[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
H.R. ___, DRINKING WATER SYSTEM IMPROVEMENT ACT AND RELATED ISSUES OF
FUNDING, MANAGEMENT, AND COMPLIANCE ASSISTANCE UNDER THE SAFE DRINKING
WATER ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 19, 2017
__________
Serial No. 115-33
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
__________
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COMMITTEE ON ENERGY AND COMMERCE
GREG WALDEN, Oregon
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
FRED UPTON, Michigan BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
BILLY LONG, Missouri KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
BILL FLORES, Texas Massachusetts
SUSAN W. BROOKS, Indiana TONY CARDENAS, CaliforniaL RUIZ,
MARKWAYNE MULLIN, Oklahoma California
RICHARD HUDSON, North Carolina SCOTT H. PETERS, California
CHRIS COLLINS, New York DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
Subcommittee on Environment
JOHN SHIMKUS, Illinois
Chairman
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
Vice Chairman Ranking Member
JOE BARTON, Texas RAUL RUIZ, California
TIM MURPHY, Pennsylvania SCOTT H. PETERS, California
MARSHA BLACKBURN, Tennessee GENE GREEN, Texas
GREGG HARPER, Mississippi DIANA DeGETTE, Colorado
PETE OLSON, Texas JERRY McNERNEY, California
BILL JOHNSON, Ohio TONY CARDENAS, California
BILL FLORES, Texas DEBBIE DINGELL, Michigan
RICHARD HUDSON, North Carolina DORIS O. MATSUI, California
KEVIN CRAMER, North Dakota FRANK PALLONE, Jr., New Jersey (ex
TIM WALBERG, Michigan officio)
EARL L. ``BUDDY'' CARTER, Georgia
GREG WALDEN, Oregon (ex officio)
C O N T E N T S
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Page
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 1
Prepared statement........................................... 3
Hon. Paul Tonko, a Representative in Congress from the State of
New York, opening statement.................................... 4
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 5
Prepared statement........................................... 6
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 7
Witnesses
Martin A. Kropelnicki, President and CEO, California Water
Service Group, on behalf of The National Association of Water
Companies...................................................... 9
Prepared statement........................................... 11
Answers to submitted questions............................... 157
Scott Potter, Director of Nashville Metro Water Services,
Nashville, TN, on behalf of The American Municipal Water
Association.................................................... 22
Prepared statement........................................... 24
Answers to submitted questions............................... 162
Steve Fletcher, Manager, Washington County Water Company,
Nashville, IL, on behalf of The National Rural Water
Association.................................................... 35
Prepared statement........................................... 37
Lisa Daniels, Director, Bureau of Safe Drinking Water,
Pennsylvania Department of Environmental Protection, on behalf
of The Association of State Drinking Water Administrators...... 45
Prepared statement........................................... 47
Answers to submitted questions............................... 169
Kurt Vause, Special Projects Director, Anchorage Water and
Wastewater Utility, on behalf of The American Water Works
Association.................................................... 57
Prepared statement........................................... 59
Answers to submitted questions \1\........................... 175
Lynn Thorp, National Campaigns Director, Clean Water Action...... 74
Prepared statement........................................... 76
Answers to submitted questions............................... 177
James Proctor, Senior Vice President And General Counsel, McWane,
Inc............................................................ 82
Prepared statement........................................... 84
Submitted Material
Statement of the U.S. Environmental Protection Agency............ 123
Answers to submitted questions............................... 130
Letter of May 19, 2017, from Tony Cardenas to the subcommittee... 155
----------
\1\ Mr. Vause did not respond to questions for the record.
H.R. --------, DRINKING WATER SYSTEM IMPROVEMENT ACT AND RELATED ISSUES
OF FUNDING, MANAGEMENT, AND COMPLIANCE ASSISTANCE UNDER THE SAFE
DRINKING WATER ACT
----------
FRIDAY, MAY 19, 2017
House of Representatives,
Subcommittee on Environment,
Committee on Energy and Commerce
Washington, DC.
The subcommittee met, pursuant to call, at 8:30 a.m., in
room 2123, Rayburn House Office Building, Hon. John Shimkus,
(chairman of the subcommittee) presiding.
Present: Representatives Shimkus, McKinley, Barton, Murphy,
Harper, Johnson, Hudson, Walberg, Carter, Walden (ex officio,
Tonko, Ruiz, Peters, Green, McNerney, Dingell, Matsui, and
Pallone (ex officio).
Staff Present: Grace Appelbe, Legislative Clerk, Energy/
Environment Subcommittees; Ray Baum, Staff Director; Mike
Bloomquist, Deputy Staff Director; Jerry Couri, Chief
Environmental Advisor; Jordan Davis, Director of Policy and
External Affairs; Wyatt Ellertson, Research Associate, Energy/
Environment Subcommittees; Blair Ellis, Digital Coordinator/
Press Secretary; Adam Fromm, Director of Outreach and
Coalitions; Tom Hassenboehler, Chief Counsel, Energy/
Environment Subcommittees; Zach Hunter, Director of
Communications; A.T. Johnston, Senior Policy Advisor, Energy
Subcommittee; Alex Miller, Video Production Aide and Press
Assistant; Dan Schneider, Press Secretary; Sam Spector, Policy
Coordinator, Oversight and Investigations Subcommittee; Hamlin
Wade, Special Advisor, External Affairs; Jeff Carroll, Minority
Staff Director; Jacqueline Cohen, Minority Chief Environment
Counsel; David Cwiertny, Minority Energy/Environment Fellow;
Rick Kessler, Minority Senior Advisor and Staff Director,
Energy and Environment Subcommittees; Alexander Ratner,
Minority Policy Analyst; Andrew Souvall, Minority Director of
Communications, Outreach and Member Services; and C.J. Young,
Minority Press Secretary.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. I would like to call the hearing to order.
And I want to thank our witnesses for joining us today.
First of all, I know it is early. The one thing that is
certain about us in Washington, D.C., is that there is
uncertainty around us. So because of other meetings scheduled
and planned, we asked for you to come early. And I do
personally appreciate it. And it shows you the interest of our
colleagues that they are here this early, so that is great.
No matter how many miles you travel--first of all, we have
got folks from as far away as Alaska and as close as
Pennsylvania here. No matter how many miles you have traveled
to be with us, we are grateful for the time and financial
sacrifice you are making to share your expertise with us today.
I also want to mention that even though they did not send
someone to present oral testimony, I appreciate the
Environmental Protection Agency providing us with a written
statement to include in our hearing record. I ask for unanimous
consent.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Shimkus. And I am also pleased to announce that the
Agency has agreed to take written questions from members for
our hearing record. This is highly unusual but an essential
step to making this hearing record as complete as possible. And
we obviously consider the Agency an important player whose
technical experience and input is critical to the quality of
our work.
I now recognize myself 5 minutes for giving an opening
statement.
Today, our panel continues its look broadly at our Nation's
drinking water infrastructure structure and examine questions
as to what is necessary for the Federal Government to do in the
way of planning, reinvestment, and technical support of these
systems to meet future needs.
The discussion draft which is subject to the hearing is
meant to build on the testimony from our last hearing to help
our subcommittee think more precisely about what items should
be prioritized for legislation and how they should be addressed
in the legislation.
Importantly, the discussion draft is not a finite universe
of all the issues that the committee is open to considering. It
is a true baseline for conversation and an invitation for
feedback or refinements or suggested alternative approaches and
an opportunity to make the case for including additional
issues.
I know that some of us here today are curious why one
provision or another is not added. I hope we can talk about
those things today. I suspect we might be able to find
agreement on some of those issues after we have had some time
to find out each other's objectives and reflect on the best way
to balance the needs of water, consumers, providers, and
program implementers.
Let me take a minute to explain some items in the
discussion draft, why they are there.
Based on oral testimony and written responses for the
record, the water utility groups that testified at the last
hearing talked about the importance of partnerships for
addressing growth and compliance issues. The discussion draft
proposes language to allow contractual arrangements or
management of engineering services that will get a water system
into compliance.
Under questioning, many of the witnesses mentioned the
important role that asset management can play in addressing
short- and long-term water system needs but that mandating this
requirement would be challenging. The discussion draft has
states consider how to encourage best practices in asset
management and has the EPA update technical and other training
materials on asset management.
We received testimony on the need to further aid
disadvantaged communities. The discussion draft increases the
amount a state can dedicate to disadvantaged communities to 35
percent of their annual capitalization grant and permit states
to extend loan payments for these communities by another 10
years.
We received testimony on the need to increase funding for
the Drinking Water State Revolving Loan Fund and the Public
Water System Supervision grant, but not specific
recommendations about what a realistic number is or whether
commensurate budgetary cuts will offset these increases.
In response to this, the discussion draft creates a 5-year
authorization for appropriations of both these programs but
leaves them blank to allow a greater and more specific
conversation to occur. This will not be easy. Some of these
conversations will be very difficult, but we will have to have
them in an open and honest manner, but that is not new. Anyone
who has been around our subcommittee for a while knows we have
a reputation for tackling challenging issues.
As I said earlier, we are at the beginning of this journey
with a discussion draft as a baseline, and we are not close to
the finish line as of yet.
With that, I yield back my remaining time. And now I yield
to my friend from New York, the ranking member, Mr. Tonko.
[The prepared statement of Mr. Shimkus follows:]
Prepared statement of Hon. John Shimkus
The Subcommittee will now come to order.
I want to thank our witnesses for joining us today, one
from as far away as Alaska and the other as close as
Pennsylvania. No matter how many miles you traveled to be with
us, we are grateful for the time and financial sacrifice you
are making to share your expertise with us today.
I also want to mention that, even though they did not have
send someone to present oral testimony, I appreciate that the
Environmental Protection Agency provided us written statement
to be included in our hearing record, so ordered.
I am also pleased to announce that the Agency has agreed to
taken written questions from Members for our hearing record.
This is a highly unusual, but essential step to making this
hearing record as complete as possible and we, obviously,
consider the Agency an important player whose technical
experience and input is critical to the quality of our work.
I now recognize myself for 5 minutes for giving an opening
statement.
Today, our panel continues its look broadly at our nation's
drinking water infrastructure and examine questions about what
is necessary for the Federal government to do in the way of
planning, reinvestment, or technical support of these systems
to meet future needs.
The Discussion Draft, which is the subject of the hearing,
is meant to build on the testimony from our last hearing and
help our subcommittee think more precisely about what items
should be prioritized for legislation and how they should be
addressed in that legislation.
Importantly, the Discussion Draft is not a finite universe
of the issues that the Committee is open to considering. It is
a true baseline for conversation and an invitation for feedback
on refinements or suggested alternative approaches and an
opportunity to make the case for including additional issues.
I know that some of us here would are curious why one
provision or another is not added, I hope we can talk about
those things today. I suspect we might be able to find
agreement on some of those issues after we have had some time
to find out each other's objectives and reflect on the best way
to balance the needs of water consumers, providers, and program
implementers.
Let me take a minute to explain some items in the
Discussion Draft and why they are.
Based on oral testimony and written responses for the
record, the water utility groups that testified at the last
hearing talked about the importance of partnerships for
addressing growth and compliance issues. The Discussion Draft
proposes language to allow contractual arrangements for
management and engineering services that will get a water
system into compliance.
Under questioning, many of the witnesses mentioned the
import role that asset management can play in addressing short
and long-term water system needs, but that mandating this
requirement would be challenging. The Discussion Draft has
States consider how to encourage best practices in asset
management and has EPA update technical and other training
materials on asset management.
