STATEMENT OF JOSEPH A. MOORE
ALDERMAN CHICAGO, ILLINOIS
THE NATIONAL LEAGUE OF CITIES before the
ENVIRONMENT AND PUBLIC WORKS
COMMITTEE UNITED STATES SENATE on
Mr. Chairman, members of the
Committee: I am Joseph Moore, Alderman from the city of Chicago, and chair of
the National League of Cities' Energy, Environment and Natural Resources
Committee. I am here today to testify on behalf of NLC and the 18,000 cities we
represent across the United States on S. 1961, the Water Investment Act of
2002.
First and foremost, I would like
to congratulate the four co-sponsors of S. 1961 for recognizing the need for a
renewed federal partnership in helping finance the rehabilitation and
replacement of the nation's aging water infrastructure. We deeply appreciate
your willingness to commit $35 billion over the next five years to our
wastewater and drinking water infrastructure needs. The introduction of S. 1961
demonstrates your understanding that the nation's cities and towns truly face
an uphill struggle in assuring the continuation of the environmental progress
made in the past thirty plus years and need your help in protecting the
significant investments we have jointly made.
Accordingly, while we understand
that the current statutes - the Clean Water Act and the Safe Drinking Water Act
-- authorize the expenditure of SRF resources for infrastructure rehabilitation
and replacement, NLC nevertheless believes water infrastructure should be one
of the expressed priority purposes of S. 1961. As the committee well knows,
infrastructure replacement costs are expected to approach $1 trillion over the
coming two decades and should therefore be highlighted as a principal and
primary purpose of this statute.
NLC also advocates including
water security as an appropriate use of these funds. Our wastewater and
drinking water facilities were constructed with little, if any, thought given
to~ the potential for the unprecedented terrorist activities of the type
witnessed on September 11th. The security mechanisms built into these systems
were not designed for anything; of that magnitude. We believe federal
assistance to enhance wastewater and drinking; water security needs -
especially those involving vulnerability assessments and capital investments -
is both necessary and a legitimate use of these funds.
While NLC applauds the bill's attempt to provide
non-refundable assistance to communities that do not meet the definition of a “disadvantaged
community” by providing subsidies that will benefit the poor populations in
those cities, it is unclear how this provision would be implemented. The idea
is laudable in concept; we are uncertain whether it will work in practice. We
would like the opportunity to work with you on developing this provision so
that it is acceptable to you and accomplishes the intended objectives for us.
Other
provisions in S. 1961 affecting funding which NLC supports include:
• the extension of the transferability provisions allowing the use of a portion of the wastewater and/or drinking water funds to be used interchangeably;
• revisions to the ;allocation formula in
the Clean Water SRF to reflect needs more closely;
• the extended repayment period for loans
from the SRFs. We would recommend, however, that these provisions be applicable
to all loans, not just those for small communities;
• the addition of source water protection as
an eligible activity for funding; and,
• inclusion of demonstration projects to
promote innovative technology and new approaches to water quality management
and supply. For too long, the federal government has been inadequately involved
in the development of new and more cost-effective ways to come into compliance
with the requirements of the Clean Water and the Safe Drinking Water Acts. We
would strongly urge you add stormwater as an appropriate category for
demonstration programs as well. Given that most municipalities will begin
implementation of the stormwater program next month, and given the likely
application of TMDLs to stormwater at some point in the future, we are sorely
in need of information and demonstration programs on how to accomplish such
objectives.
In parts, S. 1961 seems rather overly prescriptive. While
we understand the legitimate concerns of the federal government in protecting
its investments, NLC believes that if the proposal imposes too many mandates as
a condition for the receipt of funds, they may prove to be a disincentive to
apply for them -- regardless of need.
Many water systems already have asset management programs
in place. Likewise, many utilities have kept their rate structures up-to-date.
It is important to recognize these achievements in the context of eligibility
requirements. While there are utilities which have not implemented new
management techniques and/or updated their rates, NILC believes there may be
better alternatives to assure proper operations and adequate rate structures
than new mandates with respect to such activities. Furthermore, NLC is
concerned that utilities that already have asset management programs in place,
and have imposed rate increases to maintain and operate their systems
effectively, not be barred from, or have lesser status in, accessing these
funds. We would like to work with you to assure that all water systems are well
managed and that rate structures -- to the maximum extent feasible -- are
adequate to meet the short- and long-term needs of local water utilities.
NLC is also concerned that states may not have adequate
capacity, or the expertise to develop the required strategies. Congress is
aware that the states are currently struggling with the TMDL program, and are
expected to have significant resources involved in these activities for the
foreseeable future. If, because of these or other priority responsibilities at
the state level, asset management strategies are not developed, we also have
concerns about the penalty. From the local government perspective, reducing
federal assistance to the state by 20 percent penalizes the local governments
in that state. We are aware that these types of penalties are supposed to
insure that the affected local governments pressure the states to develop their
strategies. But, such pressures don't always work - especially when the states
are overloaded with their own responsibilities - responsibilities that are
subject to lawsuits if not completed.
Other criteria of concern to NLC are those with respect to
public/private partnerships and consolidation.
Public/Private
Partnerships: NLC
is newly arrived at discussions about the impact of international trade
agreements on the privatization of local services and the relationship of such
agreements to the maintenance of local control and autonomy. So while having
little expertise, NLC considers it important to raise the issue for further
review by the committee. As the committee undoubtedly knows, the majority of
the large private water companies operating in the United States are foreign
owned. At the local level, we have concerns that contracting with these foreign-owned
companies may -- because of the terms and conditions of international
agreements -- adversely affect the ability of a local government to make many
critical determinations about the utility once it is under contract with such a
private partner. We would be happy to provide expert resources and additional
information to the committee on this issue and ask only that there is a full
understanding of the ramifications of public/private partnerships in the water
business before requiring or encouraging; such activities in federal law.
Consolidation: The provisions relating
to consolidation of systems are also somewhat perplexing. As we read the
proposal, systems are encouraged to consider consolidation to become more
effective and efficient. Our first question is whether this is a requirement to
be eligible for funding. If so, there are some systems that already serve
millions of customers and further consolidation is neither feasible nor
sensible. Our second question is whether the committee is willing to remove
federal impediments to consolidation - for example, § 1926(b) of the
Agriculture Act of 1961, which disallows absorption of any drinking system
indebted to the Farmers Home Administration. Numerous cities have attempted to
expand their service areas to unincorporated areas served by this small system,
or to areas surrounding the small system service area. Federal law precludes
their doing so. States that have attempted to deal with this issue find that
even they may not override federal law. Many of these small systems are
inefficient and marginally protective of public health. State and local efforts
at consolidation in such areas have been barred - by federal law.
Mr. Chairman, members of the
Committee, thank you for the opportunity to testify for the National League of
Cities and for taking the initiative in developing, proposing and starting the
legislative process on S. 1961, the Water Investment Act of 2002. NLC looks
forward to continuing to work with you on making this one of the most important
and effective pieces of legislation in the 108th Congress.