[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING: WHEELING, IL: FLOODED OUT: VANISHING ENVIRONMENTAL
REVIEWS AND THE SBA'S DISASTER LOAN PROGRAM
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JULY 19, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-036
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
37-066 WASHINGTON : 2019
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TRENT KELLY, Mississippi
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
Adam Minehardt, Majority Staff Director
Melissa Jung, Majority Deputy Staff Director and Chief Counsel
Kevin Fitzpatrick, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Brad Schneider.............................................. 1
WITNESSES
Mr. Mike Warner, Executive Director, Lake County Stormwater
Management Commission, Libertyville, IL........................ 5
Mr. Howard Learner, Executive Director, The Environmental Law &
Policy Center, Chicago, IL..................................... 7
Mr. John Durning, Owner, Pizzeria Deville, Libertyville, IL...... 9
APPENDIX
Prepared Statements:
Mr. Mike Warner, Executive Director, Lake County Stormwater
Management Commission, Libertyville, IL.................... 25
Mr. Howard Learner, Executive Director, The Environmental Law
& Policy Center, Chicago, IL............................... 48
Mr. John Durning, Owner, Pizzeria Deville, Libertyville, IL.. 52
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
James L. Anderson, Director Natural Resources, Lake County
Forest Preserve District................................... 60
Christopher Johnson.......................................... 66
Joe Massarelli, Owner, Liberty Auto City..................... 68
Stacy Meyers, Senior Council & Molly Kordas, Staff Attorney,
Openlands.................................................. 70
Quin O'Brien................................................. 75
Daniel M. Pierce, President, North Shore Water Reclamation
District................................................... 76
David Shimberg, Riverwoods Preservation Council, President... 79
John F. Wasik, Journalist, Lake County Board and Forest
Preserve Commissioner...................................... 81
Terry L. Weppler, Mayor, Libertyville Spirit Independence.... 82
FLOODED OUT: VANISHING ENVIRONMENTAL REVIEWS AND THE SBA'S DISASTER
LOAN PROGRAM
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FRIDAY, JULY 19, 2019
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:30 a.m., at
Wheeling Village Hall, 2 Community Blvd., Wheeling, IL, Hon.
Brad Schneider presiding.
Present: Representative Schneider.
Mr. SCHNEIDER. The Committee will come to order.
Welcome. I want to thank everyone for joining us here this
morning.
Let me first thank the House Small Business Committee and
Chairwoman Nydia Velazquez for allowing us to host today's
field hearing here in Wheeling.
I also want to thank the staff, the Committee staff,
Melissa Jung and Naveen Parmar, who are in the corner, who are
here today to help facilitate today's event.
As we sit here in Village Hall, let me thank the Village of
Wheeling for graciously providing today's location and for the
local elected officials, who are in the front row, who have
joined us here today.
Can I ask the elected officials just to raise your hand?
Thank you guys for joining us today.
And finally I want to take the prerogative of thanking my
team. It is impossible to overstate the amount of hard work
that went into making this event today possible, everything
from arranging witnesses to logistics to making sure people
know about the event. Clearly, by the audience we have today,
they effectively got the word out, so thank you all for joining
us as well.
I will say as far as logistics, yesterday O'Hare was kind
of socked in because of the rains. More than 700 flights were
cancelled; more were delayed. We can vouch for this because it
affected every one of us, including staff. I got to fly into
Milwaukee and drive down, but it did give me the chance to show
the Committee staff where Foxconn is, where our district is,
and they got to drive the length of the Des Plaines River. So
again, thank you for that.
For everyone in attendance today here, I do want to share
some background on how the proceedings are going to work. This
is a formal hearing, a field hearing of the House Committee on
Small Business. Due to that format, there is not an opportunity
for questions or public comments from the audience. I thank
everyone for your attendance and interest in the issue.
We do have in the back flyers, in the back of the room with
instructions so that you can share your thoughts and concerns
about the issues today. When we say back of the room, do we
mean on the side? In the back of the room.
Field hearings play an important role in the work of our
Committee. Traveling to Washington and testifying before
Congress presents a lot of barriers and costs in time that can
oftentimes prevent important voices from being heard. Field
hearings like this serve to bring the work of the Committee
closer to our districts and offer our communities The
Opportunity (2:42Video 1) to share their views on issues that
matter. They are relatively rare, so we are very fortunate to
have this hearing here today.
One of the important local issues is the problem of
flooding and the impact on our communities, on people,
property, local governments, and of particular interest today,
small business. As we will focus on today, the threat of floods
has been compounded for our communities here in Illinois and in
the 10th District by the massive Foxconn development just over
the state line in Wisconsin. This project and its still
unfulfilled promises of job creation will push through with
great fanfare, including participation by President Trump in
the groundbreaking.
But missing was any serious environmental review of the
consequences of this project. The administration of former
Wisconsin Governor Scott Walker dispensed with the extremely
critical environmental review requirements in their haste to
please foreign investors.
Foxconn is a local issue, but it is emblematic of a
national problem of vanishing environmental enforcement
exacerbating damaging impacts of climate change. We need to
address this deficit not just to protect the affected
communities but also to ensure the longevity of critical
programs such as the Small Business Administration disaster
recovery programs that are designed to help people who own,
work at, and are served by local businesses.
Our communities along the Des Plaines and Fox River
Watersheds have long faced flooding issues during significant
rain events. Coupled with the effects of global climate change,
which is increasing the frequency and intensity of extreme
weather events, this threat is growing.
Since 2013, Lake County has experienced two 100-year
floods, and six of our district's 10 largest storm events on
record have occurred since 1994.
In July 2017, storms and flooding damaged more than 3,200
homes, resulting in a state of emergency declaration for the
region and causing millions of dollars of damage to the
community. Today we'll (4:50) Video 1) hear from a small
business owner who dealt personally with the flooding.
Though the Federal Emergency Management Agency, FEMA,
declined to declare a Federal emergency for the region, the
Small Business Administration did declare an emergency, making
local businesses eligible for disaster loans. For small
businesses in the aftermath of a disaster, access to affordable
credit can make the difference between remaining in business or
closing their doors and putting hard-working Americans out of
work. In fact, FEMA estimates that 40 to 60 percent of
businesses impacted by natural disasters never reopen their
doors.
That is why one of the foremost priorities of this
Committee is to ensure the Small Business Administration's
Disaster Loan Program, which provides direct loans to help
businesses, homeowners, and renters rebuild following a
federally declared or certified disaster, is functioning
efficiently and effectively and that it is prepared to meet the
challenges of the future, and in particular climate change.
A key part of strengthening the foundation of the program
is making sure new development does not make flooding worse.
Yet, that is exactly the situation our communities face after
important environmental considerations were cast aside in the
Foxconn development. Environmental reviews are necessary to
understand the potential impacts of a development, and they
give the public and government officials the ability to make
informed decisions prior to construction and the opportunity to
mitigate adverse impacts. Unfortunately, environmental reviews
are too often skipped for expediency or as leverage, and that
has the potential to exacerbate flooding in places like the Des
Plaines River Watershed.
When corners are cut on environmental reviews, our local
communities pay the price. It puts strain on government
programs and resources, and small businesses and homeowners
that need vital assistance in the days after a disaster might
not be able to access policies or programs enacted for their
benefit.
This is the case we are facing in Lake County. Foxconn
Technology, a Taiwanese electronics manufacturer, worked with
former Wisconsin governor Scott Walker's administration on a
proposed manufacturing development site outside Mt. Pleasant in
the state's southeast corner. In order to entice the company to
invest in the state, and based on the promise of up to 13,000
direct jobs in the region, Governor Walker and the Wisconsin
state legislature passed the largest incentive package for a
foreign company in U.S. history.