We received testimony on the need to further aid
disadvantaged communities. The Discussion Draft increases the
amount a State can dedicate to disadvantaged communities to 35
percent of their annual capitalization grant and permits States
to extend loan repayment for these communities by another 10
years.
We received testimony on the need to increase funding for
the Drinking Water State Revolving Loan Fund and the Public
Water System Supervision grants, but not specific
recommendations about what a realistic number is--or whether
commensurate budgetary cuts will offset these increases. In
response to this, the Discussion Draft creates 5-year
authorizations for appropriations of both of these programs,
but leaves them blank to allow a greater and more specific
conversation to occur.
This will not be easy--some of these conversations will be
very difficult, but we will have to have them in an open an
honest manner, but this is not new. Anyone who has been around
our subcommittee for a while knows we have a reputation for
tackling challenging issues.
As I said earlier, we are at the beginning of this
journey--with the Discussion Draft a baseline--and we are not
close to the finish line.
With that, I yield back my remaining time and now yield to
my friend from New York, the Ranking Member of the
Subcommittee, Mr. Tonko.
OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Tonko. Thank you, Chairman Shimkus. And thank you to
our witnesses for being here on what is apparently a very busy
morning in the House.
We can all agree that aging drinking water systems can hold
back economic growth and threaten public health. These problems
will only get worse if we continue the decade's long trend of
neglect. I know we have limited time, so I will not restate all
the details of our growing national need to invest in drinking
water systems and update the Safe Water Drinking Water Act.
Suffice it to say, the need is immensely great. This
subcommittee has been building a tremendous record that more
than justifies the need for action.
Mr. Chair, I appreciate you holding this hearing and
offering the discussion draft to bring attention to our hidden
infrastructure, which has been out of sight and, regrettably,
out of mind for far too long.
This draft responds to many of the issues that have been
identified in previous hearings: the need to reauthorize the
Drinking Water SRF and the Public Water System Supervision
program; as well as the need to encourage asset management
plans, greater source water protection, and support for
disadvantaged communities.
With that said, I truly believe we can improve upon the
draft before us today which will ensure strong bipartisan
support moving forward. There are a number of democratic bills
that have already been introduced that can help inform these
efforts. The AQUA Act includes provisions on how to further
assist disadvantaged communities and better incentivize asset
management plans. It would also help fulfill a stated goal of
this administration mandating Buy America requirements.
Mr. Pallone's SDWA amendments would enable EPA to
promulgate much needed national standards. The bill also
creates programs to reduce lead in schools among other
important SDWA updates.
Mr. Peters has a bill to provide grants to assist systems
with resiliency, source water protection, and security in the
face of changing hydraulic conditions, such as droughts, sea
level rise, and other emerging pressures on systems.
We do know the national need is growing: $384 billion over
the next two decades to maintain current levels of services. We
need to have the vision to acknowledge that this does not
account for stresses, environmental and financial, that will
continue to get worse if we simply do nothing.
Finally, the Drinking Water SRF has been a tremendous
success. I am grateful that Chair Shimkus has undertaken the
first funding reauthorization since its inception in 1996. But
as we will hear today, the draft includes unspecified funding
levels.
As a candidate, President Trump called for tripling funding
for both SRF programs. The AQUA Act proposes levels that are in
line with that--with what states handled following the Recovery
Act. I think these are good targets to start negotiations.
We must recognize that local governments are struggling.
Significant amounts of projects go unfunded each year, and the
status quo of Federal support will simply not reduce the
massive and growing levels of need. It is time for the Federal
Government to step up and contribute its fair share.
Mr. Chair, I would end by asking for a commitment to sit
down with our side, learn more about some of our proposals, and
work together to make this a truly bipartisan effort that moves
us forward. We had close cooperation on the brownfields
reauthorization draft. I think we can get to a similar place on
drinking water.
And with that, I yield back.
Mr. Shimkus. I thank the gentleman. The gentleman yields
back.
The chair now recognizes the Chairman of the Full
Committee, Mr. Walden, for 5 minutes.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Thank you, Mr. Chairman.
In March, our committee began a review of the financial
needs of our entire Nation's drinking water infrastructure. We
spoke about the need to think broadly about all things that can
affect water affordability, reliability, and safety. Today, we
take the next steps in our deliberative process by reviewing
the discussion draft and related ideas from stakeholders to
formulate policy on drinking water, state revolving loan
funding, and Public Water System Supervision grants.
We will also examine efforts to improve asset management by
utilities and other ways to lift paperwork burdens and improve
systems delivery of safe drinking water.
Both sides of the aisle support making newer and larger
investments in our Nation's infrastructure, and I agree that we
need to help ensure these assets support the great quality of
life Americans enjoy. However, in doing so, we must be careful
to select wise investments and create diversified options that
make sense for water systems, for states, and for consumers. It
is important for us to tackle this job seriously for a couple
of reasons.
As we learned at the last hearing, the country's drinking
water delivery systems are facing the challenges of older age.
We learned from the water utilities and other stakeholders the
importance of partnerships for addressing growth and compliance
issues.
The discussion draft proposes language to allow contractual
arrangements for management and engineering services that will
get a water system into compliance. We welcome feedback on that
approach.
We also received testimony on the need to increase funding
for the Drinking Water State Revolving Loan Fund and Public
Water System Supervision grants, but not specific
recommendations about what a realistic number is or whether
budgetary cuts will offset these increases.
For the last couple of years, the appropriated levels have
been consistent. The appropriations for the Drinking Water
Revolving Loan Fund were last authorized in 2003. That is long
enough. It is time to reassert this committee's proper role in
authorizing our statutes and realign the focus of the EPA and
other agencies back to their core missions, in this case,
ensuring the provision of safe drinking water for our Nation's
consumers.
We look forward to continuing the dialogue on this as our
committee process continues.
I want to welcome all of you here today, our witnesses, who
took time and traveled from far and wide to be with us to
comment on this discussion draft, and that is what it is. Your
input is important, and we would appreciate specific
recommendations as you are able to give on these important
issues.
And, again, thank you all for being here. We all care
deeply about drinking water, safe drinking water, and helping
our communities achieve that for all of our citizens in the
country.
And with that, Mr. Chair, I yield back the balance of my
time.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
In March, our committee began a review of the financial
needs of our entire nation's drinking water infrastructure. We
spoke about the need to think broadly about all the things that
can affect water affordability, reliability, and safety.
Today we take the next steps in our deliberative process by
reviewing a discussion draft and related ideas from
stakeholders to formulate policy on drinking water state
revolving loan funding and public water system supervision
grants. We will also examine efforts to improve asset
management by utilities, and other ways to lift paperwork
burdens and improve systems' delivery of safe drinking water.
Both sides of the aisle support making newer and larger
investments in our nation's infrastructure and I agree that we
need to help ensure these assets support the great quality of
life Americans enjoy in the future. However, in doing so, we
must be careful to select wise investments and create
diversified options that make sense for water systems, states,
and consumers. It is important for us to tackle this job
seriously for a couple reasons.
As we learned at the last hearing, the country's drinking
water delivery systems are facing the challenges of older age.
We learned from the water utilities and other stakeholders the
importance of partnerships for addressing growth and compliance
issues. The discussion draft proposes language to allow
contractual arrangements for management and engineering
services that will get a water system into compliance. We
welcome feedback on that approach.
We also received testimony on the need to increase funding
for the Drinking Water State Revolving Loan Fund and the Public
Water System Supervision grants, but not specific
recommendations about what a realistic number is--or whether
budgetary cuts will offset these increases. For the last couple
years, the appropriated levels have been consistent; the
appropriations for the Drinking Water Revolving Loan Fund were
last authorized in 2003. That is long enough. It is time to
reassert this committee's proper role in authorizing our
statutes, and realign the focus of the EPA and other agencies
back to the core missions: in this case ensuring the provision
of Safe Drinking Water for our nation's consumers. We look
forward to continuing the dialogue on this as our process
continues.
I want to welcome all our witnesses who took time and
traveled from far and wide to be with us to comment on the
discussion draft. Your input is important, and we would
appreciate as specific of recommendations as you are able to
give on these important issues.
Mr. Shimkus. The gentleman yields back the balance of his
time.
The chair now recognizes the Ranking Member of the Full
Committee, Mr. Pallone, for 5 minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. Thank you.
The safety of our drinking water is an incredibly important
topic which deserves more time than we have at today's hearing.
At our last drinking water hearing, we heard broad
agreement from witnesses and members that we need to
reauthorize the Drinking Water State Revolving Fund and
increase the funding. My democratic colleagues and I have been
saying this for years, so I am encouraged that Republicans on
this subcommittee now seem to agree.
Unfortunately, this rushed hearing is not sufficient to
address this issue. We have great ideas, but they are not
reflected in the barebones discussion draft. We need a
bipartisan effort to modernize the Safe Drinking Water Act, but
in preparing this discussion draft, your staff didn't consult
with us. We were eager to work with you, but we were told,
without explanation, that such discussions could only happen
after this hearing.
So before us today is a discussion draft that, in my
opinion, fails to measure up to the severity of the problem. It
simply does not meet the needs of public water systems and the
communities they serve. The draft contains nothing to address
the growing problems of lead in drinking water in homes and
schools. It does nothing to improve the regulatory process and
better protect public health from new and emerging pollutant
classes, and it does nothing to improve transparency and
restore consumer confidence in the safety of our tap water, and
there is no commitment to increase funding.
So I am disappointed in the discussion draft, and I urge my
colleagues to look at the real solutions in the bills that my
democratic colleagues and I have introduced, and that is H.R.
1071, the AQUA Act of 2017, and H.R. 1068, the Safe Drinking
Water Act Amendments of 2017.
I want to thank our witnesses for coming. I apologize that
we don't have more time available, but I also want to express
my frustration at the lack of a witness from the EPA. This
subcommittee cannot produce meaningful legislation to
reauthorize the state revolving fund and strengthen the Safe
Drinking Water Act without their input. So it is clear we need
to have another hearing.
Safe drinking water is simply too important, and I hope we
can start to work together on a bipartisan bill to tackle these
serious problems.
I yield back, Mr. Chairman.
Mr. Shimkus. The gentleman yields back his time.
All members having concluded their opening statements, the
chair would like to remind members that pursuant to the
Committee rules, all members' opening statements will be made
part of the record.
I want to thank all of our witnesses for being here today
and taking the time to testify before the subcommittee. Today's
witnesses will have the opportunity to give opening statements,
followed by a round of questions from members. Our witness
panel for today's hearing are in front of us.
What I will do is recognize you individually for 5 minutes.
Your full statements are submitted for the record. And as you
can see, there is a lot of interest from our side. So if you
get too far over the 5 minutes, I might start tapping the gavel
to get you to wind up.
And before I take more time, let me just start by
recognizing Mr. Martin Kropelnicki, President and CEO of the
California Water Services Group, on behalf of the National
Association of Water Companies. He testified here before. We
are glad to have you back.
You are recognized for 5 minutes.
STATEMENTS OF MARTIN A. KROPELNICKI, PRESIDENT AND CEO,
CALIFORNIA WATER SERVICE GROUP, ON BEHALF OF THE NATIONAL
ASSOCIATION OF WATER COMPANIES; SCOTT POTTER, DIRECTOR OF
NASHVILLE METRO WATER SERVICES, NASHVILLE, TN, ON BEHALF OF THE
AMERICAN MUNICIPAL WATER ASSOCIATION; STEVE FLETCHER, MANAGER,
WASHINGTON COUNTY WATER COMPANY, NASHVILLE, IL, ON BEHALF OF
THE NATIONAL RURAL WATER ASSOCIATION; LISA DANIELS, DIRECTOR,
BUREAU OF SAFE DRINKING WATER, PENNSYLVANIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION, ON BEHALF OF THE ASSOCIATION OF STATE
DRINKING WATER ADMINISTRATORS; KURT VAUSE, SPECIAL PROJECTS
DIRECTOR, ANCHORAGE WATER AND WASTEWATER UTILITY, ON BEHALF OF
THE AMERICAN WATER WORKS ASSOCIATION; LYNN THORP, NATIONAL
CAMPAIGNS DIRECTOR, CLEAN WATER ACTION; AND JAMES PROCTOR,
SENIOR VICE PRESIDENT AND GENERAL COUNSEL, MCWANE, INC.
