factored in the cost for TMDLs, which now are estimated to put 

just the cities in Los Angeles County up to $140 billion. One county—$140 billion. 

How did we get here? When the Clean Water Act and the Safe 

Drinking Water Act were first established, Congress set lofty aspirational goals. Congress put skin in the game and provided grants 

to local communities, and that investment fostered a reasonable attitude about how to accomplish those goals together. 

That is not the case now. Congress retreated from the grant program primarily because of the high costs. But the implementation 
7 

of the water policies by successive administrations did not retreat 

with Congress’s retreat from funding. Quite the contrary, the administrations transformed the aspirational goals into unfunded 

mandates involving hundreds of billions of dollars of costs imposed 

on local communities. Let me give you some examples. 

In CSO consent decrees, cities are held by EPA policy to an arbitrary number of no more than four overflows per year. However, 

there is no science substantiating the need for that. So in some 

cases cities are allowed 14, while in other cases zero overflows. Engineering a system that could handle any type of storm event with 

zero overflows is almost impossible, needlessly expensive, and 

wasteful of local resources. 

In my own city, I have a river that is labeled as fishable and 

swimmable. That river dries up in the summer to only 4-inch-deep 

pools of stagnant water. I can safely say that no one is ever going 

to swim in that river. Yet, we are held to that standard of compliance. 

Bottom line, EPA is dictating our priorities and where our taxpayer money is spent. I do not want to give any impression that 

Mayors do not care about clean water. We do. We care passionately, and our actions and investments speak loudly. But we need 

Federal and State government to once again be our partners. We 

fundamentally believe that change must take place, and we are 

asking Congress to act on the following: codify integrated planning, 

define affordability, develop reasonable and sustainable goals, 

allow for additional time, and establish a review process to appeal 

decisions made at the regional level. 

I thank you for the opportunity to speak here today. 

[The prepared statement of Mr. Berger follows:] 
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Senator INHOFE. Thank you, Mayor. 

Mr. Chow is the Director of the Department of Public Works for 

the city of Baltimore. 

Mr. Chow. 

STATEMENT OF RUDOLPH S. CHOW, P.E., DIRECTOR, DEPARTMENT OF PUBLIC WORKS, BALTIMORE, MARYLAND, ON BEHALF OF THE WATER ENVIRONMENT FEDERATION 

Mr. CHOW. Good morning, Chairman Inhofe, Ranking Member 

Boxer, and members of the Committee. My name is Rudy Chow. I 

am the Director of the Department of Public Works for Baltimore 

City. It is my honor to be here today on behalf of the city of Baltimore, the Water Environment Federation, and the WateReuse Association to discuss the importance of the Federal role in keeping 

water and wastewater infrastructure affordable. I have over 30 

years’ experience working in the water and wastewater field. 

Today you are examining a very important national issue that is 

near to my heart—how we can address the burgeoning need for investment in our water infrastructure. My boss, Mayor RawlingsBlake, appeared before this committee’s subcommittee back in 2012 

to testify on the challenges of financing water infrastructure using 

Baltimore experiences. 

Baltimore is faced with the massive cost of more than over $3 

billion of regulatory mandates, including wet weather consent decree, or ENR, enhanced nutrient removal at our wastewater treatment plants as well as our stormwater improvements, and covering 

up our open finished water reservoirs. 

This is just a snapshot of the project that we must undertake to 

upgrade and to meet today’s standard. We consider ourselves to be 

good stewards of the environment and public health of our community and the Chesapeake Bay Watershed, and take these obligations seriously. We are also tasked with maintaining and improving a large and aging infrastructure system. 

So how do we pay for all of these? To say that Baltimore is not 

a wealthy city is a gross understatement. The median household 

income, 40 percent of our population in Baltimore falls below the 

national median household income level, and 25 percent falls below 

the poverty line. It is that population base that will be disproportionately impacted by water bill rate increases to pay for the infrastructure investment that we must take. 

My written testimony highlights a number of efforts to WEF and 

other water organizations are undertaking to identify policy 

changes and programs that will assist communities and ratepayers 

dealing with affordability issues. I urge you to review these items 

in the testimony. 

Senator Cardin’s legislation to reauthorize and increase funding 

in the Clean Water and Drinking Water SRF program is an important first step. Congress should reauthorize both SRF programs 

and increase the funding for them. In Baltimore, we have direct experiences with SRF programs and know they work well. We have 

gotten, in the last 3 years, over $168 million in low interest loans 

from the Maryland SRF program and $4.5 million of principal forgiveness loans. 
86 

Additionally, Congress should support increased funding from 

other existing financing grant programs such as WIFIA, USDA 

Raw Development programs. All these programs are vital to help 

communities make needed and wise investments in their infrastructure. 

Note when I speak about the water infrastructure, I use the 

word investment. Those of us that are familiar with our Federal infrastructure funding programs have long known that the Congressional Budget Office scoring for the program does not fully reflect 

the complete economic benefits of these programs. For this hearing, 

WEF and WateReuse Association contracted a team of economists 

to conduct the quick analysis of the economic benefits. Though the 

analysis has not been completed, upon completion we will submit 

that for the record. 

The analysis estimated that economic impact of SRF spending in 

four example States, namely California, Maryland, Ohio, and Oklahoma, which represent a good cross-section of States across the Nation, representative of geographic size, population size, cost of living, as well as rural versus urban population, and general age of 

infrastructure. 

The model of analysis was based upon the IMPLAN economic 

model to estimate the impact of SRF spending on output, labor income, jobs, and Federal tax revenues in the four States. IMPLAN 

captures the effects of spending as it ripples through the economy. 

So, for example, utility spending of SRF will result in what we call 

direct impact effect, which is the construction contractor. When the 

construction contractor reuses that money to buy goods and services, that is what we call an indirect effect. And then the fact that 

the indirect spending generates employment, creating additional 

income for households, which result in what we call induced effect. 

So the total economic impact is the sum of the direct, indirect, and 

induced effects. 

The results of the analysis show that Federal investment in 

water and wastewater infrastructure through the SRF programs 

has meaningful benefits to the economy, U.S. Treasury, and households across the Nation. 

For starters, the analysis found that SRF spending generates 

Federal tax revenues. Total State and Federal annual SRF spending in the four States average about $1.46 million—— 

Senator INHOFE. [Remarks made off microphone.] 

Mr. CHOW. Thank you. 

So, in other words, every million dollars of SRF spending is estimated to generate about what we call $2.25 million in total output 

for the State economy, on average. 

I urge the committee and Congress to continue to support our efforts in the local levels to invest in water infrastructure. The investment we make, with your support, delivers environmental, 

public health, and economic benefits to our country. Thank you 

very much. 

[The prepared statement of Mr. Chow follows:] 
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Senator INHOFE. Thank you, Mr. Chow. 

Robert Moore, from Madill, Oklahoma, is representing the National Rural Water Association. 

Robert. 

STATEMENT OF ROBERT MOORE, GENERAL MANAGER, MARSHALL COUNTY WATER CORPORATION, MADILL, OKLAHOMA, ON BEHALF OF THE NATIONAL RURAL WATER ASSOCIATION 

Mr. MOORE. Good morning, Senator Inhofe and members of the 

committee. I am Robert Moore from rural Oklahoma. I am a General Manger of the Marshall County Water Corporation. I am representing all small and rural community water and wastewater 

suppliers today through my association with both Oklahoma and 

the National Rural Water Associations. 

Our member communities have the very important public responsibility of complying with all Federal regulations and for supplying the public with safe drinking water and sanitation every 

second of every day. Most all water supplies in the U.S. are small. 

Ninety-four percent of the country’s 51,000 drinking water supplies 

serve fewer than 10,000 people. 

I want to acknowledge that rural America is very appreciative of 

you, Senator Inhofe, for standing up for rural communities on environmental issues. Your actions have improved the lives of all rural 

families, and the environment and the public health in rural USA. 

Small and rural communities often have more difficulty providing safe, affordable water due to our limited economies of scale. 

While we have fewer resources, we are regulated to the exact same 

manner as large communities. In 2016, there are rural communities in the country—and even in my county—that still do not 

have access to safe drinking water or sanitation due to the lack of 

density or the lack of funding. 

I am what you would call a working general manager. Much of 

my day is spent in the field repairing water lines, operating backhoe dump truck, helping conduct routine maintenance on our distribution system. If someone in the community loses water in the 

middle of the night, the emergency call gets forwarded to my cell 

phone at home. 

But Marshall County Water has a similar story to tell, such as 

many other rural and small water suppliers. We were started to 

provide the first water service to rural communities that had limited access to water or marginal water wells. In 1972, we began operations to supply water to about 800 farms and ranches. The Federal Government provided that funding to begin and later expand 

our water service through low interest loans from USDA. We now 

serve approximately 15,000 customers through a little over 6,000 

taps. 

In crafting water infrastructure funding policy, we urge Congress 

to consider the following. First, local communities have an obligation to pay for their water infrastructure, and Federal Government 

should only subsidize water infrastructure when the local community can’t afford it and there is a compelling Federal interest, such 

as public health, compliance, or economic development. 
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We have recently been denied a $3 million USDA low interest 

loan for a 15-mile raw water line. USDA determined that we could 

afford a commercial loan from a bank and did not need the Federal 

taxpayer to subsidize our water infrastructure. 

The USDA and EPA SRF funding programs achieve this principal objective by requiring that Federal subsidies be targeted to 

communities most in need. One of our concerns with the new 

WIFIA program is that it lacks any needs-based targeting, credit 

elsewhere means-testing, or focus on compliance issues. This year’s 

EPA budget request decreased funding for SRFs and substantially 

increased funding request for the WIFIA program. This gives the 

appearance that limited Federal water subsidies are being moved 

from programs targeted to the neediest communities to the communities with less need. 