Included in the package were billions of dollars in public
investment through tax breaks and government incentives. But
the incentives also included waiving important environmental
requirements related to water management and flooding, first by
refusing to consider the 3.3 square mile Electronics and
Information Technology Manufacturing Zone, the EITM Zone (7:40)
Video 1, and associated development within the Des Plaines
River Watershed, a major action that the state effectively
waived the requirement for a state environmental impact
statement.
Second, the Wisconsin legislature exempted the development
from standard wetland permitting requirements, allowing Foxconn
to discharge fill material into non-Federal wetlands. This
affects and raises serious concerns about the area's ability to
sufficiently absorb rainfall. Storm water that is not retained
in local wetlands naturally runs downstream, and thus threatens
to cause increased flooding here in Illinois.
As well, the state waived certifications on water quality.
Several downstream communities in Lake County responded to the
development by passing resolutions of disapproval on the
Foxconn development. The Lake County Board passed its own
resolution of disapproval, and the Illinois state senate
adopted a resolution urging Wisconsin to give more rigorous
consideration to the environmental impact the Foxconn
development would have.
Personally, I have written a letter to the new Wisconsin
governor, Tony Evers, joined by my colleagues Dick Durbin and
Tammy Duckworth, and Congresswoman Lauren Underwood, urging the
governor to submit the development to thorough environmental
review, especially aspects that threaten storm water
management. In response to local concerns, the Lake County
Storm Water Management Commission contracted an engineering
report to evaluate the potential downstream impact the
development could have on local communities.
The report raised significant concerns about Foxconn's
treatment of wetlands and concluded that just the Phase 1
development would result in storm water and flood plain storage
deficit of 30 million gallons. This means that the area around
Foxconn will be less able to absorb the deluge, like we saw in
2017, with rainfall running downstream rather than being
contained locally. We will hear directly from the Commission on
that report later in the hearing, and I thank Lake County for
its leadership on this issue.
By exempting the Foxconn development from critical
environmental review requirements, Wisconsin increased the
likelihood of flooding along the Des Plaines River and passed
the consequences downstream to our communities. Wisconsin
taxpayers may be paying the price for the Walker
Administration's exorbitant economic incentives, but it is
Illinois residents and small businesses who will be under
water, literally, due to our neighboring state's irresponsible
decision to ignore environmental reviews, and Wisconsin's
missteps will have a direct effect on Federal resources like
the SBA Disaster Loan Program meant to help our community.
I look forward to exploring the importance of environmental
reviews with our panelists today and the consequences of
waiving them to expedite development.
On a final note, we invited the Secretary of the Wisconsin
Department of Natural Resources, Preston Cole, as well as Dr.
Lewis Woo, the chief negotiator for Foxconn, to testify at this
hearing. Unfortunately, both declined.
Again, I want to thank our witnesses for being here today.
I will just take a moment to explain how this hearing will
work. I will introduce each of our witnesses. Each will be
given 5 minutes approximately to make an opening statement that
summarizes their written testimony. We will then have time for
questions that I hope will help illuminate the concerns that I
have mentioned so far.
I would like to now introduce our witnesses.
Our first witness is Mr. Mike Warner. Mike is the Executive
Director of the Lake County Stormwater Management Commission,
where he has worked since 1994. He started there as the Chief
Engineer for four years and has served as Executive Director
for 13 years. He has overseen several significant flooding
events and has helped coordinate the country's response. I want
to welcome Mr. Warner, as well as his daughter Charlotte.
Our second witness is Mr. Howard Learner, the Executive
Director of the Environmental Law and Policy Center. Howard
founded ELPC in 1993, and the organization served as the
preeminent Great Lakes environmental advocacy group. Prior to
founding ELPC, he served as General Counsel to business and
professional People for the Public Interest and practiced civil
rights law focused on housing and economic issues. ELPC has
seven offices throughout the Midwest, as well as an office in
Washington, D.C., and advocates on a wide array of critical
environmental issues.
Welcome, Mr. Learner.
Our final witness is Mr. John Durning. John is the owner of
Pizzeria Deville in Libertyville, a local favorite. John opened
his pizzeria in 2014 after more than a dozen years working at
Wintrust as a Managing Director focused on commercial real
estate. Since opening his small business, John has experienced
several major flooding events that cost thousands of dollars in
damages to equipment and his property.
Welcome, Mr. Durning.
Now I will let the witnesses make their opening statements,
starting with Mr. Warner.
STATEMENTS OF MIKE WARNER, EXECUTIVE DIRECTOR, LAKE COUNTY
STORMWATER MANAGEMENT COMMISSION, LIBERTYVILLE, IL; HOWARD
LEARNER, EXECUTIVE DIRECTOR, ENVIRONMENTAL LAW AND POLICY
CENTER, CHICAGO, IL; JOHN DURNING, OWNER, PIZZERIA DEVILLE,
LIBERTYVILLE, IL
STATEMENT OF MIKE WARNER
Mr. WARNER. Thank you, Congressman Schneider, for arranging
this hearing and the opportunity to comment regarding these
important issues.
Lake County has seen record-setting flooding over the last
three years. The July 2017 flood, which you mentioned, set
record high water levels on all nine river gauges throughout
the county that cost millions of dollars of damage and
threatened the lives of many residents and visitors.
In 2018, the Des Plaines River gauge set a record by
exceeding flood stage six times, which is more than triple the
average. And in 2019, a new record rainfall was set for the
month of May, and flood stage has been topped four times
already this year.
The Illinois State Water Survey Research shows this trend
of higher rainfall and corresponding flood events is continuing
in the region. We recently released a study on the Upper Des
Plaines Watershed. The study was done in response to
Wisconsin's waiver of environmental regulations for development
upstream within the Electronics Information Technology
Manufacturing Zone and the impacts of that development to Lake
County.
The study found significant deficiencies for mitigation of
flood plain, storm water, and wetland impacts that is worsening
the flood risk within the watershed. The study describes four
main conclusions. The current flood plain study for the Des
Plaines River in Wisconsin, both the flood plain mapping and
flood flows, are grossly underestimating flood risk to existing
and new businesses and residential buildings. The flood plain
study methodology removed the largest storm event of record and
does not include the most recent six of the largest ten strorm
events, with the result being an underestimation of the flood
plain.
The Wisconsin DNR provided similar comment on the
Kinnickinnic flood plain study just to the north, and when
updated the resulting flood plain, flow increased by up to 86
percent. A study quote states that higher flow results in
higher flood profiles and an increase in the computed flood
risk in the watershed.
Through the development process in Wisconsin, there is a
deficit of stormwater storage created by filling existing
natural depressions, too large of a retention pond release
rate, and uncompensated flood plain fill. Lake County has
similar landscape to Wisconsin, with a significant amount of
natural depression storage. Whereas Lake County requires
preservation of this natural storage, Wisconsin does not. Our
estimate of the natural storage to be lost in the EITM zone is
156 acre feet. The detention pond release rate is double that
of Lake County, which will further reduce surface runoff stored
and allows more impervious cover per acre of development.
Additionally, any fill in the flood plain does not require
compensation because the Des Plaines River is not a defined
flood storage district even though it meets the technical
requirements to become one.
Wetlands are being lost within the Des Plaines Watershed in
Wisconsin due to development. All Wisconsin Department of
Transportation impacts are being mitigated outside the Des
Plaines Watershed. That ignores Army Corps wetland regulatory
criteria regarding mitigating in the same watershed as the
impact site and the ``no net loss'' principle, as this is
resulting in a significant net loss in the Des Plaines.
