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S. HRG. 110–1135 

MEETING AMERICA’S WASTEWATER 

INFRASTRUCTURE NEEDS IN THE 21ST CENTURY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TRANSPORTATION SAFETY, 

INFRUSTRUCTURE SECURITY, AND WATER QUALITY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

September 19, 2007 

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

( 

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

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

JOSEPH I. LIEBERMAN, Connecticut 

THOMAS R. CARPER, Delaware 

HILLARY RODHAM CLINTON, New York 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

JAMES M. INHOFE, Oklahoma 

JOHN W. WARNER, Virginia 

GEORGE V. VOINOVICH, Ohio 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming1

LARRY E. CRAIG, Idaho 

LAMAR ALEXANDER, Tennessee 

CHRISTOPHER S. BOND, Missouri 

BETTINA POIRIER, Majority Staff Director and Chief Counsel 

ANDREW WHEELER, Minority Staff Director 

SUBCOMMITTEE ON TRANSPORTATION SAFETY, INFRASTRUCTURE SECURITY, AND

WATER QUALITY

FRANK R. LAUTENBERG, New Jersey, Chairman 

BENJAMIN L. CARDIN, Maryland 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

BARBARA BOXER, California, (ex officio) 

DAVID VITTER, Louisiana 

CHRISTOPHER S. BOND, Missouri 

GEORGE V. VOINOVICH, Ohio 

JAMES M. INHOFE, Oklahoma, (ex officio) 

1Note: During the 110th Congress, Senator Craig Thomas, of Wyoming, 

passed away on June 4, 2007. Senator John Barrasso, of Wyoming, joined 

the committee on July 10, 2007. 
(III) 

C O N T E N T S 

Page 

SEEPTEMBER 19, 2007 

OPENING STATEMENTS 

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ........... 5 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 7 

Voinovich, Hon. George, V., U.S. Senator from the State of Ohio ....................... 10 

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 12 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 102 

WITNESSES 

Grumbles, Hon. Benjamin H., Assistant Administrator for Water, U.S. Environmental Protection Agency .............................................................................. 13 

Prepared statement .......................................................................................... 15 

Responses to additional questions from: 

Senator Lautenberg ................................................................................... 21 

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

Palmer, Hon. Douglas H., Mayor of Trenton, NJ, President of the U.S. Conference of Mayors ................................................................................................. 30 

Prepared statement .......................................................................................... 32 

Brasseaux, Hon. Glenn, Mayor of Carencro, LA, Board Member, Louisiana 

Rural Water Association ...................................................................................... 36 

Prepared statement .......................................................................................... 38 

Freeman, Joe S., Chief, Financial Assistance Division, Oklahoma Water Resources Board, Vice President, Council of Infrastructure Financing Authorities ......................................................................................................................... 41 

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

Responses to additional questions from: 

Senator Lautenberg ................................................................................... 45 

Senator Inhofe ........................................................................................... 46 

Westhoff, Christopher M., Assistant City Attorney, Public Works General 

Counsel for the City of Los Angeles, President of the National Association 

of Clean Water Agencies ...................................................................................... 49 

Prepared statement .......................................................................................... 51 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 54 

Senator Cardin .......................................................................................... 54 

Stoner, Nancy, K., Director of the Clean Water Project at the Natural Resources Defense Council ...................................................................................... 55 

Prepared statement .......................................................................................... 57 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 73 

Senator Lautenberg ................................................................................... 74 

Senator Cardin .......................................................................................... 75 

ADDITIONAL MATERIAL 

Statements: 

Briant, Robert A., Chairman, Clean Water Construction Coalition ............. 83 

The American Society of Civil Engineers ....................................................... 88 

National Association of Water Companies ..................................................... 95 

Ullrich, David A., Executive Director, Great Lakes and St. Lawraence 

Cities Initiative.................................................................................................. 100 
Page

IV 

—Continued 

The Associated General Contractors of America ........................................... 104 

Navarrete, Judy, Executive Director, Water Infrastructure Finance Authority of Arizona (WIFA) ............................................................................ 107 

National League of Cities ................................................................................ 109 

American Council of Engineering Companies (ACEC) .................................. 117 

Bonner, Linda Hanifin, Ph.D., Executive Director, National Onsite Wastewater Recycling Association ......................................................................... 120 

Frevert, Larry W., P.E. President, American Public Works Association ..... 123 

Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) ............................................................................................ 127 
(1) 

MEETING AMERICA’S WASTEWATER INFRASTRUCTURE NEEDS IN THE 21ST CENTURY 

WEDNESDAY, SEPTEMBER 19, 2007 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON TRANSPORTATION SAFETY, 

INFRASTRUCTURE SECURITY, AND WATER QUALITY, 

Washington, DC. 

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

406, Dirksen Senate Building, Hon. Frank Lautenberg (chairman 

of the subcommittee) presiding. 

Present: Senators Lautenberg, Inhofe, Warner, Voinovich, Vitter, 

Cardin. 

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. 

SENATOR FROM THE STATE OF NEW JERSEY 

Senator LAUTENBERG. Good morning. We call this subcommittee 

hearing to order. As I took the chair here, I went for this pitcher 

into the glass in an area where it is recommended, often, that you 

don’t drink the water, and I wonder whether this is just a reality 

check to see whether or not I will survive the hearing. But the fact 

of the matter is that there are signs in this great city of ours that 

we see periodically because of failures of the system that the water 

production system and other problems involved with inability for 

the wastewater treatment plants to turn out water that doesn’t pollute the Potomac and other major water sources. 

I want to welcome everybody to today’s hearing on the need to 

modernize our sewage treatment systems, stormwater systems to 

keep wastewater out of our rivers, streams, and oceans. 

In 1972, we established the Clean Water Act that would help us 

keep our waterways safe and clean. Now, part of the Clean Water 

Act helps us to build new sewage treatment plants. The first thing 

that we did, the first means of funding them was through grants. 

But since 1987, we use loans through the State Revolving Fund or 

SRF. The SRF funds have provided $25 billion for States to improve their infrastructure, clean their water so that people can use 

it recreationally and for other purposes as well. 

The current funding levels, however, for the State Revolving 

Fund falls far short of what we need. Much of the infrastructure, 

including pipes and treatment plants, is simply worn out or inadequate in its size, overwhelmed often by too much water. 

I am pleased to see the Ranking Member on this committee, our 

friend from Oklahoma, Senator Inhofe. As I think about the things 
2 

that we are going to consider today, Senator, am I correct in remembering that Oklahoma has had unusually heavy rainfalls? 

Senator INHOFE. Yes, that is correct. 

Senator LAUTENBERG. Because part of the problem is the deluge 

that we see frequently in different parts of the country. That too 

overwhelms our system, in addition to the normal growth that we 

have through development. 

EPA estimates that there is somewhere between 23,000 and 

75,000 sanitary sewer overflows each year. Those spills dump billions of gallons of untreated sewage into our rivers, our lakes, and 

coastal waters. In addition, combined sewer overflow spill is 850 

billion gallons of contaminated stormwater into our waterways 

each year, and EPA estimates that it will take $170 billion over the 

next 20 years to fix these sewer systems. But instead of making 

this important investment, the Administration has proposed a 

nearly $400 million cut in the SRF for 2008. 

Now, without more investment, more people will be exposed to 

sickness and disease, beaches will close and marine life certainly 

will suffer. President Bush needs to fully fund the SRF and we 

have to reauthorize it so that money is available to cities and 

towns to keep their water clean. In addition to increased funding 

our subcommittee will examine how best to spend those funds, including what role green infrastructure can play in reducing the 

burdens on our sewer systems. 

I would also note that in addition to our mission to reauthorize 

the SRF, Senator Voinovich and I have introduced the Water Quality Investment Act. This bill would authorize $1.8 billion in Federal 

grants to local communities to clean up combined sewer and sanitary sewer overflows. 

We look forward to the testimony from our witnesses, but now 

we ask our colleague, Senator Inhofe, for his statement. 

[The prepared statement of Senator Lautenberg follows:] 

STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR FROM THE

STATE OF NEW JERSEY

Let me welcome everyone to today’s hearing on the need to modernize our pipes 

and sewer systems to keep waste out of our rivers, streams and oceans. 

Since 1972, we have relied on the Clean Water Act to keep our waterways safe 

and clean. Part of the Clean Water Act helps us build new sewage treatment plants. 

First we used grants to pay for them. Since 1987, we have used loans through the 

State Revolving Fund, or ‘‘SRF.’’ 

The SRF has provided $25 billion for States to improve their infrastructure and 

clean their water so people can swim, fish and boat in it. But the current funding 

level for the SRF falls far short of what we need. Much of the infrastructure, such 

as pipes and treatment plants, is simply worn out—or overwhelmed by too much 

water. 

EPA estimates that there are between 23,000 and 75,000 sanitary sewer overflows 

each year. Those spills dump between 3 and 10 billion gallons of untreated sewage 

into our rivers, lakes and coastal waters. In addition, Combined Sewer Overflows 

spill 850 billion gallons of contaminated stormwater into our waterways each year. 

EPA estimates it will take $170 billion over the next 20 years to fix these sewer 

systems. But instead of making this important investment, the Administration proposed a nearly four hundred million dollar cut to the SRF for 2008. This is irresponsible. Without more investment, people will get sick, beaches will close, and our marine-life will suffer. President Bush needs to fully fund the SRF, and we must reauthorize it so that money is available to cities and towns to keep their water clean. 

The federal government’s role in repairing our aging pipes, pumps and treatment 

plants must grow. 
3 

In addition to increased funding, our Subcommittee will examine how best to 

spend those funds, including what role ‘‘green infrastructure’’ can play in reducing 

the burdens on our sewer systems. I would also note that in addition to our mission 

to reauthorize the SRF, Senator Voinovich and I have introduced the Water Quality 

Investment Act. This bill would authorize $1.8 billion in federal grants to local communities to clean up Combined Sewer and Sanitary Sewer Overflows. I welcome any 

testimony from our witnesses on that legislation as well. 

There is nothing partisan about keeping our waterways safe and clean, and I hope 

our Subcommittee will act soon to strengthen our clean water programs. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. 

SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Senator Lautenberg, Mr. Chairman. 

First of all, I would like to thank you for having this long-overdue 

hearing. As Chairman of this committee during the past two Congresses, I have twice moved comprehensive legislation to reauthorize both the Clean Water and the Drinking Water State Revolving 

Loan Funds. I am pleased to see that this issue remains a committee priority. 

This will come as a shock to many of you out there, but Senator 

Lautenberg and I don’t always see eye to eye on issues. On this one 

I think we do. We recognize—— 

Senator LAUTENBERG. I remember one 16 years ago. 

Senator INHOFE. That is right. That is right. 

[Laughter.] 

Senator INHOFE. It is back. 

But I am glad also to welcome Mr. Joe Freeman. He is chief of 

the Financial Assistance Division from the State of Oklahoma. I 

welcome you to being here for this important hearing. Mr. Freeman 

has been a great resource to my staff, and I welcome his insights 

into how the program is currently working and what we may do 

to make it work better. 

I am also pleased that the National Rural Water Association, 

based in Oklahoma, is represented today by the Louisiana chapter. 

I welcome you here. The majority of the Nation’s wastewater systems are small systems, and theirs is a perspective from which we 

can all benefit hearing. 

The Clean Water SRF is the cornerstone of Federal clean water 

systems to the Nation’s cities and towns. Since its creation in 1987, 

the Clean Water SRF has saved its borrowers over $3.7 billion in 

interest, costs, and also provide $8.2 billion in funding to improve 

the Nation’s water quality. Importantly, the Federal Government 

has provided $24 billion in State capitalization grants. In 2006, 

there was more than $60 million available for loans to communities. 

Today’s hearing is limited to wastewater or clean water needs. 

Oklahoma has projected $586 million in clean water related needs 

over the next 20 years. As one of today’s witnesses mentions, this 

figure does not include any future costs due to new regulations. 

Further, in the last drinking water survey, Oklahoma’s reported 

needs were $4.8 billion over the next 20 years. Importantly, $107 

million of that need is known to be a direct result of Federal drinking water requirements. Without providing sufficient Federal funds 

to help cities to meet those requirements, they become not just requirements, but Federal unfunded mandates. 
4 

I have to say this, with the arrival of Senator Voinovich. He and 

I were both, Mr. Chairman, mayors of major cities. People talk 

about problems facing the cities. It is not prostitution and crime, 

the greatest problem, I think he would agree with me, are unfunded Federal mandates. This is what we are committed to correcting, and a lot of it comes from the legislation that we are talking about right now. 

My staff has received assurances that the absence of drinking 

water from this hearing will not preclude us from reauthorizing the 

drinking water SRF program. I look forward to working with my 

colleagues to develop a clean, comprehensive funding proposal. 

The effort that we are about to undertake will be the fourth time 

in four Congresses that we have attempted to move a water infrastructure bill. Only one of our previous three attempts at passing 

a water infrastructure bill was bipartisan. I hope that this year we 

can again have a bipartisan bill, as we did last Congress under my 

leadership, and that we can work together to move it to the Senate 

floor. To do that, we must avoid many of the mistakes of previous 

efforts. 

The bill must be clean of too many additional requirements on 

applicants. We are not providing grants through the current SRF; 

these are loans to be repaid by municipalities, and they are. In 

order to truly provide them with Federal assistance in meeting 

their regulatory obligations under the Federal environmental statutes, we have to provide loans with as few strings attached as possible. There are legislative proposals pending that include additional requirements for States and localities to meet, and while I 

am sure someone can find value in almost all of these requirements, I am concerned their cumulative impact may be to create 

a program far too burdensome for anyone to use. 

Additionally, in previous attempts, even last year, we failed to 

come to a unified committee resolution to the issue of Davis-Bacon. 

Failing to do so again will likely result in yet another stalemate. 

I must again, as I have in the past, encourage all parties to come 

to the table to find a path forward that keeps the committee united 

behind a single bill. 

This is an important issue. While some may disagree over the 

exact amount of the funding gap, there can be no denying that it 

exists. The question before the committee is what, if any, changes 

do we need to make to the Federal clean water program to ensure 

it is best meeting the needs of our local communities and lessening 

that gap. 

As the single-most conservative member of the U.S. Senate, as 

voted by the American Conservative Union, I have consistently 

voted for developing and improving the Nation’s infrastructure and 

providing for our Nation’s defense. I think that is what Government is supposed to be doing, Mr. Chairman. I look forward to this 

hearing and to working with my colleagues to develop a comprehensive funding program, and I thank you again, Senator Lautenberg, for calling this hearing. 

[The prepared statement of Senator Inhofe follows:] 
5 

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

STATE OF OKLAHOMA

I would like to thank Senator Lautenberg for having this long overdue hearing. 

As Chairman of this Committee during the past two Congresses, I twice moved comprehensive legislation that reauthorized both the clean water and drinking water 

state revolving loan funds. I am pleased to see this issue remains a Committee priority. 

I am glad to welcome Mr. Joe Freeman, Chief of the Financial Assistance Division 

for the State of Oklahoma. Mr. Freeman has been a great resource to my staff and 

I welcome his insights into how the program is currently working and what we may 

do to make it better. I am also pleased that the National Rural Water Association, 

based in Oklahoma, is represented today by the Louisiana chapter. The majority of 

the Nation’s wastewater systems are small systems and theirs is a perspective from 

which we can all benefit hearing. 

The Clean Water SRF is the cornerstone of Federal clean water assistance to the 

Nation’s cities and towns. Since its creation in 1987, the Clean Water SRF has 

saved its borrowers over $3.7 billion in interest costs and also provided $8.2 billion 

in funding to improve the Nation’s water quality. Importantly, the Federal Government has provided $24 billion in state capitalization grants. In 2006, there was 

more than $60 billion available for loans to communities. 

Today’s hearing is limited to wastewater or clean water needs. Oklahoma has projected $586 million in clean water related needs over the next 20 years. As one of 

today’s witnesses mentions, this figure does not include any future costs due to new 

regulations. Further, in the last drinking water needs survey, Oklahoma’s reported 

needs were $4.8 billion over the next 20 years. Importantly $107 million of that 

need is known to be a direct result of Federal drinking water requirements. Without 

providing sufficient Federal funds to help cities to meet those requirements, they 

become not just requirements, but Federal unfunded mandates. My staff has received assurances that the absence of drinking water from this hearing will not preclude us from reauthorizing the drinking water SRF program. I look forward to 

working with my colleagues to develop a clean, comprehensive funding proposal. 

The effort that we are about to undertake will be the fourth time in four Congresses that we have attempted to move a water infrastructure bill. Only one of our 

previous three attempts at passing a water infrastructure bill was bipartisan. I hope 

that this year we can again have a bipartisan bill as we did last Congress under 

my leadership and that we can work together to move it to the Senate floor. To do 

so, we must avoid many of the mistakes of previous efforts. 

The bill must be clean of too many additional requirements on the applicants. We 

are not providing grants through the current SRF. These are loans to be repaid by 

municipalities. In order to truly provide them with Federal assistance in meeting 

their regulatory obligations under the Federal environmental statutes, we must provide loans with as few strings attached as possible. There are legislative proposals 

pending that include additional requirements for states and localities to meet. While 

I am sure someone can find value in almost all of these requirements, I am concerned their cumulative impact may be to create a program far too burdensome for 

anyone to use. 

Additionally, in previous attempts, even last year, we failed to come to a unified 

committee resolution to the issue of Davis-Bacon. Failing to do so again will likely 

result in yet another stalemate. I must again, as I have in the past, encourage all 

parties to come to the table to find a path forward that keeps the Committee united 

behind a single bill. 

This is an important issue. While some may disagree over the exact amount of 

the funding gap, there can be no denying that it exists. The question before the 

Committee is, what if any changes do we need to make to the Federal clean water 

program to ensure it is best meeting the needs of our local communities and lessening that gap? As the single most conservative member of the Senate, as voted by 

the American Conservative Union, I have consistently advocated for developing and 

improving the Nation’s infrastructure and providing for our Nation’s defense. I look 

forward to this hearing and to working with my colleagues to develop a comprehensive funding proposal. Thank you again to Senator Lautenberg for holding this hearing. 

Senator LAUTENBERG. Thank you. 

Senator Voinovich, we welcome you and ask you for your statement at this time. 
6 

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. 

SENATOR FROM THE STATE OF OHIO 

Senator VOINOVICH. Thank you, Senator Lautenberg and Senator 

Vitter. Thank you for holding this hearing on wastewater infrastructure. 

Water infrastructure has been a longstanding concern of mine. In 

fact, my first bill that I introduced as a young legislator in the 

1960’s was a $375 million State bond issue to get the State involved with wastewater treatment. I think it is clear that we are 

facing an environmental and public health crisis in this country 

when it comes to water infrastructure, and I am very pleased that 

this subcommittee has made it a priority by holding this hearing. 

In addition, I would like to thank the witnesses for being here 

today. As a former Governor and mayor, I respect and know firsthand the enormous challenges you have in addressing the issues in 

your cities and States. 

As many of my colleagues know, the Clean Water SRF program 

is an effective and immensely popular source of funding for wastewater collection and treatment projects. Billions of dollars have already been spent and billions more are needed to upgrade this Nation’s aging wastewater infrastructure. I firmly believe the Federal 

Government is responsible for paying its fair share. That is why I 

was very disappointed that the EPA’s 2008 budget proposed severe 

spending cuts for the Clean Water SRF program. I hope the increased funding levels in both the Senate, $1.1 billion, and the 

House, $887 million, Fiscal Year 2008 interior appropriation bills 

for the program will remedy that situation. 

As in many States, Ohio’s needs for public wastewater system 

improvements greatly exceed the typical Clean Water SRF funding 

levels. 

Mr. Chairman, when we really did something about wastewater 

was back when the Feds picked up 75 and the locals picked up 25. 

That is when we really moved from primary down to tertiary treatment. 

According to the Ohio EPA, Ohio’s capital investment needs for publicly owned wastewater treatment facilities are $12.9 billion. Of 

that amount, almost $6.3 billion of improvements have been identified as necessary to address combined sewer overflow problems in 

over 100 communities. The city of Akron, for example, has proposed 

to spend $426 million over 30 years to fix the city’s CSO problems. 

Of course, they can’t do it over 30 years because the EPA tells 

them they have to do it in 15 years. 

That is why I am an original cosponsor of Senator Lautenberg’s 

bill, the Water Quality Investment Act, which would authorize 

nearly $2 billion in Federal grants to fund the repair and replacement of combined sewer overflows and sanitary sewer overflows. In 

2002 and 2004, the EPW Committee adopted my amendments to 

authorize funding for this program as part of the Clean Water and 

Safe Drinking Water reauthorization legislation. I look forward to 

working on this issue once again with you, Senator Lautenberg, to 

see if we can make something happen. 

I am also concerned about the impacts of the funding needs for 

water infrastructure in our rural communities. In Ohio, many of 

these communities are in Appalachia. Data from the EPA survey 
7 

shows that 47 percent of our Appalachian households nationwide 

are not served by public sewers. For many communities, this lack 

of service is forcing residents to haul water from springs or rain 

barrels. A 2003 Appalachian Regional Commission water and 

wastewater needs study reported that counties with higher densities of septic tanks received less public funding than counties 

with lower densities of septic systems. 

I am concerned that these communities are not receiving funding 

because the SRF process is too cumbersome. I am anxious to hear 

from our witnesses today on how Congress can address this problem for our rural communities as we consider reauthorization for 

the Clean Water SRF. 

It expired at the end of Fiscal Year 1994 think of that, 1994 and 

the failure of Congress to reauthorize the program sends an implicit message that wastewater collection and treatment is not a 

national priority. The longer we wait to reauthorize this program, 

the longer it creates uncertainty about the program’s future in the 

eyes of borrowers. It could delay or, in some cases, prevent project 

financing. In order to allow any kind of substantial increase in 

spending, reauthorization of the Clean Water SRF program is necessary. 

I am particularly interested in hearing all of the thoughts of our 

witnesses on the Clean Water SRF program’s benefits and limitations as it currently stands. I would also like to know what you believe we in Congress can do to change the reauthorization to make 

the program more beneficial to our Nation’s cities and States, and, 

again, I thank you for being here. 

[The prepared statement of Senator Voinovich follows:] 

STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR FROM THE

STATE OF OHIO

Senator Lautenberg and Senator Vitter, thank you for holding this hearing on the 

wastewater infrastructure. Water infrastructure has been a long-standing concern 

of mine. In fact, my first bill that I introduced as a young state legislator in the 

1960s was a $375 million state bond issue to get the state involved with wastewater 

treatment. I think it is clear that we are facing an environmental and public health 

crisis in this country when it comes to water infrastructure, and I am very pleased 

that this subcommittee has made it a priority by holding this hearing. 

In addition, I would like to thank the witnesses for being here today. As a former 

Governor and Mayor, I respect and know firsthand the enormous challenges you 

have in addressing this issue in your cities and states. 

As many of my colleagues know, the Clean Water SRF Program is an effective 

and immensely popular source of funding for wastewater collection and treatment 

projects. Billions of dollars have already been spent and billions more are needed 

to upgrade the nation’s aging wastewater infrastructure. I firmly believe the federal 

government is responsible for paying its fair share. 

That is why I was very disappointed that EPA’s 2008 budget proposed severe 

spending cuts for the Clean Water SRF Program. I hope the increased funding levels in both the Senate ($1.1 billion) and House ($887 million) Fiscal Year 2008 Interior Appropriations bills for the SRF program subsist. 

As in many states, Ohio has needs for public wastewater system improvements 

which greatly exceed the typical Clean Water SRF funding levels. According to Ohio 

EPA, Ohio’s capital investment needs for publicly owned wastewater treatment facilities are $12.9 billion. Of that amount, almost $6.3 billion of improvements have 

been identified as necessary to address combined sewer overflow (CSO) problems in 

over 100 communities. The City of Akron, for example, has proposed to spend $426 

million over 30 years to fix the City’s CSO problems. 

That is why I’m an original co-sponsor of Senator Lautenberg’s bill—the Water 

Quality Investment Act, which would authorize nearly $2 billion in federal grants 

to fund the repair and replacement of combined sewer overflows and sanitary sewer 
8 

overflows. In 2002 and 2004, the EPW Committee adopted my amendments to authorize funding for this program as part of the Clean Water and Safe Drinking 

Water SRF reauthorization legislation. I look forward to working on this issue once 

again with Senator Lautenberg to help communities tackle sewer overflows. 

I am also concerned about the impacts of the funding needs for water infrastructure in our rural communities. In Ohio, many of these communities are in the Appalachia. Data from EPA surveys show that 47 percent of Appalachian households nationwide are not served by a public sewer. For many communities, this lack of service is forcing residents to haul water from springs or rain barrels. A 2003 Appalachian Regional Commission (ARC) water and wastewater needs study reported 

that counties with higher densities of septic systems received less public funding 

than counties with lower densities of septic systems. 

I am concerned that these communities are not receiving funding because the SRF 

process is too cumbersome. I am anxious to hear from our witnesses today on how 

Congress can address this problem for our rural communities as we consider reauthorization for the Clean Water SRF. 

Authorization for the Clean Water SRF expired at the end of fiscal year 1994, and 

the failure of Congress to reauthorize the program sends an implicit message that 

wastewater collection and treatment is not a national priority. The longer we wait 

to reauthorize this program, the longer it creates uncertainty about the program’s 

future in the eyes of borrowers, which could delay or in some cases prevent project 

financing. In order to allow any kind of substantial increase in spending, reauthorization of the Clean Water SRF program is necessary. 

I am particularly interested in hearing all of your thoughts on the Clean Water 

SRF program’s benefits and limitations as it currently stands. I would also like to 

know what you believe we in Congress can change during reauthorization to make 

the program more beneficial to our nation’s cities and states. Again, I want to thank 

you all for attending this hearing. 

Senator LAUTENBERG. Thank you very much. 

OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR 

FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Mr. Chairman, for calling this hearing. It is really important. 

As everyone has said, our Nation’s wastewater infrastructure is 

aging. Most of the system’s infrastructure has been around for 50 

to 100 years. It is deteriorating, in need of replacement, rehabilitation, so it is very important that we set this as a priority to bring 

that infrastructure in to the 21st century. 

Representing Louisiana, I certainly know this. In large parts of 

our State, our infrastructure is over double that age. A city like 

New Orleans, the infrastructure is way older than 50 to 100 years. 

We have clay pipes and the deterioration is even more significant. 

That is not just in New Orleans, it is around the State. 

Then, on top of that, with our experience 2 years ago of Hurricanes Katrina and Rita, that destroyed a lot of the infrastructure 

and further aged, in 1 day, a lot of the infrastructure. So folks living in those areas really know the strain of this decaying infrastructure. 

I want to welcome all of our witnesses today, certainly Ben 

Grumbles with EPA. Thank you for being here, Ben. The entire 

second panel. 