Second, all EPA water funding programs should primarily be 

dedicated to the compliance issues with EPA Federal mandates and 

standards. 

Third, profit-generating water companies should not be eligible 

for Federal taxpayer subsidies. 

In closing, please know that the SFRs have no limitation on size 

or scope of a water project and can currently leverage Federal dollars to create a much larger loan portfolio. Oklahoma currently operates a water fund which leverages dollars at a 1 to 10 ratio. According to EPA, most SRF funding is allotted to large communities. 

A simple review or projects funded by the SFRs included in my testimony show numerous projects funded that cost over $50 million, 

and some over $1 billion. 

Thank you all for your assistance and for this opportunity. I 

would be happy to answer questions. 

[The prepared statement of Mr. Moore follows:] 
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Senator INHOFE. Well, thank you very much, Mr. Moore. 

Mr. Arndt is from Pennsylvania and here representing the American Water Works Association. 

Mr. Arndt. 

STATEMENT OF AUREL ARNDT, FORMER EXECUTIVE OFFICER, LEHIGH COUNTY AUTHORITY, PENNSYLVANIA, ON BEHALF OF THE AMERICAN WATER WORKS ASSOCIATION 

Mr. ARNDT. Good morning, Mr. Chairman, Ranking Member 

Boxer, and members of the committee. I want to thank you on behalf of the 50,000-plus water professionals that make up the membership of the American Water Works Association, or AWWA, for 

this opportunity to provide comments on the critical issue of affordable financing for our water infrastructure, and in particular what 

the Federal role should be. 

AWWA has had two longstanding policies which bear on infrastructure financing: first, that water service should be provided by 

utilities that are self-sustaining from local rates and other charges, 

and second, that water infrastructure can best be financed with a 

multifaceted toolbox, recognizing that there is significant diversity 

among water systems in our country and their infrastructure needs 

also differ widely. 

I would like to provide some context for the suggestions that I 

will make in a few minutes, because I think they are important to 

set the stage for the circumstances that we face. 

There are many studies and reports out there which attempt to 

analyze or estimate what our country spends on average annually 

for water infrastructure, and those results vary widely. However, 

most of the results seem to home in in the vicinity of $30 billion 

to $50 billion per year, and it is important to recognize that that 

number fluctuates widely from year to year based on circumstances 

such as the general economy, interest rates, the regulatory requirements that are imposed, and also competing local demands in 

many of our communities. 

What is very clear, however, is that the annual need for investment in our water infrastructure is going to grow dramatically in 

the coming decades. By most estimates, it will at least triple—and 

possibly even quadruple—by 2040. 

In 2012, AWWA produced a report that is called ‘‘Buried No 

Longer: Confronting America’s Water Infrastructure Challenge.’’ 

That report addressed one narrow area of our water infrastructure. 

Specifically, it looked at our aging water mains. And what that report concluded is that we will require an investment of $1 trillion 

over the next 25 years just to replace the water mains that will become obsolete during that timeframe. That number includes nothing for other growing drinking water needs, nor for CSO or SSO 

or other wastewater types of issues. Clearly significant numbers 

when you compare to what we are currently spending. 

Another important feature to recognize, that water services are 

the most capital intensive of all the utility services that we provide 

in our country. What this means is when we invest bigger dollars, 

more dollars in that water infrastructure, it is going to have a big 

impact on rate, and in turn will have a big impact on the affordability of those water rates to the consumers. 
137 

We believe, given these circumstances, that we have to do two 

things, and we have to pursue these efforts relentlessly. First, we 

need to preserve existing sources of water infrastructure capital 

and add new sources to the toolbox to address those needs that are 

unmet by current tools. We also need to find ways to reduce the 

cost of the capital that is available for water infrastructure. 

In our written testimony, we identify four areas where we believe 

that the Federal Government has an important role. Specifically, 

they include tax-exempt bonds, the Water Infrastructure Finance 

and Innovation Act, the State Revolving Loan Funds, and private 

activity bonds. 

In my remaining comments, I am going to address the first two— 

not because the other two are unimportant, but I believe those 

other two will be addressed by other panelists here today. 

With regard to tax-exempt bonds, it is important to recognize 

that tax-exempt bonds are currently the largest source of funding 

for water infrastructure. Between 75 and 80 percent of our annual 

investment is currently funded via that vehicle, and tax-exempt 

bonds are used by approximately 70 percent of the utilities across 

the country. 

We acknowledge the concerns and the scrutiny on tax-exempt 

bonds that is currently under discussion, but we believe that concern is wholly inappropriate considering that they are used, in the 

case of water infrastructure, to finance essential public services. As 

water utilities, we need billions of dollars annually for water infrastructure, and we need to have lenders who can provide those billions of dollars. Recognizing the tax treatment, the steady stream 

of revenue, and the security of the investment, investors willingly 

accept a below market interest rate, and that interest rate is 

passed along to the utilities who use those tax-exempt bonds. In 

turn, those savings on the financing are used to reduce the rates 

to customers or maintain the rates to customers and improve the 

affordability of rates. 

If we take away this financing, the cost of capital and the customer rates that follow will rise to unprecedented levels and create 

unprecedented difficulties for affordability, particularly in our older 

cities. 

With regard to WIFIA, first of all, I want to thank the committee 

for their role in enacting WIFIA as part of the WRDA bill in 2014 

and more recently removing the ban on using tax-exempt bonds to 

provide the local match for WIFIA loans. We think that is a great 

step forward. 

WIFIA is clearly one of those tools that can expand the pool 

of—— 

Senator INHOFE. Mr. Arndt, you are quite a ways over your time. 

Please wrap up. 

Mr. ARNDT. OK. 

Senator BOXER. But I like what he is saying. 

Senator INHOFE. I am listening to what he is saying. 

Mr. ARNDT. I will wrap up very quickly. 

Senator INHOFE. That has been another one of our mutual 

projects, by the way. 

Senator BOXER. Yes. Very proud of that. 
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Mr. ARNDT. We have four recommendations with regard to 

WIFIA and they are in our testimony, but most importantly we 

need an appropriation so that program can be launched and that 

money can be put to work for water systems across the country. 

Thank you for your attention. 

[The prepared statement of Mr. Arndt follows:] 
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Senator INHOFE. Thank you. That was excellent. 

Mr. Gysel is here from Phoenix, Arizona, representing the National Association of Water Companies. 

Mr. Gysel. 

STATEMENT OF JOE GYSEL, PRESIDENT, EPCOR WATER (USA), 

INC., PHOENIX, ARIZONA, ON BEHALF OF THE NATIONAL ASSOCIATION OF WATER COMPANIES 

Mr. GYSEL. Good morning, Chairman Inhofe, Ranking Member 

Boxer, and members of the committee. My name is Joe Gysel, and 

I am the President of EPCOR Water and serve as the current 

President of the National Association of Water Companies representing the regulated private water industry. I am pleased to join 

you today to talk about water infrastructure actions the Federal 

Government can take to advance innovative and sustainable solutions in meeting the Nation’s needs. 

NAWC members span the Nation and range in size from large 

national and regional companies serving millions of customers to 

individual utilities serving less than a few hundred connections. 

Private utilities have existed in the United States for well over 100 

years. We are regulated by State utility commissions and have one 

of the best compliance track records in the industry. Collectively, 

we serve more than 73 million Americans. 

NAWC believes that by embracing the powerful combination of 

public service and private enterprise we can improve water infrastructure by investing in plant, improving customer service and reliability, and creating jobs. We applaud this committee for bringing 

water infrastructure issues to the forefront and your leadership in 

advancing necessary changes to preserve and enhance water infrastructure. 

This morning I would like to emphasize a few points regarding 

private water’s role as part of the solution to our infrastructure and 

resource needs. 

It is unfortunate that our aging and deteriorating public water 

systems threaten the economic viability and public health. Communities nationwide are faced with massive fiscal challenges and competing priorities to replace critical infrastructure, as was evidenced 

in Flint, Michigan. 

The American Society of Civil Engineers gives U.S. water infrastructure a failing grade of D, with a current funding gap estimated to be as high as $1 trillion. Addressing these needs requires 

innovative funding solutions to include the private sector, as Federal funding alone will not be able to bridge the growing investment gap. This will require Congress to examine all future related 

funding policies to ensure that the private water industry is part 

of the solution. 

The private water sector continues to help communities with significant capital investment. NAWC’s six largest members, which 

service about 6 percent of the U.S. population, are collectively investing approximately $2 billion annually in their systems. This is 

significant when compared to the latest annual Federal water appropriation funding of only $2.25 billion. Clearly, the private sector 

has the financial capacity, resources, and expertise to assist in the 
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Nation’s water infrastructure challenges that plague many of our 

cities. 

Sustainable water management also requires innovative technologies and strategies for long-term resource planning. NAWC 

members operate in multiple jurisdictions and are uniquely qualified to deliver strategies and solutions for long-term resource development and security. These range from water conservation programs to developing wastewater recycling and recharge facilities, 

or long-term public-private regional water agreements such as the 

one EPCOR recently signed to utilize renewable resources when 

shifting from ag to municipal applications. 

Further support in funding the Nation’s water challenges can 

also be achieved through public-private partnerships. Our member 

companies have experience with P3s, which have benefited communities in delivering superior water service while freeing up scarce 

municipal funds for competing priority projects. These same models 

can also be applied to broader water augmentation and infrastructure projects to serve large, multijurisdictional or State water 

projects to address growing water scarcity requirements. 

Unfortunately, current rules and regulations create impediments 

that restrict many municipalities from entering into cost saving 

partnerships with private water companies. Federal policy plays an 

important role in establishing incentives for water investment. 

Congress and the Administration can act to remove barriers to access the vast potential of private capital in much-needed water infrastructure projects. 