STATEMENT OF MARTIN A. KROPELNICKI
Mr. Kropelnicki. Thank you, Mr. Chairman.
Good morning. I am Marty Kropelnicki, President and CEO of
California Water Service Group, or Cal Water. We provide water
and wastewater services to approximately 2 million people in
the great State of California, Hawaii, New Mexico, and
Washington, State of Washington. I am also the current
President of National Association of Water Companies, which I
am here representing today. NAWC's members have provided water
and utility services for more than 200 years, and they serve
approximately 25 percent of the U.S. population.
NAWC applauds you, Mr. Chairman, and this subcommittee for
highlighting America's drinking water infrastructure needs and
putting forward a discussion draft amendment to the Safe
Drinking Water Act for utilities and regulators to review.
We are all working together toward the same outcome: safe,
reliable, sustainable high-quality drinking water, which is
critical to every person, every community, and every business
in this country.
Suffice it to say that substantial portions of the utility
sector face significant challenges. The Nation's drinking water
infrastructure recently received a D by the American Society of
Civil Engineers. The American Water Works Association projects
that $1 trillion will be needed to invest infrastructure
through 2035 to replace aging infrastructure to keep up with
population growth.
More ominously, recent reports by the Natural Resources
Defense Council showed that nearly one in four Americans get
drinking water from untested and contaminated systems.
With great challenges come great opportunities, and that is
what we are here to talk about today. The discussion draft put
forward by the subcommittee is a good first step to addressing
the crisis. Legislation along these lines would do much to
build upon and advance the good work of many water suppliers
that are already undertaken.
For example, NAWC estimates that our six largest members,
of which Cal Water is one, will invest in nearly $2.7 billion
this year alone in their water systems to ensure that they
remain safe, reliable, and are sustainable for decades to come.
Federal funds alone will not fix this problem, especially
given that many of the problems are the results of poor
decisionmaking year after year after year and not necessarily
the absence of funding.
Let me highlight for you several recommendations for
Congress to consider. First, we must ensure that any Federal
funds are used efficiently and effectively. NAWC and its
members support the EPA's 10 attributes of effective utility
management, which includes things such as financial viability
and infrastructure stability.
Applicants for dollars of public funds should demonstrate
that there are management assets that adequate repair,
rehabilitation, and replacement are fully reflected in
management decisions, including water rates that reflect the
true and full cost of service.
Second, failing systems that are in seriously noncompliant
situations with water quality standards must be held
accountable. If a system is plagued with a history of serious
noncompliance, it should be given an option to pursue a
partnership that will lead to compliance or be compelled to
consolidate system with an able owner or operator.
Finally, as Congress considers future funding for drinking
water programs, NAWC recommends that the private water sector
not only have equal access to Federal funding but also that
steps be taken to further enable and incentivize private water
investment and involvement in solving the Nation's
infrastructure challenges.
Apart from the more obvious tax-based measures, these
incentives should include providing a safe harbor or a shield
that would allow companies like Cal Water or NAWC members to
partner with undercompliant systems and give them that ramp-up
time to be coming into compliance.
Quite simply, private water companies like Cal Water and
NAWC members have the financial balance sheets, managerial and
technical expertise to help ensure that all Americans have
safe, reliable, and sustainable high-quality drinking water.
I sincerely appreciate the invitation to come back here
today to testify. Along with my colleagues at NAWC, we look
forward to continuing our work with you and this committee as
we work on the Nation's infrastructure challenges.
Thank you. And I would be happy to respond to any
questions, Mr. Chairman.
[The prepared statement of Mr. Kropelnicki follows:]
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Mr. Shimkus. Thank you. The gentleman yields back his time.
The chair now recognizes Mr. Scott Potter, Director of the
Nashville Metro Water Services in Nashville, Tennessee, on
behalf of the Association of Metropolitan Water Agencies.
You are recognized for 5 minutes, sir. Thank you.
STATEMENT OF SCOTT POTTER
Mr. Potter. Good morning, sir.
Chairman Shimkus, Ranking Member Tonko, and members of the
subcommittee, the Association of Metropolitan Water Agencies,
or AMWA, appreciates the opportunity to offer our thoughts
today on the Drinking Water System Improvement Act of 2017.
I am Scott Potter, Director of Metro Water Services in
Nashville, Tennessee. We provide drinking water services to
190,000 households and 200,000 sewer accounts in Nashville and
Davidson County in Tennessee. I also serve as President of
AMWA's Board of Directors. AMWA is an organization representing
the Nation's largest publicly owned drinking water utilities,
which collectively serve over 130 million Americans with
quality drinking water. Our members support reauthorization of
the Drinking Water SRF, and we appreciate that the legislation
before the subcommittee today would do so for the first time in
the program's history.
My written testimony has been submitted for the record. It
includes more detailed feedback on the various sections of the
legislation, so I will use my time today to speak more
generally about the bill and AMWA's priorities for
reauthorization of the Drinking Water SRF.
Simply put, we believe that the Drinking Water SRF is a
valuable program. It should remain a cornerstone of Federal
efforts to promote cost-effective water infrastructure
financing to help communities protect public health and meet
the regulatory requirements of the Safe Drinking Water Act.
We are pleased the Drinking Water System Improvement Act
preserves the existing framework of the Drinking Water SRF,
while making several targeted modernizations to the program and
the Safe Drinking Water Act as a whole.
For example, the bill will leverage the expertise of large
water utilities by encouraging them to enter into agreements to
help in-need water systems correct, identify water quality
violations, and carry out necessary management and
administrative functions.
The bill also recognizes the importance of asset management
by directing states to describe steps they will take to promote
the adoption of effective asset management principles,
practices, and how they will assist local utilities in training
their staff to implement asset management plans.
We support these measures, though AMWA also believes
utilities that have completed qualifying asset management plans
should be rewarded with a degree of additional preference when
they apply for Drinking Water SRF assistance.
The idea is not to make asset management plans mandatory or
to exclude systems without asset management plans from
receiving funding, but instead to incentivize all public water
systems that seek SRF dollars to think holistically about the
full life-cycle costs of their infrastructure.
As this legislation continues to develop, AMWA would like
to recommend several additional points for consideration.
Perhaps most importantly, the final bill should reauthorize the
Drinking Water SRF at a level that recognizes the immense
nationwide water infrastructure need and does not inadvertently
constrain Congress' ability to fund the Drinking Water SRF at
an amount that appropriately responds to these needs.
For example, initial versions of the fiscal year 2017 EPA
appropriations bill approved by the House and Senate committees
last year would have provided more than $1 billion for the
Drinking Water SRF. Given the Nation's infrastructure needs and
the apparent willingness of appropriators to provide this level
of investment in the program, this legislation should authorize
the funding level comfortably in excess of this figure.
Earlier this year, AMWA and other water sector stakeholders
endorsed a call to double Drinking Water SRF funding to roughly
$1.8 billion. So a figure in this vicinity would serve as a
reasonable starting point for the new authorization level.
AMWA also supports expanding the Safe Drinking Water Act's
definition of a disadvantaged community eligible for additional
assistance to include a portion of the utility service area.
The statute currently requires all the utility service area to
meet the state's affordability criteria, but this is difficult
to achieve for large metropolitan water systems that typically
serve diverse populations that both have areas of affluence and
also areas with concentrations of people in need.
By allowing defined portions of a large utility service
area to be classified as disadvantaged, more individual in-need
neighborhoods served by America's large water providers would
become eligible for the same type of benefits that are already
available to many small cities and towns throughout the
country.
Finally, we support codifying the ability of recipients to
use Drinking Water SRF funds for projects to improve the
security of a public water system.
In 2014, Congress explicitly allowed the use of clean water
SRF funds for security improvement projects at publicly owned
treatment works. So we believe it is appropriate to formally
extend the same ability to public water systems.
In closing, AMWA believes this legislation is a good
starting point for efforts to reauthorize the Drinking Water
SRF. We look forward to continuing to work with members of the
subcommittee on this legislation, and I will be happy to answer
any questions the committee may have.
Thank you, sir.
[The prepared statement of Mr. Potter follows:]
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Mr. Shimkus. The gentleman yields back his time. The chair
thanks him.
And now I would like to recognize Mr. Steve Fletcher,
Manager of the Washington County Water Company, Nashville,
Illinois, in the great State of Illinois, and in the great
district of the 15th Congressional District of Illinois, on
behalf of--who represents that? I don't know--of the National
Rural Water Association. You guys got me off my game.
You are recognized for 5 minutes.
STATEMENT OF STEVE FLETCHER
Mr. Fletcher. Good morning, Chairman Shimkus, Ranking
Member Tonko, and members of the subcommittee. I am Steve
Fletcher from rural Illinois in Washington County.
Rural Illinois and New York and the rest of America thank
you for this opportunity to testify on drinking water
infrastructure. Thank you, Congressmen Shimkus and Tonko, for
your visits to your local small communities in your districts
to tour and help with specific community water issues. This is
very much appreciated.
I also need to thank Congressmen Harper, Tonko, and the
subcommittee for passing the Grassroots Rural and Small
Community Technical Assistance Act into law in the last
Congress.
I am representing all small and rural community water
supplies today through my association with the Illinois and
National Rural Water Association.
Our member communities have the responsibility of supplying
the public with safe drinking water and sanitation every second
of every day. Most all water supplies in the U.S. are small.
Ninety-two percent of the country's 50,366 drinking water
supplies serve communities with fewer than 10,000 persons.
Illinois has 1,749 community water systems and 1,434 serve less
than 10,000 people. New York has 2,343, and 2,195 of those
serve communities with less than 10,000 people.
My water system is a not-for-profit rural water system
started by a group of farmers in the late 1980s who organized
and built the water system using funding from the Federal
Government that allowed these mainly farm families to receive
safe, piped drinking water for the first time. Without the
financial help from the Federal Government, we could never have
afforded to have safe public water or even a public water
utility.
Before the development of the rural water systems, rural
households, including mine, relied on cisterns and private
wells that were contaminated with nitrate so we couldn't drink
the water.
We are pleased to endorse the subcommittee's legislation of
the Drinking Water System Improvement Act of 2017. Small and
rural communities support the use of these existing Federal
infrastructure initiatives like the SRFs as the primary
delivery mechanisms for any new Federal water infrastructure
initiative. These initiatives all have specific provisions
targeting Federal water subsidies to community water projects
based on environmental and economic need. If some type of
needs-based targeting is not specifically included in any new
water infrastructure legislation, the funding will bypass rural
America and be absorbed by large metropolitan water projects.
This bill accomplishes this objective. We support the
bill's extended maximum loan duration and increase in the
amount of additional subsidization to disadvantaged
communities. Commonly, low-income or disadvantaged communities
do not have the ability to pay back the loan, even with very
low interest rates, and require some portion of grant funding
to make the project affordable to the rate payers.
I would like to make two more related policy points with my
remaining time. First, there is a misconception among some
stakeholders that SRFs are for small and rural communities.
