Testimony of Nancy Stoner, Director, Clean Water Project

Natural Resources Defense Council

Before the U.S. Senate Committee on Environment and Public Works

Good morning, Mr. Chairman, and members of the Committee. I am Nancy Stoner, Director of the Clean Water Project at the Natural Resources Defense Council (NRDC), a national environmental group that has a long history of working to protect our nation’s waters through the Clean Water Act. I am also one of the co-chairs of the Clean Water Network, a coalition of more than 1,000 groups supporting clean water from around the country. I present this testimony on behalf of both NRDC and the Clean Water Network. My expertise is primarily on clean water, not safe drinking water issues, so while I will touch on both, I will focus my remarks on the Clean Water State Revolving Fund.

Thank you for holding this timely hearing today on S. 1961, the Water Investment Act of 2002, which would reauthorize the Clean Water Act and Safe Drinking Water Act state revolving funds (SRFs). This is a tremendous opportunity for the Congress to provide increased funding and essential improvements in these programs.

Restore Our Water Infrastructure Investment

The federal government’s investment in wastewater and drinking water treatment over the last thirty years has brought tremendous progress in cleaning up our rivers, lakes, and coastal waters and in ensuring the safety of our drinking water. For example, EPA has documented a dramatic decrease in loadings of sewage contaminants into our waterways from the wastewater treatment plants that we built through the construction grants and clean water state revolving fund programs. Progress in Water Quality: An Evaluation of the National Investment in Municipal Wastewater Treatment, U.S. EPA 2-72 (June 2000)

That progress, however, has been eroded by water pollution resulting from urban stormwater, agricultural runoff and of discharges of inadequately treated sewage from our deteriorating collection systems and wastewater treatment facilities. In fact, the same EPA report that trumpets our tremendous success to date in reducing sewage contamination predicts that, if we do not substantially increase investment and treatment efficiency, by 2025, we will again have pollutant loadings from domestic sewage that are as high as they were in 1968 – the highest in our nation’s history.

And untreated sewage is not the only growing water pollution problem. NRDC’s annual report on beach pollution shows increasing beach closures and advisories due to bacterial contamination of coastal waters for 10 of the 13 years reported. Testing the Waters (Eleventh Edition), Natural Resources Defense Council (August 2001). The number of closures in 2000 was the highest ever. While some of the increase is due to better monitoring and reporting of beach pollution, stormwater pollution continues to increase as development replaces soil and vegetation with paved surfaces that collect and convey pollutants directly into our waterways. Stormwater Strategies, Natural Resources Defense Council 23-38 (May 1999). We need to step up our investment now to keep these sources of pollution from overshadowing our previous water quality gains.

Increase Funding and Spend It on More Environmentally Beneficial Projects

The environmental community would like to see water infrastructure legislation achieve three major goals:

1. Substantially increase funding for state clean water and safe drinking water projects.

2. Spend that money on more cost-effective and environmentally beneficial projects.

3. Improve public participation in the funding process and increase state accountability for the expenditure of federal funds.

I will describe each of these issues and our proposals addressing them through this legislation in turn, but, as an initial matter, I would also note that we are concerned that reauthorization of the Clean Water and Safe Drinking Water SRFs not be used as a vehicle for rolling back clean water or safe drinking water protections. We urge the Congress to stick narrowly to the issue of developing a new paradigm for water infrastructure funding that will better meet the needs of our nation and will provide greater environmental benefit for each dollar spent. That is a large enough task for the moment.

Mind the Gap

As was discussed extensively at the Fisheries, Wildlife & Water Subcommittee’s oversight hearing last spring, the funding gap between water infrastructure needs and available resources is very large and continues to grow. Yet, the current Clean Water and Drinking Water SRFs are grossly insufficient to meet our nation’s water quality needs, which include repairing and replacing aging sewer plants and collection systems, controlling contaminated stormwater, minimizing polluted runoff, and remedying decaying and out-of-date drinking water treatment, protection, and distribution systems. We need to authorize substantially more SRF funds to close the gap between our water needs and available federal funding. The U.S. Environmental Protection Agency and the Water Infrastructure Network estimate that $23 billion must be invested annually in the next 20 years to replace aging infrastructure and to meet the requirements of the Clean Water Act and the Safe Drinking Water Act.

While there are differing estimates of the amount of additional funding needed, the need for greater investment in clean water and drinking water infrastructure is clear and undisputed. Any reauthorization of the Clean Water and Safe Drinking Water SRFs must substantially raise the funding levels for those programs. We commend the sponsors of the Water Investment Act of 2002 for supporting substantially increased funding over the next five years, but urge you to look ahead and to authorize additional spending for at least the next ten years. We know now that we will continue to need vastly increased water infrastructure financing beyond 2007. We should begin to plan now to meet those future needs by authorizing them in this legislation.