To succeed, NAWC recommends the following actions: removal of 

State volume caps on private activity bonds for water projects, allowing for increased private investment in water systems and the 

alignment of our critical infrastructure with airports, high speed 

rail, and solid waste disposal; second, clarify the Internal Revenue 

Code to avoid defeasance of beneficial P3s so that long-term concession agreements are no longer penalized; third, expansion of State 

Revolving Funds and their eligibility so private water utilities are 

no longer limited in their use of clean water funding; in addition, 

fully implement the WIFIA program to facilitate private investment in water infrastructure and ensure private companies have 

equal opportunity to participate and fully leverage those same programs; finally, establish a centralized office to navigate the complex P3 terrain, providing professional services to assist all municipalities with this model. 

Mr. Chairman and committee members, thank you again for the 

opportunity for the NAWC to address you today. We are committed 

to work with you, our industry colleagues and stakeholders to meet 

the challenges of sustainable water infrastructure, and I am happy 

to answer questions after. 

[The prepared statement of Mr. Gysel follows:] 
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Senator INHOFE. Very good. Thank you. 

Mr. Olson is the Director of the Health Program for the Natural 

Resources Defense Council. 

Mr. Olson. 

STATEMENT OF ERIK OLSON, DIRECTOR, HEALTH PROGRAM, 

NATURAL RESOURCES DEFENSE COUNCIL 

Mr. OLSON. Thank you, Chairman Inhofe, and thank you, Senator Boxer and other members of the committee. It is an honor to 

testify this morning on behalf of the 2 million members and activists at the Natural Resources Defense Council, and I wanted to 

summarize. It has been more than 30 years I have been working 

on drinking water and water infrastructure issues, and we have 

been talking about deferred maintenance, about the failure to upgrade treatment and upgrade technology, steady deterioration of 

our water supply for many, many years; and I find myself in agreement, actually, with several of the points that have been made earlier, that we really need to be making these investments. 

We have long known that wastewater and drinking water infrastructure are deteriorating, and frankly the chickens are coming 

home to roost. Where we are now is that what we have all taken 

for granted, which is safe drinking water, we can’t really consider 

a given any longer. Flint really does remind us that the penny wise 

and pound foolish decisions to save a few bucks by not investing 

in our water infrastructure can really come home and harm public 

health, as well as harming the economy, and really erode public 

trust. 

I think in these debates sometimes it is easy to forget the impacts of these decisions on real people, and this really came home 

to me a week or so ago when we were working on behalf of some 

of the citizens in Flint, and we were working with one mom, her 

name is Miriam. Her husband and her two kids live in Flint, and 

she has lived there most of her life, and when the water was 

switched in 2014 in Flint, she noticed that the water started to 

smell like rotten eggs, that it tasted awful, that it was brown. She 

wondered about it. They switched over to bottled water, but public 

officials kept saying, no, it is perfectly safe, don’t worry about it, 

so they went back to tap water. It was really expensive. They are 

not wealthy people, and they switched back to tap water. 

Unfortunately, Miriam’s family started to suffer from some adverse health effects. In June 2014, Miriam had a miscarriage. She 

had never had a miscarriage before. She started getting skin rashes. Clumps of her hair started to fall out. A doctor prescribed treatments for her hair loss, which helped a little bit, but her skin rash 

continued. Her husband also had skin rashes and hair loss. Her 

son, who is 13, had a bad outbreak of eczema sores all across his 

back, and this happened after the water change, and it got far 

worse than it had ever been. They stopped using the Flint water 

for bathing and his skin rashes disappeared. 

Miriam read that lead contamination can be linked to miscarriages and to complications in pregnancy, and she told us, ‘‘Just 

not knowing whether lead exposure may have caused my miscarriage is really painful.’’ She worried about the possible health effects on IQ of her children and on their ability to learn, and she’s 
160 

really worried about continuing to have to use bottled water for all 

of their purposes, for cooking and drinking. She takes her kids to 

her parents, who are on a different water supply, just to go bathing, which is quite an inconvenience. She says it has really taken 

an emotional toll on her family. 

So the reason I mention this is that it is really easy in these policy debates to forget that we are really dealing with real people 

who are adversely affected. And unfortunately, we have a widespread problem with lack of investment in water infrastructure. 

I think a lot of water utilities have done a fantastic job in improving our water infrastructure, but we have huge challenges. We 

do not want a two-tiered water system where wealthy people get 

good water that is clean and safe, and poor people get crummy 

water that is threatening their health. We have a real backlog, as 

we have heard, of investment in water infrastructure. We really 

need to fix this problem fast. 

Infrastructure investments, the good news is, create a lot of good 

jobs, and we strongly support, as our testimony highlights, investments in this area. 

I wanted to also point out that there are ways we can reduce the 

cost for citizens that are paying for water bills. I lay out several 

of them in the testimony, including protecting the water before it 

gets contaminated so polluters are paying to clean up, rather than 

consumers paying to take those contaminants out of their water. 

The National Drinking Water Advisory Council and Affordability 

Group, which I served on, had several recommendations, including 

low income water assistance program, affordable rates for low income consumers, targeted compliance assistance, and increased 

funding. 

I realize my time is almost out, so I will just highlight the seven 

recommendations very briefly that we have in the testimony. 

First, we need to fix Flint’s infrastructure. We support Senator 

Stabenow et al.’s bill, 2579; second, we need to really invest in our 

water infrastructure. We support Senator Cardin’s bill that would 

increase State Revolving Fund funding. We need to fix our source 

water protections; we need to address small system regionalization 

to cut costs; fix the lead and copper rule; and, finally, let citizens 

act immediately when there is an imminent and substantial 

endangerment to their health. 

Thank you very much for the opportunity to testify. It is an 

honor. 

[The prepared statement of Mr. Olson follows:] 
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Senator INHOFE. Thank you, Mr. Olson. 

Mayor Berger, 27 years, is that right? 

Mr. BERGER. Yes, sir. I am a slow learner. 

[Laughter.] 

Senator INHOFE. Well, there have been a lot of ideas here, a lot 

of testimony here, but the thing that seems to be missing is affordability and flexibility. 

Now, you are here representing the U.S. Conference of Mayors, 

as well as a Mayor yourself. Can you tell us why the U.S. Conference of Mayors believes that the EPA’s integrated planning policy isn’t sufficient to address the Mayors’ concerns about the affordability that we talked about? 

Mr. BERGER. Thank you. 

Senator INHOFE. It is meant to do that, but is it doing it? 

Mr. BERGER. First of all, I can say for a fact that because Lima 

was the first city to actually negotiate successfully a consent decree 

involving integrated planning, that we would never have gotten to 

that point of actual agreement without the integrated planning policy. It does give us the flexibility that we need to proceed and move 

forward, and we actually are grateful for the fact that there were 

champions in headquarters at U.S. EPA that created the policy and 

actually worked through with us the negotiations with the regional 

office. 

Our concern is the fact that it is a policy; it is not the law. Our 

concern is that it should be codified so that cities all across the 

country in fact have the opportunity to use it to do their long range 

planning and priority setting for their own systems. 

We are coming up on a process—we are already in this process 

of actually electing a new President. Who knows what happens to 

that policy under the next Administration? So there is that transitional change that we are concerned about. But second, I can also 

tell you that the experience of cities around the country is that 

there is enormous resistance in the regional offices to actually implementing the integrated plan with cities. 

As of this point, we know of really only four communities that 

have been able to successfully put in place integrated plans, that 

being Lima, Ohio, Evansville, Indiana, Springfield, Massachusetts, 

and Spokane, Washington. So our concern is that this is an opportunity that cities have but aren’t able to successfully implement. It 

needs to be part of the law. 

Senator INHOFE. Thank you. It was someplace in the U.S. Conference of Mayors that the word was used as prosecutors, that the 

EPA treats some of the small communities like prosecutors. 

Mr. BERGER. Oh, I think that is a widespread experience for cities. We are treated as polluters; we are not treated as stewards, 

along with the State, for the public environment, for our systems. 

And it was very clearly the case that regional staff was dismissive. 

It took us 10 years to get to an agreement. And I believe that that 

attitude of, frankly, an arrogant, dictatorial attitude out of the 

agency is very real for most cities. 

Senator INHOFE. Do you agree with that, Mr. Chow? 

Mr. CHOW. Yes, sir, I do. First of all, Baltimore City, we also use integrated planning and basically try to manage our $4 billion 

worth of capital projects. 
178 

Senator INHOFE. OK. 

Mr. CHOW. But yes, we do experience that as we negotiate with 

our consent decree, SSO consent decree. We do get more favorable 

comments or support from the headquarters rather than from the 

region. 

Senator INHOFE. Mr. Moore, this is Senator Wicker over here. He 

introduced S. 611, I think it was, and they passed his bill, and it 

is now law, and that establishes technical assistance under the 

Safe Drinking Water Act for small and rural communities, which 

you are representing. Do you think that bill should include also 

communities meeting wastewater mandates? 

Mr. MOORE. Yes. The technical assistance end of this we certainly support a certain percentage of, you know, whether it is SRF 

or the WIFIA, to go to technical assistance to supply that assistance to the smaller systems that cannot go out, you know, and afford the engineers, or it puts a burden on them. 

Senator INHOFE. You know, I understand that, because in our 

State of Oklahoma there are a lot of Madills around. We have a 

lot of communities that would say that you are representing them 

well. And I think these are some of the things that we can do in 

our committee. 

Senator Boxer. 

Senator BOXER. Thanks, Mr. Chairman. 

Many say that in addition to bread, water is the staff of life, so 

you are dealing with something that is critical, and I thank you for 

all your passion about it, I really do, and dedicating your life to it. 

