Statement of the
Association of Metropolitan Sewerage Agencies
before the
House Transportation & Infrastructure Subcommittee on
Water Resources & Environment
Meeting Clean Water Infrastructure Needs
Testimony Provided by
Erwin J. Odeal
AMSA Board Member and
Executive Director
Northeast Ohio Regional Sewer District
3826 Euclid Avenue
Cleveland, OH 44115
216/881-6600
Representing the Association of Metropolitan Sewerage Agencies
1000 Connecticut Avenue, NW, Suite 410
Washington, DC 20036-5302
202/833-2672
Mr. Chairman, member of the Subcommittee, I am Erwin Odeal, Executive
Director of the Northeast Ohio Regional Sewer District. I am
here representing the Association of Metropolitan Sewerage Agencies
(AMSA). AMSA represents over 170 of the nation's largest wastewater
treatment agencies (see attached list). AMSA members serve the
majority of the sewered population in the United States and collectively
treat and reclaim over 15 billion gallons of wastewater every
day. I also serve as AMSA's representative to the Rebuild America Coalition's Board of Directors. Rebuild America is a broad coalition of public and private organizations committed to reversing the decline in America's investment in infrastructure.
On behalf of AMSA, I would like to thank the Subcommittee for initiating discussion of the Clean Water Act this Congress. AMSA has enjoyed a long working relationship with both this Subcommittee and the full Transportation & Infrastructure Committee, and we appreciate this opportunity to appear before you again and share our thoughts on clean water infrastructure needs.
Investment in the Clean Water Program Pays
This year marks the 25th Anniversary of the enactment of the Federal Water Pollution Control Act, commonly referred to as the Clean Water Act (CWA). The CWA is undoubtedly our nation's most successful environmental statute. Through a strong federal financial commitment of grants in the 1970's and early 1980's, and then later a national loan program coupled with enormous local investment, municipalities have built and improved upon over 16,000 wastewater treatment plants. These facilities provide safe and reliable wastewater treatment services to over 70% of the nation's population and over 99% of the urban population. Additionally, many publicly owned treatment works (POTWs) administer the national industrial wastewater pretreatment program as co-regulators with the Environmental Protection Agency. This program requires more than 200,000 factories nationwide to remove toxic and other harmful pollutants from the effluent prior to discharging to public sewers. Contributions of POTWs to municipalities go far beyond treatment of wastewater. Local economies rely on cleaner rivers, lakes and streams to promote tourism and business development, and preserve wildlife habitat. There is no doubt that investment in the national clean water program pays.
AMSA recently completed its sixth membership survey on POTW financing. The 1996 AMSA Financial Survey provides a national overview of municipal wastewater management and financing trends and was completed by 107 AMSA members. The report has been submitted with this testimony.
Through the survey, AMSA found that 93% of the responding agencies were providing secondary -- or greater -- wastewater treatment, and that by the year 2007, 95.3% expect to reach this goal. Additionally, the survey found that 31.1% of responding agencies treat wastewater to advanced secondary or tertiary levels. A major performance indicator of improved service by POTWs is the reduction of heavy metals in treatment plant influent flows due to the pretreatment program, pollution prevention, and public education. AMSA's survey has tracked the loadings of nine metals and found that loads from all nine have significantly decreased over time. The reductions range from 44% for copper to 97% for mercury
since 1986. These numbers translate into real improvements in our environment and further protection of public health.
The Need for Continued Investment is Clear
Even as we document significant progress, the need for clean water investment to be a national priority is clear. We must ensure that the Administration, the Congress, and the nation as a whole, share this critical perspective. Since AMSA last surveyed its membership in 1993, five-year capital improvement needs have shifted away from treatment expansion and upgrades to collection system needs, increasing from 43% to 53% of total reported needs. Treatment needs decreased from 56.2% to 46.1% of total needs. This shift can be directly attributed to facilities attaining secondary or greater treatment, and costs associated with controlling pollution caused by wet weather events, including stormwater, combined sewer overflows and sanitary sewer overflows.
Overall, 93 AMSA member agencies noted capital improvement needs of $22.5 billion for 1996 - 2000. This is a 41% decrease from the 1993 capital needs total of $32.4 billion, but with a corresponding 48% increase in per capita debt. Over the past three years, municipalities have invested heavily in their treatment facilities and completed many major capitol improvement projects. AMSA's survey shows that most of those projects were completed using local dollars. In 1993, members reported per capita debt at $189. The number has soared to $279 in 1996. The debt increase directly translates into higher service charges to households. The 1996 AMSA Index (a service charge survey) shows rates increasing at 2.6 times the rate of inflation over the past six years. For the years 1996-2000, local ratepayers can expect to carry over 85% of capital improvements costs for POTWs.
In addition to upgrades and improvements needed to meet regulatory standards, facilities are aging. Many wastewater treatment plants were built over twenty years ago and are now in need of capital intensive repair. AMSA's survey shows that over the past three years, there has been a significant shift in expenditures from capital improvements and reserves to operations and maintenance (O&M). O&M expenditures have increased from 37% to 43.6%, while capital improvements and reserves expenditures have decreased from 41.5% to 33.9% of total expenditures.
For what was spent in the 1970's and 1980's, these facilities are irreplaceable. Let's think long term, invest wisely, and protect our community assets.