The private development wetland impacts have yet to be
mitigated anywhere, and there is doubt that the mitigation fee
assessed can compensate for the higher land value within this
highly active development corridor, which further guarantees a
net loss of wetland function in the Des Plaines River. There
are hundreds more wetland acres at risk of loss in the Des
Plaines.
And lastly, inadequate soil erosion and sediment control
practices are being utilized by both WisDot and private
developers. These unremedied violations of the Clean Water Act
are choking waterways with sediment and contributing to non-
attainment of EPA water quality standards. SMC performed
independent inspections of the road work and development site
and documented significant soil erosion occurring as late as
yesterday, during yesterday's storm event.
The Foxconn site also received an erosion violation
citation from the Wisconsin DNR. The Des Plaines River at the
state line is listed by the Illinois EPA as impaired for
sedimentation and siltation due in part to land development
activities.
With every acre of new impervious surface and shovelful of
dirt, all four of the issues raised in our conclusions are
resulting in an increased flood risk to businesses and homes,
along with negative water quality impacts within the Des
Plaines Watershed. It is critical that these concerns are
addressed as soon as possible to compensate for future
development that will occur.
Thank you for this opportunity to provide testimony.
Mr. SCHNEIDER. Thank you, and we will now go to Mr.
Learner.
STATEMENT OF HOWARD LEARNER
Mr. LEARNER. Thank you, Representative Schneider, for the
Committee's and your invitation to testify today. I will
summarize my longer written testimony that will be submitted to
the Committee. We appreciate your thoughtful attention to what
is a serious problem and your focus on solutions to the
problems.
Like many, the Environmental Law and Policy Center was very
concerned when, under the Walker Administration, the State of
Wisconsin rolled back necessary environmental protections and
undercut what we view as essential environmental reviews in
order to entice private development by a single party here,
Foxconn.
The harmful impacts of the Foxconn development and the
effects of vanishing environmental reviews are not limited to
Wisconsin. Air pollution crosses state lines, and the impacts
on water also affect Illinois and the other Great Lakes states
as well. The Foxconn project could potentially increase
flooding in the Des Plaines River Watershed in Illinois, and
Foxconn's need for water has already led to a request to
withdraw some to outside the Great Lakes Basin.
The purpose of environmental reviews, whether it is the
National Environmental Policy Act or the Wisconsin
Environmental Policy Act, is, first of all, to make sure that
all the potentially harmful and adverse environmental impacts
are fully considered by decision-makers before they have
reached the ultimate decision; second, to conduct a rigorous
and objective evaluation of all reasonable alternatives,
including a no-action alternative; third, to fairly and fully
consider what are called cumulative environmental impacts, so
that decisionsmakers are not just looking at one project alone,
but what are the effect of multiple activities, and that is
important particularly in this case; and finally, engage
meaningful public participation, along with some other factors.
When Wisconsin weakened its environmental protection laws
and limited the environmental review for this project and
others, that is unfortunate for Wisconsin residents and its
environment and, also, for Illinois and our state's residents.
These harmful impacts play out very significantly when it comes
to the Foxconn development and the water and flooding issues
here in Lake County. And, that, in turn, implicates the Small
Business Administration's Disaster Loan Program.
Representative Schneider, you recently commented: ``When
corners are cut on environmental reviews, our local communities
pay the price.'' I agree. Under Governor Walker's
Administration in Wisconsin, in 2017, Wisconsin policymakers
indeed cut corners when they eliminated or weakened meaningful
environmental rules and reviews in several ways. Let me
highlight three of the specific problems.
First, Wisconsin exempted this Foxconn project from the
Wisconsin Environmental Policy Act's requirement that an
Environmental Impact Statement be prepared for a major project
like this that clearly has major environmental impacts.
Second, the Wisconsin legislation exempted this Foxconn
project from state regulatory requirements that restrict the
filling of wetlands and waterways. In effect, Foxconn can fill
in wetlands without a permit. Wetlands, as others have pointed
out, act as natural sponges. They prevent flooding, and it also
provides valuable wildlife habitat.
Third, as you know, the United States Environmental
Protection Agency weakened air quality protections in Racine
County in southeast Wisconsin, in Kenosha, in a highly
criticized decision that is now on appeal to the United States
Court of Appeals for the D.C. Circuit, and the Environmental
Law and Policy Center is a party in that case. That misguided
decision has been the focus of newspaper articles and others
that have asserted there was undue political influence on what
should be, under the environmental protection laws, and
especially under the Clean Air Act, technical scientific
decisions. That, too, has an impact both on Wisconsin and on
Illinois.
So, turning to the first point, the Wisconsin Environmental
Protection Act requires an Environmental Impact Statement, and
that is part of the process for the public to engage, to
comment, and for alternatives and impacts to be fully and
fairly considered. For Foxconn, that was avoided. The
consequences are not confined to Wisconsin's boundaries when it
comes to air pollution and water impacts, as Mr. Warner just
testified.
Second, on the wetlands, Foxconn was exempted from the
permitting process and instead pays into a wetlands fund. That
is not sufficient, as the Chris Burke Engineering study for
Lake County has explained. When wetlands are filled in, their
absorption capacity is reduced and, in some cases, eliminated.
If there is going to be a fund, the place to begin spending at
least some of the funds is in the places that are affected,
namely the Des Plaines River Watershed, both in Wisconsin and
here in Illinois.
Finally, you noted in your earlier comments that all of
this is exacerbated by climate change, and sadly indeed it is.
The Environmental Law and Policy Center recently commissioned
18 leading Midwest university scientists to prepare a state-of-
the-science report of the impacts of climate change on the
Great Lakes region, and their findings are disturbing,
chilling, and realistic.
The fact of the matter is that we are looking at much more
extreme weather, according to the scientists and sound science,
more intense rain storms. That is exactly the sort of stuff
that leads to more flooding, and that needs to be taken into
account by the Committee when it comes to the SBA's Disaster
Loan Program.
There are solutions that we are advocating, but
unfortunately we are looking at more extreme weather, more
intense rain storms, and the real-world impact of that is more
flooding. So when you look at what has been done on the Foxconn
situation, other factors, like climate change, tend to make it
worse rather than better.
So let me just wrap up with a couple of points. First of
all, as the Foxconn experience underscores, Environmental
Impact Statements and proper reviews serve an essential
purpose, and they shouldn't be cast aside simply because a
particular developer is insisting upon a very lucrative package
in order to locate in a particular place. At the Environmental
Law and Policy Center, we do believe the evidence shows job
creation, economic growth, and environmental progress can be
achieved together. That is a win-win-win, and there are
examples of that here in Illinois, in Wisconsin, and throughout
the Midwest.
Second, choosing to exempt particular development projects
from important regulations and oversight has consequences.
Other people in other jurisdictions, such as here in Illinois
can be harmed, and the recourse is difficult. That is the
Foxconn situation here, with the potential flooding impacts it
creates for Illinois.
Third, our environment is fragile. Changing air quality and
water protections can affect the health and safety of thousands
of people and indeed hundreds of thousands of people downwind,
downstream, the people in Lake County, and businesses in Lake
County, as I know you will hear in a couple of minutes. That,
in turn, impairs the already stretched SBA Disaster Loan
Program.
Thank you for convening this field hearing and for your
consideration of my and the other witnesses' testimony today.
We would be pleased to address any questions or suggestions you
have.
Mr. SCHNEIDER. Thank you, and now we will go to Mr.
Durning. John, thanks for joining us.
STATEMENT OF JOHN DURNING
Mr. DURNING. Thank you, Congressman, and the rest of the
Committee, for having me in today and sharing our events during
this flood.