Everybody takes it for granted, we all do, until a kid gets violently 

ill or a woman has a miscarriage or there is rashes all over our 

body. Then we go what have we done wrong, all of us together. We 

are in this together; this isn’t an us-versus-them situation. As Eric 

said, it is all about our families. 

So when something goes wrong like that or when a child swims 

in a lake that has untreated sewage in it, Mr. Berger, and they get 

very ill because of it, everyone focuses on it. So today we are focusing on it. We are focusing on other things that I believe are secondary, because let me tell you something. We have spent, so far, 

$2 trillion in the war in Iraq, OK? I care about this country. I care 

about our kids being safe. And to say, oh, we can’t afford it, baloney. We could afford the war. Thank God not with my vote, but we 

could afford the war. So we can afford this. 

I mean, I really appreciate all of you coming here today to help 

us figure out how we can do this and not harm our people physically, mentally from this problem, and also in their pocketbooks. 

So I want to talk about a few of those things, but first I wanted 

to ask Mr. Olson are frequent discharges of combined sewage overflows and sanitary sewer overflows, are they a concern? Because we 

are focused on lead, as we should be. What about these overflows, 

with the bacteria? 

Mr. OLSON. Yes, these are definitely a concern. These are definitely a public health concern, as well as an environmental concern. From a public health standpoint, very often raw sewage is actually dumped into lakes and streams, and that can cause massive 

contamination. We see beaches being closed; we see people getting 
179 

sick, waterborne disease from swimming in it, from being exposed 

to it. 

Senator BOXER. So it is a problem that should be addressed, in 

your opinion? 

Mr. OLSON. It is definitely a big problem in hundreds of communities across the country. 

Senator BOXER. Because that is what the studies are now showing. It is disgusting, and we have to fix it. And we can argue over 

everything. We have to fix it. 

Now, Mr. Berger, I want to be your partner. The first part of 

your testimony I agreed with it, but the rest of it I found very disturbing. First of all, you mentioned my State, and you talk about 

what it costs. I want you to know that my State has tougher environmental laws than the Federal Government, A. That is what the 

people there want. OK? B, no one in L.A. ever called me to complain, so who is it you talked to specifically that I can contact and 

say what are the problems? 

Mr. BERGER. Well, the Conference of Mayors published a study 

of 33 cities—— 

Senator BOXER. You mentioned Los Angeles. 

Mr. BERGER. That is correct. 

Senator BOXER. Who told you they are upset about this? Because 

I want to contact them. 

Mr. BERGER. We will give you the published study with those 

names. 

Senator BOXER. I am not asking for a study. You talked about 

L.A. Because you do not represent L.A., I do. So you tell me who 

is complaining. And I would really appreciate it if you present it 

in writing. 

Now, Mr. Berger, in your testimony you complain that EPA resists flexibility. This could be true. We want to make sure they 

don’t. We want to get it done just as much as you do, with maximum flexibility. And insists on unrealistic timetables for meeting 

water quality requirements. Yet, your consent decree provides the 

city 24 years to come into—— 

Mr. BERGER. Yes, ma’am. 

Senator BOXER. Let me ask my question.—to come into compliance with the Clean Water Act. This consent decree comes after 

years of the city failing to comply with water quality requirements. 

And it is also my understanding that you have one of the longest 

consent decrees in the country. 

Is 24 years an unreasonable timetable? 

Mr. BERGER. That is why we agreed to it, because it is not. 

Senator BOXER. So it isn’t. So then why, on the other hand—— 

Mr. BERGER. But it took us 10 years of negotiation in order to 

be able to deal with the agency. 

Senator BOXER. Well, you didn’t mention the fact that your efforts paid off. And let the record show you got a 24-year consent 

decree. 

Now, let me ask you, Mr. Berger, do you think it is appropriate 

for cities to make improvements to stop the discharges of raw sewage into waterways that are used by our kids? 
180 

Mr. BERGER. I believe that it is appropriate for us to take reasonable measures, whether it is with combined sewer overflows or sanitary sewer overflows, to minimize those kinds of problems. 

Senator BOXER. Good. 

Mr. BERGER. But there are also instances, and many instances, 

where the requirements are not realistic. 

Senator BOXER. I understand. You said that. 

Mr. Chow, would increased funding of the programs that you say 

are helping you, will increased funding help the communities facing 

affordability issues? We all care about that. 

Mr. CHOW. Yes, it definitely would. With the fact that we are 

forced to use local money to pay for the rehabilitation of our infrastructures. 

Senator BOXER. Thank you. 

Mr. CHOW. So Federal dollars certainly would be very helpful. 

Senator BOXER. OK. Well, I will close because I know my Chairman wants me to. I will. But I want to thank Mr. Arndt for your 

kind statements about WIFIA, because we are excited about it. We 

have to fix it to meet some of the real needs, and we will, but we 

are very excited about it. We think it is a new tool, and we think 

the leverage is going to be fantastic for you. 

Thank you, Mr. Chairman. 

Senator INHOFE. Thank you, Senator. 

Senator Wicker, now that I have teed you up with your legislation, you are recognized. 

Senator WICKER. Thank you, Mr. Chairman. I have so much to 

say, and 5 minutes is inadequate, but I will do my part. 

It is a fact that EPA has used its discretion to actually reduce 

the availability of technical assistance to small communities by 75 

percent. This has eliminated two full-time circuit riders in my 

State of Mississippi. And I do appreciate the Chair mentioning the 

legislation which Senator Heitkamp and I championed last year, 

the Grassroots Rural and Small Community Water Systems Assistance Act. This was signed into law by the President on December 

11, 2015. 

Let me just tell you what we are facing in Mississippi. The town 

of New Hebron has 400 people. They are being told they have to 

spend $3 million to comply with the EPA. How are they going to 

do that? Lawrence County Water system, with approximately 2,000 

persons, needs half a million for a new well. The Town of Como, 

population 1,200, is facing overwhelming water challenges and failing to meet the current EPA permit. They just finished paying approximately $1 million loan. Now they have to spend another $1 

million. The town of Utica, with a population of 850 persons, is facing $1 million compliance upgrade. 

I don’t know why anybody runs for city councilman or Mayor in 

these small towns. My hat is off to them for trying to make small 

town and local government better. 

The small town of Shaw, 1,900 people, was under a boil water 

order because of a broken chlorinator that they couldn’t afford to 

fix. The city of Mound Bayou has approximately 2,300 persons; $87 

million to pay for a new sewer treatment facility that EPA is mandating on them because of nitrogen and phosphorus discharges. 
181 

Senator Heitkamp and I had hoped that, at a very minimum, the 

legislation that the President signed would result in a return of circuit riders in rural areas instead of increasing regulatory requirements. Sadly, the circuit riders have not returned to my State with 

the assistance that they have so capably provided to us. 

Mr. Moore, we see the burden of Federal unfunded mandates increasing and EPA assistance decreasing. Is EPA insisting on a 

Cadillac for these communities when actually a used Chevrolet 

would do all right? Is there a middle ground there? I am very concerned about the horror stories that Senator Boxer mentioned. I 

think we all are. Lead in the water, completely unacceptable; children swimming in lakes polluted by raw sewage, absolutely unacceptable anywhere, particularly in the United States of America in 

the 21st century. But is there a balance there that the regulators 

who come in and treat you like they are prosecutors, rather than 

partners, is there a balance there that we are missing? And what 

can you tell us in that regard? What do you say to these small 

towns? 

Mr. MOORE. Well, first, I would say that even as a small community or a small rural water system, it is our top priority to put out 

safe water. We will not put out water that is in any way unsafe. 

Senator WICKER. Absolutely. 

Mr. MOORE. Talking about comparing a Cadillac system or something that a big municipality would need, you know, compared to 

us, we have to have the facilities that create that safe water, and 

there is only so much, you might say, bells and whistles that go 

on some of the bigger water treatment plants that maybe we don’t 

need. 

What was the other part of your question? 

Senator WICKER. Mr. Berger, how can these small communities, 

these small towns and municipalities, pay for these mandates? 

Mr. BERGER. Well, Senator, I think that part of it has to do with 

what the requirements are, and I think the opportunity for technical assistance is essential to be able to make certain that they 

have proper technical advice about what is appropriate. When it 

comes to the actual affordability issue, there is no question that the 

Federal Government needs to become a major funder in the form 

of grants. Grants are now made to States, and States turn around 

and loan those moneys to cities. That impacts the affordability and 

makes it unaffordable. So I think that the Federal Government 

needs to look back at the time of the Clean Water Act first being 

implemented and the Safe Drinking Water Act and look at the successes that were achieved when the Federal Government had skin 

in the game in the form of direct assistance to localities. 

Senator WICKER. Thank you very much. 

Senator INHOFE. Thank you, Senator Wicker. 

Senator Cardin. 

Senator CARDIN. Thank you, Mr. Chairman. 

I want to thank the entire panel. 

My good friend, Senator Wicker, I want you to know that I visited the water treatment facility plants in my State. I was just at 

the Ashburton facility in Baltimore City this past Monday, I was 

at the WSSC plant also on Monday, and I am very proud of the 

commitment that the local governments of Maryland have made to 
182 

make sure that we have safe drinking water, and we do. But it is 

not a Cadillac; it is not a used Chevy. We are rebuilding the Model 

T. They are 100 years old. The plant in Baltimore was first built 

100 years ago. It was state of the art, state of the art, and we are 

modernizing it, but it is still the 100-year-old facility. So it is a 

struggle. 

And obviously we all want to make sure that regulations are 

done as efficiently as possible, but the bottom line is we must make 

sure that there is safe drinking water for the people of our country. 