Of particular note for me, we have Mayor Glenn Brasseaux of the 

city of Carencro. Mayor, welcome to you. Thank you for being here 

and taking time to come to be part of this important hearing. Of 

course, he will talk about wastewater infrastructure, but in particular from the perspective of small communities and also as a 

board member of the Louisiana Rural Water Association. 
9 

Again, I agree with my colleagues, the State Revolving Fund is 

very important in this, and we need to figure out how we can make 

it even more effective. So I will be very interested in hearing all 

of the witnesses’ testimony about that. 

To oversimplify, it seems to me we need to focus on two big categories. One is there is enormous demand, so I think we need to 

have more funding to meet that demand. In addition, I think, over 

the last 20 years in particular, we have created so much complexity 

in the system that a dollar goes not nearly as long as it used to 

go, and we need to step back and figure out how we reduce that 

burden and that complexity so that as we hopefully increase the 

dollars, they are able to go a lot further, which they certainly did 

20 years ago, to help bridge that gap. I look forward to everyone’s 

ideas with regard to both of those categories. 

Thank you again, Mr. Chairman. 

Senator LAUTENBERG. Thank you, Senator Vitter. Senator Vitter 

is the Ranking Member on this subcommittee and we look forward 

to working together to get many things moving that have been too 

long delayed. 

I want to now welcome to the witness table Ben Grumbles, Assistant Administrator of Water from EPA. We look forward to hearing the Agency’s views on this important issue, and I thank you for 

joining us, Mr. Grumbles. 

STATEMENT OF HON. BENJAMIN H. GRUMBLES, ASSISTANT 

ADMINISTRATOR FOR WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY 

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

committee. It is a real honor to be before you representing the U.S. 

EPA. 

I hope you will listen to my words, but I trust that you will be 

looking behind me, because what you see are the faces of the clean 

water campaign across America, the local elected officials, the advocates of various organizations who are all rallying behind something that we all share and I think we all hold in common, and 

that is working together to change the way America views and values water and the water infrastructure system that supports it. 

The 1.5 million miles of sewer lines, the 16,000 treatment plants 

are all part of the lifelines to the communities’ environmental and 

economic health of America, so I am very proud to be here. 

EPA is very proud of the role we have played with our partners 

to develop innovative, sustainable approaches to meeting the very 

large array of needs for clean and safe water across the country. 

October 18 marks the 35th anniversary of the Clean Water Act, so 

it is particularly timely and appropriate to have this hearing focusing on one of the greatest challenges. 

Administrator Stephen Johnson has articulated to everyone in 

the Agency and, just as importantly, to the many partners at the 

State, tribal, and local level, and in the private sector that one of 

his top priorities is to develop innovative and sustainable and market-based solutions for water infrastructure financing and management. 

What I am going to say in the brief amount of time I have is I 

want to focus in on the three waves of water infrastructure financ-
10 

ing over the years and what EPA is doing to usher in that third 

wave of innovative, sustainable, and market-based approaches. 

The first wave, as you know better than anyone, was the construction grants era, where there were direct grants to cities. As 

Senator Voinovich mentioned, it is undisputable that has led to tremendous, enormous progress in cleaning up the Nation’s waterways. 

The Nation evolved into a State Revolving Fund model in the 

1987 amendments, and that is the second wave. Greater sustainability. We embraced the original intent of Congress at the time, 

and that was to move toward true sustainability, after Federal capitalization grants, to get all of those funds up and running. It is 

a tremendous, remarkable success story of the State Revolving 

Fund model. It is one that we share with countries around the 

world. It is one that we are fully committed to in the sense of providing capitalization grants as we have, living up to the President’s 

commitment to provide $6.8 billion in continued capitalization 

grants through 2011 and working hard and working in a collaborative way to help States and local fund managers see those funds 

truly evolve and be sustainable. 

The third wave is the more innovative and sustainable approach, 

and it is represented by several things. One is the four pillars of 

sustainability that the Agency has been advocating and acting on 

over the last several years, which I will describe, and another one 

is in the President’s budget request these new Water Enterprise 

Bonds. We need congressional help to amend the tax code to remove the State volume caps on water and wastewater Private Activity Bonds. But we are also pursuing other aspects of true sustainability. 

So this third wave, the first part of it is focusing on the demand 

side, as Senator Vitter mentioned, and that is the four pillars of 

sustainability, and the first and most important, in many respects, 

is asset management. In May of this year, EPA signed a watershed 

agreement, a national agreement with water and wastewater agencies, national organizations, to all work to improve management of 

water infrastructure systems to know those critical assets, these 

buried assets, if you will, for many of them that are underground 

pipes, to inventory them and to have a more sustainable management approach to reduce the leaks and the overflows and to increase the productivity of those systems. 

The second is full cost pricing. It is so hard to explain how cheap 

water is in so many respects compared to the value of the service 

that is being provided. EPA is not going to set the prices and we 

are very sensitive to the needs of local communities and, in particular, local elected officials about the rate shock that Senator 

Voinovich is mentioning when we see big price tags for sewer overflow projects over the years. But we are fully committed, as one of 

our pillars of sustainability, to providing tools and information 

about helping communities get the prices right to better reflect the 

needs, the investments in their community systems. When communities invest in wastewater infrastructure, they are investing in 

their communities. 

Mr. Chairman, I would love to make available to the committee 

a video that the Local Government Advisory Committee produced. 
11 

This is part of FACA for the Administrator of EPA, and it is called 

Water Infrastructure: Successful Strategies for Local Leadership, 

and it focuses on in particular on elected local leaders. So, without 

objection, I would like to provide that to the committee. 

Senator LAUTENBERG. Great. Thank you. We will have it available for distribution for the members who would be interested in 

seeing it. 

Mr. GRUMBLES. Thank you, Mr. Chairman. 

The other two pillars of sustainability that are really part of this 

third wave to help reduce demand on our Nation’s wastewater infrastructure systems, which is a tremendous demand based on our 

gap report and the need surveys, is to focus on water efficiency like 

never before. That is why I would encourage the committee and 

others in Congress to embrace the WaterSense program, this voluntary public-private partnership of labeling of water-efficient 

products and appliances to help reduce the demand on infrastructure needs. 

The fourth pillar is a watershed approach, and that is where we 

see—— 

Senator LAUTENBERG. Can I ask you? 

[inaudible]—— 

Mr. GRUMBLES. Mr. Chairman, green infrastructure is a very important part of that. That, coupled with the Water Enterprise 

Bonds, which we believe will bring in $5 billion to $6 billion in new 

funds in partnership with the private sector, is an important way 

to proceed for meeting America’s wastewater infrastructure needs. 

Thank you. 

[The prepared statement of Mr. Grumbles follows:] 

STATEMENT OF BENJAMIN H. GRUMBLES, ASSISTANT ADMINISTRATOR FOR WATER, 

U.S. ENVIRONMENTAL PROTECTION AGENCY

Mr. Chairman and Members of the Committee, I am Benjamin H. Grumbles, Assistant Administrator for Water at United States Environmental Protection Agency 

(EPA), and I am grateful for the opportunity to testify before you today on the nation’s water infrastructure needs and the innovative and sustainable solutions the 

Environmental Protection Agency and its partners are pursuing. 

On October 18, America celebrates the 35th Anniversary of the Clean Water Act 

(CWA), one of the world’s most successful and enduring environmental laws. The 

CWA has dramatically improved water quality through scientific standards, discharge permits, pre-treatment requirements, state and local funding, watershed 

planning and a wastewater infrastructure system unparalleled in the world. 

I am proud of the work EPA is doing and the progress we are making with our 

Regions, the States, Tribal communities and other partners to implement the vital 

objectives of this milestone legislation. Today, of the 222.8 million people served by 

wastewater treatment facilities, more than 98.5 percent (219.5 million people) are 

served by ‘‘secondary treatment’’ (or better), a technical but important term of art 

that refers to a biological treatment process designed to remove dissolved organic 

matter from wastewater. Secondary treatment may remove up to 90 percent of remaining biological matter such as human waste, food waste, soaps and detergent. 

More than 281 million people receive drinking water on a daily basis from more 

than 52,000 community water systems throughout the nation. Advances in wastewater and drinking water treatment constitute major achievements in modern 

American public health. 

Administrator Stephen Johnson identifies the development of innovative, marketbased, and sustainable solutions for water infrastructure financing and management 

as a top priority in his action plan for the Agency. 

Over the past 20 years, communities have spent more than $1 trillion (in 2001 

dollars) on infrastructure, operations and maintenance for wastewater treatment 

and disposal and drinking water treatment and supply. But, it may not be enough 

to keep pace with America’s aging infrastructure systems. Many municipal water 
12 

distribution pipelines and sewer systems were constructed in the period following 

World War II with an expected design life of 20–50 years. Deteriorating pipelines 

can cause releases of water or wastewater that result in environmental contamination and a net loss of water with major economic consequences. In addition, numerous treatment facilities that process water and wastewater are in need of upgrading 

to meet capacity and water quality requirements associated with protection of public 

health and the environment. There is critical need for replacing, upgrading, and 

modernizing these infrastructure systems. 

INFRASTRUCTURE NEEDS

With the aging of the nation’s infrastructure and the growing investment need, 

the wastewater industry faces a significant challenge to sustain and advance its 

achievements in protecting public health and the environment. 

In October of 2002, EPA released the Clean Water and Drinking Water Gap Analysis Report. The report estimated that if capital investments remained at current 

levels, the potential gap between spending and needs between 2000 and 2019 would 

be approximately $122 billion (in 2001 dollars) for wastewater infrastructure and 

$102 billion (in 2001 dollars) for drinking water infrastructure. If revenue grows at 

3 percent per year, a projection that is consistent with long-term growth estimates 

of the economy, the gap is approximately $21 billion (in 2001 dollars) for wastewater 

infrastructure and $45 billion (in 2001 dollars) for drinking water infrastructure. 

The general causes of the infrastructure funding ‘‘gap’’ are not difficult to identify. 

Much of the projected gap is the product of deferred maintenance, inadequate capital replacement, and a generally aging infrastructure. In addition, populations are 

increasing and shifting geographically, thus requiring investment in existing or new 

infrastructure. The Census Bureau projects the population to grow to 325 million 

by the year 2020 (an increase of more than 15 percent over the 2000 population). 

Lastly, unlike utilities subject to state regulation such as electric and natural gas 

service and privately owned water systems, many public utilities in the United 

States have not historically charged their users the full cost of service. 

FEDERAL FINANCING FOR WATER INFRASTRUCTURE

At EPA, we think of water infrastructure financing in waves of progress. If we 

look back at the innovations of the last generation, the first wave ushered in the 

historic Clean Water and Safe Drinking Water Acts in the early 1970s in response 

to the degradation of our waters. 

The second wave was another historic moment in transitioning to the State Revolving Funds used to stretch the federal investment. On February 4, 2007 we 

marked the 20th anniversary of the passage of the Clean Water Act amendments 

that authorized the Clean Water State Revolving Fund (CWSRF) program. The creation of the CWSRF in 1987 and the Drinking Water State Revolving Fund 

(DWSRF) in 1996 were major milestones on the path to financial sustainability for 

our water infrastructure. 

With the help of federal capitalization grants, the States provide low interest 

loans for water infrastructure projects through their individual CWSRFs and 

DWSRFs. Since loan repayments allow the funds to ‘‘revolve’’ over the long-term, 

the SRFs provide sustainable sources of financing into the future. 

Over the past 19 years, The CWSRF program has played a significant role in 

helping to finance water infrastructure, a role that will continue over the long-term. 

Over this time period, EPA has provided approximately $25 billion to help capitalize 

the state-run programs. In combination with state monies, bond proceeds, and recycled loan repayments, the CWSRFs have been able to ‘‘leverage’’ the Federal investment into $61 billion to fund worthy water infrastructure projects. The newer 

DWSRF program has accumulated close to $13 billion in its first 10 years of operation. The year 2006 marked an important and notable milestone in the CWSRF: 

it was the first time that over $5 billion in assistance was provided in any one year. 

The success of the SRFs can be attributed in large part to the broad flexibility 

of the funds and the elimination of overlapping federal and state requirements. The 

broad flexibility has allowed states to implement the SRFs to fuller advantage. An 

example of this flexibility is evident in California which, on average, provides over 

$250 million in water quantity funding annually. In California, the CWSRF’s flexibility has allowed the state to undertake its most pressing water quality needs, 

whether through traditional wastewater treatment projects, or by reducing nonpoint 

source pollution from agricultural runoff. The choice of achieving nutrient reduction 

through less-expensive Best Management Practices on farm lands rather than installing highly advanced nutrient removal at publicly owned treatment works can 
13 

be a win-win for the environment and for the sustainability of our water infrastructure. 

At the same time, elimination of overlapping federal and state requirements has 

reduced both delay in funding and cost-inefficiencies we see when direct grants are 

made, as was the case with construction grants and remains the case with Special 

Appropriations Act projects (earmarks). 

EPA is committed to helping our partners sustain progress and increase opportunities for SRFs through financial stewardship, innovation, and collaboration. With 

a focus on promoting investment in sustainable infrastructure and encouraging 

greater creativity in project planning and development, we look forward to working 

with our state and local partners to make the program even more effective. The SRF 

programs demonstrate the power of partnerships to leverage, innovate, and excel to 

meet water infrastructure, watershed protection, and community health needs. 

The SRFs are now and will continue to be a critical tool for capital financing of 

our Nation’s wastewater infrastructure. But, they are not the only tool. Other aggressive and innovative actions and technologies are crucial to solving the Nation’s 

water infrastructure needs. 

WATER ENTERPRISE BONDS

In addition to the successful SRF programs, we believe that other aggressive and 

innovative financing and management tools are crucial to solving the Nation’s water 

infrastructure needs. These innovations are the upsurge of a third wave—which is 

bringing in new ideas about sustainability and encouraging greater private sector 

participation. EPA is helping lead this third wave of water infrastructure financing 

and investment by proposing an important new tool—Water Enterprise Bonds—to 

accelerate and increase investment in the nation’s water infrastructure. Water Enterprise Bonds will enhance access and flexibility for utilities to issue private activity bonds for public-purpose drinking water and wastewater facilities. 

The objectives of this proposal, contained in the President’s FY’08 Budget Request, are to accelerate and increase investment in the Nation’s water infrastructure 

and to facilitate development of more sustainable infrastructure projects through innovative market-based approaches. Specifically, the proposal is to amend the Internal Revenue Code to remove the State volume cap on the use of private activity 

bonds for water and wastewater infrastructure. Providing expanded access to private activity bonds for communities will allow them to finance, build, and manage 

water facilities using public-private partnerships that deliver the best mix of technology, construction, and operations with the appropriate transfer of risk to their 

private sector partners. To ensure the long-term financial health and solvency of 

these drinking water and wastewater systems, communities using these bonds must 

have demonstrated a process that will move towards full-cost pricing for services 

within 5 years of issuing the Private Activity Bonds. This will help water systems 

become self-financing and minimize the need for future subsidies. This proposal, if 

enacted, would lead to a more robust market offering of new solutions to our water 

infrastructure investment challenges. 

We are also looking aggressively for innovative ways to reduce costs and increase 

incentives to foster sustainable water infrastructure investment and management. 

This Nation is increasingly understanding that our goal needs to be not simply 

spending more on infrastructure, but investing wisely in efficient utilities that focus 

on life-cycle costs, plan for and find asset management and replacement, and consistently think and act like the enterprises they should be, for example, seeking to 

create revenue streams out of waste streams. 

As part of that effort, we held a milestone conference in March 2007, ‘‘Paying for 

Sustainable Water Infrastructure: Innovations for the 21st Century.’’ This unprecedented forum for idea and actions underscored the urgency of sustaining our water 

infrastructure. It brought together more than 600 of our nation’s best and brightest 

water experts to discuss, debate, and brainstorm innovative approaches to reducing 

costs and increasing investment in drinking water and wastewater systems and programs. 

We are continuing to expand upon this constructive dialogue with several followup meetings with our conference co-sponsors and other stakeholders. In addition, we 

have converted the conference website into an Innovative Financing Forum’’ that includes online discussion boards to share ideas, relevant articles, and other information. 

EPA’S APPROACH TO SUSTAINING WATER RESOURCES

The Agency has approached the challenge of keeping pace with infrastructure 

needs of the future by developing a comprehensive strategy built upon what we call 
14 

the ‘‘Four Pillars of Sustainable Infrastructure’’—better management, full cost pricing, water efficiency, and the watershed approach. It is an effort to help ensure that 

our Nation’s water infrastructure is sustained into the future by fundamentally 

changing the way America views, values, and manages its water Infrastructure. It 

is a collaborative effort involving drinking water and wastewater utility managers, 

professional and trade associations, local watershed protection organizations, private 

sector experts in technology, engineering, and finance, and federal, state, and local 

officials. 

BETTER MANAGEMENT

The Better Management ‘‘pillar’’ involves changing the paradigm for utility management from managing for compliance to managing for sustainability. We are concentrating our efforts on improved performance through state-of-the-art management approaches focused on the entire utility, working with smaller utilities to improve their capacity to comply with regulatory requirements, and providing utilities 

with information on cost-effective technologies. 

On May 8, 2007, EPA signed a groundbreaking utility management partnership 

agreement with six leading water and wastewater utility organizations to ensure 

the long-term viability of our Nation’s water systems through effective utility management. Through this partnership, we agreed to promote key attributes of effectively managed utilities, encourage broader use of performance measures by utilities 

to gauge their performance, and identity resources to help utilities manage all of 

their operations more effectively. 

This partnership provides utilities with a common management framework to 

help them ensure that their operations and infrastructure are sustainable in the future. We are now working in partnership with the signatory organizations to encourage the widespread adoption of the utility attributes and performance measures, 

along with other sustainable management practices like environmental management 

systems and asset management across the water sector. 

FULL COST PRICING

In many cases, water and wastewater services in this country do not consistently 

recover (or even calculate) the full cost of service. Over the past year, the Agency 

has been working with drinking water and wastewater utilities, public utility commissions, academia, and consultants to discuss issues associated with achieving full 

cost pricing. The challenge is significant, because we must work to help utilities correct market signals that have been distorted by years of subsidies. This past July, 

the National Association of Regulatory Utility Commissioners responded to our efforts by issuing a resolution calling for economic regulators and public health and 

environmental regulators to work together to advance attainment of sustainable 

public health and environmental protection. 

Full cost pricing will only be possible and successful in an efficiently structured 

and managed water and wastewater sector. Activities carried out under the other 

pillars will help to address inefficiencies in management and operations. We are 

also working with our industry partners to develop tools and techniques to assist 

utilities interested in recognizing and recovering the long-term, full cost of providing 

service. To this end, we will be working to convene training and workshops in 2008 

that will help communities find appropriate options for cost allocation and rate design. 

WATER EFFICIENCY

Managing water is a growing concern in the United States. Due to increases in 

both population and per capita water usage, communities across the county are 

starting to face challenges regarding water supply and water infrastructure. Improved water efficiency reduces the strain on aging water and wastewater systems, 

makes better use of existing resources, and can delay or even eliminate the need 

for costly new infrastructure investments. It also diverts less water from rivers, 

bays, and estuaries, which helps keep the environment healthy. Improved water efficiency also translates into cost and energy savings by reducing the amount of energy used to treat, pump, and heat water. 

Under the Water Efficiency ‘‘pillar’’ we are working to foster a national ethic of 

water efficiency, so that water is valued as a limited resource that should be used 

wisely. In June 2006, EPA announced WaterSense, an innovative partnership program that helps American consumers and businesses make smart water choices that 

save money and maintain high environmental standards without compromising performance. 
15 

WaterSense features a label that will make it easy to find products and services 

that save water. In order to ensure product quality and performance, WaterSense 

labeled products must be third-party certified to meet strict efficiency and performance criteria. To date, WaterSense has signed agreements with over 160 promotional, manufacturer, retailer, and certifying organization partners. 

In October 2006, WaterSense began labeling programs that certify irrigation design and installation professionals. Nationwide, landscape water use is estimated to 

account for nearly one-third of all residential water use, totaling more than 7 billion 

gallons per day and up to 50 percent of that goes to waste due to factors such as 

evaporation and runoff caused due to improper system design; these certified professionals can make a big impact. Four irrigation programs qualified for the 

WaterSense label and over 250 certified irrigation professionals have partnered with 

the program. 

In January 2007, WaterSense issued a final specification for a new generation of 

high efficiency toilets that use only 1.28 gallons per flush but still perform as well 

as, or better than, conventional models that use as much as 5.0 gallons per flush. 

If only 10 percent of the existing 222 million toilets in the United States were replaced with WaterSense labeled toilets the total savings potential is approximately 

246 million gallons per day. This equates to more than 89.7 billion gallons each 

year. Already, seven manufacturers have labeled 64 different HET models. In the 

coming weeks, WaterSense expects to finalize a specification for high-efficiency 

bathroom sink faucets and faucet accessories that could potentially save 61 billion 

gallons annually. 

WaterSense is also developing voluntary specifications for water-efficient new 

homes and is working with building rating systems such as the U.S. Green Buildings Council Leadership in Energy and Environmental Design (LEED) Green Building Rating System to adopt water-efficiency components to their rating systems. 

Looking ahead, WaterSense will focus on other commercial and residential plumbing 

products, as well as irrigation system technologies, such as soil moisture sensors 

and weather-based controllers. 

Other important activities under this pillar include implementing a Water Efficiency Leader program to inspire, motivate, and recognize organizations and individuals who are working to improve water efficiency beyond the labeling of products. 

We are also supporting the formation of a national organization called the Alliance 

for Water Efficiency (AWE), which initially will establish a water-efficiency information clearinghouse and website. In the future, AWE’s activities will expand to work 

with and complement WaterSense’s activities including monitoring national plumbing and appliance standards and codes. One of EPA’s newest and most impressive 

facilities, the Region 8 Headquarters, will save water through the use of high efficiency plumbing fixtures such as waterless urinals and dual-flush toilets. It also has 

a green roof. 

We are also beginning to collaborate with public officials and utility managers to 

identify strategies and tools for reducing water loss from systems. Making water 

distribution more efficient will not only save water and reduce costs, but it will save 

energy and significantly improve sustainability and increase capital available for infrastructure investment. 

WATERSHED APPROACH

The goal of this ‘‘pillar’’ is to integrate watershed-based approaches into decision 

making at the local level so that communities can make the most informed and costeffective infrastructure decisions that also help to ensure the overall health of the 

watershed. In many cases, adoption of watershed-based approaches, such as source 

water protection, ‘‘green infrastructure,’’ water quality trading, and watershed permitting, in conjunction with traditional ‘‘hard infrastructure’’ approaches, can help 

reduce overall infrastructure costs. 

EPA will continue to advance the President’s vision of ‘‘Cooperative Conservation’’ 

through grassroots, community-driven efforts to protect local watersheds and 

waterbodies of natural significance. Last December, we convened a group of drinking water, wastewater, and stormwater utility managers to discuss watershed approaches to utility management. Building off the success of that effort, we asked 

The National Advisory Council on Environmental Policy and Technology to provide 

EPA with recommendations on how to advance our efforts in this area. We received 

initial recommendations from the group in July and they are currently engaged in 

the second phase of their project. 
16 

GREEN INFRASTRUCTURE

The Agent’s approach to sustainable infrastructure does not rely solely on the four 

pillars strategy. In April 2007, EPA Administrator Stephen Johnson signed onto a 

partnership with four national organizations to promote the use of ‘‘green infrastructure’’ to lessen sewer overflows and runoff after storms. A primary goal of this new 

partnership is to reduce stormwater runoff volumes. 

Green infrastructure represents a new approach to stormwater management that 

is cost-effective, sustainable, and environmentally friendly. Green infrastructure 

techniques utilize natural systems, or engineered systems that mimic natural landscapes, to capture, cleanse and reduce stormwater runoff using plants, soils and microbes. 

On the regional scale, green infrastructure consists of the interconnected network 

of open spaces and natural areas (such as forested areas, floodplains and wetlands) 

that improve water quality while providing recreational opportunities and wildlife 

habitat. On the local scale, green infrastructure consists of site-specific management 

practices (such as rain gardens, porous pavements, and green roofs) that are designed to maintain natural hydrologic functions by absorbing and infiltrating precipitation where it falls. 

EPA and the Federal Highway Administration have teamed up to engage a variety of public and private partners in creating a national model for green infrastructure and sustainable transportation—the Green Highways Partnership. The Partnership, with its growing network of diverse partners, is a model for promoting sustainable infrastructure and environmental protection through low-cost and low-impact solutions such as: permeable materials and state of the art technologies that 

cost-effectively reduce or eliminate stormwater flows and pollutants; construction 

with recycled materials; and integration of planning, practices and incentives to protect critical habitats, waterways, and ecosystems. 

The Green Highways Partnership is actively benchmarking, developing and demonstrating these approaches and actions throughout the Mid-Atlantic. We are planning to share the lessons learned and innovative technologies from these studies 

and projects. The outcome of these efforts is sustainable transportation infrastructure that is ‘‘beyond compliance’’ and leaves the environment and communities ‘‘better than before.’’ 

RESEARCH

The Agency’s Office of Research and Development received nearly $7 million this 

year for a new research program to generate the science and engineering to improve 

and evaluate promising innovative technologies and techniques to reduce the cost 

and improve the effectiveness of operation, maintenance, and replacement of aging 

and failing drinking water and wastewater treatment and conveyance systems. 

The initial focus of the program will be on ‘‘underground’’ infrastructure—America’s ‘‘buried assets’’ that provide a foundation for environmental protection and economic growth. The initial plan primarily identifies research, demonstration and 

technology transfer activities for wastewater collection systems and drinking water 

distribution systems. Products will be provided to drinking water and wastewater 

utilities to help them adopt and implement new and innovative technologies and 

methods for cost-effectively operating, managing, rehabilitating and extending the 

life of their systems. 

WATER SECURITY

The security of our water and wastewater infrastructure continues to be an important priority for the EPA and the National Water Program. EPA has worked hard 

to ensure that drinking water systems fulfill their obligations under the Bioterrorism Act. We have also provided voluntary guidance and training to wastewater 

utilities on how to conduct vulnerability assessments, prepare emergency response 

plans, and address threats from terrorist attacks. To be sustainable, water and 

wastewater systems must be secure. We are working with the Department of Homeland Security to advance efforts on a variety of fronts. 

CLIMATE CHANGE

EPA and its partners are learning more and doing more to confront another serious challenge for our water resources—climate change. Increasingly, we understand 

climate change may have impacts on water infrastructure and watersheds that will 

affect our actions under the Clean Water Act, Safe Drinking Water Act, and various 

ocean and coastal laws. 
17 

While there remains some uncertainty on the scope, timing and potential regional 

impacts of climate change related effects, EPA and its partners are taking prudent 

steps now to assess emerging information, evaluate potential impacts of climate 

change on water programs, and identify appropriate response actions. The National 

Water Program recently established an intra-agency Climate Change Workgroup, 

made up of senior managers from EPA headquarters and regional water offices. The 

Water Program Climate Change Workgroup is working to improve understanding 

of climate change impacts on water resources and is finalizing a Climate Change 

Strategy for the National Water Program. 