On the night of July 11 and into July 12, 2017, the Lake
County and Libertyville, Illinois area received approximately
seven inches of rainfall, causing widespread flooding in the
area and specifically at my restaurant, Pizzeria DeVille. The
cause of the flooding from our research and understanding
initially was that it was the result of a freak storm and a
local municipal water and sewer system that was antiquated and
unable to handle the deluge. Water entered through the sewer
line and up through the basement bathroom drains at our place.
Through follow-up meetings and discussions, the water/sewer
system was only part of the issue, and apparently some of the
issue is that the system has not kept up with the ever-
expanding development of lot-filling McMansions and other heavy
development along the Des Plaines River. While I am no expert
on why it flooded, I can share its impact on me and my
business.
When the flood occurred, my family pizzeria was nearing its
third anniversary. To that point I had not ever experienced any
real flooding in my business. We had a mop sink back up a
couple of times, but that was because of debris that we had
left in the drain, no real consequences.
What we experienced on July 12, 2017 was four to six inches
of black water tainted with human waste and grease from our
grease trap floating around my basement kitchen, party room,
and into all floor and near-floor equipment and products. I
have submitted a video of what I walked into that morning, and
I was literally heartbroken. I knew we would be shut down, at
least in our basement and prep area, for a few days but didn't
fully comprehend what a hassle this was going to be.
We acted fast and were able to engage a flood remediation
company at a great price to get going on our flood mitigation.
Our insurance company, Society Insurance, was also quick to
respond. While we were able to get the space mostly cleaned up
in two days, my party room was shut down because we needed to
remove and replace doors and drywall, among other things, and
ensure the space was ready for food preparation. Everyone
pitched in and got this done in a timely fashion and we were
able to reopen for limited service on my main floor in a few
days.
Then on August 28th, 2017, it happened again, albeit less
water. We still needed to bring in another flood remediation
company and pay another insurance deductible. As a small
business with sales of about $1,100,000 annually at the time,
we lived and operated paycheck to paycheck. Having to absorb
the loss of business, pay two insurance deductibles, and have
to do so without 60 seats of our private party room and prep
kitchen left me feeling helpless. When it happened again six
weeks later, you can imagine my thoughts. Obviously, my
insurance premiums went up as well. Staff retention was a
challenge as we had to scale back for a bit, and nothing was
quite right operationally for a few weeks as our mixer was down
and we had to make our pizza dough two doors down at a
neighboring restaurant. You can imagine how difficult my
monthly loan payments to the SBA became during this period,
though we never missed or were ever late with our payment.
However, the lasting effect of this is also debilitating as
there has not been a major rainstorm since that I have not sat
awake in bed or driven directly to the restaurant to see if it
is happening again. We have seen a few more minor incidents and
have come to learn that much of this is caused by an age and
capacity issue within our municipal sewer system. Moreover,
some of the capacity issues relate directly to new development
in the area.
Our local municipality has been quick to act and address
these issues as best they can, but this does little to ease my
mind every time I see big storms on the radar. Many in our
community were hit harder than my business, and my heart truly
goes out to them. In fact, we subsequently did a fundraising
effort for a family that lives near the Des Plaines River in
the Vernon Hills/Mettawa area whose home was inundated by the
floods.
Since that time, new development seems to be moving ahead
full steam both up and down the river and around Libertyville
and its surrounding towns. Having worked in residential and
commercial real estate development in the past and now owning
my own small business, I understand the many sides to this
complex issue. With that said, I think for the good of all
involved, including local businesses, homeowners and renters
currently in place and those who would hope to live in new
developments, it is imperative that local, state, and Federal
officials figure out how to mitigate the larger issues of
wetland protection, over-development and sprawl so that those
of us who are left to live, work, and raise our families in the
area can do so with confidence that the homes and businesses we
have invested our life savings into are able to operate and
thrive without the threat of catastrophic flooding that nearly
eliminated my favorite place, Pizzeria DeVille.
Thank you again for letting me come in. I would just add,
hearing the experts talk, it makes me more scared, not less,
and so I sure hope we can get our arms around this.
Mr. SCHNEIDER. John, I couldn't agree more with all that
you said, but in particular with the need to address this issue
and not just the issue of flooding in the Des Plaines River,
which we are focused on today, and the ability to mitigate
that, but focus on long-term climate change. I thank everyone
for all that you guys do.
We will move now into the question and answer. Typically in
a hearing, each member on the dais gets 5 minutes, and the
Chairman gets the prerogative of taking more time. I am every
member and the Chairman----
[Laughter.]
So I will ask all the questions.
John, I am going to start with you, and we will be a little
bit informal. Thank you for sharing the impact on your
business. How long were you down in 2017 from the time you had
the flood overnight? How long were you out of----
Mr. DURNING. Well, fully down, we were down for a couple of
days, because the upstairs wasn't really impacted. What that
meant was we had to go through prepping in other restaurants
and off site, and it really was quite taxing and expensive for
our business to do those things. So we were able to open up
partially within a couple of days. But fully, my party room was
down for six weeks after that.
Mr. SCHNEIDER. Essentially (33:10) Video 1 One of the
things that the national data shows (33:13) Video 1 is that
businesses are down for a while. The full recovery can often
cost not just tens but into the hundreds of thousands of
dollars for a business, and it makes it a real challenge.
As Mike touched on, we had last year six above-flood-stage
events. Over the course of the year, that was a record. This
year, as of July 19th, we have had four already, on track for a
record.
John, back to you. You touched on that every time there is
a rainstorm you lie awake at night, and I appreciate that. We
have that with our own home. But how does it affect your
business decision-making when you think about the implications
of the likelihood of another flood? Does it affect your
decision-making at all?
Mr. DURNING. Absolutely. We have added new racks and new
stanchions to put all of our mixing equipment and anything that
really sits on the ground up above what the health department
requires because we just don't want to go through that again
and have to call the guy in Italy to send us a new mixer. It is
expensive, it is time-consuming, and it hurts my consistency.
So, yes, we have added equipment to address that, and the
number of things that go through my head when I see a big
storm, it runs the gamut.
Mr. SCHNEIDER. And you can just multiply that to every
business in the area.
Mr. DURNING. Every business, so many of my neighbors, their
personal items and personal effects in their homes. I mean, you
know, like I said, I feel like we got out of it very easily
compared to so many others in the community.
Mr. SCHNEIDER. And last question, then we will move to the
next topic. Were you aware of the SBA loan program in 2017? Did
you apply for a loan?
Mr. DURNING. I confess I was not aware of it, I did not
apply, and the only comment I would make is that if it is going
to be effective, it needs to be very quick to act.
Mr. SCHNEIDER. And we are working that.
Mike, let me turn to you. We talked about last year was a
record at flood level, this year we are on track. But what is
the history of flooding in the region, particularly over the
last couple of decades?
Mr. WARNER. Since 1986, we have gotten a Federal disaster
declaration seven times. Ironically, though, the 2017 flood
that set the record, we did not get the Federal declaration,
but Wisconsin, Kenosha County did, and it is based on
population and the impacts. So unfortunately, I think we got
about $12 million of damage in 2017, and we needed to get to
$18 before we got that declaration.
The Des Plaines River has a long history of flooding. The
severity and frequency of that has increased, unfortunately.
Mr. SCHNEIDER. Thank you. How have local communities
responded? The river runs, obviously, from the Wisconsin border
through all of Lake County, down through Cook County. How have
local communities responded?
Mr. WARNER. There has been a significant investment over
the years. The Stormwater Management Commission has purchased
over 200 flood-prone properties county-wide, and over the next
year-and-a-half we have planned another 30. About half of those
planned are on the Des Plaines main stem. So we do recognize
that because of the amount of water that is coming downstream,
buyouts or elevations are really the only or the best tool, I
would say, to mitigate the flooding of those homes.