Fund the Smartest, Most Beneficial Projects

The growing funding gap suggests not just the need for more funding, but also the need to begin to spend that funding more wisely to obtain the greatest amount of environmental benefit per taxpayer dollar invested in water infrastructure. We should not merely rebuild our wastewater systems using the hard infrastructure technologies of the past. We must become smarter about stretching our federal investment in water infrastructure by spending more on “green infrastructure” – non-point and non-structural solutions that are more efficient and more environmentally effective than traditional concrete and pipe solutions. We need to take advantage of the innovative approaches that have been developed over the past several decades that allow us to use on-site source controls (like rain gardens), stream buffers, conservation practices, and other approaches to prevent pollution. These approaches reduce the amount of water that needs to be conveyed to centralized treatment facilities, thereby reducing the cost of operating those facilities.

Increase Funding to Address Polluted Runoff

For years we have known that polluted runoff is the most significant source of water pollution in the nation for lakes, streams, and coastal waters. Yet, year after year, we continue to direct the vast majority of federal funding to point source discharges. According to EPA, between 1987 and last summer, only 4% went to non-point source projects. Four years ago, EPA adopted a goal of increasing the annual percentage of Clean Water SRF funds loaned for non-point source projects to 10% by 2001. EPA pledged to “work with states and territories to ensure that state loan funds are used for the highest priority polluted runoff projects that meet the programs’ financial criteria.” Clean Water Action Plan, U.S. EPA 57 (Feb. 1998). This goal has not been met. In fact, the percentage of Clean Water SRF funds used for non-point sources has not increased in the four years since this pledge was made. We need to do more than continue talking if we are going to begin to see the real changes in water quality that are the goal of the SRF program.

Prevent Pollution and Reduce Costs with “Green Infrastructure” Approaches

While states are allowed to fund non-point source projects under the Clean Water SRF, many of them continue to fund traditional, centralized wastewater treatment approaches even when a non-point or non-structural solution would be less expensive, more effective, and provide non-water quality benefits. Similarly, while states are also authorized to fund non-structural drinking water protection (such as buffer zones or easements), many states have failed to use this authority despite the cost-effectiveness and environmental benefits of such projects. While hard infrastructure projects are an important component of addressing our wastewater needs, we can often mitigate these needs and do a better job of cleaning up the water by funding a combination of cost-effective, non-structural, preventive projects (green infrastructure) and innovative and alternative engineering strategies. Use of distributed, nonstructural, pollution prevention approaches in addition to modernization of aging, decaying treatment plants, collection systems, and distribution systems can forestall the need for even more costly approaches and investments in the future.

Non-structural and non-point approaches can also provide a wider array of benefits than hard infrastructure, like pipes and wastewater treatment facilities, can. Those benefits include improved wildlife habitat, enhanced drinking water supplies, energy savings, smog reduction, decreased flooding, and higher property values. Stormwater Strategies, NRDC, Chapter 12 (Sept. 2001). These approaches result in cleaner bodies of water, a greener environment, and better quality of life. Green infrastructure is already working in a number of communities across the nation, saving money and enhancing environmental quality.

Provide a Specific Funding Incentive for Non-Structural and Non-Point Solutions

The Water Investment Act of 2002 takes a step in the right direction on this issue by clarifying that non-structural and non-traditional approaches to wastewater needs are eligible for funding under the Clean Water SRF. However, this clarification alone is not sufficient to overcome the institutional barriers to using SRF funds for non-point and non-structural solutions to address wastewater and stormwater pollution. Those institutional barriers include the relative ease of making one large loan for a major construction project rather than making many small non-point source loans, the greater voice of sewer authorities than most potential non-point loan recipients in setting priorities at the state and local level, the bias of many engineering firms for traditional, hard infrastructure projects, and the greater difficulty that many non-point source recipients have in paying back loans since they often do not have a guaranteed source of revenue as water and sewer authorities do. Some states also have laws or regulations that prevent non-point sources from obtaining SRF loans, even when their projects can provide greater environmental benefit at lower cost.

State and local officials repeatedly tell us that these institutional barriers to funding non-point and non-structural solutions with Clean Water SRF monies will be overcome only if we provide incentives for their use. That’s why NRDC and the Clean Water Network support providing a specific incentive for non-point, non-structural approaches for cleaning up our waters. In particular, we support providing an incentive of additional funding of up to 10% of base funding for any state that voluntarily sets up a SRF clean water fund for projects that provide non-structural protection to surface waters, including agricultural best management practices that benefit impaired watersheds, non-structural stormwater and low-impact development practices, conservation easements, land acquisition for water quality protection, stream buffers, wetlands restoration and other non-point source or estuary projects.

This incentive approach relies on lessons learned from the Intermodal Surface Transportation Efficiency Act of 1991 and its successor, the Transportation Equity Act for the 21^st Century, which allocated 10% of state surface transportation funds for environmental enhancement projects that improve transportation systems and the quality of life in our communities. Transportation enhancements preserve the human and natural environment, increase the transportation mode choices available to citizens, and encourage coordinated state, local, and public involvement in transportation decisions. This multi-billion dollar program has received broad support from state and local communities by making funding available for non-traditional transportation projects, including the restoration of a historic train station in Tampa, Florida, creation of a park in Manchester, Vermont, and the construction of a rail-trail in Mineral Wells, Texas.