CONCLUSION

Taken together, all of these initiatives, innovative tools, and funding resources 

will help EPA and its partners continue to build on the gains in water quality that 

we have worked so hard for and enjoyed over the past 35 years. 

As the Committee continues to study water infrastructure needs, the Administration would like to encourage a constructive dialogue on the appropriate role of the 

federal government in addressing these needs and on innovative new tools such as 

Water Enterprise Bonds. Mr. Chairman, I look forward to working with you and 

your colleagues and answering any questions you may have. 

RESPONSES BY BENJAMIN H. GRUMBLES TO ADDITIONAL QUESTIONS FROM

SENATOR LAUTENBERG

Question 1. When will the 2004 Clean Watersheds Needs Survey be released? 

What is the current status of the Needs Survey? Is it under review at the Office 

of Management and Budget? If so, how long has it been under review? If it is not 

under review, please describe where it is in the process, and EPA believes remains 

to be done before it can be released. 

Response. We anticipate that the 2004 Clean Watersheds Needs Survey will be 

released shortly. It is currently undergoing final review at the Office of Management 

and Budget (OMB). 

Question 2. I understand the National Water Quality Inventory report was cleared 

for release by the Office of Management and Budget (OMB) last spring. Why has 

this report not been released? When will it be released? Please provide the Committee with all versions of the report that EPA submitted to OMB and any changes 

to the report recommended by OMB. 

Response. The National Water Quality Inventory Report to Congress for the 2002 

Reporting Cycle was released by EPA on October 11, 2007. It was undergoing EPA’s 

final clearance and approval process during the interval between its approval by 

OMB and its final release to Congress. The final draft is available on-line at http:// 

www.epa.gov/305b/2002report. 

RESPONSES BY BENJAMIN H. GRUMBLES TO ADDITIONAL QUESTIONS FROM

SENATOR CARDIN

Question 1. EPA’s ENERGY STAR Program has proven effective as a tool in reducing energy usage in America. Do you envision a similar program for 

WaterSense? If so, can you give us examples of the savings that can be realized as 

well as the marketing plans EPA has to realize the full potential of this effort? 

Response. Launched in June 2006, EPA’s WaterSense program was designed to 

reduce water use across the country by creating an easy-to-identify label for waterefficient products that is backed by strict criteria and independent certification. 

Generally speaking, WaterSense labels products that use 20 percent less water and 

perform as well as—or better than—conventional models. To earn the WaterSense 

label, products must be independently tested and certified to meet EPA’s criteria for 

efficiency and performance. 

In less than 2 years, WaterSense has already become a national symbol for water 

efficiency among utilities, plumbing manufacturers, and consumers. Awareness of 

the WaterSense label is growing every day. More than 80 different models of highefficiency toilets have earned the label, and WaterSense labeled faucets should be 

available by next year. In addition to manufacturers, EPA is working with utilities. 

retailers, distributors, and the media to educate consumers on the benefits of 

switching to water-efficient products. 

For example, toilets account for about 30 percent of the water used in the home 

and Americans waste 900 billion gallons per year by flushing old, inefficient toilets. 

A family of four can realize a net savings of $1,200 from retrofitting their home with 

WaterSense labeled toilets over the product’s lifetime or a net annual savings of $60 
18 

per year after accounting for the cost of purchasing the new WaterSense labeled toilets. Furthermore, WaterSense labeled toilets save nearly $300 over the product’s 

lifetime when compared to other widely available toilets today with little to no significant difference in cost compared to a standard model. 

If every home replaced just one old toilet with a WaterSense labeled toilet, the 

water savings would be enough to supply nearly 10 million U.S. households with 

water for a year. Savings at the tap also result in energy savings. If just 1 in every 

10 homes in the United States were to install WaterSense labeled faucets or aerators in their bathrooms, in aggregate they could save 6 billion gallons of water, and 

more than $50 million in the energy costs to supply, heat, and treat that water. 

The potential for preserving our water supply for future generations through this 

voluntary program is great, and WaterSense will continue working on new product 

areas in the future. The average home, retrofitted with water-efficient fixtures, 

could reduce water waste by 30,000 gallons per year. If one out of every 10 homes 

in the U.S. upgraded to water-efficient fixtures (including ENERGY STAR labeled 

clothes washers), it could reduce water use by more than 300 billion gallons and 

save nearly $2 billion annually on utility bills alone (not including the cost of the 

new fixtures.) 

EPA realizes that water-efficient products are just the start of a new wave of 

water conservation. We are working with utilities to incorporate WaterSense promotion as part of their broader conservation efforts, which include behavioral 

changes as well. We are asking our retail and distributor partners to stock 

WaterSense labeled products and make it easy for their customers to find watersaving options. We have also employed public service announcements, articles, promotional materials, and other cost-effective marketing tactics to educate consumers 

about the availability of WaterSense labeled products. By promoting this easily recognizable, consistent national brand, EPA hopes WaterSense will make water-efficient products the clear and preferred choice among consumers. 

Question 2. What is the relationship between the WaterSense program the Green 

Buildings’ LEED program? 

Response. WaterSense is very supportive of the work the U.S. Green Building 

Council is doing through its LEED rating systems. WaterSense is actively engaged 

in improving the water-efficiency components of those systems. At this time we 

work with LEED in two ways. First, a staff member is a member of the Water Efficiency: Technical Advisory Group (WETAG). The WETAG advises LEED on water 

efficiency in general, reviews credit interpretation requests and helps integrate 

water efficiency into new and revised rating systems. Second, EPA has a Green 

Buildings Working group that provides a conduit for EPA review of LEED rating 

systems and other green marketplace activities. A WaterSense staff member is an 

active participant on this EPA workgroup and coordinates with them when appropriate. 

Senator LAUTENBERG. Thank you very much. Mr. Grumbles, in 

the year 2000, EPA estimated States needed $181 billion for wastewater infrastructure, but the Administration has proposed cutting 

the annual funding for the State Revolving Fund in half, from its 

longstanding funding level of $1.35 billion to $6.87 million. Now, is 

it possible that we can fulfill our wastewater needs for infrastructure while cutting the level of funding that much? 

Mr. GRUMBLES. When the Agency developed the needs survey 

and is working on the ongoing needs survey, and when we also 

issued the 2002 gap report, we made it clear that the overall gap 

or the needs are not the Federal role. Some of those needs are operation and maintenance. So the answer is that we believe that we 

can narrow that gap, over time even close the gap, if we ensure 

that the State Revolving Funds are more sustainable, not relying 

on continued or increased levels of Federal seed money, but that 

we reduce red tape through the SRF program, that we embrace 

Water Enterprise Bonds—— 

Senator LAUTENBERG. Mr. Grumbles, forgive me, but let’s not 

look back to what we thought might happen. Can we do the job 

that we have to do while we cut the funding for the State Revolv-
19 

ing Fund in half? Do you really think that is adequate to deal with 

the problems that we have now? 

Mr. GRUMBLES. I think we can make progress on that front. 

When you look—— 

Senator LAUTENBERG. That is not making progress. The progress 

can be made an inch at a time and never getting to a point when 

we have done the work that we have to. 

Mr. GRUMBLES. Mr. Chairman, I think the President’s budget request moves us in the continued direction where we will make 

progress. EPA’s budget request for the Clean Water SRF is a very 

important part of the overall picture, but it is not the only part of 

the picture, and the SRF is not the only tool—— 

Senator LAUTENBERG. The answer is no. Thank you. Mr. Grumbles, I know you are very capable, professional, and we respect the 

work that you do, but how we can find ways to justify reducing the 

funding available in half in this program, there are other things 

that also can be done, but we are deep in trouble with contaminated, polluted water. 

Senator Voinovich, who comes with a unique experience of having been a mayor and a Governor, and I have a bill to substantially 

add to the wastewater improvement problem, the cleanliness problem, and we are looking for far more funding. On the other hand, 

I hear you justifying this cut and, frankly, it is disappointing. 

When will the 2004 Clean Watershed Needs Survey be released? 

Mr. GRUMBLES. Mr. Chairman, we are working on the final 

stages of interagency review, and I am estimating that it would be 

in the next couple of months, before the end of the year. 

Senator LAUTENBERG. What has taken so long? 

Mr. GRUMBLES. It has taken quite a bit of time, and I think one 

of the reasons is looking at the various numbers, documenting, 

verifying the State data. Also—— 

Senator LAUTENBERG. Isn’t that the normal routine that you 

would go through when you have a program like this, you take the 

steps necessary to evaluate and conclude? 

Mr. GRUMBLES. It has taken longer than I would like, and I 

think part of the reason is not just the size of the numbers and the 

complexity of the different categories, but it is also the assumptions 

in analyzing what aspects of the Clean Watershed Needs Survey 

we need to focus in on. So I recognize it is an extremely important 

document, and we are working to get it to you as soon as we can. 

Senator LAUTENBERG. Would it be your guess that the report will 

show that State needs have grown or fallen? 

Mr. GRUMBLES. I think it is a mixed bag, and I don’t feel comfortable going into great detail, but I would agree with every member who has spoken so far, that the needs continue to grow in 

many respects due to the nature of the aging of the systems and 

the—— 

Senator LAUTENBERG. How about the growth in the population? 

Mr. GRUMBLES. The growth in the populations. 

Senator LAUTENBERG. How about the severity of storms that 

dump far—— 

Mr. GRUMBLES. I think that will have great impacts in some 

areas of the country, but that is something that is—— 

Senator LAUTENBERG. Will that be considered in the final report? 
20 

Mr. GRUMBLES. Well, we will certainly make sure that the Clean 

Watershed Needs Survey reflects the needs due to wet weather 

flows, storm, combined or sanitary sewers and stormwater needs to 

the Stormwater Permitting program. Mr. Chairman, it is a priority 

for me to be gathering the best information we have to look to see 

what adaptation should be made in managing the Clean Water Act 

and Safe Drinking Water Act programs in light of climate change. 

So we have an intra-agency task force on that specifically focused 

on water-related implications. It is a very good question and it is 

an area that we want to get all the information we can and adjust 

accordingly. 

Senator LAUTENBERG. We will come back. 

I now would ask the former Chairman of the committee, the 

Ranking Member on the full committee, for his questions, please, 

Senator Inhofe. 

Senator INHOFE. Thank you, Mr. Chairman. 

You had said, Ben, that there are other things, or the Chairman 

said, that also can be done, and I would ask you the question how 

is the Administration using the flexibility of the SRF to promote 

new financing mechanisms. 

Mr. GRUMBLES. The SRF has been so successful because of the 

ability to leverage the Federal funds and other State funds. The 

flexibility that States have to use innovative and creative approaches that are consistent with our overall guidelines. There are 

several items that we are very interested in pursing further and 

have gotten advice from our Environmental Financial Advisory 

Board. One is increased use of loan guarantees. Another one is link 

deposit loans, in particular in areas where the septic systems or 

other types of non-point sources, where the recipient of the loan 

wouldn’t be necessarily a community, but an individual using local 

banks with the SRFs. That is an important one. We are committed 

to keeping the SRFs flexible and sustainable because we view that 

as one of the major tools for meeting clean water needs. 

Senator INHOFE. I know you are doing a lot of things, and that 

is why I wanted to get into this discussion. The one thing we all 

agree on here is that more money is needed to get into the SRF. 

The SRF is a program that since 1987 has been working very well, 

certainly in my State of Oklahoma it has been working well, and 

there are many creative things that are being done in terms of 

bond issues to try to accommodate the match, but it is a difficult 

thing. It is kind of like the problem that you and I have talked 

about before on the transportation reauthorization bill. Two years 

ago, when we passed our reauthorization, I think it went down as 

the largest non-defense spending bill in history, and yet all it did 

is just sustain what we have now. So in that bill we are looking 

for new ways to finance roads, instead of doing it the same way we 

have done it since the Eisenhower administration. 

Now, I would challenge you to be as creative as possible. Maybe 

I am the only one up here who feels this way, but sometimes you 

just can’t pour more money in; there are other more creative ways, 

and I ask you to use the flexibility that you have been studying to 

come up with something that will resolve a program that has been 

very successful. 
21 

Now, you mentioned the four pillars. You got through asset management and the full cost pricing and sustainability and then the 

watershed approach. You were cut a little bit short on points three 

and four, the third and fourth pillar, and I want to give you the 

opportunity to elaborate a little bit more on those because I know 

you have more to say about that. 

Mr. GRUMBLES. Thank you, Senator. Water efficiency is one of 

the other pillars. In that one, all of us, particularly now, when the 

Nation and the country and the world are focused on climate 

change or on energy security, the Administrator is focused on clean 

energy and energy efficiency, and the connection to water and 

wastewater is undeniable and is inextricable. So we see that one 

of the great opportunities to reduce the demand, to save money and 

save energy for wastewater utilities in communities across the 

country is to encourage and provide information on water efficiency. 

We see connecting the dots or, frankly, connecting the drops and 

the watts, people will be able to save money and also mitigate 

greenhouse gas emissions, and the WaterSense program is a very 

exciting one. We are modeling it on the Energy Star program; we 

work very closely with the Energy Star program. This one is focused solely on water and WaterSense is committed to the principle 

of providing information so that consumers can choose water-efficient products such as high-efficiency toilets or faucets or outside 

residential irrigation systems to reduce the waste and to save 

money. That is one. 

The other pillar is a watershed approach, which really means, 

Senator, helping to fund the most cost-effective ways to deal with 

stormwater or wet weather flows in a watershed context so that 

there is not an unnecessary expenditure by a utility, if they can 

work with other partners, voluntary partners in the agricultural 

community or others. That, to us, is the key to sustainability and 

reducing costs downstream to the wastewater treatment plant. 

Senator INHOFE. That is good. Well, thank you very much, Mr. 

Grumbles. 

Thank you, Mr. Chairman. 

Senator LAUTENBERG. Senator Vitter. 

Senator VITTER. Thank you, Mr. Chairman. Ben, in the ongoing 

needs survey process—I know that is being finalized—folks from 

Louisiana identified about $4.7 billion of needs, and the word back 

from EPA was, well, we only agree or recognize $2.7 billion of that. 

Now, that is a pretty big delta, that is a big gap. I wouldn’t expect 

there to be complete agreement immediately, but that is an awfully 

big gap. How do you explain that size discrepancy? 

Mr. GRUMBLES. Senator, I would welcome the opportunity to 

learn more about the details of that discrepancy. As Chairman 

Lautenberg was asking me about the amount of time it has taken 

to complete this needs survey, one of the obvious reasons for that 

is understanding and making decisions about eligibilities. There 

are some new areas that are under discussion. So I would very 

much like to get more of the details about what Louisiana is saying 

the difference is between the two numbers. 

I would say we recognize that sometimes States have a different 

view of what is the Federal role or what is appropriate to submit 
22 

in terms of their needs, clean water needs, over a 20-year period, 

so that is probably at the heart of it, Senator. I look forward to 

working with you and understanding what the difference of opinion 

is. 

Senator VITTER. OK. We will make sure the Agency has that 

input from the State. But in terms of Federal role, I mean, I think 

we are talking about need, before we get to the issue of Federal 

role, so that is not part of the discrepancy in the sense that the 

State was asked to identify the need. It is a later discussion about 

who pays for it and what ratio, and the EPA was similarly responding to identification of the need, not just the Federal role. But 

we will make sure the Agency has all that information. 

Ben, I am very concerned that in almost all phases of government up here, in the last 20, 30 years, we have increased complexity and paperwork and regulation so much that a dollar goes 

a whole lot less far than it used to. That is true whether it is building highways or whether it is building Corps of Engineers projects, 

certainly important to Louisiana, or whether it is doing this wastewater infrastructure work. What can EPA propose specifically to 

reverse that trend so that whatever dollars we come up with gets 

more done? 

Mr. GRUMBLES. Your question is a very good opportunity to talk 

about streamlining and reducing red tape and process, and making 

sure we focus on the environmental priorities. The key is having 

a results-oriented approach. A couple things. One is continued vigilance and commitment to reducing red tape and trying the best we 

can to streamline the process in getting assistance or getting approval for clean water projects. I think that is very important as 

the committee considers reauthorization of the SRF and other programs to do the best to provide flexibility to States and also keep 

at a minimum the cost-cutting requirements. They are important 

concepts in many respects, but sometimes that can increase the 

cost of the project. 

Environmental results is the key, and that is why we embrace 

a watershed approach: water quality trading, encouraging innovative partnerships so that that little bit of money goes a lot further 

and tackles the greatest environmental priorities. That is one of 

the reasons why the Administration is enthused, why the mayors 

and why utility rate commissioners are enthused about the new 

proposal to bring in $5 billion to $6 billion in new money over time 

through amendments to the tax code and remove the Private Activity Bond, annualize State volume cap on Private Activity Bonds. 

We feel that that will encourage local choice and also public-private partnerships where the private sector—it doesn’t mean privatization, Senator. What it means is partnerships for progress. If a 

community is comfortable with new funding through partnerships 

with the private sector in combination with the public, with public 

accountability, we think removing barriers that are in the tax code, 

that is a very important step to take to get more out of our limited 

dollars and also to get environmental results. 

Senator VITTER. Well, I look forward to those specific proposals 

and any others, because I think that is a huge part of the problem. 

Mr. Chairman, I hope we can partner. I agree we need more Federal resources, but I hope we can combine that with, at the same 
23 

time, less Federal burden or paperwork, because I think we need 

to attack the gap from both of those directions to ever be able to 

close it. 

In closing, let me just say I think it is a problem overall. I think 

it is a particularly onerous problem for smaller communities. We 

are going to hear from Mayor Brasseaux, the mayor of Carencro, 

who can give some unique perspective on that. 

Thank you, Mr. Chairman. 

Senator LAUTENBERG. Thank you. 

Senator Voinovich. 

Senator VOINOVICH. Mr. Chairman, I apologize that I had to skip 

out. 

Senator LAUTENBERG. Well, we are anxious to hear your comments. 

Senator VOINOVICH. Thank you. 

If I were you right now, I would sit down with the National 

League of Cities, U.S. Conference of Mayors, the National Association of County Officials to talk about a way of streamlining the paperwork that is involved in making application for these loans. I 

really believe a lot of smaller jurisdictions just can’t do it. From 

what I understand from my people as I travel in Ohio, we have 100 

communities that are up in arms right now about the demands 

coming out of EPA, but to put salt into the wound is the stack of 

papers that they have to fill out in order to do this. If part of it 

is because you have been loaded up with stuff that we have put on 

your shoulders because we think we are going to micro manage 

your operation, then I think you ought to come back to this committee and say, look, the reason why we are doing a lot of this ridiculous stuff is because you pass these ridiculous laws that make 

us do it. OK? That is No. 1. 

No. 2, you have to face up to the fact that we don’t have enough 

money. I mean, you go up to the Office of Management and Budget, 

and what do they tell you? What do they tell you? The bottom line 

is we have the 2000 survey, right? 

Mr. GRUMBLES. Yes, sir. 

Senator VOINOVICH. We don’t have the 2004 survey. I understand 

the reason why is because OMB doesn’t want us to have the information about the needs that we have out in the country because 

it would embarrass them. Thank God the Senate passed legislation 

that is going to study the complete infrastructure needs of this 

country it will take us a couple years and we will convey to the 

American public just how we have ignored infrastructure needs in 

America today, whether it is in sewer and water, highways, Army 

Corps of Engineer projects, you name it. We just haven’t done the 

job. Our heads have been in the sand. 

So what do you say to them when you go up there to OMB? What 

does Administrator Johnson say to them when they say to you that 

we are going to cut the budget? How ridiculous is it if we have this 

problem that we are talking about now while you are cutting the 

budget for the funds? 

Mr. GRUMBLES. Well, Senator, there are budgetary constraints 

across the board in various programs. When it comes to water infrastructure—— 
24 

Senator VOINOVICH. Almost $600 billion for the Iraq war. OK? 

No request to pay for the war. So, as a result of that, a lot of stuff 

that we should be doing here in the United States of America isn’t 

getting done. So what do you tell them? 

Mr. GRUMBLES. Well, what we focus on is meeting the needs 

under the Clean Water Act, the domestic needs, and coming up 

with innovative approaches, and what that means, it means advancing full cost pricing and encouraging providing communities 

with the leeway and the opportunity to do that, to set rates that 

better reflect the true value of the services of those infrastructure 

systems, because we prefer not to be in a Department of Justice enforcement action consent decree situation. We think the better approach is to set the rates, to get the support from—and Mayor 

Shirley Franklin of Atlanta really focused in on infrastructure as 

a priority for her and got rate increases to reflect the needs in the 

community—— 

Senator VOINOVICH. Yes, but can I tell you something? I was 

there, OK? I did it as mayor of Cleveland. Our water rates were 

way down. We increased them 130 percent, OK? We have realistic 

water and sewer rates in Cleveland and the Northeastern Ohio Regional Sewer District. But the demands that you have made in 

order to take care of the overflow problem, it is impossible for them 

to do it. You are saying you have to do it in 15 years, so now they 

are with the Justice Department. Why can’t you allow them to do 

it in 30 years? If you are going to say to the local communities we 

ain’t gonna give you any money and, by the way, when you try to 

do it on your own, we’re not going to give you enough time to get 

it done, that is ridiculous. 

Mr. GRUMBLES. Well, we recognize the need, and I know the Administrator does and I do. We recognize the need for flexibility, not 

have a cookie cutter approach to what is the proper number of 

years for a long-time compliance strategy or plan when it comes to 

the CSOs and catching up on neglected infrastructure over the 

years, but we are very sensitive to the public health and environmental needs. 

I think that America demands clean water, not clean water eventually, so we get into the situation where we have to do a better 

job, Senator, of removing the red tape; providing increased funding 

opportunities; if we stand in the way as a barrier, removing those 

barriers through tax code amendments, which is what the Water 

Enterprise Bonds proposal does; but also providing greater freedom 

for innovative State fund managers to use leveraging, to use the 

linked deposit loans approach or other approaches to try to meet 

the needs, and the needs grow. 

Senator VOINOVICH. Well, what you are basically saying is you 

want to use some Rube Goldberg ideas in order to take care of the 

problems that the local communities have and patch this together 

with this over here, and, you know, in our State, frankly, we will 

do that. We will go to the Appalachian Regional Commission or we 

will go to Rural Development. We will go to anything else besides 

going to the EPA and going through the imaginable line, the paperwork that is involved. A lot of times people say I am not going to 

do it because, you know what, there is no money there, why bother 

with it, Senator? I am not going to do it. 
25 

I am just saying I don’t think you are being realistic. I think that 

third initiative, I don’t believe it; it is not realistic. Somebody has 

to look at this thing forthrightly and say, you know, it isn’t working. We do need more money. We need to look at the amount of 

time we are going to give these folks to pay back their bonds and 

to start to work with the communities, and just not say, well, I am 

sorry, you are not doing what you are supposed to do and, bam, it 

is in the Justice Department. You know what? They are all spending money now on paying for lawyers to take care of the situation. 

So I am saying to you that I think you ought to go back to the 

Department and tell them this Senator thinks their proposals don’t 

make sense and that they ought to go to the Administration and 

tell them that they ought to put some money where their mouth 

is, instead of this third initiative that they have that really isn’t 

making a heck of a lot of difference. 

Mr. GRUMBLES. Well—— 

Senator LAUTENBERG. Thank you, Senator Voinovich. Thank you 

very much for your not unusual candor. 

[Laughter.] 

Senator LAUTENBERG. Since my name is Frank and I am, we are 

quite a twosome up here. 

What I am going to do is have a 10-minute recess while we go 

to vote, and I would ask the patience of the second panel, please, 

to excuse us, but that we have to do. 

But I would ask you a question. Are there real threats posed to 

public health, to the environment, parts of our economy from sewage spills and combined sewer overflow? Are there serious threats 

there? 

Mr. GRUMBLES. There are serious threats, Mr. Chairman—— 

Senator LAUTENBERG. There are. Well, I just wanted to be sure, 

because to follow on to what my colleague from Ohio said, you 

know, the war represents a terrible threat; we want to take care 

of our troops and we want to reduce not only the anguish and the 

danger to our—— 

Mr. GRUMBLES. Senator, it is an enforcement priority for the 

Agency, specifically the sewer overflows; it is a compliance assistance priority for us as well. I—— 

Senator LAUTENBERG. Mr. Grumbles, I respect you, I really do, 

but the fact of the matter is there isn’t enough money to do this. 

We have been through this and several times you have explained 

how well off we are because the funds being replenished and so 

forth. But you also suggested that cost pricing ought to be—— 

Mr. GRUMBLES. Full cost pricing. 

Senator LAUTENBERG. Full cost pricing. So you are advocating an 

increase in the cost to all the communities and all the people that 

they ought to pay more. 

Mr. GRUMBLES. Not all. It is a community decision, and some 

communities are showing great leadership. 

Senator LAUTENBERG. OK. But the word goes out. It is pretty 

simple. The word goes out, hey, pay more. Don’t call it a tax, whatever you do, maybe call it a fee or something else, but that we want 

to pass along more of the cost to the communities. 

You know, this is not a hearing on clean water, but when you 

look at the cost of what people pay to get water in bottles or jugs 
26 

or whatever, something like $50 billion to $100 billion a year. Here 

you are trying to make excuses for the inadequacy of the funding 

by the Federal Government for the State Revolving Fund, and you 

are glib with your language, Mr. Grumbles, and I don’t want to be 

too tough, but I would tell you that is really—Senator Voinovich 

described it as Rube Goldberg, but I would say smoke and mirrors. 

We get to the same thing. 

Thank you very much. The record will be kept open; you will get 

further questions. 

Once again, we will take a 10-minute recess. I want everybody 

to note the clock while we run down, vote, and come back. We look 

forward to hearing from the next panel. 

[Recess.] 

Senator LAUTENBERG. As the committee returns, please, to order, 

I invite the second panel to take their places, please. Welcome, all 

of you, and my apologies for leaving. We took a couple more minutes than 10. We welcome the testimony that each of you brings, 

the knowledge that you bring. I can’t greet this panel without saying that the mayor of my capital city, our capital city, also president of the U.S. Conference of Mayors, Mayor Palmer, is here. He 

and I have worked together arduously on all kinds of things, including gun violence, et cetera. So we are glad to see you here, 

Mayor Palmer, and invite your testimony. 

We will introduce the other witnesses at this time: Mr. Glenn 

Brasseaux, mayor of Carencro, LA, Board Member of the Louisiana 

Rural Water Association; Joe Freeman, chief of the Financial Assistance Division from the Oklahoma Water Resources Board, also 

vice president of the Council of Infrastructure Financing Authorities; Mr. Chris Westhoff, president of the National Association of 

Clean Water Agencies; and Nancy Stoner, director of the Clean 

Water Programs at the National Resources Defense Council. Thank 

all of you for joining us. 