What happened in Flint was absolutely outrageous, and I think 

we all understand that. There were some conscientious decisions 

made there that should not have been made. But we have problems 

throughout this country, let’s make no mistake about it. In Washington, DC, in the early part of the last decade, lead leached into 

water of possibly 42,000 children; and nearly a decade ago, in my 

city of Baltimore, we have closed the drinking water fountains in 

all of our public schools, and the reason is not that the water isn’t 

safe coming into the community, it is the connections into the facilities that contain lead that can’t be used. 

So we have serious modernization. Mr. Arndt, you indicated that 

your organization’s studies showed in 2012, I think it was, that 

there is $1 trillion of backed up water infrastructure improvements 

over a 25-year period that could be spent. The EPA did a study 

showing there is over $600 billion in the next 20 years in order to 

modernize. 

I was listening to each one of you, and you all said the capacity 

here just isn’t there to do that. The ratepayers can’t burden that 

type of amount. And when you look at the Federal tools, and there 

are several, including the tax-exempt authorities that you all would 

like to see and WIFIA, but if you look at the State Revolving 

Funds, it is one-third the level it was in 2009. 

And I want to thank the Chairman, and I want to thank the 

Ranking Member, because they are trying to do something about 

that. We are going to try to reauthorize the State Revolving Fund, 

and that would be at a level, I hope, that reflects at least what the 

Federal partnership should be, and I thank our leadership on our 

committee because this committee, in a bipartisan manner, has 

tried to make more predictable water infrastructure Federal partnerships and a reasonable amount to deal with the needs that are 

out there. So we are going to continue to try to make those investments, and I have introduced some legislation, and I thank the 

leadership of this committee for their encouragement of the legislation that we are pursuing. 

Mr. Chow, I want to give you an opportunity to respond to a 

point that you made in your statement, and that is recent findings 

of economic benefit analysis on the State Federal Revolving Fund. 

You indicate that the way this is scored doesn’t always reflect the 

true economic cost and benefit of the Federal investment. Could 

you elaborate on that a little bit more? 

Mr. CHOW. Sure, Senator. So, traditionally, when we are looking 

at the State Revolving Fund, we are looking at the money coming 

from the Federal Government and/or from the State, which is looking from that end, sort of one-sided. So, for example, the four 

States in the study showed that the total State and Federal invest-
183 

ment for the years 2012 to 2014 amounted to about $1.46 billion. 

So as a result, that study actually showed that combined investment generated about $160,000 in terms of the Federal tax from 

that investment. 

But if we are just looking at the Federal portion of SRF, which 

only amounts to about 23 percent of that total combined Federal 

and State, that every million dollars actually generates $695,000 in 

terms of the Federal tax from those States. 

So, in other words, $695,000 in Federal tax revenue is generated by a Federal investment of 23 percent of $1 million, so that is quite 

awesome. 

Senator CARDIN. Thank you for underscoring that. Obviously, we 

are interested in clean, safe drinking water, but there is also an 

economic impact here, and I think the committee understands that, 

and I appreciate your testimony. 

Senator INHOFE. Thank you, Senator Cardin. 

Senator FISCHER. Thank you, Mr. Chairman. 

And I thank the witnesses for being here today. 

We need to discuss the real world implications of these unfunded 

Federal mandates, as well as the lack of flexibility and the fair 

penalties that many of our communities are facing. The affordability of water and wastewater infrastructure is a critical concern 

around the country. In my home State of Nebraska, the city of 

Omaha is faced with the challenge of addressing a $2 billion unfunded combined sewer overflow mandated from the EPA, and the 

cost to the 600,000 residents in Omaha’s sewer service area is a 

burden, and it is particularly hard on our low- and fixed-income 

residents. 

So, Mr. Mayor, I would like to ask you a question. In your testimony you discuss the extensive and the costly process that your 

city endured to reach an agreement with the EPA’s required CSO 

mandate. In your experience, what are the necessary tools that 

Congress can provide municipalities and communities to better 

equip themselves to comply with those mandates with the CSO? 

Mr. BERGER. Thank you, Senator. I believe that, first of all, one 

of the critical elements of integrated planning is the opportunity to 

prioritize. For an example, we have SSOs in our communities that 

we demonstrated had no public health impact or environmental impact but which will cost us $30 million to eliminate. We were able 

to push those off to a later time while we took on much more serious issues relating to the CSOs. That ability to prioritize is part 

of integrated planning. It needs to be part of the law. It shouldn’t 

just be a policy. 

The second issue really is around affordability, and the Conference of Mayors has developed proposals for how to, in fact, define affordability based upon not MHI, because median household 

income really masks the impact that these costs will have on lowincome households. We believe that a definition of affordability, 

which absolutely respects the need to do something, but to do it 

within the affordable limits of a community’s resources, is important to ultimately getting to solutions. And we think that additional time. 

You know, the Clean Water Act just had, I think, its 42nd birthday, and what we have accomplished didn’t happen overnight. 
184 

What has been accomplished to the Nation’s waters in fact took 40 

years to get to this point, and we are still making advances. So any 

expectations, which are there in the regional offices, that things 

must be accomplished in 10 or 15 years as the norm really are not 

realistic. So part of the challenge of dealing with affordability is allowing for the kind of time that communities need to accomplish 

it within their budgetary means. 

Senator FISCHER. Right. Could you speak a little more on the necessity to address those high priority control measures and specifically what impact does that prioritization have on public health 

and water quality? How can we have Omaha be able to benefit 

from that prioritization flexibility? 

Mr. BERGER. Well, I think that comes back to the technical assessment of where, in any system, there are places where things 

are happening at higher levels, more frequency events, and then 

there are places and systems which do not have that kind of frequency or impact. And I think assessments of the entirety of the 

solution and then plotting that over time for implementation is the 

key to ultimately getting to something that is reasonable for any 

given community. 

Senator FISCHER. Thank you. 

Mr. Chow, the Mayor just spoke about the median household income, and in your testimony you spoke about the impact on EPA 

when the agency looks at the community’s affordability to cover the 

unfunded mandates, and you specifically mentioned the benchmark 

that is used there. Could you explain why that median household 

income benchmark is harmful to our low- and fixed-income families? 

Mr. CHOW. Sure. Of course, as I mentioned, Baltimore, 40 percent of our populations in the city are below median household income at this level, and 25 percent of the population is below the 

poverty line. So when you are looking at just the median household 

income, the curve is skewed; you are sort of looking at—— 

Senator FISCHER. So what should they look at? 

Mr. CHOW. They should be looking at the low end, meaning the 

folks who are most vulnerable, because that is the greatest economic impact, is to that population. As we raise water rates, for example, we raise water rates across the board. So, in essence, what 

the local end up having to do is that we have to come up with programs that will assist senior citizens as well as low-income citizens 

to help offset. So looking at the low end would be more practical 

and more reasonable for us. 

Senator FISCHER. Thank you. 

You know, Mr. Chairman, we have a lot of low-income residents 

in Omaha, and people on fixed incomes who are being hit right now 

with their water and sewer bills, so anything we can do to provide 

that flexibility to help those folks, I would really appreciate it. 

Thank you. 

Senator INHOFE. Senator Whitehouse. 

Senator WHITEHOUSE. Thanks, Chairman. 

Three quick points I would like to make. One is that when you 

are talking about wastewater, it is like talking about real estate: 

location, location, and location are the three keys, and very often 

what is reasonable is in the eye of the beholder; and there is a con-
185 

flict, inevitably, between the upstream and the downstream. And 

I would say to Mayor Berger there are a whole bunch of municipalities up in Massachusetts who are up the Blackstone River from 

Rhode Island who probably think that they are doing what is reasonable for getting rid of their wastewater and their overflow into 

the Blackstone River, and they push back pretty hard against EPA 

trying to get them to clean it up, but the Blackstone River leaves 

their municipalities, and it comes down and flows through our municipalities in Rhode Island, and we have to deal with water that 

isn’t clean because they haven’t bothered to do the steps that we 

have undertaken actually in Rhode Island to protect our bay that 

they haven’t done themselves. 

So I hope we all remember that there is an eye-of-the-beholder 

issue here, and the downstreamers very often have a different opinion about what a good job the upstreamers are doing. 

The second point that I would like to make is that for all of the 

mockery and scorn that conversations about climate change generate from that side of the committee, in Rhode Island the wolf is 

already at the door. This is not a hypothetical for us. And what we 

are seeing is the things that are most clearly connected with climate change, from a water point of view it is rain bursts, and from 

a general point of view it is sea level rise. Unless somebody wants 

to repeal the law of thermal expansion, the sea level is going to 

rise, and our coastal States are going to get it, and we are already 

seeing that. We had, in 2010, back-to-back 100-year storms. We 

had more than 10 feet above flood level flooding. Our towns of West 

Warwick and Cranston and Warwick all had their sewage facilities 

flooded out by the rising river. I remember stopping on a highway 

overpass near where 95 was flooded and looking down into the 

Warwick sewage treatment facility, and all you could see was the 

tops of the fences and the roofs of the buildings, and everything 

else, all the sewage was off and down and out into people’s yards. 

So if you are talking about how individual communities should 

pay for that, pretty tough to tell Warwick, by the way, you have 

to rebuild your thing entirely because suddenly rain bursts that 

you had no cause in, that 15, 20 years ago, when this was built, 

weren’t anticipated, are suddenly drowning out your system. 

And on our coasts it is actually even worse. Our sea grant program and our University of Rhode Island have identified 10 at-risk 

coastal wastewater facilities. Ten in little Rhode Island, where sea 

level rise plus stronger offshore storms mean that velocity zones 

and flood zones, treatment plants are now there. So who is going 

to pay to move that? You are going to ask little Narragansett, little 

North Kingstown to pay to completely build a new—I don’t think 

they are capable of doing that. And again, they didn’t cause the sea 

level rise; it wasn’t something that years and years ago was anticipated. Now it is very, very clear. 

So I urge my colleagues say what you want about sea level rise, 

enjoy your jokes and your mockery, but remember that for States 

like mine it is very, very real. It hits home. 