The Water Investment Act of 2002 contains funding a demonstration program to promote innovations in water supply and treatment technology. While such a program would helpful to spur continued innovation in water and wastewater technologies, many green infrastructure approaches have been in use for more than a decade. They have been demonstrated to be effective and should be promoted for widespread use, not merely piloted, at this point.

Direct Funding to the Greatest Environmental and Fiscal Needs

In addition to the monetary incentive for non-point and non-structural solutions, we support a number of other mechanisms to ensure that taxpayer dollars are spent on projects that will address the greatest environmental and fiscal needs.

Fund Only Environmental Priorities

First, we need to require that Clean Water SRF funds be spent to address those projects identified by the state as its top priorities. The Safe Drinking Water SRF already has such a provision. There is no good reason why clean water funds, unlike safe drinking water funds, should be squandered on projects that are not identified as top priorities. This loophole in the current statute must be closed.

Give Priority to Projects Addressing Significant Public Health and Environmental Needs and Needs of Disadvantaged Communities

Second, we need to prioritize projects that meet the most significant public health and environmental needs and those that help disadvantaged communities the most. We support providing an explicit priority for projects on these bases, as the Safe Drinking Water Act already does, and also support principal forgiveness and other means to ensure that disadvantaged communities and users receive greater access to SRF funds. We also recommend two mechanisms to ensure that this mandate is adhered to – improved EPA oversight of state priority lists and intended use plans and increasing public participation and involvement in setting priorities and in monitoring use of the funds. With little oversight by US EPA and almost no public involvement today in the creation of intended use plans and identification of priorities, there is very little indication of whether federal dollars are supporting the most pressing public health or environmental needs. Meaningful public participation in the best way to ensure that environmental and fiscally sound choices are made. Ensuring such participation is the best way for Congress to protect and build support for its clean, safe water investment.

End SRF Funding for Sprawl Development

Third, we need to stop using SRF funds to subsidize new sprawl development. Sprawl development makes pollution worse in the long run by bringing more and ever-larger parking lots, roadways, and driveways to more and more watersheds. The volume of polluted runoff is significant – a one-acre parking lot produces 16 times more runoff than an undeveloped meadow. And the aggregate costs to our environment are adding up. Urban runoff causes nearly half of the impairment of estuary miles assessed by EPA. Disturbingly, U.S. Department of Agriculture figures show that sprawl is accelerating. The 2.1 million acre-a-year development rate in the 1990s is 50% higher than in the previous decade. The increase in paved surfaces leads directly to increased flooding, stream channel degradation, habitat loss, increased water temperature, contamination of water resources, and increased erosion and sedimentation. By using our scarce taxpayer dollars to fund sprawl, instead of repair, rehabilitation, and replacement of existing sewer systems, we could exacerbate water pollution in the long run. Sprawl will happen, but the federal government shouldn’t help foot the bill. Congress should make the Safe Drinking Water Act requirement that projects in state plans not support future growth a part of the Clean Water Act State Revolving Loan Fund as well.

Fund Only Law-Abiding Entities

Fourth, we need to discontinue funding for entities that are in significant noncompliance with the Clean Water Act and that have not made a commitment to remedy those violations in the future. Funding of significant violators undermines efforts of law abiding entities to raise funds for their wastewater needs. We will never have enough federal funding to address all wastewater needs. We need to provide incentives for communities to step up to the plate now and raise funds at the state and local level as much as possible to address their wastewater and stormwater problems, not to stay in violation and wait until more funding becomes available. The Clean Water Act SRF should be available only to entities that have committed to comply, not those that have thumbed their noses at the regulatory requirements.

Inform the Public About Publicly-Funded Projects

Fifth, we need to improve the publicly available information about the projects that taxpayer dollars are used to fund. Currently required reports on the use of SRF funds provide little useful information and are not routinely available to the public. The public has a right to know which projects are being funded at taxpayer expense and what they are accomplishing. The Water Investment Act of 2002 does little to improve state accountability for the use of funds or public availability of such information.

Americans Want Clean, Safe Water

As poll after poll has shown, Americans want clean, safe water and are willing to invest more to get it. We applaud you for moving forward with legislation to address the public’s demand for clean water. We urge you to ensure that the bill you pass is the best, most effective one possible to meet that demand. Only if Congress substantially increases funding for state clean water and safe drinking water projects, spends that money on more cost-effective and environmentally beneficial projects, improves public participation in the funding process, and increases state accountability can we hope to achieve the clean and safe water Americans want and deserve. This year is the 30^th Anniversary of the Clean Water Act. Let’s move ahead this year with legislation that will ensure clean and safe drinking water for years to come.

Thank you for providing me with the opportunity to testify today. We have drafted specific language on each of these issues and would like to work with you to address them. I would be happy to answer any questions you may have.