Besides the removal of the homes, we have done a lot of
work with regard to wetlands. So there is a private-sector
wetland bank that just opened on Mill Creek, right at the Des
Plaines River main stem, that is only three miles south of the
Wisconsin border. There are 80 new acres of wetlands that are
available there for sale, and the first credit release was sold
exclusively to IDOT and the tollway for impacts in the Des
Plaines River Watershed. So our road agencies in Illinois are
keeping to that Army Corps criteria of mitigating in the same
watershed.
I would also like to mention the Forest Preserve District
has purchased 8,500 acres of land that they have preserved and
protected in the Des Plaines Watershed, and they have also done
a significant amount of wetland restoration. They did a 1,200-
acre restoration at Rollins Savannah. They are planning another
1,000-acre restoration on the Des Plaines at the Dutch Gap
Canal preserve right at the Wisconsin border. And they also did
a 300-acre restoration at the Pine Dunes Preserve, and that was
in conjunction with the tollway wetland impacts at O'Hare
Airport.
So we are--there are hundreds and literally thousands of
acres of wetlands that we are preserving, protecting, and
restoring along the Des Plaines corridor. So it is tough to see
all that advancement and then kind of have to see a couple of
steps backward that is happening upstream.
Mr. SCHNEIDER. I will come back to it later, but part of it
is during the assessment, the environmental impact studies,
tell us what the impact will be so we can make the adjustments
and maintain it. Thank you.
I want to just emphasize a point. We are talking about the
Des Plaines River Basin because we are talking about Foxconn,
but this affects the Fox River in our community as well. We
have the mayor of Fox Lake here. So it is not just the Des
Plaines River. It affects our entire community, so thank you
(5:43) Video 2.
Howard, when we are talking about climate change in
general, we are talking about global climate change, and we see
the effects all over the world, not just here, and it is a
global issue. But there are local effects. What are the effects
of climate change here in the local region?
Mr. LEARNER. This is exactly why the Environmental Law and
Policy Center reached out to 18 leading scientists at the
University of Illinois, Northwestern, Michigan, Michigan State,
University of Wisconsin, Ohio State, the Big 10, and Canadian
scientists. The Great Lakes is bi-national.
Sorry, I am old school. Rutgers and Maryland, that is not
really the Big 10.
[Laughter.]
Mr. SCHNEIDER. It is the coast to coast conference.
Mr. LEARNER. What they have put together this March was a
state-of-the-science report on the impacts of climate change on
the Great Lakes, and the fact is you are quite right,
Congressman, global climate change is global. It is across the
planet. Its impacts are felt everywhere, and pollution that
comes from Indiana or carbon pollution from Indonesia has
largely the same effect on the atmosphere.
But the effects are felt differently in different areas.
One of the commonalities according to the scientists is the
increased intensity of rainstorms. Not only are we going to
have more extreme weather events, more tornados, hurricanes,
and more flooding, but the intensity of the storms will be
more.
So when we look at issues involving flooding in Lake
County, exacerbated perhaps by the Foxconn development, that
comes at a time when the best scientists in our region are
telling us we are going to see more rainstorms with more water
and more intensity. So this is taking an already challenging
problem and making a bad problem worse when it comes to the
real world, on the ground, on the water, in the businesses, in
the communities, regarding the impacts of climate change, and
here the Foxconn development.
Mr. SCHNEIDER. Just to put an exclamation point on that
issue, two years ago we saw Hurricane Harvey, 50 inches of rain
in one location. Houston is still recovering. The 2017 flood
here in Lake County, we had seven inches of rain here
overnight. That is what caused much of the flooding in the
community. And to add insult to injury, you watched the river
flooding, and communities like Fox Lake, like Gurney, like
Wheeling, just having recovered from a torrential rainstorm and
the flood effects of that, watched the rivers rise over the
next several days as more water came down. So I think that
intensity, we are seeing it consistently across the nation.
Mr. LEARNER. Here is what you can deal with; here is what
you can't. There are certain things in terms of global climate
change here in Lake County, here in your district,
Representative Schneider, you can't make a big difference on.
But what you can do is, recognizing those changes in weather
patterns, is to determine what steps can be taken to help
mitigate the impacts on flooding, as you are describing, what
steps can be taken to adapt to some of what we know is coming?
That is where the Foxconn issue comes in. If you know that
global climate change is going to lead to more torrential
rainstorms and flooding, as you are describing, then let's do
everything that we can at the local level, at the county level,
at the district level, to try to avoid making bad problems
worse. Let's try to mitigate those problems. Let's try to adapt
around it, and let's not do things in terms of waiving
environmental regulations as Wisconsin did under Governor
Walker for the Foxconn development, to take what we know to be
problematic and make it worse.
Mr. SCHNEIDER. So that may be a good transition, Mike,
locally. What steps can our local communities take to mitigate
the damaging effects of these increased frequency and intensity
of storms? How do state and local governments' compliance with
environmental reviews affect that?
Mr. WARNER. Well, the state water survey did just release
in March new rainfall analysis for Illinois, and it shows
exactly what we have been talking about today, that the
rainfall amounts and intensities of the storms are increasing,
and it is a trend. So it doesn't stop here, so to speak. They
are showing that our rainfall amount for the, so to speak, 100-
year storm is increasing up to 45 percent.
It is ironic, though, since it is the Illinois water
survey, that their study stopped at the Wisconsin boundary. But
there is interest from NOAA to pick up their study criteria and
apply it on a more regional basis, because we know that that
rainfall isn't going to stop at the state boundary.
As far as the environmental impacts, I think that if there
were proper reviews that were done, I think just the opposite
of what happened during that review process. Typically they
look at avoidance and minimization of wetland impacts, and I
think that is probably a preconceived understanding as to why
they waived those regulations, because they wanted to just
basically fill all the wetlands that were there and create this
development corridor, and that is what has happened. So there
is no mitigation that has been done for all the wetlands that
have been filled to date within the same river corridor. It is
pretty impactful.
I would also comment that the amount of depressional
storage that is lost--so the landscape up in Wisconsin is very
similar to Illinois where the landscape was kind of dotted with
these depressional wetland pockets before, now it is a hard
surface all the way across, a flat, hard surface, and all that
rainfall is just going to wash right off and come downstream.
Mr. SCHNEIDER. Thank you. That lays out what we are doing
here. But as you said, there is a process that should have been
followed.
Howard, I will shift to you. What is the purpose of NEPA,
the National Environmental Policy Act, and other environmental
safeguards? How is it supposed to work?
Mr. LEARNER. Let me talk and address your question with
regard to NEPA, and then with regard to specific permitting;
for example, what the Army Corps of Engineers does in terms of
wetlands.
NEPA is designed to influence decisions and the decision-
making process by requiring the decision-makers to conduct a
thorough environmental review before decisions are made, not
afterwards in order to post hoc justify a decision already
made. The purpose is to make sure that the decision-makers who
are involved consider all the relevant environmental factors,
including the adverse impacts.
Second, rigorously explore and objectively evaluate the
alternatives and other actions that can be taken.
Third, look at the cumulative impacts of multiple projects,
because one project may create a problem, but when there are
several projects in combination, it becomes a much larger
problem, to the decision-makers have to look at the whole, not
just the separate parts in a segmented way.
And then finally, engage the public, because as you are
conducting this hearing today, decision-makers learn from the
public. It is a good exchange of ideas.
That is the purpose of the National Environmental Policy
Act, and it likewise is the purpose, with some tweaks, of what
the Wisconsin Environmental Policy Act provides. So when that
process is circumvented, or in this case eliminated, the
benefits of that advanced environmental review process in which
the impacts can really be fully considered get truncated.