SRFs have no limitation on size or scope of a water project.
According to the EPA, most SRF funding is allocated to large
communities. Approximately 62 percent of Drinking Water SRF
funding is awarded to large communities, including numerous SRF
projects that cost over $50 or $100 million. SRFs work for all
sized water systems, and we are grateful for your support of
the programs.
My final point is regarding local governmental choice in
decisions of consolidation and privatization. The decision for
any local government to privatize or consolidate should be
determined at the discretion of local citizens. There is
nothing inherently more efficient or more economical in the
operation of our private water utility versus the public
governmental water utility.
Regarding consolidation, rural water associations and
systems like mine have assisted in more communities
consolidating their water supplies than any program or
organization. Again, when communities believe consolidation
will benefit them, they eagerly agree with these partnerships.
I have numerous examples from my own community which partners
with six neighboring water utilities in various forms. We do
not think any new Federal regulatory policy at expense of local
government control and choice for privatization or
consolidation would be beneficial to local communities or their
citizens.
Thanks, Mr. Shimkus, for being such a good friend in
support of rural America and to give us this opportunity today.
I am happy to answer any questions.
[The prepared statement of Mr. Fletcher follows:]
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Mr. Shimkus. The gentleman yields back his time, and the
chair thanks him.
And now I would like to turn to Ms. Lisa Daniels, director
of the Bureau of Safe Drinking Water at the Pennsylvania
Department of Environmental Protection, on behalf of the
Association of State Drinking Water Administrators.
You are recognized for 5 minutes.
STATEMENT OF LISA DANIELS
Ms. Daniels. Good morning, Chairman Shimkus, Ranking Member
Tonko, and members of the subcommittee. Thank you for the
opportunity to be here to discuss the status of our Nation's
state drinking water programs.
I am also President-Elect for ASDWA, so I am very glad to
be here to represent the organization.
Our members are on the front lines every day ensuring safe
drinking water and protecting public health. Vibrant and
sustainable communities, their citizens, and businesses, all
depend on a safe and adequate supply of drinking water.
States oversee more than 152,000 public water systems and
interact with them through a broad range of activities that are
funded through two Federal funding sources. Of course, there is
the Drinking Water State Revolving Loan Fund, but there is also
the Public Water System Supervision program.
The vast majority of community water systems are in
compliance with health-based standards. That is the good news.
But what about those systems that struggle?
The Drinking Water SRF can provide solutions for struggling
systems. At only 20 years old, it really is a remarkable
success story. It has allowed states to fund projects to
upgrade treatment plants, rehabilitate distribution systems,
address our aging infrastructure, and it has been quite
successful. In fact, states have been able to leverage Federal
funding to fund more than 13,000 projects through the SRF.
A major component of the 1996 amendments was new statutory
language that allow states to undertake what we call proactive
measures. Funded through the set-asides, proactive measures
such as operator training, technical assistance, and source
water protection offer support for water systems as they strive
to enhance their performance.
Water systems are encouraged to consider a range of
options, including partnerships, which could be as simple as
sharing a backhoe or as complex as merging with a neighboring
system. And the set-aside funds are available to support many
of these activities.
I would like to share an example from my home state. The
Stockton Water System was a very small 43-home community that
was operating as an untreated, unfiltered, and unpermitted
surface water system. We discovered this system in 2014 because
of customer complaints.
The water was found to contain E. Coli, giardia, and
salmonella. Traditional strategies and enforcement weren't
working in this community. They really needed a different kind
of assistance. We employed several capability enhancement
programs in Stockton, including Capability Enhancement program,
which provided the initial assessment and also provided onsite
technical assistance to really help folks understand the
challenges with this community. We also employed the
professional engineering services program, which was able to
conduct feasibility studies and design work to find the best
solutions.
These initiatives came together with PENNVEST, which is our
SRF funding agency, to identify a willing partner. And we found
that in the nearby Hazelton City Authority system. They agreed
to work with Stockton, make the Drinking Water SRF application,
extend water service, replace Stockton's existing distribution
system, while keeping water rates at an affordable $35 per
month. The total project cost was $2.2 million, which was
underwritten by PENNVEST and, today, Stockton now has a safe
and reliable supply of drinking water.
Solutions such as this would absolutely not be possible
without the Drinking Water SRF and the set-asides. Drinking
water systems and the communities they serve are the direct
beneficiaries of the work accomplished through these programs.
State drinking water programs have often been expected to
do more with less, and we have always responded with commitment
and integrity, but we are currently stretched to the breaking
point. Insufficient Federal funds increase the likelihood of
contamination incidents, and we do not want to see another
Charleston, West Virginia; Toledo, Ohio; or Flint, Michigan.
To sustain public health protection, states need
congressional support. For the past 4 years, the PWSS program
has flat funded, and the Drinking Water SRF funding has
decreased. These essential programs come with well-documented
needs, and they must be fully supported.
ASDWA recommends the PWSS program be funded at $200
million, and we also recommend the Drinking Water SRF be funded
at $1.2 billion to allow us to continue to do this great work.
In summary, the 1996 amendments offered the community a
promise of enhanced public health protection through a
framework of both traditional and proactive collaboration
between state drinking water programs and the water systems
that they oversee. Maintaining funding for the Drinking Water
SRF, the set-asides, and the PWSS program is critical.
State drinking water programs are committed to fulfilling
the promise of the 1996 amendments. Thank you.
[The prepared statement of Ms. Daniels follows:]
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Mr. Shimkus. I thank the lady.
The chair now recognizes Mr. Kurt Vause, who gets the
longest traveling award for getting here, Special Projects
Director at Anchorage Water and Wastewater Utility, on behalf
of the American Water Works Association.
You are recognized for 5 minutes. Welcome.
STATEMENT OF KURT VAUSE
Mr. Vause. Good morning, Chairman Shimkus, and members of
the subcommittee. My name is Kurt Vause. I am the Special
Projects Director for the Anchorage Water and Wastewater
Utility from Anchorage, Alaska. I also serve as the Chair of
the Water Utility Council and Acting Chair of the Asset
Management Committee of the American Water Works Association.
We deeply appreciate this opportunity to offer the
viewpoints and experiences of drinking water providers to the
important deliberations and decisions of this committee.
The discussion draft of drinking water legislation this
subcommittee is considering is a good step towards addressing
the Nation's needs, to reinvest in its water infrastructure,
and towards addressing other needs as well. I would like to
briefly address three topics.
First, providing safe drinking water to communities
requires a complex mix of engineering, capital investment,
management, science, community engagement, and regulatory
resources. This complexity makes it particularly difficult for
many small systems to remain in compliance in regulation and
maintain their infrastructure.
Options to help address these challenges include
partnerships or regionalization to share resources among these
systems, many who serve small systems and communities.
Regionalization or partnerships encompass anything from
physical connections to shared management, engineering,
operations, and purchasing resources.
When a compliant utility absorbs or merges a noncompliant
utility, that newly formed utility faces a regulatory
compliance challenge. The SDWA ought to provide a finite grace
period for the newly merged system to come into compliance with
regulation. Whether a utility has explored consolidation should
become one of the factors weighted in ranking SRF loans or in
evaluating compliance options.
Second, all utilities manage their assets, but the practice
we now formally call asset management is more scientific and
focused. The goal of infrastructure asset management is to meet
a required level of service in the most cost-effective manner
at an acceptable level of risk through the management of assets
for present and future customers.
We do not believe a specific level of asset management
practice should be mandated, because that would put Congress or
a regulatory agency in the business of defining asset
management objectives. Utilities vary too greatly in strategic
objectives, size, type of assets, geography, climate, source
waters, type of treatment and distribution for a Federal
definition to be practical.
Professional organizations such as AWWA are making
education and asset management practice an ongoing part of our
educational efforts for members. For example, AWWA's upcoming
annual conference. Our Asset Management Committee has developed
a track of sessions on project infrastructure and asset
management with five individual sessions containing 27 separate
presentations.
We also believe there is a role States can play in similar
efforts through the maintenance of the PWSS supervision grants.
We urge Congress to maintain PWSS funding for fiscal year 2018
at no less the current authorization levels.
Third, as we have said before to Congress, local rates and
charges have been and will likely always be the backbone of
local water system finance. However, when major infrastructure
projects require either to comply with regulations or replace
aging infrastructure, there is a need for a quicker, larger
infusion of cash than those rates and charges typically
provide.
This is where the toolbox of utility finance comes into
play. This spring, AWWA cosigned a two-page summary of how the
Federal Government can assist water utilities in financing
these challenges. The highlights of that were: Number one,
preserve the tax-exempt status of municipal bonds; two, provide
fully authorized funding for the Water Infrastructure Finance
and Innovation Act, known as WIFIA, at $45 million for fiscal
year 2018; three, double appropriations for the drinking water
and wastewater SRF programs; and four, remove the annual volume
caps on private activity bonds for water infrastructure
projects.
We realize appropriations come from the Appropriations
Committees, but we seek your support in funding with these
panels.
This concludes my remarks to the subcommittee. We also look
forward to continuing dialogue with this panel after this
hearing.
[The prepared statement of Mr. Vause follows:]
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Mr. Shimkus. The chair thanks the gentleman.
The chair now recognizes Ms. Lynn Thorp, National Campaigns
Director at Clean Water Action.
You are recognized for 5 minutes.
STATEMENT OF LYNN THORP
Ms. Thorp. Thank you.
Good morning, Chairman Shimkus, Ranking Member Tonko, and
members of the subcommittee. My name is Lynn Thorp. I am
National Campaigns Director at Clean Water Action. We are a
national organization with 1 million members working in 15
states on health and environmental projects with an emphasis on
drinking water issues.
Thank you for the opportunity to provide comments on the
Drinking Water System Improvement Act. Recent high profile
events have highlighted the importance of infrastructure
investment, effective system operation, and source water
protection. From the drinking water crisis in Flint, Michigan,
to the leaking chemical storage tank that contaminated the Elk
River in West Virginia, we have seen how taking drinking water
for granted can lead to public health risks and economic
disruption of entire communities.
Our approach to meeting 21st century drinking water
challenges needs to be a holistic one. It should include not
only increased investment in infrastructure, but also
sufficient resources for effective oversight of Safe Drinking
Water Act compliance by Federal and state primacy partners,
more funding for research and innovation, more attention to
keeping drinking water sources clean, and a vision for how we
want our drinking water systems to look in the second half of
the 21st century.
You can see some ideas about that in the testimony from the
witnesses we have heard from already this morning and in the
2016 U.S. Environmental Protection Agency Drinking Water Action
Plan.
We do hope this subcommittee will consider provisions in
the Safe Drinking Water Act Amendments of 2017, H.R. 1068,
introduced by Representatives Tonko and Pallone earlier this
year. Transparency, how we determine which contaminates to
regulate, climate resiliency and drought, threats to drinking
water from oil and gas and other activities, water efficiency,
and technology innovation are all important if we are to
maintain a high quality of drinking water and healthy water
systems.
We support Drinking Water State Revolving Fund
authorizations commensurate with those proposed in the AQUA Act
mentioned earlier today, which would authorize over $3 billion
in fiscal year 2018, and increase thereafter reaching $5.5
billion on fiscal year 2022.
AWWA, the American Society of Civil Engineers, and EPA have
repeatedly found investment needs orders of magnitude greater
than those authorizations I have mentioned. Ambitious
authorizations signal a commitment to clean drinking water and
are a reasonable contribution to the mix of funding sources
available to drinking water systems.