And the last thing that I want to say is, to Senator Cardin’s 

point, we are dealing with a lot of pretty old Model T stuff. You 

guys have seen these before, but I love to bring these out. Here is 

a pipe from a water repair that was done in Rhode Island. You can 
186 

see how big the pipe is. You know, I can barely get my finger 

through the little hole in the middle of it because it has been so 

filled up with sediments over the years. Here is a bigger version 

of the same thing. This was a nice big pipe at one point, but now 

you can see it got pretty clotted up. 

In my lifetime, we have actually been removing wooden water infrastructure out of older Rhode Island communities. 

So we have a big, big catch-up gap just in terms of this being 

this ain’t a Chevy, this ain’t a Cadillac, this is horse and buggy 

stuff, and we need to invest in building it so that we don’t get the 

public health concerns that we have experienced. 

And I thank the Chairman for his attention to this. I think that 

working with Chairman Inhofe on these infrastructure issues is a 

very positive thing, and I appreciate his interest in it, and of course 

the Ranking Member as well, who is terrific on these things. So 

thank you both very much for this hearing. 

Senator INHOFE. Thank you, Senator Whitehouse. 

Senator Sullivan. 

Senator SULLIVAN. Thank you, Mr. Chairman. I want to thank 

you and the Ranking Member for calling this hearing; it is a really 

important one. 

And I want to commend the witnesses today. I have read through 

your testimony and really appreciate the diverse views and a lot 

of the insights that you are bringing to this hearing. I wanted to 

ask a couple questions that relate more to—and I appreciate the 

focus on the small communities, because that is one of the things 

that we struggle with in Alaska. 

You know, a number of those Senators have been talking about 

the challenges of old infrastructure. I actually, in my State, have 

the challenge of no infrastructure. There is a big difference. So I 

am sympathetic with communities that have to get rid of pipes and 

deal with old aging infrastructure, but we are kind of unique in 

that we have entire communities with no infrastructure. So in 

rural Alaska there are over 30 communities, thousands of my constituents that have no running water, no flush toilets. They use 

what we call in Alaska honey buckets. And trust me, the honey 

buckets don’t smell good. That is a euphemism. 

So I am going to be looking forward to working with the committee. I have talked to the Ranking Member about this a little bit 

and trying to address some of these urgent issues. 

As I mentioned, one in four rural homes in Alaska lacks running 

water or flush toilets. And as you know, particularly those from the 

rural communities, that can actually lead to very high levels of disease, third-world disease levels in some of these communities in 

America—in America. I think most Americans would be surprised. 

Yes, we have old infrastructure, but we have third-world conditions, and it is unacceptable. 

I wanted to ask, Mr. Moore, you were talking about the small 

community paradox. I think it is a really important point that even 

if we did have infrastructure, or tried to get it or tried to upgrade 

it, in a lot of small communities, like you were talking about, there 

is no ability to bond, there is no ability to amortize financing on 

future projects just because of the lack of a population base that 
187 

hits critical mass. How do we address that? And I will start with 

you on that issue, then I really want to open it up to anyone else. 

Mr. MOORE. Well, we address trying to reach out our water system to those around us, you know, that does not have, like you 

said, even access to water at this point, or they have wells that are 

marginal water quality. 

Senator SULLIVAN. But I mean in terms of financing, should it 

be grant programs? I mean, if your community doesn’t even have 

the ability to bond, there is kind of a different step you need to 

take. Anyone else see what I am talking about? It just seems like 

you are kind of stuck if you are not like L.A., where you can do 

a bond, or any big city. It is different for the small communities. 

Mr. MOORE. The low interest loans, you know, combined with a 

grant is our best option. 

Senator SULLIVAN. So you think the Federal grant program also 

has to be part of that option. 

Mr. MOORE. Yes. 

Senator SULLIVAN. Does everybody else agree on that? 

Mr. ARNDT. Senator Sullivan, I think one of the things that we 

need to look at closely as it relates to small systems are the State 

Revolving Loan Funds. At least in my State in Pennsylvania, they 

have used a substantial part of their funding for the small system 

needs in the State of Pennsylvania, and certainly, given the volume 

of dollars that are available through the State Revolving Loan 

Funds, it is not like they can fund these major CSO and SSO 

issues and needs that are out there. So I think there is a direct 

linkage there, so robust funding for the SRFs is clearly something 

that is important. 

The other thing I would say to you, like many, many problems, 

there is no silver bullet, but my authority over the last 40 years 

has acquired approximately 40 systems in Pennsylvania. Of those 

systems, all but two or three of them were small systems, and what 

we were able to do is leverage the presence of our core system to 

solve problems in those smaller systems, whether it is replacing 

supplies, upgrading mains. The fact that you have the ability to 

spread the cost over a broader customer base is an advantage. I 

recognize that may not be practical in Alaska. 

Senator SULLIVAN. Let me just ask one final question. Mayor 

Berger, you raised it, and it has been in testimony. I think it is a 

really important issue. According to the U.S. Conference of Mayors, 

the EPA, with regard to these water issues, has moved from being 

no longer a ‘‘partner to local government that it once was. The 

agency has, instead, assumed the role of a prosecutor.’’ And I 

couldn’t agree more with that assessment. That is from the U.S. 

Conference of Mayors. 

But Mayor Berger, you were alluding to this issue of moving 

from partner to prosecutor to one-size-fits-all to extremely onerous 

regs even for small towns like you mentioned Lima, Ohio. Can you 

go into that a little bit more? And is there anything we should be 

able to do from a statutory standpoint if the EPA has turned into 

a prosecutor, not a partner, which I fully agree with? They also 

don’t abide by their own regs and law a lot of the time. What 

should we do in the Congress in terms of trying to change that attitude which you articulated so well? 
188 

Mr. BERGER. Well, in the consent decree process you have not 

just the agency, EPA, you also have the Department of Justice. 

This is a hostile setup. So the principal fix that can change that 

is to take it and transform it to a permitted process. This set of 

arrangements made between the State and Federal Government 

and locals doesn’t have to be enforced through consent decrees; it 

can be built into permits that get renewed with a set of obligations 

that get attached to it over time. So changing it from a consent decree process to a permitted process would change that. 

Senator SULLIVAN. Thank you. 

Thank you, Mr. Chairman. 

Senator INHOFE. Thank you. 

Senator Capito. 

Senator CAPITO. Thank you, Mr. Chairman, and thank the Ranking Member as well. 

And I want to thank all of you for being here today. 

I wanted to talk to you, Mr. Moore, about rural America. We 

heard our Senator from Alaska, some of the issues. Obviously, he 

has a much greater land mass and fewer people than anybody else 

in the United States, so those are particular challenges. But I 

think we found in rural West Virginia, at least, that the places that 

have the least amount of resources are still asked to comply at the 

same kinds of levels, and it is difficult because you have to go to 

the ratepayer first to try to see if you can—we have a public service commission, that is how ours is regulated—to see if the ratepayer can bear some of the burden, and a lot of times in these rural 

areas is where we are economically challenged at the same time. 

So what kind of solutions do you see to be able to alleviate— 

maybe not alleviate the burden because we want clean water everywhere, of course, but to help rural areas get over this hump? 

Mr. MOORE. Our Oklahoma Rural Water Association, through 

EPA funding, has circuit riders. 

Senator CAPITO. Right. We have those too. 

Mr. MOORE. And they are instrumental in our State at helping 

with compliance and getting the ideas there that hopefully can 

solve a problem, rather than bringing in millions of dollars of new 

equipment, because we just can’t afford that. 

Senator CAPITO. So when you are putting into an expansion or 

doing a replacement, what other resources are you looking at besides the ratepayer? I don’t know if Oklahoma has a State infrastructure bank or anything of that nature. 

Mr. MOORE. Yes. 

Senator CAPITO. What other? If you could just enumerate them 

kind of quickly. Small cities block grant? 

Mr. MOORE. Yes, we do have that, and the SFRs are administrated through the Oklahoma Water Resources Board, and then the 

USDA rural development. 

Senator CAPITO. Right. 

Mr. MOORE. That is normally where—— 

Senator CAPITO. Where your resources are. OK. 

Mr. Gysel, I would like to talk about public-private partnerships, 

because in the last bill we passed, the WIFIA, which we think has 

some promise in terms of being able to access public and private 

dollars to maximize the availability of resources, how do you see 
189 

that and are you familiar with it, No. 1? It hasn’t actually been 

funded yet, so as soon as we have it funded maybe you would have 

a better answer, but what kind of promise do you think that has? 

Mr. GYSEL. Thank you, Senator. We think it has a lot of promise 

in the fact that WIFIA—and we are assuming it is going to go 

ahead, hopefully—allows for both the blending of Federal funding 

as well as private money to come together and leverage that out 

properly. As we said in our testimony, the infrastructure gap is so 

great right now we don’t think that Federal funding will be able 

to bridge that gap, and we have to bring in these other funding resources through public-private partnerships to do that. 

A big part of public-private partnerships is not just the funding 

component, but is also the risk transference that happens between 

the municipality or the customer and the company taking on that 

risk. And we feel that through what we have accomplished through 

public-private partnerships, that risk transfer can generate incremental value to that customer as a definitive delivery of a model 

for fixed price and for fixed delivery over the life of the project. The 

infrastructure initially is very important, but the life of the project, 

the next 30 years of operations, before you turn that infrastructure 

back to the client, is very important as well. 

Senator CAPITO. Right. I know on TIFIA, which is the transportation that has allowed a lot of PPPs to move forward, one of the 

things we are doing in our State through the creativity, I think, of 

our Governor and others is to have the company come in and sort 

of forward-fund the project, and then have the State reimburse 

over a longer period of time. So you cut not just the initial dollar 

that is needed at the public, but you also cut the timing, and you 

can front-end load it. Do you see that as having the same possibilities in these kinds of projects? 