Some of that may get done anyway. Somebody may say, well,
we looked at some things, but not with the thoroughness, the
rigor, the thoughtfulness that NEPA, the National Environmental
Policy Act, review process requires.
Likewise when it comes to wetlands permitting, there is a
set of rules and standards that apply under Wisconsin state law
that generally apply under Federal law as well, and that is
designed to really look at, when you are filling wetlands: do
you have to do it, is there any other reasonable alternative;
or if you have to do it, then what do you have to do in order
to fully offset, replace, and remedy what you have done?
When you circumvent, that can avoid, if you will, wetlands
acting as a sponge, soaking up water. By and large, if you fill
wetlands, that means water has to go somewhere downstream, and
downstream here is northern Illinois.
Mr. SCHNEIDER. If I can summarize, I am thinking of my
background in business. It is assessment, it is analysis, and
then it is decision-making.
Mr. LEARNER. That is right. You don't put the cart before
the horse, to use a more street term on it.
Mr. SCHNEIDER. The metaphor I was going to use is instead
of ready, aim, fire, it seems like we did ready, fire, aim.
Mr. LEARNER. That would be another good way of putting it,
yes.
Mr. SCHNEIDER. You can miss it.
Mike, at a local level, how do we understand the importance
of following the policy rather than the other way around, the
consideration for water displacement for large developments
like the manufacturing hub we see in Wisconsin, or
transportation infrastructure we see with roads up north but
also through our own communities? Why is it so important to
have that understanding?
Mr. WARNER. I would say that our knowledge of wetlands and
the functions that they provide have grown over the past few
decades to the point where it is a matter of business now, at
least in Illinois, that it is understood that if you impact a
wetland in this area, in Lake County, Cook County, in an area
that is under the regulations of the Army Corps Chicago
District, that you are going to have to mitigate for those.
So that has driven the private sector mitigation banking
community, to the point where we have been able to recapture
all of those wetlands that are impacted, within the same
watershed as where they are impacted. So I think that is one of
the things, one of the big items that is missing in this
equation, and possibly a solution is the way the Wisconsin
banking instrument is set up and their mitigation policy is----
Mr. SCHNEIDER. Let me pause you for a second just to make
sure, this is for me as much (17:24) Video 2 as for everyone
else here. When we are talking about the banking instrument, it
is not like the bank where we cash a check. We are talking
about the ability to bank land that will provide wetlands. Is
that what you are talking about?
Mr. WARNER. Correct, yes. I should explain that. So the way
wetlands are impacted and then filled and credited in other
locations is there will be a landowner that creates a huge
wetland restoration area, and they can actually sell those
credits to someone that impacts them in another location in the
watershed.
What we are recommending to Wisconsin is that they consider
the Des Plaines as its own watershed. Right now they have it
grouped in with another watershed so that if you impact in the
Des Plaines, you can mitigate for it somewhere else, and that
is exactly what Wisconsin DOT did when they created all the new
roadways up there. They took jurisdiction over the local
roadways where in some cases there is a two-lane country road
and they are expanding them to a six-lane road section with
pathways on both sides, so essentially almost a seven-lane road
section. So it is a huge increase in impervious surface.
All of that wetland, all of those streams that were filled
are banked or replaced, so to speak, outside the Des Plaines
Watershed. So all of that benefit that we had of that wetland
to absorb any of that surface water is now gone. That is really
the local impact in a different way of how it has looked across
the border here in Illinois.
Mr. SCHNEIDER. So in very simple terms, we have talked
about increased frequency and intensity of storms. We have more
water coming from the sky. By filling in land, reducing the
impressions, by covering land, making it more impervious, that
water volume coming down and going up does fall on the ground.
It all has to go somewhere. I will ask the obvious question:
Where does it go?
Mr. WARNER. It is going into the Wisconsin floodplain and
then the Illinois floodplain.
Mr. SCHNEIDER. Which is here.
Mr. WARNER. Right, which is right next door, just down the
street from here. That is one of our biggest--another comment
was it is not just harming Lake County and Cook County
downstream in the Des Plaines, but they are really putting more
businesses and homes at risk in Wisconsin as well, because
their floodplain definition up there is very small and very
underestimated, in our analysis.
Mr. SCHNEIDER. I am going to go to Howard, and then John in
a second.
Foxconn is a big development. It is huge. You touched on
cumulative, a lot of small developments can add up to a big
development. But with a development like the Foxconn facility,
how should NEPA restrictions apply, and how do we extend that?
What should happen in a situation like that?
Mr. LEARNER. The cumulative impacts standard under NEPA,
the National Environmental Policy Act, requires the decision-
makers to not look at the impacts of one project in isolation,
albeit a big project in this case, Foxconn, but look at it in
the context of other surrounding developments and other
activities.
So, for example, on the air quality side where the region
is teetering on being a non-attainment area for ozone, which it
has been in the past, when you add the Foxconn development, a
bad problem gets worse.
Now, it is not just Foxconn itself. You have to look at the
cumulative impacts not just of Foxconn but of other projects
that are proposed going forward that both add air pollution
problems; or, in the particular case you are raising, also
affect wetlands, also affect flooding, also affect downstream
communities when it comes to water flowing here in the Des
Plaines River Watershed and the Fox River as well. That is what
NEPA requires.
Mr. SCHNEIDER. So that is the requirement. It is not
necessarily what happened.
So, John, I turn to you. You talked in your testimony about
development going on around our communities. On the one hand,
that is good. As a small business, you want more people to buy
your pizza. On the other hand, you look to the skies with every
rainstorm and say, literally, can I weather this storm?
As we are talking about all this, what goes through your
head? As you are thinking about planning for your business, I
would love to get your take at this point in the conversation.
Mr. DURNING. I can't help but think, as I listen, I was
just thinking about this, this whole river and pushing the
problem down the river is an amazing allegory for so many
things impacting our country right now, and time really is that
river, and all the problems are getting pushed down to our
kids.
For me, forget about Pizzeria DeVille and anything uptown
and anything else I am involved in. We need to fix this for our
kids. That is why we need to get in front of this and do
something meaningful for our children. That is my only takeaway
from this, and I appreciate you letting me voice my opinion.
Mr. SCHNEIDER. Thank you. I appreciate that.
Let me go back to Foxconn. We talked a little bit about
what should have happened. You may have assessed this,
Foxconn's general track record for abiding by environmental
regulations, where it is here or--they are a global company.
Mr. LEARNER. I think, Congressman, you are aware that there
has been a fair amount of media criticism on Foxconn, really in
two principal respects: first, Foxconn's environmental
performance record; and second, concerns that Foxconn promises
a palace and they come back with a bungalow.
We have already seen in Wisconsin that when the deal was
cut with Governor Walker's administration, Foxconn was
asserting, and President Trump was reflecting, many thousands
of jobs that would supposedly be created, particular types of
video screens that would be made, a lot of manufacturing jobs
and so forth. If I understand what is going on presently in
Wisconsin with regard to Foxconn, the company is not living up
to the promise when it comes to actual performance. Some of the
incentives they didn't receive at the end of 2018 because they
hadn't delivered on the number of promised jobs. Apparently,
Foxconn is now talking about a relatively different facility,
more technical jobs than manufacturing jobs, less jobs, and so
forth.
I was not in the middle of the negotiations with what
exactly did Foxconn promise in detail, the documents, and is
Foxconn living up to the spirit or the letter of the
commitments that were made. Suffice it to say, there is a fair
amount of skepticism and concern over whether Foxconn is
delivering on what it promised; and second, on its
environmental performance and reputation.
Certain companies, as you know, develop a track record of
strong environmental performance, and when they are dealing
with the public and they are dealing with decision-makers, they
stand on their track record and they deliver on that
performance. Others don't quite have that reputation.