POTW Privatization
When faced with the numbers presented in AMSA's survey, combined with other priority municipal costs, it's no wonder that federal, state and local officials are looking to the private sector for financial assistance. Over the past 15 months, AMSA has been working closely with its membership to address this issue and produced two publications, Evaluating Privatization: An AMSA Checklist and Managed Competition: Developing and Responding to RFQs and RFPs to assist our members in evaluating privatization proposals. These publications have been submitted with our testimony.
While providing service at a reasonable cost is important, we must remember that wastewater treatment facilities exist for the protection of public health and the environment. We must also recognize the important and dramatic progress that has been made by publicly owned treatment works over the past 25 years. Much of the progress can be directly attributed to a partnership of federal, state and local investment in excess of $500 billion since 1972 in support of the goals of the Clean Water Act. This investment has yielded public assets that go far beyond improved water quality and it is important to preserve the equity of taxpayers who made these investments possible. Wastewater utilities have enabled cities, private investors, and local communities to restore rivers, lakes and beaches and adjacent lands to productive community assets. Riverwalks, urban recreation facilities, wildlife preserves and education centers have become the hub of many metropolitan areas.
Today's wastewater utilities are full-service providers, tasked by their communities with much more than simply treating wastewater. Environmental responsibilities include removal of raw sewage from homes and businesses, safe handling and disposal of biosolids, and protection against releases of airborne pollutants. All of these environmental services are provided with comfortable margins of safety to assure compliance with environmental requirements and provide added protection to public health and the environment. POTWs are often at the forefront of new and innovative environmental programs. Where communities have moved towards watershed management to control water pollution, POTW employees are often heading up the program. Other services provided by POTWs include:
- protection against sewer backups, fires and explosions under the
national industrial wastewater pretreatment program;
- technical assistance on wastewater treatment and waste minimization
to industrial customers;
- ambient water quality, groundwater, and sediment monitoring;
- provision of reclaimed water supplies;
- septic tank retrofitting and septage pumping;
- disaster planning and emergency preparedness and response;
- cooperations with neighboring local governments or large institutional
users such as universities, military installations, or government
complexes;
- public education and outreach programs; and,
- participation with state and federal regulatory agencies on issues of policy and rule-making.
It is also important to recognize that POTW privatization doesn't mean that someone else if footing the bill. Ratepayers are still ultimately responsible for the cost of operating and maintaining wastewater facilities. To date, no analysis have been performed on the effects of privatization on ratepayers. It's just too new and there are not enough examples. We urge you to carefully consider the ramifications of any legislation that would actively promote the transfer of POTW operations and maintenance or assets to the private sector without serious evaluation.
Currently, wastewater treatment facilities are effectively operated and maintained through public, private and public/private arrangements. AMSA believes that all of these options can deliver the desired results. Under any scenario, it is imperative that all variables included in the financing, operation and maintenance of a wastewater treatment utility be carefully evaluated to ensure that the chosen option is best suited for the individual municipality.
Getting the Most Bang for Your Buck
In these times of decreasing federal investment in the national clean water program, we should look for opportunities to get the most out of every dollar invested. AMSA believes that investments can be maximized by implementing a national program of comprehensive watershed management. Establishing watershed management as an integral focus of the Act would go along way toward shifting the direction of our national clean water program -- away from command and control -- and toward a bottom-up, stakeholder driven process. It would allow us to focus both our efforts and our resources in areas where real water quality improvements could be realized. As we celebrate the 25th Anniversary of the Clean Water Act, we need to look forward to the next quarter century of water quality improvements from a new perspective. Watershed management involves a national shift in our approach to addressing water quality issues that will provide the information and tools we need to truly make a difference in our nation's water quality in years to come.
Watershed management is ongoing is some areas of the country and the findings are the same -- nonpoint source pollution is the largest remaining source of water pollution. We need a national initiative to target nonpoint sources of pollution and ensure that those responsible are held accountable for their contribution to water pollution. The message we want to convey is not, "stop regulating point sources and start regulating nonpoint" -- it is instead that all categories of impairment to water quality should be examined and corrected in the context of the watershed in which they occur.
To ensure the success of watershed management, it is essential to have a strong federal financial commitment for watershed planning and implementation activities. We should consider watershed planning as "Clean Water's next Act" and commit to its success in the same manner that we committed to the success of the Clean Water Act in the 1970's and early 1980's.
Our job is not done, and Congress still has an important role to play in providing funding to support clean water progress. AMSA's financial survey results provide concrete evidence that investment in the national clean water program pays. A simple walk along the waterfront in most major urban centers
confirms the numbers. We urge you to support continued clean water progress through the following actions:
- Amend the Clean Water Act to facilitate and fund watershed planning
and implementation programs (AMSA plans to offer specific recommendations
in this regard in the coming weeks);
- strengthen nonpoint source controls;
- expand eligibility and provide funding consistent with Clean Water
Act requirements and new environmental mandates;
- streamline SRF regulations and procedures to increase or remove
the limits on the sizes on the loans, lessen the loan application
preparation effort, reassess traditional eligibility determinations,
and extend loan terms; and,
- dedicate fees, enforcement revenues and other monies resulting from any new clean water revenue sources solely to provide additional funding for environmental improvements.
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