We also support increased authorizations for Public Water
Systems Supervision grants. The Association of State Drinking
Water Administrators has estimated the gap in needs between
current funding and comprehensive State programs to be $300
million or more annually. As noted earlier, bridging this gap
will increase public health protection and support sustainable
drinking water systems.
Drinking Water State Revolving Fund dollars can be spent on
numerous activities that support those goals: pipe replacement,
treatment upgrades, source water protection, improvements for
storage, and system restructuring and consolidation. We want to
highlight just two of those here as examples: pipe repair and
replacement and source water protection.
As you know, EPA estimates we may have between some 6 1A\1/
2\ or even more than 10 million lead service lines or partial
lead service lines in the United States. Lead is a highly
poisonous metal, and children under 6 are most at risk.
Increased investment can help more communities move sooner to
full lead service line replacement.
American Society of Civil Engineers also estimates there
are over 240,000 water main breaks each year due to
deteriorating and poorly maintained pipes. As you probably
know, just this week, a pipe from 1860, a water main broke
right in Northwest, D.C. We lose water through leaks in mains
and service lines as well, and these disruptions threaten
public health, allowing pathogens to get into the pipes and, of
course, lead to loss of treated water. Some estimates say up to
18 percent of treated water, which is a valuable commodity, if
you will.
So shoring up our underground drinking water infrastructure
not only protects public health, reduces lost revenue for
drinking water systems, but also leads to less disruption, like
we saw in parts of D.C. just this week.
We can also use Drinking Water State Revolving Funds for
source water protection, and many communities are using
innovative strategies in this area. The return on investment
there is clear in terms of public health protection. And the
EPA estimates that every dollar spent on protecting a drinking
water source saves $27 in drinking water treatment.
I just want to close by noting that EPA programs are
fundamental to the success of state programs and water systems.
So increased state revolving fund investment won't be as
effective if at the same time EPA lacks staffing and funding
for oversight, enforcement, research, development of
contaminant standards, support for small systems, and other
critical activities.
We urge subcommittee members to oppose cuts in EPA funding
as well as rollbacks of health and environmental protections
that would put our Nation's drinking water sources at risk of
contamination.
Thank you for the opportunity to provide these comments.
[The prepared statement of Ms. Thorp follows:]
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Mr. Shimkus. Thank you.
The chair now recognizes Mr. James Proctor, Senior Vice
President and General Counsel at McWane, Inc.
You are recognized for 5 minutes.
STATEMENT OF JAMES PROCTOR
Mr. Proctor. Chairman Shimkus, Ranking Member Tonko,
Chairman Walden, Ranking Member Pallone, members of the
subcommittee, good morning. I am Jim Proctor from McWane in
Birmingham, Alabama, and I greatly appreciate the opportunity
to be here this morning to testify about an issue that is so
vital to our Nation's health, economy, and security.
For almost 200 years, McWane has proudly provided the
building blocks for our Nation's water infrastructure,
supplying the pipes, valves, fittings, and related products
that transport clean water to communities and homes across the
country. We employ more than 6,000 team members who work in 14
States and 9 other countries. Most of those team members are
represented by the United Steelworkers and other labor
organizations who we consider as partners in our efforts to
improve our economy and our communities.
I am pleased that the Committee is considering efforts to
modernize the Drinking Water State Revolving Fund. The Drinking
Water SRF has played a key role in delivering the investment
efficiently to communities throughout the Nation. However, as
the Committee has recognized, it needs reform to make it more
responsive to the scale of America's water infrastructure
needs.
A vital component of any drinking water SRF improvement is
a significant and consistent annual authorization level to spur
increased capital investment. This investment will create and
preserve the highways jobs that make these products and allow
producers to harness the economies of scale that make American
products more competitive. These impacts have a multiplier
effect as they ripple through supply chains.
We also need to invest those dollars wisely. Like
generations before us, we should rebuild our infrastructure
with the most durable energy efficient and safe materials
available. And smart technology offers many innovative
solutions that can improve system management and reduce cost to
cash-strapped utilities. But increased funding and better
management do American workers and industry little good if
their tax dollars are spent on unfairly traded foreign imports.
Like many other American manufacturers, we have made huge
investments to modernize our operations to exceed the world's
most rigorous environmental safety and regulatory standards.
But we must compete every day against foreign state-owned or
state-subsidized foundries that do not operate by any
comparable regulatory standards and have little regard for
workplace safety or the environment. This creates significant
competitive disadvantages and have led to lost sales, closed
plants, and lost jobs. And as the factories that once built our
Nation's infrastructure disappear, communities lose the vital
tax revenues and rate payers needed to operate and maintain
their water systems.
Put simply, we can't continue to divorce Federal regulatory
policies from procurement policies. The same Federal Government
that regulates our operations and taxes our workers should use
their tax dollars to purchase domestic products for the
Nation's infrastructure, particularly when foreign alternatives
are produced in conditions that would make members of this
esteemed body cringe.
Fortunately, this problem has been mitigated recently by
the application of the American Iron and Steel Buy American
preference to the SRFs and WIFIA programs. Buy America has
created incentives to preserve increased production capacities
in the United States and to maintain work forces critical to
sustaining the communities around them. I can say with pride
and relief that this Buy American preference has saved at least
one of our plants and preserved hundreds of jobs in the
economically depressed area.
By 2008, our waterworks fittings plant in Anniston,
Alabama, was the last surviving domestic manufacturer of these
products. At one time, there were as many as a dozen such
plants in the U.S., but all fell victim to the unfair
competition I described previously. Even that lone survivor was
at risk of closure during the Great Recession, operating at
around 30 percent of its production capacity. But because of
Buy American, that plant has increased its capacity utilization
to almost 70 percent, added product offerings, and more than
doubled the number of jobs. Our other plants have seen similar
benefits.
But the impacts aren't limited to our operations. Because
of Buy America, the primary importer of waterworks fittings has
brought its production back to the United States, recently
purchasing a domestic production facility and restoring
hundreds of American jobs, while increasing competition in the
marketplace.
In 2014, Congress codified the Buy American preference for
the Clean Water SRF and WIFIA. Over that same time, it has been
applied to the Drinking Water SRF through the annual
appropriations process.
Congress should align the Drinking Water SRF with the Clean
Water SRF, WIFIA, and other Federal infrastructure programs,
like transportation, of making the provision permanent. This
will not only preserve jobs, but a consistent standard will
increase administrative efficiency and reduce costs since many
water projects tap into multiple federal funding sources.
The reformation and reauthorization of the Safe Drinking
Water Act programs with the Buy American preference are crucial
to our Nation's health and prosperity. We at McWane are honored
to have the opportunity to contribute to that process.
Thank you very much.
[The prepared statement of Mr. Proctor follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Shimkus. I thank you all for your testimony.
We will now move into the question-and-answer portion of
the hearing. I will begin the questioning and recognize myself
for 5 minutes.
And, of course, I will go to Mr. Fletcher first. Is it
challenging for a small community to go through application
processes for government assistance?
Mr. Fletcher. Very much so, Congressman.
Mr. Shimkus. What would you recommend a process of
streamlining or the challenges? What could we do to make it
easier?
Mr. Fletcher. Well, I believe that if we have assistance,
circuit rider program, something similar to that, for each
state, that the circuit riders would have the knowledge to go
to these small systems and help them through the process with
the SRF application.
Mr. Shimkus. Mr. Vause, your testimony calls for
streamlining the SRF application process. What does that
include for you?
Mr. Vause. Mr. Chair, we do support efforts to reduce the
burden on regulation and the application process itself. We
think that the EPA can do, among its regions, developing best
practices that can be applied to all of the regions there to
streamline the application processes themselves.
We believe, secondarily, that the ability to do the
applications themselves rely on certain forms and certain
procedures that the agency should streamline. Those procedures
themselves go to the issue of the Buy America provisions, they
go to the issues of tracking minority, disadvantaged, and women
business enterprise activities related to SRF projects. So
those are two areas that we would like to see where there is
streamlining done. Thank you.
Mr. Shimkus. And if anyone else on the panel would like to
comment on the possibility of streamlining the application
process for SRF?
Oh, Ms. Daniels.
Ms. Daniels. Yes. So if I could just add. So we have heard
from applicants that they much prefer the RUS program because
it is much more streamlined. And it seems that it can give the
applicant upfront information sooner about what they might be
eligible for, what rates they might be looking at, and it helps
them then move forward from there and really design the project
that fits sort of their understanding of funding.
So if our program could figure out a way maybe to do a
letter of intent where you get the financial information up
front, because that is generally what is used to determine
rates and moneys available, that would give folks some upfront
information then to move forward and finish the complete
application.
Mr. Shimkus. Yes. What is the burden? You mentioned burden.
Ms. Daniels. So the burden for completing the application?
Mr. Shimkus. Right.
Ms. Daniels. Well, I mean, it is substantial for small
systems. In some cases, they are just not capable of completing
it. So one of the assistance programs that I mentioned before,
professional engineering services program, we do provide
assistance. So if a community really needs help completing the
application, we will work with them to do that.
Mr. Shimkus. And I agree, being from rural America, I think
the RUS ability for rural water co-ops and stuff have been
very, very helpful. And I haven't heard the same concerns that
I had with the SRF.
Going back to you, Ms. Daniels, are there other reasonable
steps that can be taken to simplify the SRF application process
or paperwork? Anything else you can think of?
Ms. Daniels. I think if we can come up with sort of an
upfront screening process, so an upfront letter of intent, I
think that gives folks a better sense.
So in Pennsylvania, before they can come in for an
application, they already have to have the project designed,
they have to have all of the permits in place. There is a lot
of expense that goes into getting to that point, and we don't
even know yet, then, what they might qualify for or what rates
they might be looking at.
Mr. Shimkus. So let me finish up with you. We have heard a
fair amount of testimony on disadvantaged communities. Are you
comfortable with the flexibility that the Safe Drinking Water
Act allows regarding the amount you can spend and how much debt
you can forgive?
Ms. Daniels. We really are. I think keeping the language of
``up to'' gives states the flexibility. So in a given year, if
we have lots of projects that meet that criteria, we are able
to fund those. But in other years where we don't, it means we
don't necessarily have to set that funding aside. We can use
that for other worthwhile projects.
Mr. Shimkus. Thank you very much.
I would yield back my time, and now recognize Mr. Tonko for
5 minutes.
Mr. Tonko. Thank you.
Many of the organizations represented today testified
earlier this year. At that hearing, everyone agreed that more
funding is necessary for the Drinking Water SRF.
The SRF was initially authorized at $1 billion in 1996 and,
frankly, I don't think that level of 20 years ago would meet
our Nation's needs, especially since we have seen the need grow
significantly during this time period.
So my question to everyone on the panel is, do you support
sustained increased funding for the SRF relative to historic
levels?
Mr. Kropelnicki?
Mr. Kropelnicki. Yes, we do.
Mr. Tonko. Mr. Potter?
Mr. Potter. Sir, I would like to address the fact that the
drinking water industry is a jobs program waiting to happen. We
can put a lot of people to work in a hurry. So the level of
funding that Congress would appropriate really can't be enough.
We can put people to work. We can renew infrastructure. We can
keep the dollars in the United States. We have used McWane
pipe. It is a good pipe. Everything about the whole program is
good for us. Fund us; we will put people to work.
Mr. Tonko. Thank you.
And can we continue, Mr. Fletcher, just across the board?
Mr. Fletcher. Any increased funding for small communities
would be greatly appreciated.
Mr. Tonko. Thank you.
Ms. Daniels?
Ms. Daniels. So ASDWA supports funding of about a billion.