Mr. SCHNEIDER. But there were a lot of promises made--this
is for both Howard and Mike--a lot of promises made and
questions about how now are they being delivered. But in return
for those promises, there were shortcuts, waivers, all kinds of
things. What decisions, what shortcuts, what was done that is
going to have an impact on environmental--or have environmental
consequences going forward? Do you have any insights on that?
Mr. LEARNER. I think that is what I was summarizing in my
testimony. The written testimony goes into far more detail. I
didn't think you wanted that much this morning; the 20-minute
version as opposed to the 5-minute version. The Committee has
the more detailed testimony.
But to tick it off in very rapid fashion, number one,
Foxconn apparently requested, and the Walker Administration
agreed, to waive environmental review under the Wisconsin
Environmental Policy Act, and that is the conversation we just
had about why you should have those sorts of reviews in
advance, and why do you, as you put it, ready and aim before
you fire.
Second, the various state permitting requirements, when it
comes to wetlands as part of the negotiations between Foxconn
and Governor Walker's administration, were truncated--that is
probably a polite word--at the very least, truncated.
Then finally, there have been a lot of concerns raised on
how the U.S. EPA did its ozone non-attainment evaluation and
certain changes that were made in which FOIA requests showed
that certain politicians, in effect, overrode the science
technical staff recommendations, and that at least has some
linkage, it appears, to Foxconn as well from the added
pollution that would come from the plant.
So those are three examples. There are others, as well.
Mr. SCHNEIDER. Mike, these were decisions, shortcuts that
were made, like the county decision to study assessing the
likely consequences that might follow.
So, a two-part question. Can you summarize again--I know
you talked about it in your opening statement--the conclusions
from that study? But also I would welcome your opinion, and
anyone else, Howard, of had the proper steps been taken in
authorizing the Foxconn project, would the outcomes, would the
projections of the study have been different?
Mr. WARNER. Absolutely. Again, going back to the stormwater
storage aspect, the wetlands aspect, and the floodplain issue,
we believe that if those processes had been followed, more
mitigation would have occurred to offset the increases in
surface water. So really, that is what our study focused on,
was what kind of flows are we going to see coming downstream
from Wisconsin, and how are those going to be increased as
development progresses in Wisconsin.
So there was a mention that there is a cumulative effect
and Foxconn isn't the only development that is occurring
upstream. They are a very large one, though, and they do have
an effect all on their own. But if you combine that with what
is happening in the development pattern that is occurring, what
we are estimating right now is that the 100-year flood is going
to be where the 500-year flood is right now.
That is a rough estimation, but our numbers have been
verified by an independent computer model that we have run on
those numbers as well. I don't know if I can say it is a good
thing, but at least we know where the 500-year flood is at
within Lake County, so it is a mapped larger floodplain. But it
is significantly higher, and there is more flow, and it is
something to be concerned about.
As far as one of the waivers that Foxconn was given, they
were immediately allowed to fill all their wetlands. We have
mentioned that. But they were told they had to mitigate at a 2-
to-1 ratio. So they filled in 17 acres of wetlands, and the
intent is, and we hope it comes to fruition, that they do
mitigate 34 acres somewhere. There is no mitigation that has
been done at all for those fills as of now, and we don't think
that the fee assessed will really allow them to mitigate a full
34 acres.
So right now they are just paper wetlands. They have paid
into the fund. They are on paper.
Mr. SCHNEIDER. Are those effective at collecting water?
[Laughter.]
Mr. WARNER. No, not much. Only what you spill on them. So
we are missing that resource that has been impacted.
Mr. SCHNEIDER. So I just want to, again, confirm my
understanding. The 100-year flood doesn't mean that you are
going to have this flood once every 100 years. What it means is
you have basically a 1 percent chance each year of having a
flood at that level. Is that fair?
Mr. WARNER. That is correct.
Mr. SCHNEIDER. So saying that the 500-year flood is now at
the level of the 100-year flood, it means that a flood that had
a .2 percent probability of occurring in any given year is now
five times more likely to occur.
Mr. WARNER. That is exactly right.
Mr. SCHNEIDER. So it is not, oh, we had a horrible flood
last year, we won't have another one like this again for 100
years. We could have one like this, or five times worse, this
year, at a greater percentage.
Mr. WARNER. Correct.
Mr. SCHNEIDER. And that is the impact. Again, not being
lied about, the less capacity the land has to absorb that or to
hold that, to retain that upstream from us, means those of us
downstream are going to have the impact of that and have to
absorb the water we get in our own rainstorms, but also the
water that rains on our neighbors as well.
Mr. LEARNER. I might sharpen the point just a little bit.
Mr. SCHNEIDER. Please.
Mr. LEARNER. First of all, the prior assumptions of what is
an area with a 100-year flood possibility, a 100-year
floodplain, is sort of antiquated at this point. What we are
finding in Illinois and around the Midwest, and everywhere, is
that those assessments made on the basis of prior weather
patterns, for all the reasons we have just discussed with
regard to climate change, show far more flooding occurring
within short periods of time than one would expect in a true
100-year floodplain.
Unfortunately, the Trump Administration actually cut the
budget for the evaluations to be done of remapping what
floodplains actually are: whether it is a 20-year or 10-year or
50-year or 100-year floodplain. But the old assumptions of
something being a 100-year floodplain in many cases are up for
question under the new weather patterns.
Second, as Mike put it in addressing your question, it is
akin to going to a slot machine. If you happen to pull down the
arm and get three cherries and you get a jackpot, that has no
predictive value on whether the next time you pull that will be
the 1 in 1,000, or whether you will go another 999 and you
still won't even get to 1,000. Any year is a prediction, and
any year can be 1 in 100, or can be 2 in 100.
On the other hand, when you start seeing 3 in 100 within a
relatively short period of time, that tells you that the
assumption that this is a 100-year floodplain is probably no
longer valid.
Mr. SCHNEIDER. Extending that to floods, I will make the
observation--I mentioned Hurricane Harvey. Three of the five
most devastating hurricanes on record in the United States
occurred in 2017.
Mr. LEARNER. That is correct.
Mr. SCHNEIDER. So that is, I think, the emphasis, that we
are seeing increased frequency and intensity in our storms.
So, Howard, Wisconsin, by failing to categorize the Foxconn
development as a major action, it allowed the development to
effectively skirt the need for an Environmental Impact Study
(1:05) Video 3.
My question to you is in your view, do you believe (1:07)
Video 3 Foxconn should be required to have an Environmental
Impact Statement, and can you walk us through the process that
would follow from that?
Mr. LEARNER. We believe that, yes, Foxconn should have been
required to do an Environmental Impact Statement, or that an
Environmental Impact Statement, to be more precise, should have
been done by the Federal and state decision-makers with regard
to the Foxconn development. It is a little bit more complicated
today because, in effect, the purpose, as we have been
discussing, of the environmental review process is to analyze
and examine before you make the decision rather than make the
decision and try to somehow fit it in. So it is sort of an
interesting question today of if there were to be an
Environmental Impact Statement required, how do you go back and
seriously reexamine?
That said, doing a careful environmental review, albeit
late, would be a very positive action here.
Mr. SCHNEIDER. Thank you.
I am going to wrap up. I have one last question, but I will
say this. What we are hearing is an egregious example of
shortcuts and skirting responsibilities with Foxconn. As I said
in my opening remarks, that is not unique to Foxconn, but this
is something that is happening here.
Our purpose is, in effect, to discuss the impact and the
importance of the SBA Disaster Loan Program in that context,
because as this Administration has cut funding for doing
environmental studies, as it has cut funding for NOAA to
understand weather patterns--I mean, we have seen egregious
cuts of funds, and even where Congress has intervened and said,
no, you are not cutting those funds, an effort to diminish the
capacity of the agencies to do the work they have to do.
