Testimony Before the United States Senate
Committee on Environment and Public Works
Subcommittee on Fisheries, Wildlife, and Water
April 30, 2001
by
Patrick T. Karney, P.E., DEE
Director
Metropolitan Sewer District of Greater Cincinnati
Cincinnati, Ohio
Chairman Crapo, Senator Voinovich, on behalf of the 650 environmental professionals of the Metropolitan Sewer District of Greater Cincinnati and the 800,000 Hamilton County users of our utility I want to thank you for providing this opportunity to address your committee on this rising crisis.
When our country was young and still made up of vast wilderness, waste disposal was a very simple matter---nature would take care of it with very little help. As our population grew, and our ability to produce larger and larger quantities of wastes increased nature’s solutions began to become overwhelmed. The resulting pollution of our environment drove America, and the developing world to institute increasingly complex methods of wastewater collection and treatment. Wastewater infrastructure---underground sewer systems and wastewater treatment plants---was invented, implemented and continuously refined to answer the ever-growing need for protection of public health and the environment.
National water pollution abatement law was not developed until a century after founding of our country with 1878 passage of the Ports and Harbors Act. Follow-up to this legislation did not appear for another century with Public Law 92-500, the Clean Water Act being passed in 1972. Prior to early 1900s, wastewater disposal was basically addressed by either forcing it into the ground (privies or outhouses), or moving the waste to the nearest water body, be it a stream, river or lake. Treatment of the waste was left to nature. And nature did an acceptable job until civilization’s capacity to generate wastes exceeded nature’s ability to treat it.
Water pollution abatement is a relatively modern innovation, with many of our large U.S. cities not constructing their first major treatment works until the 1950s or 60s. As treatment facilities moved from rudimental, primary treatment process to the more refined secondary treatment processes during the 70s and 80s, regulatory emphasis began to turn to deficiencies in the collection systems (underground piping). That movement was more strongly pursued as the 1990-decade progressed with the publication of the USEPA’s CSO Policy in 1994. SSO issues continue to evade our grasp, especially given the incredible financial impact that is becoming apparent.
Cincinnati and Hamilton County, Ohio’s experience closely parallels that of the nation. Our collection system has origins in the early 1800s, with the installation of drainage systems to remove rainwater from developed neighborhoods and the business district. Shortly thereafter, the cesspool crisis was addressed by collecting individual building waste streams, connecting them to the existing stormwater system and conveying this combined flow to the nearest stream (this marked the beginning of Hamilton County’s combined sewer system). As the smaller stream’s assimilative capacity was surpassed and the degree of localized pollution could no longer be tolerated, those waste flows were intercepted and conveyed to larger streams and to the Ohio River.
By the 1940s discharge of sanitary wastes into the Ohio River became intolerable, and designs were prepared for the construction of regional wastewater treatment plants. Underground pipes were redirected to the first of these plants in 1953. This is clear testimony to the fact that the water pollution control industry is not that old. The interceptor sewers which captured the old stream/river discharges were designed to convey the sanitary flow and a portion of the stormwater, with constructed regulators to discharge excess combined flow to local streams and the Ohio River (CSOs).
Soon design approaches changed through the nation, with Hamilton County following suit---combined sewer systems were no longer the design of choice; separate sanitary and storm networks were installed to prevent the co-mingling of sanitary and storm waters in newly developing areas. As more and more development occurred in the separate sewer areas, and additional sources of sanitary sewage were connected to the existing collection network, the older portions of the sanitary system became overwhelmed. Localized wastewater back-ups occurred on an increasingly frequent basis. Resolution of these health hazards was economically arrived at by the installation of collection system relief lines (Sanitary Overflows)---these were logically planned and installed using conventionally accepted engineering methods. Little did the engineers and elected officials of the day realize they were constructing an incredible liability for future generations.
Primary treatment plants were upgraded to secondary processes as the 70s turned into the 80s. Then in the late 80s, following massive investment in its water reclamation plants and reflecting a change in national emphasis, Cincinnati turned its attention to another aspect of the problem---that unseen and often forgotten underground maze of pipes known as the wastewater collection system. The much heralded site-specific solutions of less than a generation earlier, the overflow relief structures, had descended the environmental scale to a status of environmental detriments.
Beginning in 1987, the Metropolitan Sewer District of Greater Cincinnati initiated countywide studies aimed at finding solutions for CSOs. Over the past decade that work has translated into not only system capacity increases and constructed solutions, but has further expanded into issues involving SSOs. Cincinnati’s efforts have mirrored, and often led, national regulatory development aimed at curing the problems inherited from past generations.
Estimated Financial Impact of Current/Proposed Regulations
(not including National Nutrient Removal or TMDL-imposed Standards)
Early in 2000, the Metropolitan Sewer District of Greater Cincinnati performed an in-house estimate of the costs involved in addressing its current collection system needs. The resulting figures were so staggering that District management elected to engage a consulting engineering firm to perform an independent analysis of the needs. Given some unknowns with respect to developing national regulations, a single number could not be reliably arrived at. The fact that the two studies (one internal and one external) came to very similar conclusions provides a very high degree of confidence in their accuracy.
Exclusive of normal operations and maintenance costs and the routine/planned rehabilitation efforts of an aging system, which the community now supports, the new design/construction necessary to alleviate the CSO and SSO problems amount to somewhere between One Billion Dollars and Three Billion Dollars.
User Charge Implications
At the present time the user charges in affect for MSD are right in the middle of those for the surrounding 67 utilities.
In order to meet the obligations currently imposed upon it by the federal government, MSD will be forced to increase its user charge rate by approximately 7% per year for each of the next fifteen years---One Billion Dollars of design and construction. This would multiply the existing rate by nearly three-fold (276%).