Now I would call on Mayor Palmer. You have 5 minutes, Mayor, 

each one of you, by the way, and we would hope that you could 

complete your testimony in that time. We are fairly loose for about 

20 or 30 seconds, but beyond that it gets tough. 

Mayor Palmer. 

STATEMENT OF HON. DOUGLAS H. PALMER, MAYOR OF TRENTON, NJ, PRESIDENT OF THE U.S. CONFERENCE OF MAYORS 

Mr. PALMER. Thank you, Mr. Chairman. It is indeed a pleasure 

to see you again. Just 48 hours ago we were together at the site 

of the Brooklyn Bridge with myself, you, and Mayor Bloomberg and 

other mayors related to guns and terrorism, and now we are here 

talking about water and wastewater. So, suffice it to say we have 

to keep meeting like this. 

Senator LAUTENBERG. Yes, indeed. Protecting the public is our 

mission. 

Mr. PALMER. Absolutely. 

Mr. Chairman and members of the committee, my name, as was 

stated, is Douglas H. Palmer. I am the mayor of Trenton, NJ and 

president of the U.S. Conference of Mayors. I also would like to 

thank the members of the subcommittee for inviting me to testify 

and ask that my full testimony be submitted for the record. 
27 

As president of the Conference of Mayors, my responsibility is to 

represent the Nation’s mayors on national and local priorities. In 

January, we developed a 10-point plan entitled ‘‘Strong Cities . . . 

Strong Families . . . for a Strong America.’’ One of our 10 points 

re-emphasized a point that mayors have been focusing on for years, 

and that is improving our Nation’s infrastructure, which includes 

our water and wastewater systems. In our plan, we call for tax incentives, bonds, and other measures to support local and State efforts and stimulate private sector participation to improve our Nation’s infrastructure. These incentives and bonds would help create 

thousands of jobs and revitalize critical infrastructure that is necessary to keep the United States competitive. 

In my past role at the Conference, I also served as chair of the 

Mayors Water Council, which was created to focus on water resource issues. The Mayors Water Council has conducted numerous 

surveys and reports regarding water issues that face our cities, and 

I would like to outline some of our findings. 

The Mayors Water Council conducted a survey that identified the 

three most important water resource priorities facing the Nation’s 

cities: No. 1, rehabilitating aging water and wastewater infrastructure; No. 2, security and protection of water resources infrastructure; and No. 3, water supply availability. 

A 2007 report summarized how much money is being spent by 

local governments on water and sewers. In Fiscal Year 2005, local 

government spent $82 billion to provide sewer and water services 

and infrastructure, which is up from $45 billion in Fiscal Year 

1992. Total spending on sewer and water from 1991 to 2005 was 

$841 billion. We estimate increased spending by local government 

at $110 billion annually by the year 2010. 

Local financing of water and wastewater infrastructure varies, 

but is limited to a few general approaches: cities typically use more 

than one financing source for major capital investments; the payas-you-go approach stands out as the most common financing tool; 

revenue bonds are the second most frequently used; slightly more 

than a third of cities use the SRF; and Private Activity Bonds, 

which was mentioned earlier, are seldom used due to a Federal tax 

code impediment imposing State volume caps. 

Cities generally prefer to use municipal bonds and pay-as-you-go 

cash rather than the SRF loans. Cities find rate increases in government bonds are often more cost-efficient due to better finance 

terms and because of the greater time certainty in the finance process. About a third of the larger cities rely on the CWSRF because 

they may not have the access to favorable borrowing terms. 

Also, when we talk about Federal financial assistance and municipal water infrastructure investments, you would think if twothirds of the Nation’s principal cities are not attempting to use the 

SRF loan program, in favor of other financing mechanisms, then 

why is the water infrastructure needs gap growing. As municipal 

spending on water infrastructure has increased over the last two 

decades,—and I know Senator Voinovich and Mayor Voinovich, as 

I like to refer to him—so have the number of unfunded Federal 

mandates. Local government cannot completely satisfy spending requirements because of the growing costs in this area and for other 

competing and worthy public services. 
28 

Unlike the Federal Government that plans on deficit spending, 

cities are required to balance our budget every year. Our priorities 

are the cost for water infrastructure has been squarely on the 

shoulders of local government and rate payers. Local government 

pays for 99 percent of drinking water and 95 percent of clean water 

services and infrastructure. At present, States play a minor but important role in helping local government provide these services and 

infrastructure. The Federal-State Revolving Fund Loan program 

plays a minor but a very important part in financing clean water 

infrastructure. As local government costs increase to keep pace 

with additional Federal and State mandates, and to adapt the climate change impacts, it is clear that increasing rates and the full 

use of the SRF will fail to satisfy our water needs. 

Unless Congress modifies the tax code to make access to private 

capital and expertise for public purpose water and sewer services 

and infrastructure, the outlook is indeed gloomy. The Mayors 

Water Council has identified some basic approaches, including 

grants, 30-year no-interest loans, and greater use of the private activity bonds; providing grants to municipalities either directly or 

through States for water and wastewater infrastructure where 

there is an affordability issue or when a community faces severe 

environmental problems, including communities that have combined sewer overflow problems; expanding some portion of the current 20-year loan category to include a 30-year no-interest category 

or a 30-year low-interest loan payback period under the State Revolving Fund loan program for water and wastewater investment; 

and modifying current tax law by removing the Private Activity 

Bonds used for water and wastewater infrastructure from State 

buy-in caps. 

We call on Congress to annually appropriate the Clean Water SRF at $1.355 billion or more and the Drinking Water SRF at $850 

million or more to extend eligible SRF activities to include more 

competitive. 

I know my time is up, but I would be glad to answer questions 

later. 

[The prepared statement of Mr. Palmer follows:] 

STATEMENT OF HON. DOUGLAS H. PALMER, MAYOR OF TRENTON, NJ AND PRESIDENT

OF THE U.S. CONFERENCE OF MAYORS

Mr. Chairman and Members of the Committee, my name is Douglas H. Palmer. 

I am the Mayor of Trenton, NJ and President of the U.S. Conference of Mayors. 

I would like to thank the members of the Committee for inviting me to testify 

here today. 

The Conference of Mayors is a national nonpartisan organization that represents 

cities with populations of 30,000 or more of which there are over 1,200 in the United 

States. 

As President of the Conference of Mayors, my responsibility is to represent the 

mayors of the United States on priorities for our cities and our nation. In January 

we gathered together to outline our priorities for the new Congress. We created a 

10—Point Plan entitled ‘‘Strong Cities . . . Strong Families . . . for a Strong America.’’ 

One of our 10 points reemphasized a point that Mayors have been focusing on for 

years—improving our nation’s infrastructure which includes our water and wastewater systems. In our plan we call for tax incentives, bonds, and other measures 

to support local and state efforts and stimulate private sector participation to improve our nation’s infrastructure. These incentives and bonds would help create 

hundreds of thousands of jobs and revitalize critical infrastructure that is necessary 

to keep the United States competitive. 
29 

In my past role at the Conference, I also served as a Chair of the Mayors Water 

Council (MWC) which was created to focus on water resources issues, particularly 

on water and wastewater infrastructure development, financing, and most recently 

on water supply, conservation issues, and climate change adaptation. 

The Mayors Water Council has also conducted numerous surveys and reports regarding water issues that face our cities. We have asked cities what are their most 

critical water issues, the financing tools they use to pay for water and wastewater 

infrastructure, and research on how much money is being spent. 

I would like to outline some of the highlights of these findings and recommendations and submit the rest of my testimony into the official record. 

NATIONAL CITY WATER SURVEY

The MWC conducted a survey of the nation’s largest cities in 2005 that, for the 

first time ever, asked cities to identify the most important water resources issues 

they face. The three most important water priorities facing the Nation’s cities are: 

(1) Rehabilitating aging water and wastewater infrastructure (60.6 percent); 

(2) Security/Protection of Water Resources Infrastructure (54.6 percent); and 

(3) Water Supply Availability (46.5 percent) 

In 2007 we did follow research and determined how much money is being spent 

by local governments on water and sewers. 

In Fiscal Year 2005 alone, local government spent $82 billion to provide sewer 

and water services along with infrastructure, up from $45 billion in FY 1992. This 

translates that local government share of spending on sewer is over 95 percent and 

the state share is just under 5 percent. The local government share on spending on 

water supply is over 99 percent. Total spending on sewer and water from 1991–2005 

was $841 billion. 

The trend is for even greater spending levels. Factors contributing to the increased need for investment include: population growth and land use development; 

an aging water infrastructure that needs constant maintenance; changing environmental mandates; and climate change impacts that threaten water supplies from 

drought; reduced snow-pack; salt water intrusion on coastal aquifers; and increased 

storms, hurricanes and flooding that will require infrastructure hardening. 

Local financing of water and wastewater infrastructure varies, but is limited to 

a few general approaches, (see Table 1). The columns in this Table do not add to 

100 percent because cities typically use more than one financing source for major 

capital investments. The ‘‘Other’’ category, however, stands out because it is comprised of ‘‘pay-as-you-go’’ finance approaches. It is commonplace for cities identifying 

this approach to raise user fees and rates to finance new construction, replacement 

construction and rehabilitation of existing water infrastructure. 

Other important findings from the survey indicate that: 

• Revenue bonds are the second most frequently used form of financing after 

‘‘pay-as-you-go’’ 

• Private Activity Bonds are seldom used (primarily due to the state volume caps 

limiting such use) 

• Slightly more than a third of cities use the CWSRF as a financing tool 

Table 1.—Frequency of Multiple-Source Financing of Major Capital Investments in Water 

Infrastructure 

Type of Financing 2000–2004 (% of Cities) 2005–2009 (% of Cities)* 

General Obligation Bonds ....................................................................... 28.8 28.0 

Revenue Bonds ....................................................................................... 46.1 50.8 

Private Activity Bonds ............................................................................. 0.8 1.4 

State Revolving Fund .............................................................................. 38.3 38.6 

Other ....................................................................................................... 51.7 53.5 

*Planned major capital investments in water infrastructure. 

The 38 percent of cities that use the SRF do so because they have no other means 

of financing needed water infrastructure improvements, or would have to delay investments until financing capabilities match demand for investment. 

CITY PRACTICES AND ATTITUDES CONCERNING THE STATE REVOLVING

FUND LOAN PROGRAM

The MWC prepared a report in July 2006 on city attitudes about the Clean Water 

State Revolving Fund loan Program (CWSRF) and the Safe Drinking Water State 
30 

Revolving Fund loan Program (DWSRF). This Report sheds light on why cities do 

or do not prefer to use the SRF financing approach. The summary findings indicate: 

• Cities generally prefer to use municipal bonds—revenue and general obligation 

bonds (35.2 percent of cities); and, Pay-As-You-Go—cash (26.0 percent of cities) rather than SRF loans. The primary reason for this is because it is more cost-efficient 

due to better finance terms and the greater time-certainty in the finance process. 

This preference also reveals that cities with healthy bond ratings and user fees and 

charges that anticipate the need for reinvestment in water infrastructure play a 

strong role in finance decisions. 

• Red Tape, burdensome paperwork and SRF loan conditions and strings were 

identified by 15.1 percent of the survey cities as the critical reason why they did 

not turn to the SRF program for water projects. 

• Another 11 percent of survey cities indicated that they applied for an SRF loan 

but were either rejected or did not receive a response to their application; or, they 

did not apply because they had knowledge that they would not qualify either because of the type of water project involved or because the state priorities would not 

favor their applications. 

• A small percentage of survey cities (5 percent) stated that they prefer to seek 

grants over the use of SRF loans. 

• A small percentage of cities (6.8 percent) indicated that they had used the SRF 

loan program in the past, and they ‘‘might’’ or ‘‘will’’ consider using it for water 

projects scheduled between 2005 and 2009. 

• About 10 percent of the survey cities stated that they did not investigate the 

use of the SRF loan program for water projects; or that they did not need to use 

the SRF; or that they were not responsible for capital investments in water infrastructure (3.2 percent for this latter group). 

FEDERAL FINANCIAL ASSISTANCE AND MUNICIPAL WATER

INFRASTRUCTURE INVESTMENTS

If two-thirds of the nation’s principal cities are not attempting to use the SRF 

loan program because they have other viable financial resources for water projects, 

why is the water infrastructure ‘‘Needs Gap’’ growing instead of closing? 

The transfer of financial responsibility for water infrastructure investments from 

federal and state governments to local government is firmly entrenched. Simultaneously, major capital investments have shifted from federal and state grants to 

local lending by way of municipal bonds, user charges and low interest SRF loans. 

The U.S. Bureau of the Census reports that combined municipal expenditures for 

water and wastewater infrastructure are second only to educational expenditures. 

We are experiencing enormous investment, but a growing or, at best, stable water 

infrastructure investment ‘‘Needs Gap’’. 

As municipal spending on water infrastructure has increased over the last two 

decades so has the number of unfunded federal mandates. The ‘‘Needs Gap’’ itself 

is measured in terms of what it will take to comply over a 20-year term with existing law. As new environmental requirements are set for water quality the cost to 

reach or maintain the compliance point is adjusted upward. 

Local government also cannot completely satisfy spending requirements in this 

area because the costs will continue to grow along with competing needs for public 

capital. Mayors face the daily challenge of balancing the multitude of needs in the 

community for worthy public-purpose spending with limited financial resources. And 

we, unlike the federal government, are required to balance our budgets every year. 

THE U.S. CONFERENCE OF MAYORS WATER INFRASTRUCTURE POLICY PRIORITIES

The Conference of Mayors and the Water Council has passed numerous policies, 

recommendations, and encouraged best practices that will enhance city efforts to 

provide and pay for clean and safe water for our citizens while protecting our water 

supplies. 

In the area of financing, we continue to encourage cities to conduct full cost accounting and utilize asset management techniques to determine the true cost of providing and maintaining water systems as well as educating the public on the true 

cost of water. But as I mentioned before, with the ever growing needs, cities can 

not do it alone and therefore we need additional financing tools to assist us with 

our efforts. 

The Mayors Water Council has identified some basic approaches including: 

grants; 30-year no-interest loans; and, greater use of Private Activity Bonds (PABs). 

• Providing grants to municipalities, either directly or through states, for water 

and wastewater infrastructure where there is an affordability issue or when a com-
31 

munity faces severe environmental problems including communities that have combined sewer overflow problems; 

• Expanding some portion of the current 20-year loan category to include a 30- 

year no-interest loan category, or a 30-year low-interest loan payback period, under 

the State Revolving Fund loan program for water and wastewater infrastructure investment; and 

• Modifying current tax law by removing Private Activity Bonds (PABs) used for 

water and wastewater infrastructure from state volume caps. The increased use of 

private activity bonds for public water infrastructure can boost aggregate spending 

on water infrastructure and help cities make progress in closing the ‘‘Needs Gap’’. 

In our opinion, these approaches are necessary to help us meet our water infrastructure needs. 

Increased Funding and Flexibility of the SRF 

Regarding the traditional SRF programs, the Conference of Mayors resolution 

adopted in June 2006 calls for Congress to annually approve recapitalization authorization to the CWSRF at $1.355 billion or more, and the DWSRF at $850 million 

or more. The resolution ‘‘. . . strongly urges the Congress to approve legislation to 

substantially increase the authorized levels for both Funds to help reverse the continuing decline of the federal share of financing these federally mandated improvements.’’ 

The Conference of Mayors water resources policy supports reauthorization and recapitalization of the CWSRF. While the CWSRF is not perfect, it has proven to be 

a valuable financing resource to the nation’s cities. The state SRF programs and the 

U.S. EPA have much experience with this program, and the Conference of Mayors 

would rather improve on the current program than implement a new initiative. 

Some additional improvements that we would recommend based on the results of 

our 2005 National City Water Survey results would be to extend eligible SRF activities to include replacement or major rehabilitation would be a step in the right direction. Similarly, the Conference of Mayors adopted policy in June of 2005 calling 

on Congress ‘‘. . . to approve legislation that would complement the Drinking Water 

State Revolving Fund and the Clean Water State Revolving Fund by providing more 

targeted and direct federal resources to help the nation’s communities deal with 

other water infrastructure-related issues, including $50.6 billion for combined sewer 

overflows, and $88.5 billion for sanitary sewer overflows and stormwater management;’’. 

Other eligible activities that could be funded under the SRF include: development 

of a conservation and management plan, implementation of lake protection programs, programs to reduce municipal stormwater runoff, and watershed protection 

including the encouragement of green infrastructure programs. We would like to see 

even greater encouragement to fund such comprehensive efforts to improve water 

quality. 

The Conference of Mayors is supportive of legislation that includes a program, 

even if it began as demonstration program, for water quality enhancement and 

management. One of the most difficult problems cities face involves achieving state 

water quality objectives and total maximum daily loads (TMDLs) in the face of the 

virtually unregulated nonpoint pollution sources that are usually outside our jurisdictions. 

The U.S. Environmental Protection Agency (EPA) has recognized that agricultural 

and livestock land uses contribute a major portion of nonpoint source pollution in 

many areas. Many of our cities are engaged in watershed management efforts to 

deal with nonpoint sources (including urban runoff). Yet there is a critical lack of 

regulatory drivers forcing the agricultural and livestock land users to contribute to 

the solution. In some cases, the timing of pending TMDL requirements will force 

cities to pay for water treatment caused in large part by the upstream, non-urban 

land users. EPA’s Water Quality Trading Policy requires the non-urban polluter to 

voluntarily participate in a trading scheme. 

The Conference of Mayors adopted an action plan for sustainable watershed management nearly 10 years ago. One of the five principles of that plan is to focus on 

non-urban, nonpoint source water pollution, and pursue public policy that would assign responsibility to pay for the treatment of polluted water commensurate with 

the contribution of the pollutant loadings. The action plan also clearly calls for allowing the agricultural and livestock land users to employ best practices and least 

cost approaches that are effective in lieu of stringent and costly regulations. Mayors 

fully recognize that these land users, although they may or may not be part of our 

cities, are important contributors to our regional economies. While we prefer to use 

the powers of persuasion to convince them to participate in the water pollution solu-
32 

tions, such as the Water Quality Trading Policy approach, we have begun to experience failure in cooperative efforts. 

The Conference of Mayors also adopted a comprehensive watershed organics management policy in 2002. This policy calls for Mayors to take an active, and leading, 

role in watershed planning to control organics and their nutrients which pollute 

streams and lakes, that subsequently require more costly treatment at water facilities. 

Demonstration project could provide some of the appropriate financial incentives 

necessary to bring voluntary cooperative efforts to bear to solve the water quality 

designation/TMDL problems that we are facing. The Conference of Mayors supports 

this type of innovative approach and we would encourage this subcommittee to consider this approach. 

Analyzing and encouraging the cost and effectiveness of alternative management and 

financing approaches 

The Conference of Mayors supports encouraging but not mandating SRF applicants to explore cost-effective measures in their wastewater infrastructure solutions. 

Congress should encourage communities to consider regional alternatives, consolidation and public-private partnerships. It has been our experience that alternative approaches to planning, financing and operating wastewater facilities can yield significant public benefits for the amount of money invested. While choosing a public-private partnership approach should not be prescriptive, but it should be made possible 

for those cities that want to take advantage of such an approach. 

A number of case studies were prepared by the Mayors Water Council on longterm Operations & Maintenance agreements between cities and private water companies. These projects have been able to produce cost-savings of 10 to 30 percent, 

as well as provide additional public benefits. 

The ability of private water companies to competitively bid for ‘‘design, build and 

operate’’ (DBO) projects in wastewater is another important dimension to explore. 

The Conference of Mayors adopted policy encourages competition in the designbuild-operate phases of new and refurbished water and wastewater infrastructure. 

This policy was adopted once it was determined that competition can lead to less 

costly projects than the traditional design-build methods employed in the past. 

CONCLUSION

On behalf of the Conference of Mayors and the Mayors Water Council I wish to 

thank you again for this opportunity to speak before this subcommittee. We look forward to working with you as you move forward on important water resources legislation. 

Senator LAUTENBERG. Thank you very much. 

Mr. Brasseaux. 

STATEMENT OF HON. GLENN BRASSEAUX, MAYOR OF 

CARENCRO, LA, BOARD MEMBER, LOUISIANA RURAL WATER 

ASSOCIATION 

Mr. BRASSEAUX. Good morning, Mr. Chairman and members of 

the committee, and a special greeting to my Senator, Mr. Vitter, 

who is personally familiar with my small town in Carencro. 

I am the mayor of the city of Carencro, just outside of Lafayette, 

LA. We have about 2,100 homes and businesses that we provide 

water and sewer service. We are a typical small city struggling to 

comply with Federal mandates, take care of our infrastructure, finance the cost of running water and sewer systems, and at the 

same time keeping water rates from overwhelming our citizens, especially our low income populations. 

In Carencro and thousands of similar cities, we are barely getting by. Two years ago, the city self-financed with tax exempt municipal bonds a $1.5 million upgrade to the wastewater treatment 

system to comply with our sewer permit and handle new growth, 

which has been dramatic since the hurricanes have pushed numerous families into our community. 
33 

Recently, we were grateful to receive a $500,000 grant from the 

CDBG program to buy a new lift station, which was needed because, whenever we had more than a 2-inch rainfall, we had sewage overwhelming the distribution system and flowing out of our 

manholes into the ditches, an unacceptable situation. Keep in mind 

we have 13 more lift stations that need replacing or upgrading, 

some that are currently overwhelmed in significant rain events and 

release sewage in the streets. 

In addition to the pumping and treatment issues, we have hundreds of feet of old truss pipe that is failing, which means it collapses without warning. Also, these old sewer lines result in too 

much water getting into the system and overwhelming the new 

treatment plant. This is the treatment plant that we just upgraded 

for $1.5 million. The engineers tell us in order to stop overwhelming the treatment plant, we need to spend another $300,000 

to $400,000 to build a storage reservoir to hold excess water until 

it can treat it. The same engineers estimate that it would take 

about $7 million to fix old pipes, lift stations, crumbling manholes, 

and treatment plants. 

It gets worse, Mr. Chairman. On the drinking water side of our city’s operation, we just sold an estimated $3 million in city bonds 

to finance a new drinking water treatment plant and rebuild one 

of our five wells that was pumping sand. As I stated, we have recently self-financed the two largest upgrades for $4.5 million. We 

had attempted to finance these projects through the State Revolving Loan Funds, however, there was too much red tape involved 

with going through the State programs. I keep asking the city auditor if we can sell more bonds, and they tell me, with our existing 

debt, that we are maxed out on additional loans. No one thinks 

that rates can rise on low income households without causing economic hardship on these families. The city has reduced our emergency reserve account by more than 40 percent over the last few 

years. 

My situation is common in all the States because small communities make up the overwhelming percentage of water and wastewater utilities, over 90 percent of regulated communities. Small 

town consumers often pay high water and sewer rates. Simultaneously, the rural areas have a greater percentage of low income 

families and a lower median household income. This results in a 

very high compliance cost-per-household in rural systems coupled 

with a lesser ability to pay. 

As the committee looks at new policy and legislation for assisting 

small and rural communities, please know that on the onsite rural 

water technical assistance is what the Nation’s small communities 

depend on for compliance and expertise in maintaining our water 

and sewer supplies. In Carencro, when our manhole covers were 

overflowing with sewage, Louisiana Rural Water had a fuel technician onsite to provide us help, direction, and a plan within 3 hours. 

We called the State to report the problem; however, the State is not 

in a position to tell us how to fix the problem, and advised us to 

call Louisiana Rural Water. 

Another key principle we would like for you to consider is to target Federal subsidies to communities exhibiting the greatest need, 

both economically and environmentally. They should receive fund-
34 

ing first. A significant portion of the funding should flow toward 

small systems because, generally, they need it more. 

Our last point is that we believe State Revolving Funding should 

not be limited to making loans because, in many situations, small 

communities will not have the ability to pay back a loan. 

In closing, Mr. Chairman, I would like to thank the committee 

for this opportunity. All of rural and small town America is grateful for your assistance and interest in helping. 

I am happy to answer any other questions. 

[The prepared statement of Mr. Brasseaux follows:] 

STATEMENT OF HON. GLENN BRASSEAUX, MAYOR, CARENCRO, LA, BOARD MEMBER, LOUISIANA RURAL WATER ASSOCIATION

Good Morning Mr. Chairman and Members of the Committee—and a special 

greeting to my Senator; Mr. Vitter who is personally familiar with my little town 

of Carencro. 

Thank you for allowing me to testify today on behalf of the over 50,000 small and 

rural communities with federally regulated public water and wastewater supplies. 

I am also testifying on behalf of my small city in Louisiana—the City of Carencro, 

the Louisiana Rural Water Association and the National Rural Water Association. 

In order to focus my remarks, I would like to tell you about the water and funding 

challenges my community is facing—and then relate my situation to our key policy 

points that we would like the Committee to consider in any new state revolving 

funding legislation and in Congressional water appropriations. 

I am the mayor of the city of Carencro, just outside of Lafayette Louisiana. We 

have a population of about 7,500 people—which means we have about 2,100 homes 

and businesses that we provide water and sewer service. We are a typical small city 

struggling to comply with federal mandates, take care of our infrastructure, finance 

the cost of running water and sewer systems, and at the same time keep water 

rates from overwhelming our citizens—especially our low income populations. 

In Carencro, and thousands of similar small cities—we are just making it. Two years ago, the city self-financed, with tax-exempt municipal bonds, a $1.5 million 

upgrade of a portion of the wastewater treatment system to comply with our permit 

and handle new growth, which has been dramatic since the hurricanes pushed numerous families north in Louisiana. We have been spending thousands of dollars, 

from our operating budget, to retrofit another part of the wastewater system—our 

old lagoon that is about 50 years old, to meet our permit. Recently we were grateful 

to receive a half million-dollar grant from the CDBG program to buy a new lift station, which was needed because whenever we had more than a 2-inch rainfall, we 

had sewage overwhelming the distribution system and flowing out of manholes into 

the ditches—an unacceptable situation. Keep in mind we have 13 more lift stations 

that need replacing or upgrading—some that are currently overwhelmed in signification rain events and release sewage in the streets. In addition to the pumping 

and treatment issues, we have hundreds of feet of old truss/cast-iron pipe that is 

failing—which means it collapses without warning. We have to call in a contractor 

to repair collapsed lines at typical $5,000–$10,000 an incident. Also, these older 

sewer lines result in too much water getting into the system—and overwhelming the 

new treatment plant—this is the treatment that we just upgraded for $1.5 million. 