Now, that isn't quite the same as maybe the double or the
triple numbers that you are hearing from other folks. One of
the reasons is that we have to understand that state staffing
levels are what they are right now based on sort of the
historical funding. States would have a difficult time quickly
staffing up to be able to move a two or three times the amount
of funding. I think what states may need is more moderate
increases over a longer period of time and maybe some
predictability that those funding levels will continue. That is
what states need to really be sort of confident that they can
increase staffing levels to be able to move those moneys.
Mr. Tonko. Right. And I believe AQUA reflects that in its
language.
Mr. Vause?
Mr. Vause. Mr. Tonko, yes. As we had indicated in our
testimony, the doubling of SRFs, and we believe a sustained
effort is necessary both for the SRFs and the WIFIA program.
We do recognize, though, that states do have a match to the
SRFs. So along with the increased funding at the Federal level
is a requirement that the states have to match as well.
Mr. Tonko. Thank you.
Ms. Thorp?
Ms. Thorp. Yes, thank you, Congressman. Yes. As I
mentioned, we support significant increases in the state
revolving funds as well as in the Public Water System
Supervision grants. We recognize there are complications and
that it is not the only solution to our Nation's drinking water
challenges, but it is certainly a much needed piece of the
puzzle.
Mr. Tonko. Thank you.
Mr. Proctor?
Mr. Proctor. Absolutely. As has been noted previously,
there is an estimated trillion dollar need to rehabilitate our
country's water infrastructure. The unfortunate thing, though,
is that highways, airports, other things like that get more
attention, but the need is just as critical for water. If there
is a pothole in a highway, I am sure you all get a phone call
from a constituent, but with water, even though 20 percent of
our water is leaking into the ground today, which is massive
waste of a precious resource as well as the energy associated
with it, it is out of sight, out of mind. But we can live
without roads; we can't live without water.
Mr. Tonko. Thank you.
There are disadvantage systems that need extra assistance,
and this discussion draft has some good ideas, but I believe
there are additional things we can do to support them.
Mr. Potter, can you expand why it is important to expand
the definition of disadvantage community?
Mr. Potter. Yes, sir. Fundamentally we are a large system,
so we have 190,000 water accounts. We have areas at Metro Water
Services that are relatively affluent. We have areas that are
economically disadvantaged. If we do not expand the definition,
then we wouldn't have the ability to have the additional
subsidization available through the Drinking Water SRF.
It provides us another tool to fund a project specifically
in a disadvantaged area that we would not have if the
definition wasn't expanded, so we would request that it be done
so.
Mr. Tonko. Thank you. And an asset management, the benefits
of that management, of asset management are being more widely
accepted, and I do understand the concerns about being overly
prescriptive, but also believe that more can be done to
encourage utilities to implement plans.
To Mr. Vause and Mr. Potter, do you see a benefit to having
systems finance projects that focus on the long-term
sustainability of their systems?
Start with you, Mr. Vause.
Mr. Vause. Mr. Tonko, yes, and we do believe in the
encouragement of every utility doing a project of that nature
to consider the life cycle costs associated with that and to
factor that into the decisionmaking on what is the right
solution for that particular project issue at hand.
Mr. Tonko. And Mr. Potter?
Mr. Potter. Yes, sir. Asset management is a good thing.
Recognizing that some utilities will have staffing that is more
available than a small system. A good example is, is this a
pump? If you take a brand new pump out of the box, and you
install it, and you do vibration analysis and lubricational
analysis over the life cycle of the pump, it is going to last
longer. And that is a better use of O&M funding.
If you don't do that, and that means you don't have asset
management program, it is going to cost more. And if it costs
more, those dollars will not be available for capital
investment.
So overall it is a good idea. We recognize that some
utilities will have higher capabilities than others, but
overall asset management works.
Mr. Tonko. Thank you. Thank you. And I yield back.
Mr. Shimkus. The gentleman's time is expired. The chair now
recognizes the Chairman of the Full Committee Mr. Walden for 5
minutes.
Mr. Walden. Thank you, Mr. Chairman.
Mr. Vause, one of the proposed SRF enhancements that you
discussed in your testimony was added flexibility and repayment
terms for the SRF loans. Why is added flexibility for repayment
terms needed, and do you support the provision in the
discussion draft that extends loan repayment schedules for
disadvantaged communities from 30 years to 40 years?
Mr. Vause. Mr. Walden, we do support the issue of extending
the terms to disadvantaged communities, and essentially it is
an issue of this, when you think about when you take out a loan
for a home for other things, those are long-lived assets, and
to be able to extend the terms out to not exceed the useful
lives of the a ssets that are being funded through the SRF and
so forth, that is an appropriate way to help communities who
need to extend out the terms and so forth to be able to afford
the loan.
Mr. Walden. All right. And today's discussion draft removes
Federal reporting requirements on Federal funding if state or
local requirements are equivalent to the Federal requirements.
From your perspective, Mr. Vause, what effect would this
provision have, and would it be as beneficial as some of us
think it would be, and do you support it?
Mr. Vause. Mr. Walden, we do support that concept, and it
does help and facilitate the ability of the loan recipient to
be able to ease the administrative burden of a project of this
nature.
When utilities go through, being able to show that an equal
or more stringent requirement exists, at the state level, makes
it much easier to facilitate the use of the loans in the
administration of a project that is funded and financed that
way.
Mr. Walden. And is there something we should do in terms of
prioritization or should we stay out of that, and by ``that'' I
mean when we identify in the country a problem, let's say lead
in the pipes or arsenic in the water or something, should we be
thinking about a way, or maybe it is already there, to target a
support to communities to deal specifically with those issues
as opposed to just a leaky water system or something of that
nature?
Mr. Vause. Mr. Walden, every state that acts as the primacy
agency for SRF funds has their own set of criteria that they
use to prioritize projects, and typically those prioritizations
involve things that are of critical public health need, and,
therefore, most of the monies that our experience is, is
projects go to those that have the highest priority to protect
public health.
Mr. Walden. OK. Then sort of the several billion dollar
question that is before all of us: How do we pay for this? I
know at the local level in my water bill I pay for it. The
Federal level we tend to just throw a number on a piece of
paper and then go borrow it or find it or something.
Are there any of these authorized programs out there that
you would tell us really aren't working and we should move
money from them to this? Any ideas on how we should pay for
this from the Federal level, other than giving our kids and
grandkids the due bill later in their life?
Mr. Vause. Mr. Walden, I think a short answer to that is is
the newly created WIFIA program is a great example of where the
burden on the Federal Treasury is de minimis. In that situation
it is a loan program.
Mr. Walden. Right.
Mr. Vause. And therefore, those who are in receipt of WIFIA
loans really are paying back to the Federal Treasury and the
effect is very, very minor.
Mr. Walden. OK. Anybody else on the panel want to tackle
the funding issue, other than being recipients of the funding.
Mr. Shimkus. Would the chairman yield?
Mr. Walden. Sure, of course.
Mr. Shimkus. Under the WIFIA, which has been part of the
discussion too, it is my understanding for small communities
the requirements are so large that they can't apply. In fact,
no loans have been made out of the WIFIA program yet.
Am I correct or someone tell me about what they have done
with the WIFIA. Mr. Potter?
Mr. Potter. Sir, we think WIFIA is in addition to SRF. We
don't think they are mutually exclusive. We think they are
complementary, and we think they should both have equal funding
attention.
Mr. Walden. But to his point, and Mr. Vause, I represent
eastern Oregon, it is not as big as Alaska, but we have got a
lot of these little tiny communities.
Mr. Shimkus. But you are a broadcaster in Alaska.
Mr. Walden. That is true. The Mighty Ninety KFRB Fairbanks.
But the point is they don't have a huge water department, it is
the mayor or somebody. They have got a public works, but what
we want to do is how do we streamline this and put the money in
the pipe and the ground and the water system and not in the
paperwork and the reporting and all of that? Isn't that what we
are trying to get to here?
Mr. Vause. Mr. Walden, with respect to the WIFIA program,
for example, small communities under the size of 25,000, the
project size that is eligible is a $5 million project. States
also can apply for WIFIA loans, and they can bundle projects
together from small communities to help facilitate that in that
program.
The ability of the small communities to administer an SRF
program, to that question, I think the ideas that we have
previously talked about of streamlining some of the paperwork
exercising, having best practices used, but more importantly,
the idea of being able to demonstrate the ability to use state
regulations to avoid the issues of the cross-cutting
requirements at the Federal level are all things that really
help try to streamline that effort.
Mr. Walden. Thank you, Mr. Chairman.
Mr. Shimkus. The Chairman's time is expired. The chair now
recognizes Ranking Member, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman. We have seen numerous
serious problems in the Safe Drinking Water Act that should be
addressed in any legislation this committee passes to amend the
Safe Drinking Water Act. The biggest challenge is clearly the
lack of funds, but I want to quickly touch on a few others. And
my questions are of Ms. Thorp.
Does the discussion draft that is before us fix the
weaknesses in the standard setting process under the Safe
Drinking Water Act?
Ms. Thorp. Thank you, Congressman Pallone. The discussion
draft, as I read it, didn't address any of the contaminant
regulation, national primary drinking water regulation setting
process at all, so it didn't go into that topic.
Mr. Pallone. All right. And the source water protection
provisions in the statute have proven ineffective, and that is
why my bill would create an entirely new program to ensure
source water protection.
Does the discussion draft before us do enough to ensure
source water protection in your opinion?
Ms. Thorp. Congressman Pallone, if I recall, the discussion
draft did allow for some set-asides in Drinking Water State
Revolving Fund monies to do source water protection plans and
to update those systems and states. So we think that is a good
idea.
We do think there is some creativity and some innovation
that needs to be applied as we look at the future of the Safe
Drinking Water Act, which really as currently written, doesn't
do much to protect source water or to reinforce our other
environmental and public health protection statutes and
regulations. Some interesting work could be done on that in the
future.
Mr. Pallone. All right. Thank you.
Now, our Democratic proposals also address threats to
source water, including oil and gas development and climate
change. Does the discussion draft before us today address those
threats?
Ms. Thorp. Still to me, Congressman?
Mr. Pallone. Yes, these are all to you.
Ms. Thorp. Thank you, Congressman Pallone. I did not see
anything on oil and gas activities and other sector threats to
drinking water sources or on climate change and resilience.
Mr. Pallone. All right. One of the concerns we hear about
most on drinking water is lead contamination, particularly
concerns about lead service lines and lead in school drinking
water. Will this discussion draft get lead out of our homes and
schools or do we need to do more?
Ms. Thorp. I don't think the discussion draft addressed
lead in schools or lead in water, and specifically, although as
I mention in my testimony, increased authorizations and
appropriations can help us with some aspects of the lead
service line problems, for example.
Mr. Pallone. All right. And then we also hear a lot of
concerns about the need to restructure water systems to ensure
the technical, financial, and managerial capacity to deliver
safe water.
Does the discussion draft need to be strengthened to
effectively address the restructuring and consolidation in your
opinion?
Ms. Thorp. Well, I think some detail could be added. I
think the discussion draft noted that this is one use of State
Revolving Fund funds. So I think some of the detail we have
seen in the bill that you, Congressman, introduced and in other
places to support appropriate restructuring and consolidation
would be helpful.
Mr. Pallone. All right. Obviously, it is my opinion that
this discussion draft needs a lot of work if it is going to
actually address the problems we see in the Safe Drinking Water
Act, so my hope is that my Republican colleagues will work with
us as we move forward on some of the issues that I mentioned.
I want to yield the rest of my time, though, to Mr.
McNerney.
Mr. McNerney. Well, I thank the ranking member of the full
committee for yielding. I am going to read a statement and I
want to know if all the panel members agree with a yes or
disagree with a no: ``The draft mostly continues with the
status quo, which is necessary but not sufficient to meet our
Nation's drinking water needs.''
