The U.S. House Transportation and Infrastructure (T&I) Subcommittee on Water Resources and Environment held its first hearing of the 115th Congress in early March to explore the role of federal agencies in building water infrastructure that is ready for the challenges of the 21st century.
U.S. Rep. Garret Graves (R-LA), Chairman of the Subcommittee opened the hearing stating “There has been a lot of talk about making available $1 trillion to invest in U.S. infrastructure and today’s meeting will explore some of the options with regard to water infrastructure that we need to think about. We also need to improve our ability to quickly begin these projects. We have met with state and local governments and other non-governmental entities who have shared their thoughts on needed infrastructure.”
The Ranking Member of the Subcommittee Grace Napolitano (D-CA) added, “We need to start off in a bipartisan fashion and find common ground with local water resources needs. We need to adequately fund and invest in US infrastructure because communities are calling on Congress to assist in water and wastewater systems. We also need to renew the federal commitment by reauthorizing the State Drinking Water Revolving fund.
Chairman of the (full) Transportation and Infrastructure Committee Bill Shuster (R-PA) and Ranking Member Peter DeFazio (D-OR) were also present and offered their instructions. Shuster said, “The President has said he wants to figure out how to invest $1 trillion in infrastructure and it is up to us to figure that out. The funds are going to come from multiple sources, not just the federal government. It will require joint partnerships, federal, state and local governments, private investments, and others. We have talked to the President and his people and the dollars are going to be in his proposed budget.
DeFazio added, “U.S. ports are operating at 35 percent of maximum capacity. And, this does not include the challenges that have yet to be addressed with the new Panamax vessels. But the most paramount problem is the lack of funding.”
Testimony was provided by Gary McCarthy, Mayor, City of Schenectady, New York, (On Behalf of The U.S. Conference of Mayors). Mayor McCarthy said, “Right now, cities spend $115 billion per year on water and wastewater operations and infrastructure while Congress provides around $2 billion. We would like Congress to step forward and do more to assist us by increasing the EPA State Revolving Fund (SRF) program and making sure the states provide more money in the form of low‐interest and zero‐interest loans.”
The City of Schenectady sewer system dates back over 100 years and until 2014 was considered a combined sewer system that consists of over 320 miles of public storm and sanitary infrastructure with a permitted Combined Sewer Overflow (CSO) and 18.5 mgd wastewater treatment plant which services multiple municipalities.
Since 2011, the City has undertaken large amounts of borrowing to upgrade its sewer and water system. From City Fiscal Year (CFY) 2011-2017, the City has borrowed collectively, $42.9 million for sewer and $9.8 million for water, respectively. The City’s sewer debt alone has quadrupled in the past seven years. The total borrowing for the City over seven years for both sewer and water was estimated at $52.8 million. A majority of the borrowing went to upgrading the City’s sewer and water system pipes, replacing outdated equipment, and rehabilitating their water plant.
There are improvements to water systems that can be made below ground. There are some 16,000 sewer utilities, and over 53,000 water utilities in the United States that together serve over 250 million Americans. Three common challenges cities face in providing public water and sewer services include:
- infrastructure deterioration,
- sourcing financial support, and
- compliance issues,
Many communities trying to address one or more of these issues have made the hard choice to raise customer rates; but new information indicates that current water, sewer and flood control costs per household (the rate payer) in a growing number of communities is placing a disparate financial burden on low and middle income households. Thus, local utilities who are expected to provide uninterrupted service in compliance with a myriad of federal mandates are seeking ways to do more, often despite having an unfavorable balance sheet.
The alternatives to traditional utility investments and management have the potential to improve a local utility’s financial sustainability. All utilities small and large can improve service through incorporation of modern technology specifically designed to increase efficiencies and reduce or avoid costs.
Kathy Pape, Senior Vice President, American Waterworks Company (On Behalf of The Bipartisan Policy Center) offered testimony on how private investors can help fund U.S. infrastructure. American Water provides water, wastewater and services to 15 million people in 47 states and Ontario, Canada treating and delivering more than 1 billion gallons of water daily through 49,000 miles of pipelines.
Ms. Pape said the private sector is ready to partner and assist by bringing capital, investors with billions of dollars, to actively seek water and wastewater projects to support. She provided an example of how American Waterworks purchased Pennsylvania American Water for $16.8 million. The system serves 4,000 customers in Pennsylvania.
American Waterworks offered these recommendations:
- Federal, and any other investments must be directed to sustainable water and wastewater systems. Right now federal dollars are going to poorly administered systems. Rather, funding should be directed to efficient and cost transparent systems. Cost transparent in that charges are true costs of service.
- Private companies can already access drinking water state revolving funds but not clean water state revolving funds. Private companies need access to clean water revolving funds.
Subcommittee Ranking Member Grace Napolitano (D-CA) asked witnesses what would a 30 pct proposed cut do to you? The Trump administration is proposing to increase defense spending by $54 billion and pay for it with cuts to domestic programs. Witnesses estimated the potential cut would result in cost reductions to most state projects in a range of 15-25 percent.
Congresswoman Brenda Lawrence (D-MI) raised the Flint, MI, water crisis and cited the 2016 GAO study in which EPA estimated water and sewer utilities will need to spend $655 billion over the next 20 years to maintain, upgrade, or replace water infrastructure. Many midsize and large cities that lost a large percentage of their population are struggling to replace their pipes and treatment plants. Without improvements, these cities may be at serious risk of more frequent accidental sewage discharges and lead contamination among other things. Concerned that utility rates are increasingly unaffordable for low-income customers, some utilities are reducing water treatment capacity or decommissioning lines in vacant areas to fit current demands.mid to large cities with declining populations. Water infrastructure of cities investment is a luxury, not a necessity.
Congresswoman Lawrence said, “The water crisis in the U.S is under investment. Water affordability will become the next issue in the U.S.