The engineers tell us, in order to stop overwhelming the treatment plant, we need 

to spend another $300,000–$400,000 to build a temporary storage reservoir to hold 

excess water until we can treat it. The same engineers estimate it would take about 

$7 million to fix all the old pipes, lift stations, crumbling manholes, and treatment 

plants—however that would take a long-time, so we would still need the temporary 

reservoir. It gets worse Mr. Chairman. On the drinking water side of the city’s operation —we just sold an additional $3 million in city bonds to finance a new drinking 

water filtration treatment works and rebuild one of our five wells that was pumping 

sand. Our old drinking water treatment works was over 50 years old and was literally rusting away. We had to backwash our filters every four hours, where a new 

plant would only have to backwash once a day. Our energy and chemical costs have 

risen precipitously to comply with standards and meet the water demand of the 

community. And at times, our local courts will force small communities, like mine, 

to takeover very small failing sewer systems in our proximity to ensure public 

health protection, however, we often have to pay for the line extensions. 

As I stated Mr. Chairman, we self-financed the two largest, and most recent funding proposals to finance the $1.5 million for the wastewater upgrade and $3 million 
35 

for the water upgrade. We had looked at attempting to finance their project through 

the state revolving loan funds, however, the experts and engineers assisting us on 

these projects thought there was too much red tape involved with going through the 

state programs—and that it would be most effective and economical for the city to 

sell bonds to move these projects forward. 

As mayor, I recently supported a city sales tax increase just to pay for the increases in the cost of running the water and sewer. This initiative failed on a ballot 

measure by a 60 percent-40 percent vote of the citizens. I don’t think our current 

rates are unreasonable, however my view is not shared by a large percentage of the 

city—and no one thinks that rates can rise on the low-income households without 

causing economic hardship on these families. We are constantly looking for new 

sources of financing and grants. The city has reduced our emergency reserve account by about 40 percent over the last few years to funding water projects. I keep 

asking the city auditor if we can sell more bonds—and they tell me with our existing debt that we are getting on shaky ground. I am primarily here to talk about 

water, however, we are other challenges to the city has to deal with including: 

roads, social spending, police, schools, competitive city salaries, etc. And I just 

learned last month that we could become a non-attainment area for ozone under the 

Clean Air Act. 

My situation is common in all the states because small communities make up the 

overwhelming percentage of water and wastewater utilities—over ninety percent of 

regulated communities. Due to a lack of economies of scale, small town consumers 

often pay high water and sewer rates. Water bills of $50–$100 for water are not 

uncommon in rural areas. This dynamic often results in very high compliance costs 

per household in rural systems. Simultaneously, the rural areas have a greater percentage of the nation’s poor and a lower median household income. This results in 

very high compliance cost-per-household in rural systems coupled with a lesser ability to pay. Small communities often have limited technical and administrative resources to deal with compliance and navigate through funding programs. In the 

smallest systems, one person may run both the water and sewer system and in some 

cases communities can only afford a part-time or volunteer operator. This lack of 

resources makes small systems a challenge for state agencies—the more complicated 

we make funding programs the more likely the small communities, which need the 

funds most, will not be able to participate. 

As the Committee looks at new policies and legislation for assisting small and 

rural communities with water quality, financing, and compliance, please consider 

the following priorities of small communities that we believe need to be recognized 

in federal legislation. Most of these provisions were included in some manner in the 

drinking water SRF—balancing the federal priorities with the state’s flexibility to 

tailor individual programs and discretion on implementation of each these programs. 

1. On-site rural water technical assistance is what the nation’s small communities 

depend on for compliance with the Clean Water Act and expertise in maintaining 

our water and sewer supplies. Carencro, and all the other small towns across the 

state and the Nation depend on the technical assistance provided by their state association for most all water issues. Whenever we have a problem in Carencro we 

call Louisiana Rural Water and they send someone immediately. When our manhole 

covers were overflowing with sewage—rural water had a field technician on-site to 

provide us help, direction, and a plan within 3 hours. We called the state to report 

the problem, however, the state is not in a position to tell us how to fix the problem. 

Regulators can tell us that we must fix the problem, but only the rural water technicians will tell us how to fix it, and in the most economical manner. For that particular crisis, our engineers told us what we needed to do three weeks later with 

a consulting fee. There is nothing wrong with that, however, with all the complexity 

and constant pressure to comply with new and changing federal rules, we need access to rural water associations’ free and common-sense technical assistance. When 

Congress passed the mandate for all small communities to conduct a vulnerability 

assessment (under the 2002 Bio-Terrorism Act), the rural water association staff 

showed us how to complete this assessment without charge. Some consultants were 

charging thousands of dollars to assist communities in the same manner. Every 

community wants to provide the best possible water quality to their consumers. 

Rural Water provides the resources and training to achieve this objective in a common sense, hands-on manner systems can use. Please make funding for rural water 

technical assistance the key component of federal assistance under the Clean Water 

Act. 

2. Communities exhibiting the greatest need should receive funding first. A significant portion of the funding should flow toward small systems because, generally, 

they need it more. Rates are often much higher per household in small commu-
36 

nities—often from compliance requirements. EPA rules on the horizon will significantly increase water rates in rural systems. Also, rural communities often have 

lower median household incomes. The CWA and SDWA axiom in rural areas is: 

much higher cost per household with much lower income. No large system is facing 

cost increases on a per household basis comparable to what is facing small systems. 

It only makes sense that federally subsidized funding would flow toward the communities with the greatest need—that is to small systems. 

3. Programs should not be limited to making loans because in many situations, 

small communities will not have the ability to pay back a loan—even with very low 

interest rates. 

4. A minimum portion of the funds should be set-aside for small systems. This 

ensures that a state must set up a process for dealing with small communities. Once 

established, local pressures and priorities will determine the actual portion directed 

to small systems, which we expect will often be greater than the minimum prescribed. We urge the Committee to include, at least, the same set-aside amounts for 

the wastewater and drinking water programs; 15 percent minimum for small systems as like the drinking water program and 30 percent disadvantaged community 

subsidy like in the drinking water programs. This parity will ensure states have the 

tools to help the systems most in need and will be especially important if the two 

funds have transfer authority between them. 

5. Corporate water systems should not be eligible for state revolving funding. Taxpayer subsidies should be prohibited from profit generating companies or companies 

paying profits for shareholders/investors. Private companies argue that they have to 

comply with the same regulations. However, they voluntarily chose to get into this 

‘‘business’’ and compliance is not the over-riding principle that should be considered 

in this discussion. We believe that the distinction in mission between public and private is the core principal that should be considered. Private systems are in the business to maximize profit. Public water utilities were and are created to provide for 

public welfare (the reason why public water continues to expand to underserved and 

non-profitable populations). This is a significant difference. And while we believe 

that maximizing profit is a noble virtue and as American as safe water, we do not 

think that taxpayers should help the cause of privately owned systems. In addition, 

the needs of less affluent public water systems and families with no piped water 

dwarf the current SRF allocations. The state of Florida has a novel compromise to 

this issue. Florida limits SRF funds to private water systems less than 1,500 people—ensuring funds are limited to the class of private water systems that did not 

get into the business as a corporate enterprise. 

6. Consolidation and privatization are limited solutions for small systems. Consolidation can work in some situations, but only for a small portion of small systems 

and only when the systems are in dose proximity and the economics make sense. 

Rural water associations are the lead proponents of consolidation when it makes 

sense—when it results in better service for the consumer, and we have consolidated 

numerous communities in all the states. Consolidation and regionalization that is 

in the consumers’ best interest will happen naturally at the local level regardless 

of federal policy on issue. Privatization is rarely a less costly solution for very small 

communities. In the very small communities it is, perhaps, more common to see private systems being transferred to public bodies so they can obtain better financing 

and local governmental control. The missions of private water and rural water systems are fundamentally different, the reason being the lack of profitability in sparse 

rural populations. 

7. The 1996 Safe Drinking Water Act State Revolving Fund made a significant 

policy change in the Safe Drinking Water Act funding by including as much flexibility as possible. Nowhere is this more apparent than in the state revolving fund 

section. Under this approach, states were given all sorts of discretion on how to 

spend the money to meet their local priorities. For example, a state can make 

grants, can fund set-asides, expand technical assistance efforts, create new prevention programs, increase state staff, or choose to do none of these and retain the traditional low interest loan focus. Small communities’ message here today is that this 

was a monumental step in the right direction. This flexibility has made state SRFs 

better and more responsive to nearly every stakeholder. Small systems have seen 

a level of inclusion and benefits from the drinking water SRF that we could not 

imagine based on our experience with the wastewater SRF that does not include 

these flexible provisions. 

8. Local Responsibility and Growth.—The amount of the ‘‘appropriate’’ federal contribution to local water supplies depends on what one considers the local responsibility to provide and pay for that service. The more you place responsibility on the 

locals for paying for service, the lower the federal obligation and cost. Rural water 

associations believe that local governments have the primary responsibility for pro-
37 

viding water and sewer service. We believe that the federal government should subsidize the local community when there is a clear federal welfare interest to increase 

public health, assist low-income communities, protect the environment, or create 

economic development. Public health and environmental protection interests are 

often tied to a federal unfunded mandate, which should also be a priority of federal 

funding. However, we do not believe that the federal government is responsible for 

all water funding—and this is why we believe it is critical to target federal funding 

towards well-defined federal priorities. Due to the unique realities and characteristics of small communities, they arc often in greater need of federal subsidies to accomplish federal objectives. 

9. Small communities are experiencing water problems due to aging infrastructure. We commonly see pipes that are decades old that contain outdated asbestos 

and cement materials that are failing and resulting in public health and environmental threats. Ruptures in wastewater pipes can lead to sanitary sewer overflows 

in varying degrees of environmental risk and possibly contaminating water supplies. 

Inflow and infiltration (I&I) of sanitary sewer systems is a widespread problem in 

rural and small communities. This can result in communities violating their NPDES 

permits, especially in wet weather, and cause mechanical facilities to need replacing 

more often. Aging water distribution lines can leak and cause significant loss of 

water and energy. In 2006, rural water associations assisted over 6,000 communities 

with problems of aging infrastructure directly resulting in water loss or I&I problems. 

10. Complexity of the Application Processes.—In the smallest systems, one person 

may run both the water and sewer system and in some cases communities can only 

afford a part-time or volunteer operator. This lack of resources makes small systems 

a challenge for state agencies—the more complicated we make funding programs the 

more likely the small communities, which need the funds most, will not be able to 

participate. We urge you to exercise caution for increasing demands on applicants 

as each new demand makes the process tow complicated for small systems and 

therefore less attractive. We believe that the current review process is fully adequate to ensure repayment of loans, progressive environmental planning, and longterm capacity of applicants. 

Senator LAUTENBERG. Thank you very much. 

Mr. Freeman. 

STATEMENT OF JOE S. FREEMAN, CHIEF, FINANCIAL ASSISTANCE DIVISION, OKLAHOMA WATER RESOURCES BOARD, 

VICE PRESIDENT, COUNCIL OF INFRASTRUCTURE FINANCING AUTHORITIES 

Mr. FREEMAN. Good morning. I am Joe Freeman. I am chief of 

the Financial Assistance Division of the Oklahoma Water Resources Board, and I serve as vice president of the Council of Infrastructure Financing Authorities. 

We welcome today’s focus on the issue of financing water quality 

improvements. Hopefully, this hearing will signal a renewed effort 

to move forward in cleaning up our Nation’s water bodies and protecting drinking water sources. 

While the progress made by States and the Federal Government, 

working in partnership, address water quality challenges has been 

considerable, it is hardly sufficient to meet the overwhelming need. 

All evidence points to a gap that is large and growing. A survey 

of State Clean Water SRF programs undertaken by my organization in 2005 identified over 2,000 projects seeking loans requiring 

almost $9 billion in funding. In my State, the city of Tulsa alone 

has needs of an estimated $194 million over the next 5 years. It 

is clear that at current funding levels a great many needed projects 

are not going to move forward anytime soon. 

The State Revolving Fund programs are at a crucial juncture. 

The Congress has an important choice to make in the future. We 

believe the State Revolving Fund model remains the most effective 
38 

and efficient means to provide assistance to communities to provide 

safe drinking water and achieve water quality goals. In order for 

this very successful State-Federal partnership to continue to succeed, the Federal commitment must be clear and sustained. 

Since its inception, the Clean Water SRF has achieved an impressive record of success in restoring this country’s lakes, rivers, 

and streams, and protecting the health of citizens. Since 1990, in 

Oklahoma, the Clean Water SRF has loaned over $665 million for 

projects, and I am proud to say provides over 65 percent of Oklahoma’s wastewater financing. Nationally, over $60 billion in low interest loans have been awarded to finance the construction of thousands of projects across the country. These projects serve millions 

of people and treat billions of gallons of wastewater every day, 

wastewater that would otherwise destroy precious water resources 

and threaten the health of millions of people. 

Let me turn to a few specific examples of what is being accomplished in my State of Oklahoma. Since 1999, Oklahoma has made over $324 million in Drinking Water SRF loans. Our $45 million loan to the city of Bartlesville 

was used to construct a 26 million gallon per day water treatment 

plant, which allowed the city to realize cost savings of almost $14 

million, or a third of the cost of the total project. 

Our largest borrower is the city of Tulsa, which is using the 

Clean Water SRF program to implement a comprehensive wastewater plan to rehabilitate aging infrastructure, meet capacity 

needs, and comply with discharge permit requirements. By using 

the Clean Water State Revolving Fund loan program, it is estimated Tulsa will save about $59 million in just 5 years. 

As these projects illustrate, the State Revolving Funds are playing a vital role in helping Oklahoma communities improve water 

quality. 

As the committee develops SRF reauthorization legislation, we 

hope you will be mindful of the perspectives of State program managers. We are very concerned that reauthorization could end up 

adding more burdens to the SRF program than improvements. 

State SRF managers who participate in the State-EPA 

Workgroup that oversees the program wrote the Chair and Ranking Member of this committee this summer to express exactly that 

concern. Making a reference to the House-passed reauthorization 

bill, H.R. 720, they warned, ‘‘This bill contains provisions that will 

make the program considerably less effective and efficient for potential applicants. The large number of additional program and 

project requirements proposed by H.R. 720 will result in additional 

work, time and expense, making it less likely that municipalities, 

especially small communities, will be able to afford to seek financing through the Clean Water SRF. We ask that you carefully avoid 

provisions that would impose restrictions on State program flexibility or will add new burdensome requirements on potential applicants.’’ CIFA echoes these concerns. 

We have long sought reauthorization legislation. We feel funding 

levels and program operations have suffered from the failure to reauthorize the Clean Water SRF and Drinking Water SRF, and believe that reauthorization will deliver a strong message that Congress remains committed to the State Revolving Funds. However, 
39 

we see little benefit from the legislation that would hamper our 

flexibility and burden communities we serve with barriers to their 

participation. 

The success of this program derives from the flexibility of the 

SRF model, allowing each State to determine the most effective 

means to address individual local water quality issues. Efforts to 

mandate certain approaches or restrict the use of funds to particular types of projects fail to recognize that water quality needs 

vary and each State is in the best position to decide how best to 

meet those needs. 

Mr. Chairman, we appreciate the opportunity to share our views 

and we look forward to working with the committee. Thank you 

very much. 

[The prepared statement of Mr. Freeman follows:] 

STATEMENT OF JOE S. FREEMAN, CHIEF, FINANCIAL ASSISTANCE DIVISION, OKLA- HOMA WATER RESOURCES BOARD, VICE PRESIDENT, COUNCIL OF INFRASTRUCTURE

FINANCING AUTHORITIES

I am Joe Freeman, Chief of the Financial Assistance Division of the Oklahoma 

Water Resources Board. I am testifying today on behalf of the Council of Infrastructure Financing Authorities in my capacity as Vice President. CIFA is the national 

organization of state officials involved in the financing of water and wastewater pollution control projects. CIFA members are responsible for management of the Clean 

Water and Drinking Water State Revolving Funds. 

We welcome today’s focus on the issue of financing water quality improvements. 

Hopefully, this hearing will signal a renewed effort to move forward in cleaning up 

our nation’s water bodies and protecting drinking water sources. 

While the progress made by States and the Federal government working in partnership to address water quality challenges has been considerable, it is hardly sufficient to meet the overwhelming need. All evidence points to a ‘‘Gap’’ that is large 

and growing. A survey of state CWSRF programs undertaken by CIFA in 2005 identified over 2,000 projects seeking loans requiring almost $9 billion in funding. In my 

state the city of Tulsa alone has needs of an estimated $194 million over the next 

5 years. It is clear that at current funding levels a great many needed projects are 

not going to move forward anytime soon. 

The past 5 years have not provided much encouragement in terms of the federal 

commitment to preserving and improving our water resources. Both House and Senate committees developed comprehensive legislation to reauthorize the State Revolving Funds, providing significant funding increases and program enhancements, only 

to see these efforts end in stalemate. Appropriations levels, at least with respect to 

the CWSRF, have been in a steady decline until that trend was reversed somewhat 

in the current fiscal year. 

The State Revolving Fund programs are at a crucial juncture. The Congress has 

important choices to make as to their future. We believe the State Revolving Fund 

model remains the most effective and efficient means to provide assistance to communities to provide safe drinking water and achieve their water quality goals. In 

order for this very successful State-Federal partnership to continue to succeed, the 

federal commitment must be clear and sustained. 

Since its inception, the CWSRF has achieved an impressive record of success in 

restoring this country’s lakes, rivers and streams and protecting the health of its 

citizens. Since 1990 in Oklahoma, the CWSRF has loaned over $665 million for 

projects, providing over 65 percent of Oklahoma’s wastewater financing. Nationally, 

over $60 billion in low interest loans has been awarded to finance the construction 

of thousands of projects across the country. These projects serve millions of people 

and treat billions of gallons of wastewater every day—wastewater that would otherwise destroy precious water resources and threaten the health of millions of people. 

The CWSRF produces these environmental and economic benefits in an affordable 

way for the customers who use these projects. The low interest loans offered by the 

CWSRF significantly reduce the user rates customers have to pay and bring these 

rates in line with their ability to pay. The low interest rates offered by CWSRF 

loans funded over the life of the program translate into $18 billion in savings, compared with what they would be paying had these projects been funded with market 

rate borrowing. For a typical $10 million project with a CWSRF loan, the saving 

is $3.2 million. Since these interest savings are typically targeted at the most finan-
40 

cially distressed borrowers, they represent a vital mechanism for bringing public 

health, environmental and economic development benefits to needy communities. 

The Drinking Water State Revolving Fund, while a less mature program, has 

been a critical factor in bringing improved public health protection to close to 100 

million Americans. Over $11 billion in loans and other assistance has been allocated 

to nearly 5,000 projects. Almost three-fourths of these loans have been to communities serving 10,000 or fewer people and over one-fourth have been to disadvantaged communities. 

Let me turn to a few specific examples of what is being accomplished in my State 

of Oklahoma: 

Since 1999, Oklahoma has made over $324 million available in DWSRF funding. 

Our DWSRF loan to Bartlesville, used to construct a 26 million gallon per day treatment plant, allowed the city to realize cost savings of almost $14 million, nearly a 

third of the total project cost. The Lawton Water Authority will experience similar 

savings as it constructs a water treatment plant with a capacity of 40 million gallons per day. 

Our largest borrower is the City of Tulsa which is using the CWSRF program to 

implement a Comprehensive Wastewater Plan to rehabilitate aging infrastructure, 

meet capacity needs and comply with discharge permit requirements. By using the 

CWSRF, it is estimated Tulsa will save $59 million over 5 years. 

As these projects illustrate, the State Revolving Funds are playing a vital role in 

helping Oklahoma communities improve water quality. 

CIFA strongly supports maintaining the State Revolving Loan Funds as the foundation for future progress in meeting water infrastructure needs. Innovation, new 

approaches and new priorities can be addressed in the context of the SRF. We also 

believe restoring funding to at least pre-2004 levels is essential if we are to continue 

forward progress in meeting our nation’s water quality goals. Hopefully, passage of 

SRF reauthorization will lay the groundwork for more realistic SRF funding levels. 

As the Committee develops SRF reauthorization legislation, we hope you will be 

mindful of the perspectives of State program managers. Ultimately, it is up to each 

State to deliver on the goals of the Clean Water Act and it is vital that federal legislation help us do our job. We are very concerned that reauthorization could end up 

adding more burdens to the SRF programs than improvements. 

State SRF managers, who participate in the State/EPA Workgroup that oversees 

the program, wrote the Chair and Ranking Member of this Committee this summer 

to express exactly that concern. Making reference to the House-passed reauthorization bill, H.R. 720, they warned, 

This bill contains provisions that will make the program considerably less effective and efficient for potential applicants. The large number of additional program and project requirements proposed by H.R 720 will result in additional 

work, time and expense, making it less likely that municipalities, especially 

small communities, will be able to afford to seek financing through the 

CWSRF. . . We ask that you carefully avoid provisions that would impose restrictions on state program flexibility or will add new burdensome requirements 

on potential applicants. 

CIFA would certainly echo those concerns. We recognize the obligations and responsibilities of states in the SRF partnership. We must manage the funds in a fiscally responsible manner and be accountable. We must give priority in our loan decisions to the water quality benefits that will result and the urgency of environmental 

problems needing resolution. We need to give particular attention to the challenges 

faced by small, rural and disadvantaged communities. And, we must be creative financial stewards looking for innovative solutions to solve water quality problems. 

We have long sought SRF reauthorization legislation. We feel funding levels and 

program operations have suffered from the failure to reauthorize the CWSRF and 

that reauthorization will deliver a strong message that Congress remains committed 

to the State Revolving Funds. However, we see little benefit from legislation that 

will hamper our flexibility and burden the communities we serve with barriers to 

their participation. 

Certainly States must be fully accountable for their use of federal dollars but an 

excessive statutory overlay of mandates and set aides and operational requirements 

will only serve to stifle innovation and interfere with the ability of States to best 

respond to local needs. The success of this program derives from the flexibility of 

the SRF model allowing each State to determine the most effective means to address individual local water quality issues. Efforts to mandate certain approaches 

or restrict the use of funds to particular types of projects fail to recognize that water 

quality needs vary and each State is in the best position to decide how best to meet 

those needs. 
41 

I also want to note legislation recently introduced, S 1910, to provide for a change 

in arbitrage rebate rules that will make available significant additional funds for 

States that operate leveraged SRF programs. These States are currently forced by 

the arbitrage rules to limit and pay rebate on their earnings on those portions of 

the SRF funds which are considered under these rules to be bond proceeds. This 

reduces the resources available to provide financial assistance to communities. Applying the arbitrage rules in the case of SRFs does not make sense since by law 

these funds can only be used for the purpose of financing water and wastewater facilities and prompt lending is ensured by oversight and program audits by the EPA. 

Fixing this could mean a good deal more money for water infrastructure without 

additional appropriations and I hope members of this Committee will support that 

effort. 

We very much appreciate the opportunity to share our views and look forward to 

working with the Committee. 

RESPONSE BY JOE S. FREEMAN TO AN ADDITIONAL QUESTION FROM

SENATOR LAUTENBERG

Question. Your testimony expressed concern about excessive mandates, set-asides, 

and operational requirements in reauthorization legislation. Please specify which 

mandates, requirements and set-asides in the House bill CIFA opposes. 

Response. At the outset I want to make clear that CIFA supports the effort to 

reauthorize the Clean Water State Revolving Fund and increase the authorized 

level of funding for the CWSRF. The House bill. H.R. 720, contains many elements 

that we support including the continued reliance on the CWSRF as the primary 

funding mechanism for water infrastructure; expanded eligibilites for SRF funding; 

extended loan repayment periods; increased support to cover State administrative 

costs and more flexible financing to address affordability issues. 

H.R. 720, however, has a number of provisions that would in our view work an 

unnecessary burden on State SRF programs and pose significant barriers to potential borrowers, especially smaller communities. They are as follows: 

Section 302 (b) includes several ‘‘additional requirements’’ that are burdensome: 

Innovative and alternative processes.—States are directed to require loan applicants to evaluate innovative and alternative processes, materials, techniques 

and technologies as well as alternative ways to finance and manage water infrastructure projects. This set of requirements will increase the cost of projects and 

is likely to drive potential borrowers away from using the CWSRF. It would be 

a particular burden for small communities who lack professional staff and 

would need to hire engineering/consulting services to do such evaluations. 

CWSRF funded treatment works must comply with Clean Water Act Title II 

grant requirements.—A number of requirements in place prior to 1995 would 

again be imposed on the States. There is no evidence of adverse effects resulting 

from the absence of these requirements which would argue that they are not 

necessary. They would be costly, significantly encumber the efficient management of the SRFs and for the most part duplicate State standards already in 

place to accomplish the aims of Title II. 

Procurement of engineering services by SRF borrowers to follow federal procurement rules.—States already have laws in place governing procurement of 

professional services. Since engineering services are usually obtained before financing, this requirement would likely only serve as an impediment for potential SRF borrowers. 

Fees.—States would be inquired to use any fees charged either for the cost 

of administering or for the eligible purposes. This would place a new restriction 

on the use of fees, removing a key flexibility of the program. Presently, fees can 

be used for a range of water quality activities such as technical assistance to 

small communities, preplanning and application assistance, small grants for remediation of septic systems and pollution control. EPA guidance makes clear 

the use of fees is limited to activities furthering the goals of the Clean Water 

Act. 

Section 303(c) As a loan condition require recipients to develop and implement a 

fiscal sustainability plan: 

Fiscal Sustainability Plan.—While such plans can be useful tools for improving 

efficiency and reducing costs, CIFA is concerned as to what EPA may require 

of States to demonstrate compliance and whether this will significantly increase 

costs for borrowers. The provision fails to address the type or size of projects 

and whether such a plan would be appropriate for some projects. 
42 

RESPONSES BY JOE S. FREEMAN TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. How would the application of Davis Bacon to projects in Oklahoma 

affect the cost of administering the SRF as well as the cost of completing infrastructure projects? 

Response. The application of Davis Bacon would significantly increase costs of administering the program and the costs of completing infrastructure construction 

projects as well as place the SRF program on non-competitive footing with other 

funding sources. 

The implementation of Davis Bacon would greatly impact the OWRB administrative process and Oklahoma communities. When Davis Bacon was previously a part 

of the Construction Grants Program and the CWSRF, the wage rate was updated 

on a monthly basis. It was necessary to purchase a subscription to this monthly 

publication. Davis Bacon implementation would require that every plan and specification for a construction project have a continuously updated wage rate. If a 

project had gone out into the bid phase and the wage rate changed before bids were 

opened, an amended bid would be required to be sent to replace the previous wage 

rate. If a bid was accepted with non-current wage rates then the bid would be voided and a new bid process would be required. Both of these delays in construction 

are very costly to the community and to the OWRB. With the current trends in construction prices nationwide, delays of any kind greatly increase the total project 

cost. 

According to past experience with Davis Bacon, the OWRB would be required to 

have a full time employee spend 50 percent of their time just on Davis Bacon administration including complaints, compliance, and contesting records. 