Mr. Kropelnicki?
Mr. Kropelnicki. I would agree with that, yes.
Mr. McNerney. Mr. Potter?
Mr. Potter. Yes, sir, I would agree with that statement.
Mr. Fletcher. Yes.
Ms. Daniels. Yes.
Mr. Vause. Yes.
Ms. Thorp. Yes.
Mr. Proctor. Yes, sir.
Mr. McNerney. Well, everybody said yes. I was going to take
as just the ones that said yes, name one thing briefly that you
think would most improve the legislation? Starting briefly. Go
ahead.
Mr. Kropelnicki. Requiring that any funds being expedited
are used, be used economically, efficiently, that asset
management and full life cycle pricing and full cost in the
true value of water is reflected in the rates being charged to
customers.
Mr. McNerney. Mr. Potter?
Mr. Potter. Yes, sir. I would support enhancement in asset
management program requirements and codifying the amounts in
the SRF funding levels, and strengthening the WIFIA
authorizations.
Mr. McNerney. Mr. Fletcher, briefly now?
Mr. Fletcher. Technical assistance would be very important.
Mr. McNerney. Very good.
Mr. Fletcher And that for small systems in rural
communities.
Mr. McNerney. [continuing]. Ms. Daniels?
Ms. Daniels. I would actually support being able to shift
some of the work for source water protection plans to the SRF
because that would free up set-aside funds for more technical
assistance and other things within that program.
Mr. McNerney. Thank you. Mr. Vause?
Mr. Vause. Yes. EPA has stated that various states have
unobligated or unspent balances in their Drinking Water SRF
accounts, and when those dollars are not in circulation they
are not being used to improve drinking water infrastructure.
So in combination with increased SRF funding, we, AWWA,
would urge Congress to use all the necessary tools to help
state primacy agencies put those unexpended funds to use in
drinking water infrastructure.
Mr. McNerney. Ms. Thorp? Quickly, please.
Ms. Thorp. To increase authorization, I think creative use
of technical assistance and state programs to move toward
having the most 21st century modern drinking water systems we
can nationwide.
Mr. McNerney. Yes.
Mr. Proctor. In addition to the domestic preference and
consistent levels of funding I mentioned in my earlier
remarks----
Mr. McNerney. Quickly, please.
Mr. Proctor [continuing]. Additional things that would
improve, the adoption of smart technology would go a long way.
Mr. McNerney. Thank you, chairman.
Mr. Shimkus. The gentleman's time is expired. The chair now
recognizes the gentleman from Texas for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman. And I am not going to
take 5 minutes.
We appear to be on the verge of having a bill that most
people agree with on both sides of the aisle. I don't hear a
lot of negativity. I guess my only question would be, this
section A, it says adds a new provision that if the Federal
reporting requirements on Federal funding are pretty much the
same as local requirements that you don't have to make the
Federal report.
Do you all agree with that? That sounds like a good deal to
me.
Mr. Kropelnicki. Yes.
Mr. Barton. Nobody has heartburn over there?
Ms. Daniels. No.
Mr. Barton. With that, Mr. Chairman, I am going to yield
the rest of my time to Mr. Murphy of Pennsylvania.
Mr. Murphy. I thank the gentleman. Mr. Vause, let me start
off with you.
In your testimony you argued the present Buy America
requirements to the SRF are unrealistic and that the conditions
for granting a waiver should be loosened to make it easier to
buy nonAmerican products, am I correct?
Mr. Vause. We supported modifying the language.
Mr. Murphy. Just am I correct or not, to make it easier to
buy nonAmerican, is that a yes or a no?
Mr. Vause. I am sorry, could you repeat the question?
Mr. Murphy. So you said in your testimony, you argued the
present buy American requirements are unrealistic and that the
conditions for granting a waiver to this should be loosened to
make it easier to buy non-American products. Did I understand
that correctly?
Mr. Vause. Yes.
Mr. Murphy. OK. So are you willing to forego U.S. taxpayer
dollars for your water projects in order to buy your steel from
wherever you want?
Mr. Vause. No.
Mr. Murphy. Well, then what percent of funding from the
Federal Government should you have cut in order to allow you to
support the economy of China instead of the United States?
Mr. Vause. That is not our intent, sir.
Mr. Murphy. Well, but if you are not buying American steel
but you are using American taxpayer's money to buy products
from other countries, that is how it works out. So intention or
not, that is the outcome.
So, Mr. Proctor, in your testimony you discussed the
benefits to McWane and the broader domestic steel industry of
the American Iron and Steel Institute preference for Drinking
Water State Revolving Fund. What impact would Congress enacting
a statute to permanently apply this procurement preference
policy to the DWSRF have on industry, domestic manufacturing,
and jobs?
Mr. Proctor. I think it would accelerate the repatriation
of jobs back here to the U.S. A permanent provision would give
industry the signal that it is worth investing in the new
capital and the new capacity here in the United States, and we
would see exactly what has already happened in the fittings
business where jobs that went to China are coming back to the
United States, and that would increase competition, as well as
increase jobs and economic benefits.
Mr. Murphy. So you speak of the lost opportunities of the
domestic industries, as well as the administrative
inconsistencies and inefficiencies that this generates. Can you
explain what you mean by that?
Mr. Proctor. Well, it just seems inconsistent that on the
one hand you are taking tax dollars from American workers and
then using those tax dollars to fund the purchase of materials
and in the process taking away their livelihoods, number one.
Number two, the agency that is charged with the
administration of the SRF is the Environmental Protection
Agency. When they impose regulations on American manufacturers
that make them uncompetitive so that people go to China, India
and other places to buy their products, they are having the
perverse effect of sending those manufacturing jobs to place,
not only eliminating jobs here in the U.S., but sending them to
places that have no regard for the environment.
Mr. Murphy. Like state-owned governments who also subsidize
it and without the environment--so what happens is, so you may
have an American steel worker paying U.S. taxes. Those taxes
then go to help subsidize water projects to the community,
which then because of the onerous regulations of the United
States make other countries' steel cheaper, and those
communities then buy other countries' steel, which further puts
that steel worker out of a job, do I follow that correctly?
Mr. Proctor. That is exactly right. That is exactly right.
And you are making the environment worse in the process.
Something around 25 percent of the particulate matter that
falls on California comes from China.
Mr. Murphy. So all the work we do in environmental
improvements are just very small and overridden, I understand,
by what China does in a short period of time?
Mr. Proctor. That is correct.
Mr. Murphy. Right.
Mr. Proctor. China produces more carbon dioxide and
greenhouse gasses than all the other iron and steel
manufacturing companies in the world combined.
Mr. Murphy. Thank you.
Ms. Daniels, real quickly, how big of a national problem is
the undiscovered water systems containing pathogens like in
Cydectin?
Ms. Daniels. It is really hard to quantify that. Every year
it seems we find one or two undiscovered water systems mainly
in our rural areas.
When you are driving past a community it is hard to see,
are they on private wells or a connected community water
system?
So often we find out about them because we get folks
calling complaining about water quality, and that sort of leads
us to the investigation.
Mr. Murphy. Thank you. I yield back.
Mr. Shimkus. The gentleman yields back the time. The chair
now recognizes the gentleman from California, Mr. Peters, for 5
minutes.
Mr. Peters. Thank you, Mr. Chairman, and thanks for having
this hearing. It comes at an important time when we obviously
heard issues like Flint, we have got a 5-year drought ending in
California, and it is a good time to talk about sustainability
and resiliency, and we see reports that water prices would have
to increase by 41 percent in the next 5 years to cover the
costs of replacing infrastructure.
A New York Times op-ed by Charles Fishman said ``Water is
Broken. Data Can Fix It.'' And it claims that more than any
single step, modernizing water data would unleash an era of
water innovation like anything in the century. So I wanted to
explore that with some of you who mentioned that.
Ms. Thorp, you said that in your testimony that invasion
data and information systems could increase transparency,
enhance public engagement and awareness, provide more effective
oversight and ultimately lead to increased public health
protection.
Can you tell me kind of what are the primary drivers for
the lack of data and, you know, what are the steps we might
take to employ data to be doing something beyond what we all
agree we are doing today but we need to do?
Ms. Thorp. Thank you, Congressman Peters.
I think it is not a lack of data necessarily. It may be a
lack of ability to compile the data and then make it usable to
not only regulators but to folks in the drinking water sector
in the public interest and public health communities.
There are some interesting recommendations on that sometime
late last year the President's Council of Science Advisors did
an interesting report on drinking water data and urged folks to
take a look at it. I do think some of the authorizations we
have talked about today for state programs, as well as SRFs and
EPA itself could lead to progress.
Mr. Peters. I guess I am looking for more specifics on the
steps we should be taking.
Sometimes I find that if you leave it up to states to make
these decisions, some of them will make more progress than
others if they are not given the kind of technical assistance
that we might be able to provide here.
Ms. Thorp. Well, one simple step would be improving the
technology we use both at EPA and in states for making it
possible for drinking water consumers to understand monitoring
results in their water systems, not just lead but others. That
sort of thing.
Mr. Peters. Mr. Potter, maybe you had some ideas about
this, as well. Is it feasible to put water quality data online
in real time, would that increase transparency?
Mr. Potter. Yes sir it is. Was that directed to me?
Mr. Peters. I am sorry, I was looking at Proctor, but I am
sorry, Mr. Potter, yes.
Mr. Potter. Yes sir it is. We have real time water quality
data that we do and can put on the web.
Mr. Peters. Is there something in this bill we should be
doing to encourage that?
Mr. Potter. I think encouragement of that in the asset
management realm would be a perfect idea. Another example would
be use of automatic metering to measure use at the tap and
compare that to production. That would be a great asset
management tool to identify where your leaks are.
So that is lots of room for additional technology to be
used in our industry.
Mr. Peters. Is that being successfully employed in
particular places?
Mr. Potter. We are exploring that presently.
Mr. Peters. OK. But you are exploring whether it is being
employed or how it could be employed?
Mr. Potter. How it can be used once it is deployed. We are
transitioning to that technology right now.
Mr. Peters. Mr. Vause, maybe you could tell us, we received
a D on our drinking water infrastructure, and you have talked
about whether this bill appropriately addresses the water
infrastructure needs.
What funding levels would you recommend adding into each
bracket, and briefly why would you do that?
Mr. Vause. Mr. Peters, we talked earlier about the fact
that we would recommend appropriations at the full
authorization level for WIFIA at $45 million in fiscal year
2018, a doubling of the SRF's water and wastewater from their
current fiscal year 2017 levels for fiscal year 2018.
To the issue of the data and the information, if that is
part of this question, as well, I concur with what was said
using it for asset management but also from security and
preparedness, having on time real line data on water system
quality I think is a very, very vital thing, and I think the
PWSS programs and supporting the states in their efforts at not
less than the current funding levels are really important to go
forward.
Mr. Peters. And just along the lines of Mr. McNerney's
question I think we have something here that we can find wide
agreement on, but I think we can do more, and I hope we take
the opportunity to improve off of the standard things we have
been doing for a long time, and I appreciate all the witnesses
for being here today. I yield back.
Mr. McKinley [presiding]. The gentleman's time is expired.
I recognize myself for 5 minutes.
To the group, maybe it goes to you, Mr. Proctor, about
energy efficiency. Tonko out of New York and Welch out of
Vermont, we have worked together on trying to find ways of
efficiency, and one of the things that I am concerned about is
from this in the water system one of two engineers in Congress,
and one of the things we are talking about is always how do we
improve efficiency?