Mr. GYSEL. Very much so. Very much so. 

Senator CAPITO. Your dollars are going to go farther. 

Mr. GYSEL. They will. And our company is in the process of 

building the largest P3 project in Regina, Saskatchewan in Canada. 

It is a $200 million wastewater treatment plant for compliance reasons, and they have a 30-year ongoing operation maintenance program for another $600 million, and then they turn it back to the 

city at the end of the time. 

Senator CAPITO. OK. 

Mr. GYSEL. But the timeline, you are very correct, the timeline 

to crunch this down, to turn the financing and deliver the project 

is critical in these value generations. 

Senator CAPITO. I am a big supporter of WIFIA. Thank you. 

Mr. GYSEL. Thank you. 

Senator INHOFE. Thank you, Senator Capito. 

Senator Markey. 

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

You know, clearly Flint is the perfect example of how water policy can just go completely wrong. They had the highest bills and 

the worst water in times of quality simultaneously, and in a very 

poor community. And we know that communities that are poor are 

disproportionately harmed by this issue, and other environmental 

issues as well. So I have a group of questions I would like to ask, 

because as we saw in Flint, Michigan, the timeliness of reporting 
190 

water quality issues to the residents exacerbated the problem. It 

took too long for the proper agencies to receive notification of the 

extent of the problem and too long for the information to be relayed 

to the citizens of Flint. 

Does anyone disagree that one way to get EPA the information 

would be to require States to inform the EPA about persistent violators or systems who have serious violations? Does anyone disagree with that? 

Mr. BERGER. Senator, I believe they already are required to do 

that. 

Senator MARKEY. They are already required? 

Mr. BERGER. Yes, sir. 

Senator MARKEY. OK. So none of you disagree with that it is already a requirement. 

Does anyone disagree that public awareness of drinking water 

quality in their communities would be increased if it was online 

and reported electronically, instead of through annual paper reports? 

Mr. GYSEL. We agree. In fact, our utilities are moving to that 

very online reporting as well. 

Senator MARKEY. So would that be a reasonable requirement for 

communities to do it online, rather than paper reports? 

Mr. GYSEL. That is what we are doing, yes. 

Senator MARKEY. Does anyone disagree with that? 

Mr. ARNDT. The only difficulty with going exclusively to an electronic-based report is that there are still elements of the community that are not accessible to that kind of information, surprisingly. So I think really the best way is to do it in both fashions. 

Senator MARKEY. So you are saying that a Flint, Michigan, 

wouldn’t have the capacity to be able to report that? A poor community would not have the capacity to be able to do it electronically, as opposed to on paper? 

Mr. GYSEL. Not to speak for him. I think what he was saying is 

that the customers may not have the ability to receive that electronic information. 

Senator MARKEY. But ultimately should a community have that 

capacity, even if individuals do not within it? Because even in a minority community you would have well over 50 percent who would 

have digital access that would make it possible for them to report. 

Mr. ARNDT. I would think you would find general agreement in 

the water works industry that the electronic distribution is a preferred approach. But you also have to be careful so that you can 

reach every one of your customers. 

Senator MARKEY. So there were clear communications issues between agencies with the Flint crisis. Does anyone disagree that the 

CDC and State and local public health agencies should be immediately notified if drinking water violations are found that could 

have an adverse effect on public health so that those public agencies can help to detect and respond to the illness or evidence of exposure? 

Mr. CHOW. I think we are pretty much doing that as a part of 

our water quality permit requirement already, as is. 

Senator MARKEY. Does anyone disagree that encouraging realtime monitoring of drinking water quality can ensure that potential 
191 

concerns which may have adverse effects on human health are handled in a timelier manner? Obviously, that was not the case in this 

situation. 

Mr. Berger. 

Mr. BERGER. Senator, real-time implies huge, sophisticated system for testing and evaluation. Again, I think that what is now required is a timely report, and I think Flint broke down not because 

of reporting but because there were some pretty bad decisions 

made, deliberate human decisions made, with a variety of circumstances that just built on itself. So my sense is that the regime 

in most places allows for the kind of notification and timeliness 

that you are seeking. 

Senator MARKEY. Yes, sir. 

Mr. OLSON. Senator, I think that there was a combination of 

problems in Flint. Some of it was a lack of swift reporting and adequate testing, and we certainly would strongly support immediately 

reporting of violations and providing that to public health authorities, particularly in cases of significant health threats. Frankly, 

blood lead levels aren’t even automatically reported to CDC, and I 

know there is legislation Senator Cardin and others have proposed 

to address that. 

Senator MARKEY. Thank you. 

Thank you, Mr. Chairman. 

Senator INHOFE. Thank you, Senator. 

Senator Barrasso. 

Senator BARRASSO. Thank you, Mr. Chairman. 

Mr. Moore, shortly after they passed the Clean Water Act in 

1971, continuing to today, Congress has appropriated money to the 

EPA to provide nonprofit organizations with experience and with 

expertise in the water and wastewater industry to assist rural communities, to assist them in operations, in training, management, 

regulatory compliance for their water and their wastewater systems. But it seems to me that the EPA, over the last several years, 

has shifted a portion of that funding provided for this initiative 

away from this previous on-the-ground technical assistance in 

training to other methods that included funding entities with very 

little or no experience in the water industry with no established relationships with utilities that are being served. Things like 

Webinars were used as a primary tools to provide outreach and 

training rather than people on the ground. 

Do we want communities and utilities to use a Web site or 

Webinar, or call some university automated help line to get help, 

or is it better to have them rely on experienced boots-on-the-ground 

technicians who can provide onsite training and technical assistance, especially during an emergency? I would just appreciate your 

thoughts on that. 

Mr. MOORE. I do know that the circuit rider program has taken 

cuts in the last few years, and a lot of States have lost circuit riders. There is nothing wrong with Webinars, but in the State of 

Oklahoma we have many small rural water systems that may have 

100 users. They operate out of an office in someone’s home. They 

do not have access to the Webinars. Where the circuit riders can 

come in and they do a job, they are there face-to-face and they see 
192 

the infrastructure, they see the problem, and they normally have 

immediate response that they can implement. 

Senator BARRASSO. And you think they have knowledge of what 

the system situation is on the ground? 

Mr. MOORE. Yes. 

Senator BARRASSO. Just because they live there, they are part of 

the community. 

Mr. MOORE. Yes. And the circuit riders, they are there for that 

reason, and they have seen other systems, the neighboring systems, the systems across the State, and they have gathered that 

information, and they can bring that information that applies to 

your system and give it to you. 

Senator BARRASSO. In your testimony you talked about the onsite 

technical assistance that allows communities to comply with the 

EPA rules. I just ask how valuable it is, this onsite technical assistance, especially to utilities that lack the capacity or the financial 

ability to have the expertise to comply with the EPA. 

Mr. MOORE. It is critical that we fund these circuit rider programs. Like I said, on the very small rural water systems in the 

small cities, they rely very heavily on that technical assistance. 

Senator BARRASSO. Thank you. 

Mayor Berger, if I could ask you about a question that you might 

have some insight into. We have several small communities in Wyoming, Bridger Valley, Southwest Wyoming. They were in compliance with the EPA’s arsenic maximum contaminant level standard 

until that level was changed from 50 parts per billion to 10 parts 

per billion a number of years ago. You know, these communities 

had arsenic levels in the mid to low 20s, but the EPA lowered the 

level from 50 to 10, so for decades the 50 parts per billion was an 

acceptable health level. Suddenly it has changed, and then it becomes very expensive, very cost prohibitive to implement the technology to get down to that 10 parts per billion. Some engineering 

quotes in the first years were in the millions to get that number 

down. 

So the costs may have come down maybe $100,000, but for a 

community of 200 to 400 people, that money is still out of reach 

when you think about the other issues that our Mayor has to deal 

with; other people clamoring for that same money, and you are seeing more bang for the buck with other things. So shouldn’t we just 

be reducing the regulatory burden on communities to allow them 

to have the funds to address the immediate health and safety challenges of an aging infrastructure and give them the authority to 

make these decisions? 

Mr. BERGER. Well, there is no question that the technology of 

measurement has changed dramatically over the last 40 years. 

Who could have imagined that we would ultimately be measuring 

things down to the nano level? And following the measurement, the 

regulations have become mandates to treatment levels. So the 

question becomes, for any given circumstance, when you are looking at a single regulation, how does that compare to the other public health challenges that a community has. And I think that often 

the regulators come in in a very siloed kind of way. They are 

charged with this particular mandate and ignore the rest of the 

mandates that a community might have. So I think, again, inte-
193 

grated planning allows folks to be able to look at all the challenges 

in front of them and make choices and set priorities, and I think 

that is why it has to become a part of the law. 

Senator BARRASSO. Thank you, Mayor Berger. 

Thank you, Mr. Chairman. 

Senator INHOFE. Thank you, Senator Barrasso. 

Senator Carper. 

Senator CARPER. Thanks so much. I apologize for arriving late. 

We had a classified briefing on another subject, and I needed to 

stay there through its conclusion. So thank you for still being here, 

and thank you for attending and giving us your thoughts and responding to our questions. 

I would like to ask a series of questions, and I am going to ask 

these for each of you, and just yes or no answers, initially. Except 

I am not going to ask, Mr. Olson, you to respond to these questions, 

they are really more for folks that are representing a utility or 

maybe a city that provides water for its residents. 

Here is the first question: Do you charge more for water when 

supplies are tight? 

Mr. BERGER. No, sir. 

Mr. MOORE. No. 

Mr. CHOW. No, sir. 

Mr. ARNDT. No, sir. 

Mr. GYSEL. No, sir. 