The inclusion of the labor wage rate in the construction bids would also impact 

which contractors bid on CWSRF projects. Small contractors would realize a significant negative impact from the implementation of Davis Bacon in terms of employee 

payroll costs. Small contractors and large contractors would realize negative effects 

in terms of projects that were delayed due to compliance issues with Davis Bacon. 

Question 2. Can you describe for the Committee Oklahoma’s application process, 

including any state requirements with which an applicant must comply? Does this 

bundling of funds in any way add to the applicant’s paperwork requirements? 

Response. The bundling of funds does not increase the applicant’s paperwork for 

an OWRB loan. The applicant will have to submit the correct documents for other 

Oklahoma funding agencies such as Community Development Block Grants, USDA 

Rural Development Grants, and other funding sources. However, we are very cognizant of this and try to use similar language and process in order to ease the application process. Enclosed is ore checklist and review of documents required for a loan 

application. 

The only added state requirements for an applicant would be compliance with the 

Oklahoma Completive Bidding Act and Open Meeting Act. 
43 
44 
45 

Senator LAUTENBERG. Thank you very much. 

Mr. Westhoff. 

STATEMENT OF CHRISTOPHER M. WESTHOFF, ASSISTANT 

CITY ATTORNEY, PUBLIC WORKS GENERAL COUNSEL FOR 

THE CITY OF LOS ANGELES, PRESIDENT OF THE NATIONAL 

ASSOCIATION OF CLEAN WATER AGENCIES 

Mr. WESTHOFF. Thank you. Good morning, Chairman Lautenberg 

and members of the subcommittee. My name is Christopher 

Westhoff. I am an assistant city attorney and public works general 

counsel for the city of Los Angeles. I am president of the National 

Association of Clean Water Agencies and a member of the Water 

Infrastructure Network. NACWA represents the Nation’s public 

wastewater treatment agencies, environmental stewards who treat 

and reclaim more than 18 billion gallons of wastewater each day. 

Thank you for holding this important hearing. With the 35th anniversary of the Clean Water Act just around the corner, this hearing and your leadership on environmental issues are both timely 

and fitting as we face some serious challenges moving into the 21st 

century. In order to meet these challenges, all levels of government—Federal, State, and local—must develop a lasting partnership that recognizes the need for more investment in our Nation’s 

clean water infrastructure. 

While the Clean Water Act has been hugely successful in helping 

us meet our clean water objectives, we must not stop and pat ourselves on the back for a job well done. The job is far from finished. 

In 1972, Lake Erie was declared dead by ‘‘Time’’ magazine, and the 

burning Cuyahoga River became a poster child for Federal action 

in the form of a tougher Federal law and unprecedented infusion 

of Federal money which helped cities begin to meet the Nation’s 

water quality challenges. Today, our rivers, lakes, and estuaries 

are much cleaner as a direct result. 

In the formative years of the Clean Water Act, the Federal Government invested more than $72 billion to help cities treat their 

wastewater. Federal assistance for wastewater infrastructure has 

declined more than 70 percent since 1980. This has contributed to 

a funding gap of between $300 billion and $500 billion over the 

next 20 years. Local communities now pay more than 95 percent 

of the cost of meeting their Clean Water Act obligations and, in effect, are on their own to address the ever-increasing challenges of 

aging infrastructure, population growth, demands for better service, and more expensive Federal regulations. Clean Water ranks 

second only to education in terms of how local governments spend 

their money. 

In the 1990s alone, the city of Los Angeles spent over $1.6 billion 

on the upgrade of the Hyperion Treatment Plant to full secondary 

treatment. This is only one plant, and only a small portion of this 

expenditure was funded through the Federal Clean Water Grant 

Program. In this decade, Los Angeles will spend more than $4 billion to address the physical needs of its aging 6,500 mile long sewage collection system and other wastewater infrastructure, and 

there is no Clean Water Grant Program to help. To cover these 

costs, rates have been raised 7 percent per year for each of the past 
46 

5 years, and in 2008 we will ask our city council for a nearly 9 percent increase for each of the succeeding 5 years. 

This financial situation is untenable. EPA has stated that if the 

infrastructure funding gap is not addressed soon, the water quality 

gains we have seen over the past 35 years could be erased by 2016. 

To address this funding crisis—and this is a crisis—NACWA and 

WIN believe the Federal Government should recommit itself to 

clean water and the ideals that led to the passage of the Clean 

Water Act in 1972. We believe this involves a viable, long-term 

dedicated source of revenue to bridge the ever-growing funding gap. 

The best way to accomplish this is through a Federal Clean Water 

Trust Fund. Clean and safe water is no less a national priority 

than a safe and efficient system of highways and airports, both of 

which enjoy sustainable, long-term sources of Federal investments. 

As a first step, NACWA and WIN strongly recommend that the 

Senate introduce and pass legislation similar to the Water Quality 

Financing Act of 2007. This bill passed the House in a vote of 303 

to 108, and would provide $14 billion over 4 years for the Clean 

Water State Revolving Fund and would require the GAO to study 

revenue sources for Clean Water Trust Fund. NACWA and WIN 

also support the inclusion of funding for pilot projects that incorporate green infrastructure as a cost-effective way to address the 

challenges of wet weather. We would hope that Congress would 

pass such legislation by October 18 to commemorate the passage of 

the original Clean Water Act 35 years ago. 

Cities cannot meet these financial challenges alone. Municipalities have already raised fees on average by more than twice the 

rate of inflation for the past 5 years. 

Mr. Chairman, if you ask some of our members, they will tell you 

they have to increase their rates by more than 15 percent per year 

to meet the growing demand for wastewater infrastructure funding. 

The world around us has changed significantly since 1972, from 

growing and shifting populations to the emergence of new pollutants. NACWA and WIN encourage the committee to seek innovative approaches and appropriate funding to help achieve water 

quality goals in the face of these new challenges. ‘‘Water is water’’ 

is what we hear from many of our stakeholders. The result of this 

very real concept certainly signals the need for a new watershed 

based approach to dealing with this invaluable resource that better 

equips us to meet head-on new complicated and expensive challenges in the water quality arena. 

During deliberations of the original Clean Water Act, Congress 

decided that water infrastructure was a national asset that demanded Federal investment. Without this investment, we seek a 

perfect storm brewing at the local level. We must not allow this 

storm to push gains made in water quality back to pre-1970 levels. 

The image of the Cuyahoga River on fire is forever etched in our 

collective memory. We must not allow the Nation’s great waterways to again become the poster children for a Nation’s water quality in crisis. Whether it is the Potomac, the Chesapeake Bay, the 

Mississippi River, the Great Lakes, or my own California coastal 

waters, the point is simple: the Federal Government must join 

States and municipalities as full-fledged long-term partners in 

funding the Nation’s clean water infrastructure. Your leadership, 
47 

Mr. Chairman, and the foresight of this committee’s members can 

make such a partnership a reality again. 

Thank you for your time and allowing NACWA and WIN to 

share their views on clean water funding, and I would be happy to 

answer any questions. 

[The prepared statement of Mr. Westhoff follows:] 

STATEMENT OF CHRISTOPHER M. WESTHOFF, PRESIDENT, NATIONAL ASSOCIATION OF

CLEAN WATER AGENCIES (NACWA) 

INTRODUCTION

Good morning, Chairman Lautenberg and Members of the Subcommittee. My 

name is Christopher Westhoff and I am an Assistant City Attorney and public 

works general counsel for the City of Los Angeles. I am testifying today on behalf 

of and as the President of the National Association of Clean Water Agencies 

(NACWA) and as a member of the Water Infrastructure Network (WIN). NACWA 

is the only organization dedicated solely to the interests of the Nation’s public 

wastewater treatment agencies. Our members are dedicated environmental stewards who work to carry out the goals of the Clean Water Act and to treat and reclaim more than 18 billion gallons of wastewater each day. WIN is a broad-based 

coalition of local elected officials, drinking water and wastewater service providers, 

state environmental and health administrators, engineers, environmentalists, and 

labor advocates dedicated to preserving and protecting the health, environmental 

and economic gains that America’s drinking water and wastewater infrastructure 

provides. 

I am pleased to be here and thank you for holding this important hearing examining the state of our nation’s critical water infrastructure, which protects our vital 

water resources, improves public health, and provides recreational enjoyment for all 

Americans. With the 35th anniversary of the Clean Water Act just around the corner, this hearing and your record of leadership on environmental issues are both 

timely and fitting as we face some serious challenges moving into the 21st century. 

In order to meet these challenges and ensure continued water quality improvements, all levels of government—federal, state, and local—must develop a lasting 

partnership that recognizes the need for more investment in our nation’s clean 

water infrastructure. 

AS FEDERAL FUNDS DECLINE, THE LOCAL COST OF CLEAN WATER RISES

While the Clean Water Act has been hugely successful in helping us meet our 

clean water objectives, we must not stop and pat ourselves on the back for a job 

well done. Unfortunately, the job is far from finished. There is no doubt about the 

record of environmental achievement in the 35 years since the Clean Water Act became law. In 1972, Lake Erie had been declared dead by ‘‘Time’’ magazine, and the 

burning Cuyahoga River became the poster child for federal action—action in the 

form of a tough federal law and an unprecedented infusion of federal money which, 

together with state and local contributions, helped POTW’s across America begin to 

meet the Nation’s water quality challenges. Today our rivers, lakes, and estuaries 

are much cleaner as a result. 

The federal government has invested more than $72 billion since 1972 to help cities build publicly owned treatment works (POTWs). This investment in clean water 

has not come at the expense of economic growth. Quite the contrary. Economic 

growth has gone hand in hand and, indeed, has been enhanced by this investment. 

However, despite the huge sums spent to meet our clean water goals, our Nation 

now faces serious long-term funding shortfalls to meet its vital water and wastewater infrastructure needs. 

Federal assistance simply has not kept pace with needs, declining more than 70 

percent since 1980. The Nation now faces a funding gap of $300 billion to $500 billion over 20 years between current levels of spending for wastewater infrastructure 

and total funding needs, according to the U.S. Environmental Protection Agency 
48 

1 U.S. Environmental Protection Agency, The Clean Water and Drinking Water Infrastructure 

Gap Analysis (2002) http://www.epa.gov/safewater/gapreport.pdf. 2 Congressional Budget Office, Future Investment in Drinking Water and Wastewater Infrastructure (November 2002); http://www.cbo.gov/ftpdoc.cfm?index=3983&type=0&sequence=0 3Water Infrastructure Network, Clean and Safe Water for the 21st Century (2000); http:// 

www.win-water.org/reports/winreport2000.pdf. 4 U.S. Conference of Mayors, Who Pays for the Water Pipes, Pumps and Treatment Works?— 

Local Government Expenditures on Sewer and Water—1991–2005 (http://www.usmayors.org/ 

urbanwater/07expenditures.pdf) 

(EPA),1 the Congressional Budget Office,2 and WIN3. Little has been done since 

these estimates were released, and the picture has not improved with the passage 

of time. 

Local communities now pay more than 95 percent of the cost of meeting their 

Clean Water Act obligations, according to a recent report by the U.S. Conference 

of Mayors4. In effect, these communities are on their own to address the ever increasing challenges of aging infrastructure, a growing population, expectations of 

higher quality service, and more expensive federal regulations to address wet 

weather, emerging contaminants, nutrient removal, total maximum daily loads 

(TMDLs), and other demands for limited resources. Clean water ranks second only 

to education in terms of how local governments are spending their money. In the 1990’s alone, Los Angeles spent over $1.6 billion on the upgrade of the 

Hyperion Wastewater Treatment Plant to full secondary treatment. This was only 

ONE plant, and only a small portion of this expenditure was funded through the 

Federal Clean Water Grant Program. In this decade, Los Angeles will spend more 

than $4 billion dollars to address the physical needs of its aging 6,500 mile long 

wastewater collection system and other wastewater infrastructure. To meet this aggressive expenditure program, rates have already been raised 7 percent per year for 

each of the past 5 years, and in 2008, our infrastructure team will ask our City 

Council for a nearly 9 percent rate increase for each of the succeeding 5 years. 

This financial situation is untenable. With local governments shouldering so much 

of the financial burden and having limited options for further financing, we risk losing ground in the battle for clean water. In fact, EPA has stated that if the infrastructure funding gap is not addressed soon, the water quality gains we have seen 

over the past 35 years could be erased by 2016. Already, the physical condition of 

our treatment plants, equipment, and other capital improvements in many of the 

nation’s 16,000 wastewater treatment systems has suffered because of the lack of 

resources to pay for upgrades and the replacement of pipes and treatment systems. 

The EPA also reports that more than 40 percent of the Nation’s assessed waters 

remain impaired, with the majority of this impairment caused by nonpoint sources 

of pollution. Furthermore, our growing population, which is expected to add another 

100 million people over the next three decades, coupled with increasing industrial 

output further stresses our aging clean water infrastructure. 

FUNDING THE CLEAN WATER ACT

To address this funding crisis—and this is a crisis—NACWA and WIN believe the 

federal government should recommit itself to clean water and the ideals that led to 

the passage of the 1972 Clean Water Act. We believe such a recommitment should 

involve a viable long-term, dedicated source of revenue to bridge the clean water infrastructure funding gap. In short, we think the best way to accomplish this is 

through the establishment of a federal clean water infrastructure trust fund that 

would provide a reliable source of financial assistance for the construction and repair of water and wastewater infrastructure. Clean and safe water is no less a national priority than an adequate system of interstate highways and a safe and efficient aviation system. If these other highly important infrastructure programs enjoy 

sustainable, long-term sources of federal investment, water and wastewater infrastructure should as well. 

As a first step toward a long-term funding solution, however, NACWA and WIN 

strongly recommend that the Senate introduce and pass legislation that mirrors the 

Water Quality Financing Act of 2007. This bill, which passed the House in an overwhelming 303-108 vote, would provide $14 billion over 4 years for the Clean Water 

State Revolving Fund (CWSRF) and would require a GAO study of revenue sources 

for a clean water trust fund. We would hope Congress would pass such legislation 

by October 18 to commemorate the passage of the original Clean Water Act 35 years 

ago. 

The need for additional, viable revenue streams is even more important when considered in the context of the Administration’s approach for overcoming the funding 

gap. This approach, referred to as the ‘‘Four Pillars,’’ includes better utility manage-
49 

ment, water conservation, full-cost pricing, and the reliance on watershed planning. 

While NACWA believes these practices are beneficial, they ultimately boil down to 

the federal government washing its hands of the matter and putting the burden entirely on the shoulders of local governments. In essence, the Administration’s approach assumes the federal government has no role, and if local governments charge 

more and implement the other elements of the Four Pillars, the funding gap vanishes. This is simply not the case. 

According to NACWA’s annual Rate Index, municipalities have already been 

forced to raise the average residential user service charge at twice the rate of inflation for the past 5 years, and many utilities are raising their rates by double-digits. 

Mr. Chairman, if you ask some of our members, they will tell you that they are having to increase their rates by more than 15 percent per year to meet the growing 

demand. 

NACWA, through its Clean Water Funding Task Force, has done extensive research regarding public perception on clean water funding and how best to overcome 

the gap. More than 91 percent of Americans, when made aware of this gap, overwhelmingly support federal legislative action to guarantee the water quality of the 

Nation’s rivers, lakes, streams, and bays. Polling data also show that the vast majority of Americans would support a dedicated revenue source for clean water infrastructure structured similarly to those that exist for highways and airports and that 

Americans are willing to pay out of their own pockets to do so. 

NEW CHALLENGES IN THE 21ST CENTURY

The world around us has changed significantly since 1972, from swelling and 

shifting populations to the emergence of new pollutants that have the power to 

change the course of nature. NACWA and WIN encourage the Committee to seek 

innovative approaches, with appropriate funding, to achieving water quality goals 

in the face of these emerging challenges. The federal government currently supports 

technology research and development through EPA programs and Congressional appropriations to non-profit research foundations. Yet, none of these programs focuses 

specifically on infrastructure and non-traditional solutions. Innovative and alternative approaches are needed to reduce nutrient pollution, improve methods for conserving and reusing water, improve monitoring and data analysis, reduce nonpoint 

sources of water pollution, reduce municipal stormwater pollution, reduce sanitary 

sewer and combined sewer overflows, address new water resource management 

issues presented by climate change, and develop more effective methods for treating 

wastewater—including ‘‘green technology,’’ conservation easements, stream buffers 

and wetlands. 

Integrated strategies to managing drinking water, wastewater and stormwater 

issues such as water reuse, water conservation, and energy efficiency through a 

meaningful watershed management approach are critical to achieving sustainability. 

Green technologies too are becoming increasingly accessible and commonplace. 

‘‘Water is water’’ is what we hear from many of our stakeholders. The ramifications 

of such thinking are many and broad, signalling the need for a new approach to 

water quality that better equips us to deal with new, complicated, and expensive 

challenges. 

CONCLUSION

During deliberations of the original Clean Water Act, Congress decided that water 

infrastructure was a national good that demanded federal investment. The American people agreed as more than 20 million participated in the original Earth Day 

activities in 1970. Although consensus still exists in the form of broad public support for federal action, the federal commitment to clean water investment continues 

to wane. This trend is inexplicable in light of the ever-increasing costs to comply 

with new federal requirements and enforcement actions. On top of it all, the escalating cost and unanticipated price increases for materials, experienced consultants, 

engineers, and utility staff are creating the ‘‘perfect storm’’ for wastewater utility 

managers at the local level. We must not allow this storm to push gains made in 

water quality back to pre-1970 levels. 

The image of the Cuyahoga River on fire is forever seared in our collective memory. It helped illuminate the plight facing our precious waterways and inspired our 

Nation to act and act decisively. We must not allow the nation’s great waterways 

to again become the poster-children for a Nation’s water quality in crisis. Whether 

it is the Potomac, the Chesapeake Bay, the Mississippi River, the Great Lakes or 

California’s coastal waters, the point is simple: the federal government’s failure to 

join states and municipalities as a full-fledged, long-term partner in funding the Nation’s clean water infrastructure will have unacceptable consequences. Your leader-
50 

ship, Mr. Chairman, and the foresight of this Committee’s members can make such 

a partnership a reality again. Thank you for your time and for allowing NACWA 

and WIN to share their views on clean water funding for the 21st century. I would 

be happy to answer any questions. 

RESPONSE BY CHRISTOPHER M. WESTHOFF TO AN ADDITIONAL QUESTION FROM

SENATOR INHOFE

Question. In the 107th Congress, bipartisan legislation was introduced to reauthorize both SRFs. NACWA (NA–CWA), then the Association of Metropolitan Sewerage Agencies, testified about that bill stating ‘‘They [the bill authors) suggest that 

. . . Congress does not have confidence in our management skills and believes we 

are not charging Americans enough for their water, and that the states and EPA 

need to micromanage our operations.’’ Many of the provisions in H.R. 720 said the 

same message and yet, NACWA has urged us to pass that legislation. Does your 

organization believe we should place additional requirements to be met by applicants for loans? 

Response. When NACWA, then the Association of Metropolitan Sewerage Agencies (AMSA), made the statement quoted in this question, the legislative language 

at issue in the 107th Congress’s SRF funding bill, S. 1961, was much broader than 

in H.R. 720. Specifically, S. 1961 required municipalities to prepare, as a condition 

to SRF funding, new asset management repair and replacement plans; new and potentially far-reaching physical and operational analyses of systems; as well as an 

analysis of the cost-effectiveness of alternate financing approaches, including a plan 

to have rate structures reflect the actual ‘‘cost of service’’—a term that S. 1961 did 

not define. The breadth and details of these plans were left largely up to EPA and 

State authorities and centered on decisions that by their nature should remain at 

the local level. 

H.R. 720 scales these requirements back significantly, clarifying that municipalities need to certify that they have ‘‘studied and evaluated innovative and alternative 

processes, materials, techniques, and technologies for carrying out the proposed 

project.’’ This provision seeks to ensure that new 21st century approaches, such as 

green infrastructure and energy saving techniques, are considered in the SRF funding process—a goal NACWA supports. H.R. 720 also contains a certification requirement that municipalities must have ‘‘considered the cost and effectiveness of alternative management and financing approaches for which assistance is sought.’’ Unlike S. 1961, this provision does not specifically call on utilities to perform costly 

analyses or open municipal decisions up to a time-consuming and unnecessary State 

and/or EPA review process, which could significantly hamper the very purpose of 

the SRF program—to get money to municipalities as quickly as possible to perform 

much-needed wastewater infrastructure projects. 

NACWA’s public agency members are the leaders in implementing competitive 

asset management techniques and strongly believe asset management involves sitespecific considerations that ought not to be the subject of federal legislation. The approach taken in H.R. 720, however, takes a sensible approach. It balances the needs 

to get funds as swiftly as possible to municipalities to perform much-needed infrastructure projects with the understandable objective of ensuring that these funds 

are going to go, as H.R. 720 states, to projects that ‘‘result in greater environmental 

benefit.’’ 

RESPONSE BY CHRISTOPHER M. WESTHOFF TO AN ADDITIONAL QUESTION FROM

SENATOR CARDIN

Question. The EPA Inspector General recently released a report about the effects 

of sprawl development on the restoration efforts in the Chesapeake Bay. In summary, the report suggests that the increase in polluted stormwater runoff that accompanies the influx of new residents in the watershed is overwhelming the gains 

being make in other areas to improve water quality. What steps is Los Angeles taking to make sure that investments in wastewater infrastructure are actually resulting in a net gain in water quality? Do you direct development into areas already 

served by existing wastewater infrastructure, or do your give priority funding to 

such areas? Should EPA or the State require such a condition on the use of federal 

or state money? 

Response. NACWA believes that local governments are in the best position to determine their own development and balance that with environmental concerns. Usually, areas that are growing can pay for their own growth so federal funds are able 

to be delivered to those areas that need it to upgrade existing wastewater infra-
51 

structure. NACWA believes the delivery system for federal funds, namely through 

state priority lists, works well and is not in need of major changes at this time. 

Los Angeles, for better or worse, does not have a large amount of undeveloped 

land suitable for large developments within its borders. However, any development 

of multiple single family homes, muti-family residences or commercial property, 

whether constructed as an ‘‘in-fill’’ development or built on previously undeveloped 

land, requires an analysis of existing wastewater infrastructure (sewer pipes) for 

available capacity to service the new construction. If deemed necessary, the developer is required to provide ‘‘off-site’’ mainline sewers to connect to other existing collection system pipes where sufficient capacity exists to take the sewage to the City’s 

treatment plants. Where sufficient sewer capacity already exists, the developer still 

pays a fee for that capacity. When the development is finished and the individual 

properties are sold to new owners, those new owners will continue to pay fees on 

a monthly basis to cover their portion of the O and M and future capital costs of 

the City’s entire wastewater collection and treatment system. 

Los Angeles as co-permittee under a County-wide Stormwater permit has a comprehensive Standard Urban Stormwater Mitigation Program (‘‘SUSMP’’) where each 

new development is reviewed and required to ‘‘mitigate’’ any additional urban runoff 

contributed by the new development. The development must be designed to keep at 

least the first 3⁄4 of an inch of rainfall onsite (‘‘first flush’’) and also mitigate potential pollutants exiting their site by the use of catch basin inserts or other filter type 

devices. 

Senator LAUTENBERG. Thank you very much. 

Ms. Stoner. 

STATEMENT OF NANCY K. STONER, DIRECTOR OF THE CLEAN 

WATER PROJECT AT THE NATURAL RESOURCES DEFENSE 

COUNCIL 

Ms. STONER. Good morning, Mr. Chairman and members of the 

subcommittee. My name is Nancy Stoner, and I am the director of 

the Clean Water Project at the National Resources Defense Council. I am delighted to be invited to testify here today and to hear 

the broad bipartisan support we have among the committee and 

subcommittee members who have been here today for clean water 

funding. 

I would like to ask to have my full statement be put in the 

record, but I did bring a few photos that I wanted to share with 

you today, and hope you would appreciate the informal approach. 

Senator LAUTENBERG. Without objection, they will be included. 

Ms. STONER. Thank you. 

The first point has been made already and well recognized by the 

members of the committee and subcommittee here today, that 

there is a Federal role for clean water funding. Water pollution, of 

course, knows no political bounds, and it is not fair to downstream 

communities to have to pay for upstream pollution that those communities choose not to address. Americans need to be able to go 

across the country and know that the tap water is safe to drink everywhere, the waters are safe to swim in everywhere, and the fish 

is safe to eat. Congress has looked at this question many times and 

viewed it the same way every time. There is a Federal role complimentary to those of State and local entities in funding wastewater infrastructure. 

Of course, it is an excellent investment. Again, several speakers 

have spoken on this already today. The investments we have had 

over the past 20 years in the State Revolving Fund have improved 

the environment, have protected public health, and added to local 

economies. The photograph there is the installation of permeable 

pavement by construction workers in Portland. I put that up to em-
52 

phasize the fact that green infrastructure, like the more traditional 

ways of controlling wastewater that have been used, provide jobs 

for small businesses, for entrepreneurs, for architects, for maintenance workers, for construction workers, landscape architects. It is 

part of the fabric of our economy that we need to support. 

Despite the investments that we have made and the progress 

that we have made, water pollution problems are growing. There 

are a number of indicators that are showing negative trends, including beach closings, red tides, dead zones, and the like here. As 

several witnesses have also mentioned, global warming is projected 

to exacerbate those negative trends. The chart here shows EPA’s 

predictions of what would happen in terms of sewage pollution. If 

we stay on the current path, it shows that those levels of oxygendepleting substances from sewage would reach the same levels in 

2025 that they were in 1968, before the passage of the Clean Water 

Act, which is obviously very disturbing. 

Even though the problems are growing the Federal funding is 

shrinking. The two lines there, the blue one is one that we discussed earlier today, about the Presidential budget for green infrastructure. The red line is the funding that has been provided by 

Congress. Am very pleased to see earlier this year that Congress 

did increase the funding for the SRF for Fiscal Year 2007, and 

there is a choice pending now before the Senate whether to continue that increase or to adopt a number closer to the President’s 

budget. We, of course, would urge you to speak with your appropriations colleagues and other colleagues to fund at the $1.125 billion that is the House number for this year. 

So the solution that we see is basically more money better spent. 

The photo there is of a restored wetland in Houston, TX. This is 

one form of green infrastructure. We would like to see substantially 

increased funding in general for the SRF over the next 10 years 

and better targeting of the resources to achieve water resource protection goals, as well as an increase in research and develop funding to move us to the new plane where we will have the technologies that can best address the Nation’s problems. 

To increase efficiency of SRF spending, there are several different things that we suggest: funding existing needs, not sprawl; 

funding green infrastructure that achieves more for each dollar 

spent; funding the highest priorities, looking at those from an integrated water resource perspective; as I mentioned, increased R&D 

funding; and increased public involvement and transparency to get 

better results. 