And I think a smart grid system could be very interesting
with our meters, and I think you were alluding to that perhaps
in your testimony because if we have 240,000 breaks during a
year, and we lose anywhere from 20 to plus percent of our
water, that is not efficient. The electricity is lost in motors
and generating pumps to move that and the water we are moving
and the chemicals all the process, so the efficiency, I know
that Europe is investing about $8 billion in the next 3 years
in a smart systems smart metering system.
Do you see that as being part of the solution of how we can
be more prudent in our water programs?
Mr. Proctor. Absolutely. And I would like to make two
points about that. One is the smart technology that is emerging
right now does create the opportunity to monitor as well as
meter water that is flowing through our distribution systems.
So you can detect leaks, and when you can detect the leaks
you know exactly where it is so you don't spend a lot of time
looking around trying to find it so you can repair it.
Mr. McKinley. If Europe is so much out in front with $8
billion, do you know what kind of numbers we are putting into
this, into the research, into a smart meter?
Mr. Proctor. I don't know the answer to that.
Mr. McKinley. If you can get back to me on that.
The other thing I wanted to talk about maybe to you, Mr.
Vause, is rural water. I come from West Virginia. We have a lot
of areas that are really hurting for water, and I am thinking
in Alaska you have got a similar situation.
And we know around the world there are some deficiencies
with that people can't get access to water. And there is a
program that is being developed in West Virginia at Ohio Valley
University with Katharos, it is a group out of Denver in
consolidation or in coordination with the Ohio Valley
University to develop a mobile water treatment facility.
And they have been able to get it now to the point that
they can produce water now at $0.27 per person per day. That is
pretty competitive with it. So I am wondering whether or not
that is something that we should--first, are you first are you
aware of the Katharos Catharis program?
Mr. Vause. I am not aware of that particular program
myself, but at our state, in Alaska for example, there are
several ways that we are researching in partnership with the
EPA ways to improve water supply to many rural areas of our
state, and those include using innovation and trying to provide
recycling and reuse technologies, so that for the limited
supplies that are available, that there are ways in which we
can improve at a household level the ability to have----
Mr. McKinley. I know their program is what they are trying
to develop there, is also been using solar panels, so they can
go to areas without electricity and still be able to process
water for families in that immediate area.
I think it also has opportunity for us where we have some
serious leaks where people can't get water that a mobile unit
could come in and be able to provide them water service during
the interim period of time.
I am very optimistic that these mobile units could be very
helpful to us, so I thank you on that. Could you grab that?
This is an example of, when I say a water problem, I have
designed thousands of miles of water systems, and this is one
in rural West Virginia, a good 1-inch waterline that probably
has about 80 percent of it occluded that they can't pass water
through.
This is what we see all across America. That is why this
urgency of getting something done so that these families can
have dependable clean water, and this is certainly unable to
provide that.
So I thank you for that and I yield the balance of my time.
Who do we have next?
OK. Mr. Green, you are recognized for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I want to thank our
chairman and ranking member for holding hearings today.
Water challenges are all over the country and where I am
from in Texas I have a very urban district. It is mostly
incorporated by either the City of Houston or smaller cities
that provide water, but we have some areas that are urban areas
outside the city limits and none of the cities will annex it
because of the low property values. They just can't afford to
come in and put new waterlines or streets or anything else.
So what I was going to see if is in these unincorporated
communities that are very urban, and I am sure rural areas have
the same problem with low property values. In Texas we created
decades ago water districts that are actually local levels of
government for water and sewer and other things if they would
like.
But, again, you can't even create that if you have low
value for your property because you can't sell bonds if you
can't afford to pay them off.
Is there a Federal program for these areas similar to what
rural water authorities would be to help get water and sewer
because, again, these are very urban areas, but our traditional
sources of water and sewer are not there, so what they have is
water wells and septic tanks that are, again, in urban areas
not designed to have that much usage, I guess.
Is there a Federal program that would help that? Our county
commissioners have helped with what they can but, again, they
don't have the budget oftentimes to except to provide just a
little bit of money, so that we have a partner but we would
need Federal funding to do it in a low wealth area.
Anybody have any? Yes, sir.
Mr. Fletcher. Rural development has their water loan and
grant program, and in Illinois, in my system itself, was
unserved back in the late eighties. And we got a group of
people together that tried to form this water system. And they
went and talked to people, and people put deposits in of $20.
It cost them $150 to get the meter once we had funding, but we
went to a Farmers Home Administration and got our first loan
and grant was $2-and-a-half million.
And we served those people. And we have continued to do
that through this program. And I can only assume that there
could be somebody in that area that would take the bull by the
horns and try to do the same thing there.
Mr. Green. Mr. Proctor, can you tell us a little about the
role your company plays in drinking water infrastructure
projects?
Mr. Proctor. Yes, sir. We manufacture the basic building
blocks for the Nation's water infrastructure. We make pipe,
valves, fittings, fire hydrants, and all those related
projects.
Mr. Green. OK. Coming from Houston, and I have a whole
bunch of chemical plants that make PVC pipe, and I just met
with a group of them yesterday. I know there is some
competition because PVC typically doesn't rust, but there is
other problems with it also, so what would you guess would be
the usage of PVC compared to metal pipes?
Mr. Proctor. I am not sure what the percentages are
exactly, but I can say this, that iron is much more durable
than PVC, and their modern techniques virtually eliminate the
corrosion for pipe that is installed today.
But even without that, if you look at the track record of
iron, as someone mentioned earlier, there was a problem that
occurred just the other day for a pipe manufactured in 1860,
and that was old cast iron.
Today we have ductal iron that is even stronger and lasts
even longer.
Mr. Green. OK. And I know in my area, though, when we see
new subdivisions built I almost always see it being built by
PVC. Again, because local prices and things like that I guess
goes there.
What are the steps that Congress and the EPA can take to
ensure that we have the trained workers who need to modernize
and maintain our water system? In our district, like I said
earlier, we have disadvantaged communities that do not have the
resources to invest. In fact, some of the areas in our district
would be called-- are colonia, which decades ago was created
along the border.
Somebody would go buy, set out a subdivision, but they
wouldn't provide any water and sewer, so people would buy a
lot, and the only way they could get water is do their own well
or a septic tank. But I am also interested in the training for
the employees that need to be putting these systems in.
Anybody on the panel? Yes, sir.
Mr. Fletcher. Texas Rural Water Association has circuit
riders and technical assistance and training for people like
that, for operators that want to learn how to operate a system
and get certified. And it is free of charge to these small
communities.
Mr. Green. Great. Thank you. I have run out of time. Thank
you, Mr. Chairman.
Mr. Shimkus. The gentleman's time has expired. The chair
now recognizes the gentleman from Mississippi, Mr. Harper, for
5 minutes.
Mr. Harper. Thank you, Mr. Chairman, and thank you for
holding this hearing. I know this is an issue we have looked at
for years and continue to be concerned about.
I want to thank each witness for being here and taking time
to help us. This is something that as we look at the aging
infrastructure in so many of these systems and how we are doing
that, and I agree to Mr. Fletcher, the circuit riders in my
State of Mississippi have done a remarkable job of helping
areas that maybe don't have the resources, and I think that has
been a great value across the country where those have been
used.
Mr. Vause, if I could ask you a couple of questions. And I
know that Mr. Tonko touched on some of this earlier, but I want
to try to look a little deeper. I know in your written
testimony you emphasize the need for asset management to be
encouraged but not mandated. Is there agreement among the
industry as to what constitutes good asset management
practices?
Mr. Vause. There are basically two models, and those models
revolve around five basic concepts. The concepts are more or
less solidified between those two models, and so what
constitutes good practice really gets to the level of how well
you practice each one of those five steps within asset
management.
So, I would say generally yes is the answer to that
question.
Mr. Harper. OK. But also in that these are sometimes goals
or objectives, but how they are met I guess depends upon the
resources and determination of each group. Would that be
correct?
Mr. Vause. There is. There are policy considerations,
considerations that go to what are the necessary levels of
service that need to be provided for a particular community.
Those are objectives that are set through public policy. There
are what are also besides the required levels of service are
what are the tolerances that a community has for the degree of
risk that they are willing to accept or not accept.
Again, those are public policy choices that are made best
at the local level, and so there is no one specific answer.
Mr. Harper. Sure. And of course you are here wearing more
than one hat, but on behalf of the American Water Works
Association what is that organization doing to encourage or
support that better asset management?
Mr. Vause. Yes. We provide through a variety and suite of
educational offerings, both in printed materials, in
conferences, in workshops, webinars, and so forth, a variety of
opportunities for practitioners to be able to learn about these
concepts, to see how they are applied both in the United States
and elsewhere.
And to bring that information down to the level that allows
people from the top executive level down to the plant floor and
operators to have the opportunities, the educational
opportunities that are necessary to learn how to best apply
those practices for their utilities.
Mr. Harper. All right. Well, let's look at where we are
right now. If we were talking about what industry or government
could do, that might encourage better asset management, does
something stand out that you would give us as a takeaway that
you want to make sure we don't miss?
Mr. Vause. I think the ability to have the Environmental
Protection Agency to be able to monitor these developments and
provide materials on a periodic basis to update as time
progresses, I think that is an important thing to include in
this particular legislation is to ask the administrator to be
able to update those on a regular basis and to make them
available to all water systems across the United States. I
think that is one aspect.
The second aspect that I think is as important is to
provide the encouragement through providing a positive
incentive to those systems that are interested in securing an
SRF loan to be able to reward them for having made positive
steps in advancing and adopting those practices at their local
utility, not to penalize anyone for not having done so.
But to reinforce through positive rewards, if you will, the
ability to work with the agencies and to secure loans so that
there is a recognition that advancing these practices leads to
good things for utilities.
Mr. Harper. And do you believe you have sufficiently
objective criteria to measure that progress?
Mr. Vause. I think there are ways to measure that, and we
would certainly be interested in working with the panel here to
help identify those specific things that would be able to show
measurable progress.
Mr. Harper. Thank you very much. And with that I yield
back.
Mr. Shimkus. The gentleman yields back his time. Mr. Chair?
Mr. Tonko. If I might, I know we are rushing off to the
briefing for all the House Members.
I just wanted to offer this observation, that everyone is
indicating that we need more Federal dollars to address what is
a basic core bit of infrastructure that speaks to our needs,
individual needs, household needs, and business needs. But if
we can find it in our means to provide for 70 billion from the
general fund for roads and bridges the FAST Act, I think we
need to step up and say, hey, look, this is a hidden
infrastructure that cannot be out of sight and out of mind.
We need to do better. We need to prioritize here and not
set aside the needs here that should be funded with additional
resources from the Federal budget based on recent happenings
here in DC.
Mr. Shimkus. And I applaud my colleague for being
passionate and committed. So thank you for that.
Seeing there are no further members wishing to ask
questions for the panel, I would like to thank you all for
coming and also coming early. Again, in my 20 years this is
probably the earliest hearing I have been involved with.
Before we conclude I would like to ask for unanimous
consent to submit the following document for the record, a
letter from the United States Steel Workers. Without objection
so ordered.
[The information appears at the conclusion of the hearing.]
Mr. McKinley. And pursuant to committee rules I remind
members they have 10 business days to submit additional
questions for the record, and I ask that witnesses submit their
responses within 10 business days upon receipt of the
questions.
And you may get a little bit more since we are so busy this
morning, so I think minority counsel warned you all about that
previously. Upon receipt of the questions.
Without objection, the subcommittee is adjourned.
[Whereupon, at 10:11 a.m., the subcommittee was adjourned.]
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