Taking a more conservative view of how the pending SSO regulations might final impact the utility, the cost would rise to Three Billion Dollars for design and construction. That would result in rate increases of 21% per year for fifteen years. This would multiply the current rates seventeen times (1,750%).
National nutrient standards and TMDL-related limitations would impose an even greater financial burden upon the Cincinnati/Hamilton County ratepayers. Their impact is not definitively quantifiable, but could easily approach upwards to an additional One Billion Dollars. That would place the utility in a position of having to raise Four Billion Dollars, with a forty-five-fold increase being imposed upon the residents (4,526%) over fifteen years.
Isn’t it Time for Users to Pay the Full Cost of Service
The Metropolitan Sewer District of Greater Cincinnati’s ratepayers have been paying the full cost of service since 1968. As with nearly all other major wastewater utilities, MSD is a stand-alone enterprise that does not receive subsidies from other governmental units via property tax contribution or payments whose source is a different taxing authority. Hamilton County ratepayers do know the true cost of wastewater collection and treatment---they see it every quarter in the bill mailed to their homes and businesses.
The
local burden is already rising. In
2000, the Metropolitan Sewer District of Greater Cincinnati’s rates were
increased by 9.5%. In 2001, Hamilton
County enacted another MSD rate increase of 7%. Further, the County Commissioners are prepared to consider
another 7% rate hike in 2002. Our local
elected officials and utility managers are stepping up to the plate and making
tough decisions about paying the cost of protecting public health and the
environment.
What if these horrendous costs are not incurred? What will happen?
Thus, these huge expenditures cannot be avoided.
Local Funding
without Federal Assistance
The rate increases noted above would begin. Within a few years the rates would increase dramatically and the results would be:
billability of the customer base, driving rates higher than originally
anticipated, further decrease use and pushing revenues even lower . . .
Cincinnati/Hamilton County are not alone in facing a financial need of crisis-proportions. Every older Northeast and Midwest city has aging infrastructure and the challenge of eliminating CSOs and SSOs. Throughout the U.S. all major cities, even those without combined sewers, are trying to cope with increasing rehabilitation needs. As with Cincinnati these other communities are coming to the realization that their future costs are far in excess of their ability to pay. Adding the expectation of ever tightening regulations only further frustrates their attempts at coming to grips with the situation.
Clearly this is not simply a local or even regional problem. Every major, as well as medium and small communities, are subject to water and wastewater infrastructure demands.
Elected officials and residents of Hamilton County alike can easily agree upon one point---local efforts are not enough to address this growing infrastructure need. The impact of not only maintaining the underground system of collection pipes dating back to the early 1800s, but also contending with ever tightening regulatory mandates is staggering. For years this infrastructure has been, “out of sight, out of mind.” But that is no longer the case.
Local utility managers have been feeling the growing pressure to plan for future needs for some time, but it has not been until recently that an effort has been undertaken to raise the national consciousness. Why the delay? The size of the problem was not quantified earlier. We, and our predecessors, knew it was quite large, and there were other day-to-day problems we had to contend with. Then as we began to get a feel for the actual numbers, they were so massive that very few of us were willing to even mention them, much less engage a national debate how to proceed.
Today we have a much better feel for what is required, and are searching for a solution. The American people can no longer avoid the growing crisis. Elected officials on the local level are beginning to feel the crunch. Individual homeowners and businesses are being affected. Local governments are facing a growing shadow of financial doom.
The need is nationwide. The magnitude of the problem is of national proportion. Citizens and local officials must have relief, and the only source for relief of this magnitude is the federal government.
WIN Proposal
The time has come to once again make water infrastructure funding a national priority. On a national basis it has been estimated a $23 Billion per year funding gap exists between current local investment in water and wastewater infrastructure and what is needed over the next 20 years to replace aging and failing pipes and meet Clean Water Act and Safe Drinking Water Act mandates.
The environmental gains made by the water and wastewater community over the past thirty years are impressive, but they are in jeopardy. According to the U.S. Environmental Protection Agency, the nation will lose a generation of water quality progress without significant new investment in water and wastewater infrastructure. Recently, more than a million consumers in California were plunged into darkness as the nation’s energy crisis deepened. Imagine what would happen if the nation’s water and wastewater systems began to fail. Could we ask our citizens to tolerate untreated or unsafe water? I think not. Failure of wastewater systems could create a public health emergency, cause widespread environmental degradation, and lead to an erosion of our local economies.
The $23 Billion gap is documented in two reports released by the Water Infrastructure Network (WIN), most recently in February’s Water Infrastructure Now: Recommendations for Clean and Safe Water in the 21st Century (WINow), which has been endorsed by over 30 nationally-recognized organizations. The WINow report makes specific recommendations on bridging the infrastructure funding gap through a renewed federal commitment to the nation’s municipalities. By authorizing an average of $11.5 Billion per year in capitalization funds over the next five years, the federal government will provide states with the necessary funds to offer grants and loans to local water and wastewater agencies for repairs and replacement of aging infrastructure.
Call to Action
It is our hope that this attempt to articulate the problem will lead Congress and the Administration to begin the lengthy process of coming to the assistance of local communities throughout the country. If we can answer any questions or provide additional information in the future to assist you in taking action, please feel free to ask. Utilities throughout America are prepared to answer your calls.
Senator Voinovich, on behalf of wastewater utilities nationwide I would like to thank you for your recent initiative aimed at re-energizing the nation’s state revolving fund program. Such leadership is what is needed to bring us all to grips with the funding crisis facing our water infrastructure, and threatening our citizens.
Thank you, again, for this opportunity to provide insight into this financial crisis that is facing our entire country.
4/25/01