The photo there is from the Navy Yard here in D.C., and it 

shows what can be done even with a very small amount of space 

to capture and treat the stormwater runoff from parking lots. 

One of the pieces of this is increasing the funding for green infrastructure. What it does is use soil and vegetation to manage urban 

and suburban runoff. It is essentially mimicking the functions that 

are provided by mother nature in a natural environment for free, 

and it is a compliment to the pipes and pumps and treatment 

plants that are, of course, also essential and part of the hard infrastructure. The photo is of a street edge alternative in Seattle. This 

is not just beautiful, it captures 99 percent of the stormwater runoff. It actually has not discharged from this area since December 
53 

1 NRDC, Testing the Waters-A Guide to Water Quality at Vacation Beaches, p. 1 (August 2007), 

available at http://www.nrdc.org/water/oceans/ttw/ttw2007.pdf. 

2002. It is very popular. The people in the neighboring neighborhoods want this in their neighborhood as well. It increases property 

values and beautifies the neighborhood. 

One of the things about green infrastructure is that the benefits 

are multimedia, which makes it a little difficult to fit within the 

regulatory system that we have, but there are a wide range of benefits, including the economic benefits that I mentioned earlier. This 

is a picture of a rain garden in Maplewood, MN. 

As I mentioned, another priority is not just funding things that 

need to be funded, but not funding things that do not make water 

pollution better. It is very well documented at this point that development and the payment associated with it increases runoff, decreases water quality, and reduces groundwater recharge. So it actually adds to the long-term pollution burden to fuel greenfield development. Yet, we spent, last year it was 19 percent of the SRF, 

on new sewers. We are not saying that development won’t happen, 

but we are saying it should not be a priority in terms of Federal 

funding and should not be subsidized by the Federal Government 

through the SRF. 

In summary, our recommendations are substantially increased 

funding for the next 10 years; clarify the eligibilities to ensure that 

we can fund everything we want to fund at the highest priorities; 

provide incentives for the most beneficial approaches, including 

green infrastructure in subsidies for sprawl; increase public involvement; increase funding for research and development. 

The last photo there is a green roof in Irvine, CA. 

I thank you. 

[The prepared statement of Ms. Stoner follows:] 

STATEMENT OF NANCY K. STONER, DIRECTOR, CLEAN WATER PROJECT, NATURAL

RESOURCES DEFENSE COUNCIL

Good morning, Mr. Chairman, and members of the Subcommittee. I am Nancy 

Stoner, Director of the Clean Water Project at the Natural Resources Defense Council (NRDC). Thank you for holding this hearing today on meeting America’s wastewater infrastructure needs. This is a tremendous opportunity for the Congress to 

step up federal investment in wastewater infrastructure and to spend smarter so 

that the U.S. will ensure that there is clean, safe, usable water for the next generation. 

The federal government’s investment in wastewater treatment and water resource 

protection over the 35 years since the Clean Water Act was passed in 1972 has 

brought tremendous progress in cleaning up our waterways. Yet, the issue of whether there is a federal role in wastewater infrastructure investment is a recurring 

question. I believe that issue was resolved appropriately by Congress in 1972. Water 

pollution knows no political bounds. Failure to protect water resources in one state 

pollutes downsteam surface and groundwater resources in neighboring states. That’s 

why Congress passed the Clean Water Act in the first place and why the federal 

role is so important. For example, for the past 17 years, NRDC has prepared a report analyzing beachwater quality in coastal states across the U.S., called Testing 

the Waters. In 2006, there were more than 25,000 beach closings and advisories in 

the U.S., and the largest known causes were contaminated stormwater and sewage, 

two of the pollution sources the remediation of which is eligible for funding by the 

Clean Water SRF.1 It would be unfair for coastal communities to have to shoulder 

the cost of cleaning upstream sources of beachwater contamination because there is 

no federal funding to assist upstream communities to make investments in controlling those sources. 

The Clean Water SRF has always been and continues to be a good investment. 

Projects funded by the Clean Water SRF provide water quality and community ben-
54 

2http://www.epa.gov/owm/cwfinance/cwsrf/factsheets.htm; U.S. EPA, Financing America’s 

Clean Water Since 1987: A Report of Progress and Innovation, EPA–832–R–00–011, pp. 9–10 

(May 2001), available at http://www.epa.gov/ownitnet/cwfinance/cwsrf/progress.pdf. 3 AFSCME, et al., All Dried Up: How Clean Water is Threatened by Budget Cuts, p. 1 (2004). 

Available at http://www.nrdc.org/media/docs/040915.pdf. 4http://www.treepeople.org/trees/default.htm (projects creation of 50,000 new jobs from green 

infrastructure initiative) 5 NRDC, Rooftops to Rivers: Green Strategies for Controlling Stormwater and Combined Sewer 

Overflows (June 2006). 6 U.S. EPA, Clean Water State Revolving Fund Programs-2006 Annual Report, p.18, available 

at www.epa.gov/owm/cwfinance/cwsrf/2006-annual-report.pdf. 

7 NRDC, Testing the Waters, pp. 1–2 (reporting annual percentage increase in beach closing 

and advisory days); Woods Hole Oceanographic Institute, Harmful Algal Research and Response: 

A National Environmental Science Strategy 2005–2015, available at www.esa.org/HARRNESS/ 

harrnessReport10032005.pdf (‘‘Whereas 30 years ago the US harmful algal bloom problem was 

scattered and sporadic, today virtually every state is threatened by harmful or toxic algal species.’’); Raloff, Dead Waters, Science News Online June 5, 2004 (the number of major dead zones 

has been roughly doubling every decade since the 1960s); NRDC, In Hot Water: Water Management Strategies to Weather the Effects of Global Warming pp. 4–16, (July 2007), available at 

www.nrdc.org/globalWarming/hotwater/hotwater.pdf (experts predict that the frequency of 

damaging events such as droughts and flooding will increase in many areas due to climate 

change); An Ocean Blueprint for the 21st Century, Final Report of the U.S. Commission on 

Ocean Policy, p.22 (Sept. 2004) available at http://www.oceancommission.gov/documents (The 

world’s coral reefs are increasingly showing signs of serious decline, with pristine reefs becoming 

rare and up to one-third of the world’s reefs severely damaged according to some estimates); 

NOAA, National Estuarine Eutrophication Assessment: Effects of Nutrient Enrichment in the Nation’s Estuaries, pp. vi-vii (Sept. 1999), available at http://ian.umces.edu/neea/pdfs/eutro—report.pdf (The severity and extent of nutrient pollution are expected to worsen in more than half 

of the nation’s estuaries and coastal waters by 2020). 8 U.S. EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis, EPA–816–R– 

02–020 (Sept. 2002). 9 In Hot Water, pp. 4–16. 10 U.S. EPA, A Retrospective Assessments of the Costs of the Clean Water Act, 1972 to 1997 

(Oct. 2000). 

efits, such as reduced discharges of raw sewage into rivers and lakes, less waterborne illness, enhanced wildlife habitat biodiversity, and more plentiful and safer 

drinking water sources.2 It also protects businesses that are dependent upon clean 

water, such as tourism, fish and shellfish harvesting, the beverage industry, and 

high tech manufacturing. SRF funded projects create more than 400,000 jobs each 

year throughout the Nation while providing other economic benefits for local communities.3 Very little current Clean Water SRF funding goes to green infrastructure, which applies natural systems or designed or engineered systems that use soil 

and vegetation to mimic natural processes to protect and enhance environmental 

quality and provide utility services. However, where it is being employed, green infrastructure creates jobs for architects, designers, engineers, construction workers, 

maintenance workers, and a variety of small businesses engaged in designing and 

building green roofs, rain gardens, tree boxes, and other types of green infrastructure.4 And both the clean waterways themselves and the green infrastructure that 

keeps them clean increase property values, revitalize blighted neighborhoods, enhance street life and community aesthetics, and provide free recreation.5 Because 

it is matched at the state and local levels, the Clean Water SRF leverages non-federal investment at a rate of 2.23 times the federal dollar.6

But it is clear that the level of U.S. investment in clean water is inadequate. 

There is an upward trend for beach closings, red tides, dead zones, droughts, flooding, coral reef damage, nutrient pollution, and sewage pollution.7 At our current 

rate of investment, U.S. EPA has projected that sewage pollution will be as high 

in 2025 as it was in 1968—before the passage of the Clean Water Act—that is, when 

Lake Erie was declared dead and the Cuyahoga River was on fire.8 In addition, 

global warming is anticipated to have adverse effects on available freshwater resources. For example, NRDC’s recent report, In Hot Water, projects that global 

warming will decrease snowpack in the West, reduce water supplies, increase the 

magnitude and frequency of floods and droughts, and degrade aquatic habitat by reducing stream flows and increasing the temperature of waterways.9

Even while the problems are growing, federal contributions to the SRF are shrinking, the funding gap is almost $20 billion annually, and both public and private investment in wastewater technology research and development that could save 

money in the long run is less than half of what it was in the 1970s.10 This year, 

after a promising start by restoring SRF funding to more than $1 billion for FY07, 

the Senate appears poised to adopt a funding cut of more than $200 million from 
55 

11 U.S. EPA, The Clean Water and Drinking Water Infrastructure Gap Analysis, EPA–816–R– 

02–020 (Sept. 2002) (projects that 47 percent of sewer pipes will in poor, very poor, or life 

elapsed condition by 2020, up from 10 percent in 1980 and 23 percent in 2000). 12 Estimates collected at http://waterislife.net/Documents/FactSheet.pdf. 13 U.S. EPA, SRF fact sheets, available at http://www.epa.gov/owm/cwfinance/cwsrf/factsheets.htm. 

last year’s enacted level. We request that the Senate adopt the House funding level 

of $1.125 billion. 

The picture is bleak. The sewer systems are getting older, more antiquated, more 

likely to fail,11 and they have more work to do, due to increasing population, land 

development that occurs at a rate more than twice the rate of population growth, 

and, as I mentioned, the projected impacts of global warming on water resources. 

NRDC’s key recommendations are that you address this situation by (1) substantially increasing funding over at least the next 10 years, (2) expand the eligibilities 

and improve the targeting of water funding so that it can be used to address a broad 

range of threats to U.S. water resources and so it achieves more per dollar spent; 

and (3) accompany the SRF with long term investment in research and development 

in new technologies that will allow the U.S. to find even smarter, cheaper ways to 

protect and enhance our water resources in the future. 

MIND THE GAP

The funding gap between water infrastructure needs and available resources is 

very large and continues to grow. Yet, the current Clean Water SRF is grossly insufficient to meet our nation’s water quality needs, which include repairing and replacing aging sewer plants and collection systems, controlling contaminated stormwater, 

minimizing polluted runoff, and ensuring adequate and clean flows in our nation’s 

rivers, lakes, and estuaries. We need to authorize substantially more SRF funds to 

close the gap between our water needs and available federal funding. While there 

are differing estimates of the amount of additional funding needed,12 the need for 

greater investment in clean water infrastructure is clear and undisputed. Any reauthorization of the Clean Water SRF must substantially raise SRF funding levels for 

those programs, and EPA’s own estimate of funding gaps should be a starting point. 

We should begin to plan now to meet future needs by authorizing funds to address 

them for at least the next 10 years. 

FUND THE SMARTEST, MOST BENEFICIAL PROJECTS

The growing funding gap suggests not just the need for more funding, but also 

the need to begin to spend that funding more wisely to obtain the greatest amount 

of environmental benefit per taxpayer dollar invested in water infrastructure. There 

are several components of this: (1) clarifying that all types of municipal water resource protection needs are eligible for funding, not just construction of hard infrastructure pipes and treatment works, (2) funding the highest priority projects first, 

(3) providing substantially increased funding for green infrastructure, and (4) ending subsidies for sprawl development. 

ELIGIBILITY AND PRIORITY

U.S. EPA has interpreted the Clean Water Act to allow the SRF to be used to 

fund a variety of types of water resource protection projects, including municipal 

drinking water source protection and municipal stormwater controls.13 NRDC urges 

you to clarify these eligibilities and to encourage the use of integrated water resource management, watershed management, and other integrated and multimedia 

tools to choose priorities for funding based on expected environmental results. 

Greater transparency and involvement of the public in the priority setting process 

would also increase the likelihood that the most environmentally beneficial projects 

would be selected for funding. 

EXPAND FUNDING FOR GREEN INFRASTRUCTURE PROJECTS

The U.S. should not merely rebuild our wastewater and stormwater systems using 

the hard infrastructure technologies of the past. We must become smarter about 

stretching our federal investment in water infrastructure by spending more on 

‘‘green infrastructure’’—non-point and non-structural solutions that are more efficient and more environmentally effective than traditional concrete and pipe solutions. Green infrastructure includes a variety of emerging technologies that can be 

used to restore urban and suburban waterways. Green infrastructure approaches include both engineered approaches that mimic natural functions, such as green roofs 

and rain gardens, and protection of natural areas (wetlands, stream buffers, forests) 
56 

14Letter from 42 Senators to the Honorable Dianne Feinstein (March 30, 2007). 15Green Infrastructure Statement of Intent (April 17, 2007), available at http:// 

www.epa.gov/npdes/pubs/gi—intentstatement.pdf. 16 U.S. EPA, Using Smart Growth Techniques as Stormwater Best Management Practices (Dec. 

2005), U.S. EPA, Growing Toward More Efficient Water Use: Linking Development, Infrastructure, and Drinking Water Policies (Jan. 2006); U.S. EPA, Protecting Water Resources With Higher Density Development (Jan. 2006), available at http://www.epa.gov/smartgrowth.; U.S. 17 U.S. EPA, Clean Water State Revolving Fund Programs—2006 Annual Report, p. 16, available at http://www.epa.gov/owm/cwfinance/cwsrf/2006-annual-report.pdf. 

to provide water capture and purification functions naturally. They are often accompanied by rain barrels, cisterns, and other approaches that ‘‘harvest stormwater’’ for 

re-use. Green infrastructure benefits include improved water quality, expanded 

wildlife habitat, enhanced drinking water supplies, protected open space and parks, 

energy savings, smog reduction, decreased flooding, improved aesthetics, and higher 

property values. Green infrastructure often saves taxpayers money as well by not 

only reducing sewage and stormwater pollution, but also by reducing the amount 

of water that needs to be conveyed to centralized treatment facilities, thereby reducing the cost of operating those facilities. Use of green infrastructure approaches in 

addition to modernization of aging, decaying treatment plants, collection systems, 

and distribution systems can forestall the need for even more costly approaches and 

investments in the future. 

Earlier this year, 42 members of the Senate recognized that green infrastructure 

can be more cost effective than traditional pipe and mortar solutions to stormwater 

management.14 In April 2007, NRDC, U.S. EPA, the Low Impact Development Center, the National Association of Clean Water Agencies, and the Association of State 

and Interstate Water Pollution Control Administrators pledged to work together to 

promote use of green infrastructure in stormwater and sewer overflow control programs.15 NRDC’s 2006 report, Rooftops to Rivers, reported on the green infrastructure strategies already employed by forward-thinking communities across the U.S. 

that are already stretching wastewater infrastructure investments to achieve more 

by focusing on multi-benefit approaches, by leveraging private as well as public investment, and by weaving green infrastructure controls into a broad range of ongoing municipal activities, such as repair and rehabilitation of roads. Green infrastructure approaches can achieve cleaner bodies of water, a greener environment, and 

better quality of life. 

FUND EXISTING NEEDS, NOT SPRAWL

Better targeting of SRF funds not only means funding new types of projects that 

provide enhanced results, it also means discontinuing funding for projects that 

cause environmental degradation. Despite the fact that subsidizing new sewer lines 

and excess capacity often fuels development that makes pollution worse in the long 

run, a substantial amount of SRF funding (and earmarks) goes to funding these 

projects every year. Development significantly increases runoff volume and velocity, 

decreases water quality, and reduces groundwater discharge. The more pavement, 

the more pollution—that is extremely well documented by now—included in multiple reports by U.S. EPA.16 Yet, the SRF still funds new collection systems, new 

treatment plants, and excess capacity—all of which can fuel greenfield development. 

According to EPA’s 2006 report, about 19 percent of the SRF was used to fund ‘‘new 

sewers.’’17 Given its adverse water quality impacts, development must pay for 

itself—it should not be subsidized by the American taxpayer—and should particularly not be paid for out of the very limited federal funding available to protect 

water resources. 

SUBSTANTIALLY INCREASE FUNDING FOR RESEARCH AND DEVELOPMENT

While green infrastructure approaches already have demonstrated performance 

results in some cities, most of the data is site specific and needs to be scaled up 

in order to be used at the watershed or subwatershed scale to achieve regulatory 

objectives, such as combined sewer overflow reduction, total maximum daily load 

implementation, streambank stabilization, drinking water source protection, and 

municipal stormwater compliance. Clarifying that green infrastructure projects are 

eligible for SRF funding is not sufficient. NRDC supports creation of a dedicated 

fund for wastewater infrastructure research needs, including those for green infrastructure technology development and transfer. For green infrastructure, those 

needs include work to further develop green infrastructure models and integrate 

them into existing watershed models, sewer system models, and even global warming and air quality models. We also need to help those communities that are pioneering green infrastructure approaches to perform multi-media monitoring of the 
57 

results that can then be compared with model projections and with results obtained 

from hard infrastructure investments. This is the kind of research expense that we 

cannot expect cities to fund solely on their own. 

Broader research and development funding is required as well. Public and private 

investment in research and development in wastewater technologies has shrunk significantly since the 1970s. The U.S. is falling behind in terms of its ability to compete with those overseas for developing and marketing innovative wastewater treatment technologies. The American taxpayer is also denied the environmental and financial benefits of employing improved technologies. Instead of developing and implementing new approaches that will ensure improved protection of resources for the 

future, we continue to argue about whether our waterways need to be safe for swimming, drinking, and aquatic habitat. Instead, we need to focus on developing the approaches that will ensure their safety, and we need to begin to look at those questions in a holistic way through integrated water resource planning. I look forward 

to working with you to ensure that Senate legislation not only improves funding for 

existing wastewater needs, but also puts in place funding for long range investments so that Americans will have enough clean, safe water for decades to come. 

Thank you for providing me with the opportunity to testify today. I look forward 

to working with you to address these issues in your reauthorization bill. I would 

be happy to answer any questions you may have. 
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62 
63 
64 
65 
66 
67 
68 
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1 In Hot Water, pp. 4–16; see also id. at 12 (‘‘The USGS modeled the effects of climate change 

on increased storm intensity and found that the risk of a 100-year flood event will grow larger 

in the 21st century. Instead of a 1 percent chance that in any year there will be a 100-year 

flood event, the likelihood in a single year could become as high as one in seventeen.’’). 2For a report exploring the very significant linkage between water and energy, see http:// 

www.nrdc.org/water/conservation/edrain/contents.asp. 

RESPONSES BY NANCY K. STONER TO ADDITIONAL QUESTIONS FROM SENATOR BOXER

Question 1. In your testimony, you discuss prioritizing projects eligible for funding 

under the SRF. Can you discuss who you would recommend do the prioritization 

and what criteria you would recommend for determining policy? 

Response. Prioritization should be done by the state through a very public process 

with multiple opportunities for outside stakeholder participation, not just a formal 

comment on the draft intended use plan. Priorities should include projects that provide the most environmental benefit for dollar spent, projects that would address 

needs of underserved and disadvantaged communities, and projects that would contribute significantly to water resource infrastructure research needs. Specific priority, and more favorable loan terms, should be given to projects that use green infrastructure to reduce sewer overflows or stormwater pollution and projects that implement integrated water resource management. The SRF should not be used to pay 

for construction of new sewage treatment plants or new collection systems. 

Question 2. One of this committee’s top priorities is combating global warming. 

Indeed, the effects of global warming are profound and will impact snow pack melt, 

rivers and other waterways. This will put more of a strain on our nation’s already 

strained wastewater infrastructure. How can the SRF program help communities 

plan for the upcoming effects of global warming on their infrastructure? 

Response. Global warming is anticipated to have adverse effects on available 

freshwater resources. For example, as NRDC recently reported, experts project that 

global warming will decrease snowpack in the West, reduce water supplies, increase 

the magnitude and frequency of floods and droughts, and degrade aquatic habitat 

by reducing stream flows and increasing the temperature of waterways.1 As stewards of one of the most valuable and scarce resources, water, Congress can lead the 

response to ongoing climate changes and help stave off further damage. The most 

important step that Congress can take, of course, is to address global warming directly by enacting the Climate Security Act; however, there are also a number of 

steps that Congress can take to mitigate the adverse effects of climate change on 

water resources. Below we include only those that we would encourage Congress to 

include in wastewater funding legislation: • Provide funding for state and local water and wastewater agencies to work together to perform vulnerability analyses addressing the impacts of climate change 

on existing flood management and water storage facilities and systems. This analysis should include changes in surface runoff, riverine hydrology, changes in watershed characteristics, sea level rise, etc. 

• Provide funding for state and local water and wastewater agencies to integrate 

climate issues into ongoing planning (e.g. flood management, levee construction, 

flood conveyance and surface storage projects), operations, funding and regulatory 

work (e.g. sewer overflows, stormwater controls, total maximum daily loads, wetlands protection). 

• Provide funding for state and local water and wastewater agencies to evaluate 

the energy-related impacts of water management decisions and the water resource 

implications of energy choices, to save both water and energy and reduce their contribution to global warming.2

• Provide funding for state and local water and wastewater agencies to analyze 

the water quality impacts of climate change. Three of the primary mechanisms are 

increases in runoff and infiltration from higher peak rain events, lower summer surface and groundwater flows (thus concentrating pollutants and depleting available 

water supplies) and higher temperatures (reducing species diversity and increasing 

the need for trees, stream buffers, and other means of cooling waterways and the 

discharges into them). 

• Provide funding for state and local water and wastewater agencies to evaluate 

surface storage re-operation opportunities—combined with explorations of potential 

increases in downstream floodways. 

• Provide funding for state and local water and wastewater agencies to encourage 

integrated water resource management—analysis of long-term trends in needs and 

uses of water resources for the next 50 to 100 years in light of global warming and 

steps to maximize the availability of those resources for human and ecological 

needs. 
70 

• Provide funding for state and local water and wastewater agencies to analyze 

100yr floodplain designations to provide for increases in the size, frequency, and 

timing of peak flows related to future climate change. • Provide incentives in the SRF funding structure for protection of existing green 

infrastructure, such as for wetlands, headwaters, and forests, and for retrofitting 

the built environment with green roofs, rain gardens, tree boxes, vegetative planters, vegetated swales, and other green infrastructure because of the climate change 

protection and surface temperature reduction they provide along with their other 

benefits. 

Question 3. In addition to the direct impacts of untreated wastewater on human 

health, there are other considerable impacts on our nation’s fish and wildlife. A part 

of America’s natural heritage, fish and wildlife also contribute greatly to our nation’s ‘‘recreation economy.’’ What are the impacts of untreated wastewater on wildlife and how do the SRF programs help address these problems? 

Response. Discharges of sewage into waterways have a number of adverse impacts 

on fish, shellfish, and other aquatic wildlife populations, including removing the oxygen they need to sustain life, smothering or blocking light to the plants that they 

eat, fueling algal blooms that contain toxins that cause disease, altering their hormonal balance, and changing the balance of species within a water body so as to 

be detrimental to some. 

Many of the pollutants found in sewage discharges are not adequately treated by 

the existing wastewater treatment system. For example, sewage effluent contains 

several dozen chemicals—both natural and man-made—that can alter animal hormones. Endocrine disruptors, which mimic hormones, are found in pharmaceuticals, 

industrial chemicals, pesticides, and a number of household compounds. Excessive 

amounts of estrogens or estrogen mimics can feminize fish or create so-called 

intersex animals with both male and female genitals, such as a male fish with eggs. 

Scientists have shown that some fish with the altered organs are infertile. Sewage 

treatment plants are not designed to remove estrogen mimicking chemicals. http:// 

www.environmentalhealthnews.org/newscience/2007/2007-1008labadieetal.html 

In addition, most sewage treatment plants fail to remove nutrient pollution even 

though technologies to do so are available. Secondary treatment standards, which 

have not been updated since 1984, were based on technology from the early 20th 

century and focus primarily on removal of sediments and oxygen-demanding substances. Dorfman, Swimming in Sewage, pp. 15–16 (NRDC, 2004). 

The SRF should provide additional funding for advanced wastewater treatment 

approaches to remove excessive nutrients from wastewater. It should also provide 

grant funding for research necessary to develop technologies for removal of endocrine disruptors and safer substitutes for endocrine disrupting chemicals that end 

up in our sewers. 

RESPONSES BY NANCY K. STONER TO ADDITIONAL QUESTIONS FROM

SENATOR LAUTENBERG

Question 1. What incentives or other legislative approaches could be used by Congress to encourage the use of green infrastructure to meet wastewater and 

stormwater management needs, as well as improve water quality? 

Response. There should be both grant funding and incentives within the SRF 

funding for green infrastructure projects. Grant funding should apply to the research components of green infrastructure projects, such as development of models 

and monitoring for the multimedia environmental and community and economic 

benefits that they provide. There should be more favorable loan terms, funded 

through additional subsidization, and priority given to green infrastructure projects 

in the SRF program because of their broader environmental benefits. 

Question 2. Please elaborate on your testimony on the cost effective of green infrastructure. 

Response. There are several different ways in which green infrastructure projects 

are more cost effective than other means of controlling stormwater and combined 

sewer overflows. For new development and redevelopment, the cost of using green 

infrastructure or low impact development techniques often saves money directly for 

the developer because it is cheaper to install than the stormwater pipes and ponds 

that it replaces. It often also produces a premium in terms of sales price for homes 

and the speed at which they are sold. This is all quite well documented at this point 

in numerous publications, including U.S. EPA, Economic Benefits of Urban Runoff 

Controls (Sept. 1995) (new development case studies), available at http:// 

www.epa.gov/OWOW/nps/runoff.html; U.S. HUD and Partnership for Advancing 

Technology in Housing, The Practice of Low Impact Development (July 2003), 
71 

www.huduser.org (‘‘[Use of LID has] resulted in rapid home sales, enhanced community marketability, and higher-than-average lot yields.’’); Aponte-Clarke, et al, 

‘‘Stormwater Strategies: The Economic Advantage, Stormwater Magazine, available 

at https://www.forester.net/swl—0101stormwater.html. 

In already developed areas, green infrastructure retrofits are most likely to pay 

for themselves directly in terms of cost savings for the building owner when they 

are integrated into an existing need for rehabilitation. For example, while it may 

not be cost effective for a building owner merely to install a green roof on an existing building, if the roof needs replacement anyway, the cost differential is such that 

payback from the insulating value of the green roof, which reduces energy costs, and 

the reduction in stormwater utility fees often cover the additional cost. Great Lakes 

Wisconsin Aquatic Technology and Environmental Research Institute Green Roof 

Project website, http://www.glwi.uwm.edu/research/genomics/ecoli/greenroof/ 

roofinstall.php. 