I will start with you, Howard, but I would like to get
everyone's view. Howard, Mike, and John, I will give you the
last word on this.
How important is the SBA Disaster Recovery Program? It
seems to me--I will show you my bias and call the question. I
guess it is a leading question. I am not a lawyer, so I can do
this.
[Laughter.]
Mr. SCHNEIDER. It seems that it is going to be increasingly
important because businesses are facing a greater probability,
an increasing risk not just of a chance of a flood but the
significance of a flood.
Howard?
Mr. LEARNER. You have to look at it, I think, Congressman,
in the following way. The SBA Disaster Loan Program is now more
essential than ever, both for it to be well funded and for the
funds to be deployed in a thoughtful, effective manner. For all
the reasons we have been discussing, we are looking at flooding
issues and others becoming worse rather than better, and
because of climate change, the reliance upon what used to be
viewed as a 100-year floodplain in many instances is going to
experience more flooding than that might indicate.
Of course, the best solution is better planning at the
front end so that to the extent that we can have an influence
on mitigating, adapting, and avoiding flooding, we are
therefore reducing the demands upon the SBA program.
So in the case, for example, of global climate change, we
should do what we can to mitigate climate change, but we are
certainly going to see some impacts of it. But what we can
really do is, in situations like the Foxconn situation, is
really think about how in advance do you mitigate the impact
of, say, the Foxconn development by having good environmental
review processes, by having good permitting processes so you
reduce the amount of flooding, and by other such actions. And
if you do that, then you are reducing some of the pressure on
the SBA Disaster Loan Program.
So, do what you can at the front end to reduce the pressure
on the program. Second, realistically recognize that there are
going to be far more demands on the program, and that the
program needs full and adequate funding, and that it needs the
ability to respond to the very changing situations that climate
change is bringing upon us.
Mr. SCHNEIDER. Excellent.
Mike?
Mr. WARNER. I would agree 100 percent that the loan program
is essential, and I would say, consistent with our other
comments with regard to FEMA disaster assistance programs, I am
not aware exactly how SBA takes into account environmental
justice areas. So the circumstance that is happening within
economically disadvantaged areas is that if they do get
impacted by flood, FEMA will come in and at the Federal level
will require a cost match typically to do mitigation in those
areas. Our comments have been consistent that in economically
disadvantaged areas, either that cost match should go away or
there should be some type of forgiveness program so they can
actually rebuild those areas and not have to come up with a
local match that is unattainable.
Similarly, on the small business loan situation, if you are
in economically disadvantaged areas, there may be more
difficulty in being able to pay back those loans and actually
recover in those areas.
So those are the comments that we have made as Congress has
looked at the flood disaster assistance, redoing those
programs, and we would make a similar comment with regard to
SBA. It is a critical program, but in order to make sure
everybody is whole and to actually recover in those
economically disadvantaged areas, some indication or some
consideration of that should take place.
Mr. SCHNEIDER. Great. I appreciate that.
John, give me your last word.
Mr. DURNING. Yes, sir. I think that is actually a great
lead-in, because having spent a lot of time in banking, I think
the availability of SBA emergency money is critical, but only
if it is hand-in-hand with addressing what causes these
problems.
When I opened my restaurant, I wasn't able to cut any
corners. I had to do exactly what the municipalities told me. I
installed state-of-the-art plumbing equipment that was brand
new and was going to take care of this problem, and yet I
suffer the consequences because someone upstream who is bigger
and stronger and mightier didn't have to do any of that stuff.
So I think it goes hand in hand.
My million-dollar-plus business isn't equipped to be a debt
servicing machine. It is just not. I have an SBA loan. I am not
real fired up about taking on more debt because I have a family
I have to take care of as well. I think it is critical that it
is available. It is going to happen more. But we need to go fix
some of the other stuff, too.
Mr. SCHNEIDER. Absolutely.
Well, with that, let me say thank you again to our
witnesses for sharing your perspectives during today's hearing.
Mr. Warner, I would like to thank you for explaining the
threat of flooding in our district and how Foxconn development
is poised to make the situation worse. Thank you.
Mr. Learner, thank you for illuminating the permitting
process of the Foxconn project and laying out the shortcuts
taken in environmental review in order to push this development
through.
And finally, thank you, John Durning, for sharing your
perspective as a small business owner dealing with flooding.
Your situation is the one that the SBA Disaster Loan Program
was created to help, specifically your situation. We need to
ensure that environmental reviews are done so that the program
is not over-stretched, and we also need to perform outreach so
that businesses like yours and others who are dealing with the
consequences of flooding know that we have these resources
available to help.
While there are dozens of hearings each week in Congress
while it is in session, field hearings like this are much, much
rarer. It is significant that we are bringing the intention of
the House Small Business Committee to our district to focus on
the issue of flooding and how the waived environmental reviews
of the Foxconn project are making flooding in our communities
worse.
Powerful interests, including as high as the White House,
align to support the Foxconn project, but that does not mean
the impact on the environment for our communities can be
discounted or ignored. We have a right to speak out and ensure
the interests of our district are taken into consideration
through the environmental review process. More broadly, we need
to address this problem of waived environmental reviews to
ensure the downstream communities do not fall victim to this
reckless development, and that the tools we have created to
help, like the SBA Disaster Loan Program, can continue serving
our communities.
Finally, I want to thank the Committee and my team for
their assistance in facilitating this hearing and helping to
bring the voices of our community to the United States
Congress.
Observing that when I am in Washington I get 5 minutes to
ask a question, I will also say for the record that I like this
format where I get to ask all the questions.
[Laughter.]
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, it is so ordered.
And if there is no further business to come before the
Committee, we are adjourned.
Thank you very much.
[Applause.]
[Whereupon, at 11:48 a.m., the Committee was adjourned.]
A P P E N D I X
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Statement of John Wasik, Member, Lake County Board and Forest Preserve
Commission, Member, Lake County Stormwater Management Commission, Lake
County Board Energy and Environment and Public Works, Planning and
Transportation Committees
Tommy:
Here is my written testimony for Friday's Congressional
subcommittee hearing sponsored by Rep. Schneider in Wheeling.
If I find any other businesses who were impacted by the 2017
flooding, I will send them your way.
In July 2017, Grayslake and Hainesville businesses and
residents experienced catastrophic flooding, causing millions
of dollars in damage. It caused disruption and anguish to
thousands of people who had never experienced that kind of rain
event--more than seven inches in a 24-hour period. It hit all
of Lake County hard.
While we have no way to predict if such a catastrophic rain
event will occur again, we know that climate change is leading
to an increase in precipitation--some 20% to 40% more than
historical averages. That will lead to severe damage and
disruption of countless businesses and residents.
Worse yet, since little meaningful flood mitigation was
done in Wisconsin when the Foxconn complex was approved, the
flooding in Lake County will likely get worse, since we are
downstream from that site, which sits on the headwaters of the
Des Plaines River. Watersheds respect no state or federal
boundaries.
As a member of the Lake County Stormwater Management
Commission and Energy and Environment Committee, I call upon
the federal government to take--and enforce--meaningful
measures to prevent future flooding.
We also call upon our neighbors to the north to not only
undertake meaningful stormwater retention measures, but to do
so in the entire I-94 corridor, which is under intense
development. In doing so, they will not only be doing the right
thing, they will be good neighbors.
John Wasik
Member, Lake County Board and Forest Preserve Commission,
Member, Lake County Stormwater Management Commission, Lake
County Board Energy and Environment and Public Works, Planning,
and Transportation Committees
[email protected]
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