Senator CARPER. OK. Do you charge more for water used for, say, 

watering lawns or washing cars than for essential functions like 

drinking and bathing? 

Mr. CHOW. No, sir. 

Mr. BERGER. No, sir. 

Mr. ARNDT. No, sir. 

Mr. GYSEL. No, sir. 

Mr. MOORE. We do have a tiered system that the water rights 

began at $5 per thousand, and then when it gets over 10,000 it is 

$7 per thousand. 

Senator CARPER. OK. I think you may have just answered this 

question for yourself, Mr. Moore. Do you charge more per person 

for water use as people use more water? 

Mr. MOORE. Yes, it is a tiered system. 

Senator CARPER. That is for each of you. 

Mr. BERGER. We do not. 

Senator CARPER. OK. 

Mr. CHOW. Actually, ours is a declining rate, so the more you 

use, the lower the unit rates become. 

Senator CARPER. OK. 

All right, go ahead, Mr. Moore. 

Mr. MOORE. No, I was just saying ours is an escalating tiered 

system; the water cost goes up. 

Senator CARPER. Just the opposite of Mr. Chow. OK. 

Mr. GYSEL. Inclining. 

Senator CARPER. Mr. Arndt, same question. 

Mr. ARNDT. Lehigh County Authority has multiple different rate 

schedules depending on a service area, but in some cases we have 

a flat rate where the same rate is charged no matter what the use; 
194 

in some cases there is actually a declining block rate where there 

are lower rates as consumption increases. 

Senator CARPER. OK. 

Mr. GYSEL. We have an inclining block rates that are accelerated, so the largest tier is that much more of your bill as well. So 

not only increasing, but increasing it dramatically. 

Senator CARPER. OK. Thank you. 

Let me just ask, and this would be for all of you, including Mr. 

Olson, why can’t or shouldn’t we embrace time of use rates or price 

increases, when prices increase, demand increases, or similar to 

what we do, say, with electricity? And if you would just lead off, 

Mr. Berger. Why shouldn’t we embrace time of use rates where 

prices increases, demand increases, like we do with electricity? 

Mr. BERGER. I think it depends upon the stress of the system. 

If your system has plenty of water, then there is no need to impose 

those kinds of restrictions. We do have the authority under city ordinance that at the point of drought or other kinds of stress, shortages, we do and can impose limits on consumption. 

Senator CARPER. OK, thanks. 

Mr. Chow, just very briefly, please. 

Mr. CHOW. No, we do not have restrictions set; however, we do 

get into that drought situation that Mayor Berger just spoke about. 

Senator CARPER. OK. 

OK, very briefly, why couldn’t we or why shouldn’t we not just 

do, but the rationale? 

Mr. CHOW. Well, I think, first of all, water usage is really individual, so individual household, individual residents within the 

household, the usage pattern is different and so on. To sort of set 

a standard per person, how many gallons you can use per day, that 

may not be practical. 

Senator CARPER. All right, thank you. 

Mr. Moore. Real briefly. 

Mr. MOORE. Especially on a residential rate, I have no problem 

escalating that rate because they use a certain amount for domestic 

use, and then everything above that goes on a lawn or something, 

that type of use. 

Senator CARPER. Mr. Arndt. 

Mr. ARNDT. I think one of the issues that relates to the technology, the availability of the metering capability to do this in a 

practical way. The other part of it is in our State we have what 

we call a uniformity clause that you have to charge the customer 

the same rate within a collect, so every residential customer needs 

to be treated the same. So if you have a customer who works night 

shift, and therefore perhaps uses water differently than someone 

who works day shift, you are actually creating a disadvantage or 

discrimination with a rate structure. 

Senator CARPER. All right, thank you. 

Mr. Gysel. Very briefly, same question. 

Mr. GYSEL. I am sorry? 

Senator CARPER. Very briefly, same question, please. 

Mr. GYSEL. Yes. It is all about technology. We have metering 

that is just going from fixed full metering to AMR technology. We 

are now moving to AMI technology. We haven’t advanced as far on 
195 

the technology side to measure the time of use, never mind to do 

the repository of all the data that would be required for—— 

Senator CARPER. OK, thank you. 

Mr. Chairman, I have just one more yes or no question, if you 

would give me the opportunity. 

Last question: Should water utilities consider inverted block pricing where prices increase with consumption? Again, should water 

utilities consider inverted block pricing where prices increase with 

consumption, yes or no? 

Mr. BERGER. No. 

Senator CARPER. OK. 

Mr. Chow. 

Mr. CHOW. It really depends on the driver in terms of are you 

trying to stimulate economy and/or are you looking at industry 

versus residential. So every municipality community might be different. 

Senator CARPER. OK. Thank you. 

Mr. Moore. 

Mr. MOORE. I do recognize the difference, you know, in municipal 

water and rural water, but yes, I do think we have the right to set 

those rates. 

Senator CARPER. Mr. Arndt. 

Mr. ARNDT. It should be an option, but I think it is very much 

driven by the specific circumstances of each system whether it is 

workable or not. 

Senator CARPER. OK. 

Mr. Gysel and Mr. Olson, then I am done. 

Mr. GYSEL. I would agree with the caveat that the cost structures of utilities are usually inversely related to the revenue structures, and by that I mean that 70 percent of our costs are fixed, 

but usually 70 percent of the revenues are a risk on consumption. 

If you have inclining or increasing block rates, that last blocks, and 

it is large enough, represents a real threat to the utility recovering 

the true cost of delivering the water service. 

Senator CARPER. OK, last witness, Mr. Olson. 

Mr. OLSON. And I would agree that generally it makes sense to 

increase the rate with more use; it encourages conservation and 

helps low-income people pay a lower rate. 

Senator CARPER. Thank you all. Thanks very much. 

Thanks, Mr. Chairman. 

Senator INHOFE. Thank you, Senator Carper. 

We have had good participation today, and I just would like to 

conclude by, first of all, recognizing that there is a very significant 

thing that came from Madill, Oklahoma. It is the wife of the 

Speaker of the House. So we want to recognize that. 

I would like to also just make a comment. You get mixed reports 

from the media as to what is going to happen with the WRDA bill. 

I have every conference. I am in the leadership; I have talked to 

the leadership on our side, Barbara has done the same thing on her 

side, and I am anticipating that we will be able to do this, get this 

out of committee, on the floor during this work period. 

And I also acknowledge that there are a lot of problems that we 

have, but there are a lot of solutions just from members of this 

committee. Senator Cardin’s SRF legislation and his proposal for 
196 

grants to replace lead service lines, Senator Booker’s trust fund 

ideas, Senator Boozman’s alternative water supply bill, rural water 

ideas. So we are working on ideas, and it has been very helpful to 

have you folks coming in from your different perspectives and levels to give us a better idea from hometown what the problems are. 

Senator Boxer. 

Senator BOXER. Thanks, Senator, so much. 

Let me be brief but take a couple of minutes to thank each and 

every one of you. I want to thank Senator Carper. Those questions 

were fascinating to the Senator from California, where we have 

such a terrible drought. So for us to hear, well, you pay less when 

you use more, it is like culture shock. But I completely understand 

that every district and every State is quite different from the next, 

and I think that is a critical part of the discussion. 

But as we move to the WRDA bill, which I am following the leadership of my great Chairman here, you don’t know how bad it gets 

until you have a severe drought and then you don’t have enough 

water. So I am going to be looking at desalination and other kinds 

of ways we can help. 

Very briefly, all of you want to see more grants rather than 

loans, and I completely get it, and I will work toward that as best 

we can, given resources. If you look at the history of Federal grants 

on water, it is very interesting, Mr. Berger, because when the program started it was 100 percent grants, until 1987, and Ronald 

Reagan worked with the Congress because they were putting pressure on Federal spending, and it changed to the State Revolving 

Fund, where now there was more of a partnership in terms of funding. 

But what is important is, and we have the SRF, it was added to 

drinking water later. The States can come in to pick up the matching, too. So your States could really help you as well. I want to 

make that point. And I think as we look at public-private partnerships, if it is done right, that is another level of funding we can 

count on. 

But I want to close with this, and hope that you will answer this 

in writing, all of you. We heard some pretty harsh words about the 

EPA and the EPA being a prosecutor. What is interesting to me is 

I look at Flint. I wish to heck they had been. They were very soft. 

They wrote little notes behind the scenes: problems, problems. 

They were quiet. They weren’t aggressive enough. 

So I still don’t dismiss the point that you feel like they are prosecutors, but I hate that broad brush comment. And I think what 

is very important is that you write to us and tell us the cases of 

specifically, specifically where they were. 

Now, some of you may not agree that they are prosecutors, but 

I know a couple of you do. So please give me that in writing, because if that is going on, that isn’t good. 

So I will say to all of you thank you very much, thank you to 

my Chairman, and I am so looking forward to another WRDA bill. 

Mr. Chairman, we have just dwindling time on our partnership 

here. You will be here forever, but I won’t. So as long as we are 

a team and we have proven we can do it, I am counting on you. 

Do you have any words of advice? 
197 

Senator INHOFE. We are going to be doing it. You know, it is 

funny, because we don’t agree on a lot of things. 

Senator BOXER. Really? 

Senator INHOFE. For example, I think one of the reasons that I 

disagree with her last statement was that I sat on that side of the 

table for a long period of time and I know what bureaucratic intimidation can mean, and I have been suffering from that. 

But on things I really believe Government is supposed to be 

doing, our highway bill, we wouldn’t have had a highway bill if she 

and I hadn’t worked together to make this happen. And I would 

say the same thing with the WRDA bill. It is very significant what 

is coming up. So we are going to be working together. 

And we are adjourned. 

Senator BOXER. Thank you, everybody. 

[Whereupon, at 12 p.m. the committee was adjourned.] 

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