Another perspective from which to evaluate costs is that of the city, county, or 

stormwater and wastewater utility. From this perspective, green infrastructure is 

often more cost effective for several reasons. First, per gallon of combined sewer 

overflow reduced or stormwater retained, it is often less expensive than surface reservoirs, tanks, or underground storage tunnels, which are not only very expensive, 

but also very difficult to fund because the public never sees them or knows that they 

are there. Second, the cost of construction and maintenance for those centralized, 

hard infrastructure approaches are borne almost entirely by the utility through the 

rates it charges its customers. On the other hand, green infrastructure is often installed and maintained by private entities, sometimes at no cost, but usually at 

least at a reduced cost, to the utility though the use of stormwater or wastewater 

fee rebates, credits, or offsets. In this way, communities can leverage private investment in tasks that would otherwise be borne entirely by the utility. Third, green 

infrastructure provides a whole host of non-water quality benefits that improve the 

cost/benefit ratio, such as improved air quality, peak temperature reduction, wildlife 

habitat, expanded green space, restored degraded urban lands, increased real estate 

values, capture of global warming pollution, reduced heat deaths, conserved water 

and energy, controlled floods, improved aesthetics, enhanced recreational opportunities, etc. Thus, per dollar spent, green infrastructure is a very good deal. Kloss, et 

al, Rooftops to Rivers (NRDC, 2006). The Center for Neighborhood Technology has 

developed a green infrastructure calculator that is available to the public free of 

charge on its website and can be used to estimate the costs and benefits of a variety 

of green infrastructure approaches. http://greenvalues.cnt.org/calculator 

RESPONSES BY NANCY K. STONER TO ADDITIONAL QUESTIONS FROM SENATOR CARDIN

Question 1. In your view, what pilot projects or research efforts still need to take 

place to demonstrate the full range of effectiveness of these green infrastructure 

strategies? 

Response. There is a growing body of literature demonstrating the positive environmental results attainable through the use of green infrastructure for stormwater 

and sewer overflow controls, but there is a lot of work that still needs to be done, 

particularly to aggregate the environmental benefits over a neighborhood, 

sewershed, or subwatershed. EPA has organized a research forum for Jan. 17–18, 

2008, to develop an action plan for: 

• (1) evaluating water quality and water quantity performances of management 

practices, including standardizing protocols for those evaluations; 

• (2) improving the capacity/ability of standard models and modeling approaches 

to provide reasonable estimates of management practices performance for predictive 

and design purposes; 

• (3) evaluating economic costs of green infrastructure technologies, including 

comparisons to more traditional wet weather management approaches. 

NRDC agrees with those research needs, but would suggest a few others for research and demonstration projects on a neighborhood, subwatershed or sewershed, 

or other community-wide level including: 

• reduction in peak summertime temperatures and associated anticipated reduction in energy savings, impacts on global warming, stream temperatures, etc. 

• reduction in ground level air pollution and carbon capture from widespread use 

of green infrastructure in a community or specific neighborhood 

• quantitative analysis of enhancement of groundwater and surface water resources, including base flow, and associated cost savings 

• reduction in stream scouring and erosion and associated water quality benefits 

and habitat benefits 
72 

• reduction in flooding, basement backups, and sewer overflows and associated 

environmental and economic benefits 

• increase in property values, including sales prices, marketability, rental value, 

and other location sensitive changes, such as hotel room rate, associated with use 

of green infrastructure on the property and within view 

• number and value of jobs created through use of green infrastructure 

• increase in various measures of community cohesiveness and empowerment, 

such as reduction in violence, reduction in crimes, reduced teen pregnancy rates, reduced dropout rate, etc. 

Question 2. Can you provide the Committee with some examples of successful, 

cost-effective projects that have demonstrated the benefits of green infrastructure 

projects? 

Response. NRDC’s report, Rooftops to Rivers (July 2006) contains a number of 

case studies from the U.S. and Canada that may interest you. Subsequent to its 

publication, the Riverkeeper in New York City, issued a report, Sustainable Raindrops, based on a study that it commissioned that found that if instead of spending 

$2.1 billion on additional underground storage tunnels, NY city were instead to 

spend those funds on green infrastructure, it could capture 2.1 billion gallons more 

stormwater, save $1.4 million per year in avoided stormwater treatment costs, remove 60 tons of air pollution and 340 tons of carbon dioxide as opposed to adding 

6,481 tons of carbon dioxide and 37.8 tons of other air pollutants associated with 

water treatment, save $67 million per year in energy savings, and increase property 

values between 3 percent and 20 percent. Plumb, Mike, Sustainable Raindrops 

(2006), http://riverkeeper.org/special/SustainablelRaindropslFINALl2007–03– 

15.pdf. 

In addition, EPA has prepared a new report, Reducing Stormwater Costs through 

Low Impact Development (LID) Strategies and Practices, for which NRDC served as 

a peer reviewer. NRDC has prepared a chart outlining a number of the case studies 

from that report below. 

No. Site Cost Savings Notes 

1 ......... 2nd Avenue SEA Street, Seattle, WA1.

$217, 255 (25%) ..... Ninety-nine percent reduction in runoff. No runoff since 

December 2002. 

2 ......... Auburn Hills, Southwestern 

WI.

$761,396 million 

(32%).

Forty percent of development saved as open space. 

3 ......... Bellingham City Hall Retrofit, WA.$22,000 (80%) ......... Used rain gardens instead of underground vault to capture parking lot runoff 

4 ......... Bellingham Bloedel Donovan 

Park Retrofit, WA.

$40,000 (76%) ......... Used rain gardens instead of underground vault to capture parking lot runoff 

5 ......... Gap Creek, Sherwood, AR .... $678,500 (15%) ....... Over 20 acres preserved as open space. Developer saved 

$4,800 per lot to develop and sold each lot for an additional $3,000, resulting in $2.2 million in additional 

profit. 

6 ......... Garden Valley, WA ................ $63,700 (20%) ......... Reduced road width, used some pervious paving, and 

used swales and bioretention with soil amendments 

7 ......... Kensington Estates, WA ....... $89,400 (12%) ......... Study projected use of LID to eliminate need for detention pond and make more lots available for development 

8 ......... Laurel Springs, Jackson, WI $504,469 (30%) ....... Conservation design with bioretention and vegetated 

swales 

9 ......... Mill Creek, Kane County, IL $3,411 per lot (27%) Cluster development with about 40% of the site saved 

as open space. In addition to cost savings, lots adjacent to open space sold at a premium. 

10 ....... Poplar Street Apts, NC ......... $175,000 (72%) ....... Conventional storm drains replaced with bioretention, depressions, grass channels, swales, and stormwater 

basins in 270-unit building 

11 ....... Portland Downspout Disconnection Program, OR.$241.5 million .......... Downspout disconnection program costing $8.5 million is 

expected to save $250 million in avoided costs for underground pipe to store CSOs 

12 ....... Prairie Glen, Germantown, 

WI.

$405,312 (40%) ....... Nearly 60% of the site saved as open space. 

13 ....... Somerset, MD ....................... $785,382 (32%) ....... In ground test found LID to compare favorably on both 

costs and environmental results to conventional design 
73 

No. Site Cost Savings Notes 

14 ....... Tellabs Corporate Campus, 

IL.

$461,510 (15%) ....... Open space design for office complex saves not only initial construction costs but also maintenance costs 

Source: U.S. EPA, Reducing Stormwater Costs through Low Impact Development (LID) Strategies and Practices (Sept. 2007), soon to be available at www.epa.gov/nps/lid 

Senator LAUTENBERG. Thank you all very much for your testimony. I think each of you was here during the EPA testimony. 

By the way, for my fellow subcommittee members, the fact is 

that we went from a relatively tiny community in Louisiana to Los 

Angeles, so we covered the scope. 

I didn’t hear either of you saying that things were hunky-dory 

and not to worry about them. 

What can be the response to the acceptance by EPA of the President’s budget as presented by Mr. Grumbles as being OK, cutting 

the funding approximately in half, that we manage to work our 

way through because of the other ways that we have of attending 

to the water quality problem? Anybody make sense of that? I 

shouldn’t say that. Anybody understand that fully? 

Mr. WESTHOFF. Well, Senator, I can tell you that, on behalf of 

NACWA and certainly the city of Los Angeles, we think it is going 

in the wrong direction. The needs of all segments of infrastructure 

in this country need money, and we need money from the Federal 

Government, States, and local. So we think it is going in the wrong 

direction to be cutting, at this point in time, the money that would 

go into the State Revolving Fund. 

Senator LAUTENBERG. Mayor Palmer, what do you and your colleagues or mayors across the country think about a 50 percent cut 

in the State Revolving Fund might do to them? 

Mr. PALMER. Not to be political, but Senator Voinovich said this, 

and it is a question of residents in my city of Trenton, NJ and residents all across this Nation are saying, you know, my mom always 

told me to take care of home first. If your house isn’t clean, you 

can’t go and try and clean somebody else’s up. If we are spending 

billions of dollars in infrastructure over in Iraq—which I am not 

saying we shouldn’t do; we should—we have to take care of our 

own infrastructure here, whether it is water, wastewater, whether 

it is bridges. 

We have seen what has happened in Minneapolis. We saw the 

water main break, steam pipe burst in New York City. Quite frankly, our infrastructure, whether it is water or whether it is bridges, 

is falling apart, and we recognize that. We are not just throwing 

money at a problem, but we are investing in America’s future, because if we don’t have roads that can take us back and forth, our 

businesses are going to be suffer, we are not going to be globally 

competitive. If we don’t have clean water to drink, the same for us 

there as well. 

So I think that we have to look at this as investments. I think 

that cities have had you-go approaches and other things, while 

using the State Revolving Fund as well. But we don’t have time to 

debate it or work on it; we have to get the job done, and we use 

whatever resources we have. But we are saying that we need to in-
74 

vest more so that America can be stronger and globally competitive. 

Senator LAUTENBERG. The idea that lies behind the State Revolving Fund is a pretty good one. The only thing is that it has to keep 

up to the volume of need that occurs as the country grows and as 

the systems that are in place show the wear and tear that one 

would expect. So is it possible that the communities, the cities can 

finance their own wastewater treatment, that the citizens in these 

cities can afford to do the price costing that is called for without 

an expansion of the State Revolving Fund? Anybody think that? 

Mr. FREEMAN. Senator, the full cost approach, as presented and 

things, such as in Oklahoma—first, let me say on behalf of Oklahoma and the Council of Infrastructure Financing Authorities, we 

are not hearing anyone who says the dollar amount should be cut. 

It should be increased. So I would like to State that. 

On the full cost pricing, such as in Oklahoma—and it is the same 

in many other States, and those who have been mayors know 

that—there is more than one way to finance a project. In Oklahoma, for instance, in most of the communities, most of the loans 

we make are not just totally secured by repayment from water and 

sewer rates; there are also other techniques that cities use to pay 

their loans, sales tax proceeds, things of that nature. So we think 

that EPA needs to look at those type of avenues for repayment. 

In Oklahoma we also see, because of the cuts and things, we 

have been fortunate enough to partner with other funding sources. 

Just this last week we worked on a very important project that was 

in the Illinois River Watershed, where we were using rural development funds with loans and grants, SRF funding, State funding. 

It really took a lot of work to get it done, but it was a push, and 

without the SRF, it couldn’t have been done. 

Senator LAUTENBERG. So now that you’ve kind of squeezed much 

of the water out of the sponge, is there any room left for additional 

projects? 

Mr. FREEMAN. It is getting tighter and tighter, sir. 

Senator LAUTENBERG. Yes. 

Mr. FREEMAN. If I could, Senator, that is why it is important to 

know and I was glad to hear the Administration saying this, because the Conference of Mayors have bene pushing and the Mayors 

Water Council have been pushing to remove the volume cap for 

Private Activity Bonds for water and wastewater infrastructure as 

one tool in terms of helping our aging infrastructure, and that is 

one tool. There is no cookie-cutter approach, there are different 

mechanisms, but the more flexibility that we can have and the less 

mandates we can have, the better cities and our infrastructure will 

be. 

Senator LAUTENBERG. But I think it all boils down, doesn’t it, 

Mayor, to the fact that you can’t simply pass off these funds to the 

citizenry without, Mr. Freeman, with what you just said, calls for 

an increase in revenues from other sources. Well, that sounds like 

taxes to me. Call it what you will. The fact is in this place, where 

there is constant railing against asking the Nation to pay more for 

the things that it owes the population—and the war is one glaring 

example—but there is no free lunch and you can’t get it done without asking for more money from the citizens. If the Federal Gov-
75 

ernment can’t find it in its revenue stream, then we have a serious 

problem. But the notion that we could cut in half the Revolving 

Fund is almost, if I might say, insulting. 

Mr. Brasseaux, I was thinking, as I listened to your testimony, 

it was very vivid. You talked about 7,100 residents, if I am not mistaken. Is that the right size? 

Mr. BRASSEAUX. It is 2,100. 

Senator LAUTENBERG. Twenty-one hundred. 

Mr. BRASSEAUX. You are correct, it’s 2,100 homes. 

Senator LAUTENBERG. That’s what I thought. 

Mr. BRASSEAUX. We have had a tremendous growth, but we continue to raise our utility rates. Our problem—and I am sure it is 

not only in South Louisiana, but across much of the South, at 

least—we have a large population of low income families, and every 

time you raise a utility rate by $1, it is really affecting a lot of people. 

Senator LAUTENBERG. I am sure it does. Well, it highlights the 

problem. 

Ms. Stoner, thanks for your presentation, it was excellent. You 

know, I had a meeting with my staff before the hearing, and we 

talked about the green approach to things, the green infrastructure, and was wondering what happens when you try to grow vegetation up on your roof; who takes care of that. Well, what we saw 

was wonderful examples in yours of cities that have done it and it 

is hard to believe, but nature will treat its own ills, given the 

chance to do it. But if you take away one part, one element of the 

total ecology, then the rest pays for it. 

So we thank you for the commentary that each of you offered. I 

am going to call on Senator Vitter, but would also remind everybody that the record will be kept open and questions will be submitted to you in writing and would ask that you respond as 

promptly as you can. 

Senator Vitter. 

Senator VITTER. Thank you, Mr. Chairman. 

Mayor Brasseaux, thank you again for your leadership and for 

being here. In your testimony, which was very compelling, you 

talked about how, in a significant project in Carencro, you basically 

abandoned trying to fool with the State and Federal Government 

in terms of the Revolving Loan Fund because of the bureaucratic 

obstacles and red tape and paperwork. Could you talk about that 

a little bit and what specific steps are necessary to change that situation so it is much less of a burden, particularly for smaller communities? 

Mr. BRASSEAUX. Well, Senator Vitter, it goes back about 3 years 

ago, and at the time I was a part-time mayor and relied a lot on 

an engineering firm to kind of guide me. They looked at it, the Revolving Loan Fund, for a good while and I met with some State 

people, and when it was all said and done, the recommendation 

from our engineer and other consulting engineer was that we are 

not going to mess with it, it is just too much red tape. I didn’t get 

into the details of that, I just went on their recommendation. 

But I am also a vice president with the Louisiana Municipal Association, and I hear that across the State, that, based on things 
76 

that they have heard and some past experiences, they won’t even 

go in there and really try anymore. 

Senator VITTER. Well, I would really welcome any very specific 

ideas about cutting through that red tape and making it much 

more attractive to local communities. Maybe you can work through 

the Rural Water Association, the Municipal Association, anything 

else like that to give us—and from my perspective, the more specific the better about how we change that application and of a process. I look forward to that. 

Also, you know, one pretty unique Louisiana experience you 

touched on in the last couple years because of the hurricanes is an 

enormous population growth overnight in some communities because of displacement from other areas for the hurricanes. Maybe 

you can touch on that a little bit, because I think—I don’t think; 

I know in Louisiana that is a huge phenomenon that impacts all 

sorts of infrastructure in communities like yours, which is on the 

receiving end of that. 

Mr. BRASSEAUX. Well, Senator, I would say our community has 

grown by at least 1,000 to 1,500 residents since the hurricanes. 

One of the reasons they are coming toward us is we are north of 

InterState 10, and because of insurance problems, having trouble 

getting insurance, they want to move a little further inland, away 

from the coastline. I guess we are about not quite an hour from the 

coast; mainly, we get winds. 

But our infrastructure is suffering because of new subdivisions 

that are popping up. Right now we have, I would say, in the planning stages or have started construction, 800 new residential lots, 

not counting probably, the last couple of years, 400 that have been 

actually homes built on it. Our problem is it is in our city limits 

and just running the lines, the infrastructure to try to meet those 

needs, it is a tremendous burden on us. 

Senator VITTER. I want to underscore something. That 1,000 residents, virtually overnight, to a community your size is a huge percentage growth overnight. Again, that is pretty unique to the hurricane experience, and I hope that we can make sure that the Federal programs recognize that enormous overnight growth, because 

that is very unusual. They probably aren’t set up to recognize that 

very quickly. 

Then, in closing on my time, Ms. Stoner, I was very interested 

in your presentation, including the green infrastructure. I know 

that carries a lot of different things, but if you could generalize in 

terms of where that technology sits today, how does that cost compare to handling the same amount of water through more conventional needs and, in terms of policy, how should we compare it? In 

other words, if it is more expensive, should we not move ahead 

with it? How should we compare it in terms of cost? I assume, over 

time, that cost will come down. 

Ms. STONER. I appreciate that question. First of all, it is a lot of 

different types of approaches, some which can be used in urban 

areas, suburban areas, rural areas. There are actually different 

green infrastructure techniques that can be used all across the 

landscape. 

As far as the costs go, one of the benefits that you get from green 

infrastructure is the ability to leverage private investment, so you 
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have to look at the costs in a little bit different way. Instead of having the utility own, construct, and maintain all of the infrastructure itself, one of the benefits of green infrastructure is that you 

set up incentives to get landowners, property owners to have really 

part of what turns out to be the wastewater infrastructure on their 

property itself. 

As Senator Lautenberg mentioned, one of these things is green 

roofs, so that the building owner gets, say, an incentive, a credit 

on water and sewer fee or on the stormwater fee every month. 

They are actually retaining the stormwater onsite. They do use 

very low maintenance types of plants, sedum and other kinds of 

desert plants that can bake in the sun every day and don’t need 

to be watered. But the maintenance that is required is then done 

by the building owner. When you look at it altogether, in terms of 

what the costs are for the utility and what the benefits are, the 

multimedia benefits that include air pollution, global warming, the 

rate comes out very favorable comparison for most communities. 

I think that we are currently generating those numbers across 

the country, looking at widespread application of green infrastructure and what we can expect to see in terms of sewershed and watershed reductions, and what the costs are. But often they come out 

so that the green infrastructure is actually very affordable and 

often cost-effective for communities, which is one of the reasons 

why it is so widely supported by so many different groups. 

Senator VITTER. Thank you. 

Senator LAUTENBERG. I want to put a question to you, Mayor 

Palmer, Mr. Freeman and Mr. Westhoff, because each of you has 

significant organizational affiliations. Are you aware in your organizations, Mayor Palmer, in the Conference of Mayors, how many 

communities would reject use of the State Revolving Fund because 

there is red tape attached? Or, Mr. Freeman, do you know from 

your organization? 

Mr. FREEMAN. The actual statistic answer to that, no, sir. We can 

find the answer out to that. I can speak on behalf of Oklahoma. 

As I mentioned in my testimony, we have been very fortunate in 

that we have been able to provide approximately 65 percent of the 

financing to communities for wastewater through Clean Water 

State Revolving Fund loan program. 

Senator LAUTENBERG. Sixty-five percent. 

Mr. FREEMAN. Yes, sir, State Revolving. 

Mr. WESTHOFF. Senator, I can honestly tell you, and to followup 

on actually the question that Senator Vitter placed, the problems 

with red tape are not limited to small agencies. I can tell you that 

the city of Los Angeles has, in the past, decided not to participate 

at various times because of the red tape. 

I think what happened when we transitioned from the Construction Grant program over to the SRF, they took all of the baggage, 

and I can tell you that the Clean Water Grant program was burdened with a lot of details and a lot of followup and a lot of postconstruction audit problems that existed. Ten years, maybe, after 

the project was already built, they were coming in, asking you to 

provide justification. So that baggage sort of followed the SRF. 

Senator LAUTENBERG. Does it eliminate the value of the Fund? 
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Mr. WESTHOFF. Senator, I don’t think it eliminates it, because I 

can tell you there are many organizations or many members of our 

organization, of NACWA, who take advantage of the SRF. But for 

the city of Los Angeles, as a large agency, a decision was made that 

it was easier for us to go out into the private investment market 

because of a high bond rating and seek investment, rather than 

utilizing a large amount of the SRF. We have used some SRF 

money, but there is a lot of red tape and, in our minds, a lot of 

unnecessary red tape. 

So second to increasing the amount of money in the SRF, the 

next most important thing would be to reduce the amount of red 

tape and make it easier for municipalities. 

Senator LAUTENBERG. We can always agree that we ought to 

minimize red tape. 

When you have questions that involve transfers of huge sums of 

money, when the competition for those funds is so keen that everybody is trying to get their hands in the largesse, you are going to 

have some red tape. We have heard complaints over the years that 

the IRS forms too much red tape. Well, at some point living has 

its difficulties, and you have to obey the rules, whether it is as simple as red lights or red tape. 

Mayor, do you have—— 

Mr. PALMER. Mr. Chairman, we just wanted to make sure. We 

did a survey of 440 cities, and 15 percent said they would not use 

the SRF program because of the red tape. 

Senator LAUTENBERG. And 85 percent were happy to take it, red 

tape and all? 

Mr. PALMER. Well, some of the larger cities don’t have to, but 

some of the smaller cities need it as well, but it is a combination. 

Senator LAUTENBERG. Well, the public is paying a terrific price 

and, again, I use the reference to drinking water, running somewhere between $50 billion and $100 billion a year spent on buying 

water in a container. So we passed along that cost. 

When I was a kid—and I don’t want to tell you about age because it is a sensitive subject with me, but the fact is we went to 

the tap and whatever you needed came from the tap. 

So we have abused the system either innocently by growth, by 

expansion, now by—Mr. Freeman, I was happy to listen to your recount of what the excessive rainfall, et cetera, does and the burdens it places on the communities to fight harder to be able to treat 

their wastewater easily. So things have changed and they will continue to change, but I haven’t heard anybody solute the need to cut 

the funding in half for the State Revolving Fund. 

With that, I thank each of you. Your testimony today was especially significant because usually when we get the panels, there is 

a certain pandering to the committee and the Senate and so forth, 

but here, I would say, for the most part you said it like it was, and 

I am happy to hear that. 

Just as a formality here, I ask unanimous consent that the written statements from the following organizations be included in the 

record of today, and that is the Clean Water Construction Coalition, the American Society of Civil Engineers, National Association 

of Water Companies, Great Lakes and St. Lawrence Cities Initiative, National Utility Contractors Association. 
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[The referenced information follows:] 
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Senator LAUTENBERG. With that, once again, my thanks. This 

hearing is adjourned. 

[Whereupon, at 12:14 p.m., the committee was adjourned.] 

[Additional statements submitted for the record follow.] 

STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM THE

STATE OF MARYLAND

Mr. Chairman: Thank you for holding this hearing today. 

We have a number of important witnesses to hear from, so I will keep my opening 

statement brief. 

This hearing is especially timely. Earlier this week the Chesapeake Bay Foundation released its report entitled ‘‘Bad Waters: Dead Zones, Algal Blooms, and Fish 

Kills in the Chesapeake Bay Region in 2007.’’ This disturbing report details the 

many problems that are associated with excess nitrogen and phosphorus that finds 

its way into the Chesapeake Watershed annually. The report also takes note of the 

numerous beach closures that hit the Chesapeake region in 2007, most of which result from faulty treatment of sewage waste. 

Mr. Chairman, about 20 percent of the excess nitrogen and phosphorus that pollutes the Bay comes from wastewater treatment plants. And virtually 100 percent 

of the Maryland beach closures on the Bay are the result of failing sewage treatment facilities. 

These startling statistics about the Chesapeake Bay are not unique to our part 

of the country. Coastal ‘dead zones,’ where too little dissolved oxygen exists for fish 

and other aquatic species to survive, are a tragic and all too common phenomenon 

from your own Barnegat Inlet in New Jersey to the Hood Canal in Washington 

State. 

We will hear testimony today about the major health effects that are associated 

with improperly treated sewage. Coupled with the ecological devastation that I have 

outlined, these problems will continue to grow until we take a much more aggressive approach to the aging and often failing wastewater treatment plants in America. 

The total cost associated with meeting wastewater infrastructure needs that the 

states have already inventoried amounts to hundreds of billions of dollars. When 

drinking water infrastructure is added to the calculation, the total approaches $1 

trillion in water infrastructure needs over the next 20 years. 

In the Chesapeake region, the states have identified more than 450 wastewater 

facilities that require state-of-the-art treatment to remove excess nutrients from 

their effluent. The total price tag for these upgrades is in the neighborhood of $6 

billion. 

In Maryland alone the cost of this advanced level of treatment is estimated at 

$2.2 billion. And that does not include other pressing costs: 

• $850 million for secondary treatment 

• $164 million to correct Inflow and Infiltration problems, 

• $868 million for sewer replacement and repairs, 

• $960 million for new sewer interceptors and collectors, 

• $430 million to repair Combined Sewer Overflows, 

• $431 million for Stormwater controls, and 

• $247 million for other non-point source pollution controls. 

Maryland’s bill tops $6.1 billion in identified wastewater treatment needs. 

During today’s hearing we will learn about some innovative efforts to address this 

funding shortfall. Clearly a major new investment of federal dollars will need to be 

part of this effort. Water efficiency programs will play a major role, and so will innovative financing tools. But I want to express my hope that we will also focus a considerable portion of our attention on the use of ‘‘green infrastructure’’ to reduce 

stormwater runoff. 

Green infrastructure takes advantage of the natural filtering and water capture 

capacity of natural landscapes to reduce the amount of stormwater that is such a 

huge part of the pollution problem facing America’s waters. 

These efforts have multiple benefits beyond their amazing water quality benefits. 

Trees, for example, can be used to intercept stormwater before it enters collection 

systems. They also filter air pollutants from our skies, and lower the ‘‘heat island’’ 

effect that we see in major urban areas. And these Green Infrastructure investments are often dramatically less expensive than traditional concrete and mortar 

treatment facilities. 

Clearly, the Nation is facing a wastewater infrastructure crisis. The Clean Water 

Act promised America swimmable, fishable, drinkable water more than a generation 
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ago. In spite of major investments and consistent efforts, that is a promise that has 

not been realized. An earlier generation of investments has now reached its engineered lifetime. We need a new investment in America’s aging infrastructure. I 

trust that today’s hearing will start us on that path. 

Thank you, Mr. Chairman. 
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