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March 13, 2008 - ASCE Brian Pallasch testifies - FY 2009 for ASCE priority issues


March 13, 2008 

Mr. Chairman, Mr. Tiahrt, and Members of the Subcommittee:

Good morning. I am Brian Pallasch, Managing Director of Government Relations and Infrastructure Initiatives for the American Society of Civil Engineers (ASCE). I am pleased to appear before the Subcommittee today to testify on behalf of ASCE to discuss key components of the proposed budgets for the Environmental Protection Agency (EPA) and the United States Geological Survey (USGS) for Fiscal Year 2009.

I. The Environmental Protection Agency
A. The Subcommittee should appropriate $1.5 billion for the CWSRF in FY 2009.

In FY 2008, Congress provided $689 million for the Clean Water State Revolving Loan Fund (CWSRF). That represented a reduction of $395 million (36 percent) from the FY 2007 enacted level. The FY 2008 appropriation represents the lowest federal commitment to the CWSRF in more than a decade. We urge this Subcommittee to renew the federal investment in our nation’s wastewater infrastructure.

The president’s budget request for FY 2009 continues the retreat begun in FY 2008 by proposing a budget of $555 million for the CWSRF—a further reduction of $134 million (19 percent) from the inadequate funding level for 2008.

The United States faces a growing crisis in the operation of wastewater treatment plants. Although the federal government has directly invested more than $80 billion in the construction of publicly owned sewage treatment works (POTWs) and their related facilities since passage ofthe Clean Water Act in 1972, the physical condition of many of the nation's 16,000 wastewater treatment systems is poor due to a lack of investment in plant, equipment, and other capital improvements over the years. The typical lifespan of wastewater equipment is 20 years, even when well maintained.

Nearly five years ago, the U.S. Environmental Protection Agency (EPA) released a detailed gap analysis, which assessed the difference between current spending for wastewater infrastructure and total funding needs. The EPA Gap Analysis estimated that, over the next two decades, the United States must spend nearly $390 billion to replace antiquated wastewater infrastructure and to build new treatment plants (the total includes money for some projects not currently eligible for federal funds, which are not reflected in the EPA State Needs Survey).

In its most recent “Clean Watersheds Needs Survey,” EPA said in January that the nation needed to invest at least $202.5 billion as of January 1, 2004, in wastewater treatment systems to prevent combined sewer overflows, sanitary sewer overflows, and other polluting conditions. The estimate is a snapshot and may not reflect total national needs.

Meanwhile, federal appropriations for the CWSRF have declined in the past decade. Between FY 1998 and FY 2004, Congress appropriated an average of $1.35 billion for the program. But the funding was cut to $1.09 billion in FY 2005, to $900 million in FY 2006, to $1.084 billion in FY 2007, and to $689 million in FY 2008.

One of the greatest challenges for the future of wastewater treatment lies in the industry’s ability to manage the increased demand for sewage treatment caused by population growth. In 2007, the U.S. Census Bureau estimated that there were 301 million people living in the United States. That number is expected to reach more than 400 million within the next 50 years. Although American families today are smaller, many are moving further from urban areas into remoter suburbs and rural areas. In 2004, the EPA reported that one-third of new housing developments will manage their sewage through septic systems (known as “on-site treatment”) due to the increasing decentralization of the U.S. population.

Treatment plant costs have risen sharply in recent years: the average per capita cost for wastewater treatment among 132 public agencies in 2004 was $171, an increase of approximately 20 percent from the $143 per capita cost in 1995, according to a survey by the National Association of Clean Water Agencies (NACWA).

At the same time, federal and state grants and loans declined from 10.6 percent to 5.9 percent of total publicly owned treatment plant revenues between 1992 and 2004, said NACWA. Thus more of the cost of providing wastewater treatment is falling upon local ratepayers, who already are paying nearly three-quarters of the cost through user fees and local bond issues. Two-thirds of all capital improvements to local treatment plants were financed by debt in 2004, said NACWA, while only 1.2 percent of all capital costs was provided by federal or state grants.

In the short run, ASCE supports increasing and expanding appropriations for the Clean Water Act State Revolving Loan Fund (SRF) program. 

B. Safe Drinking Water Act State Revolving Loan Fund

The Subcommittee should appropriate $1 billion for the Safe Drinking Water Act State Revolving Loan Fund program in FY 2009. This would be an increase of $150 million from the president’s budget request of $850 million for FY 2009. We believe this increase is necessary to continue providing funding for critically needed upgrades to the nation’s 54,000 water systems. The demonstrated need exceeds even this modest increase. The EPA’s 2002 gap analysis put the capital investment gap for the nation’s drinking-water treatment plants at almost $151 billion through 2019—an average of more than $7 billion annually..

C. ASCE supports the creation of a Water Infrastructure Trust Fund to finance the national shortfall in funding drinking-water and wastewater infrastructure systems and other projects designed to improve the nation's water quality.

Despite the consensus around the funding gap, broad public support for federal action, and years of hearings on these issues, the federal contribution to clean water investment has declined from more than 70 percent in the early 1970s, to less than five percent today. In the short run, Congress should reauthorize the CWSRF with a combination of loans, loan subsidies, and grants to help close the funding gap.

Increased funding for the State Revolving Fund is an important first step, but ASCE believes that, without a long-term clean water trust fund, clean water agencies will be hard pressed to carry out their important mandate to protect the environment and public health in a sustainable manner. As they continue to improve treatment processes and upgrade infrastructure to do the work necessary to protect and restore the nation’s waters, short and long-term changes are needed to align current environmental laws into a comprehensive watershed approach.

ASCE further supports a variety of financial mechanisms for the trust fund, such as appropriations from general treasury funds; issuance of revenue bonds and tax exempt financing at state and local levels; public-private partnerships; state infrastructure banks; user fees on certain consumer products; and other innovative financing mechanisms, including broad-based environmental restoration taxes to address problems associated with water pollution and wastewater management and treatment.

II. The United States Geological Survey (USGS)

The mission of the U.S. Geological Survey (USGS) is to collect, analyze, and disseminate geologic, topographic, and hydrologic information that contributes to the wise management of the nation's natural resources and that promotes the health, safety, and well-being of the people. This information takes many forms, including maps, reports, and databases that provide descriptions and analyses of the water, energy, and mineral resources, the land surface, the underlying geologic structure, and the dynamic processes of the Earth.

The USGS received an appropriation of $1.007 billion in FY 2008. The president has proposed a budget of $968.5 million for FY 2009, a decrease of $38 million.

A. Water Programs

The largest reduction will come in the USGS water resources budget, which is proposed for $140.7 million, down from $151.4 million enacted in FY 2008. The National Water Quality Assessment Program would suffer a cut of nearly $10 million or a reduction of 15 percent. The program collects long-term data on groundwater quality and drinking-water supplies.

The reduction will eliminate assessments of water quality at 10 of the nation's 20 largest aquifers and end the assessment of drinking water quality at almost 200 community water systems in California, Arizona, Utah, Massachusetts, New Jersey, Louisiana, and Alabama.

We recommend that this Subcommittee restore the budget for the National Water Quality Assessment Program to the FY 2008 level to avoid the loss of critically important water-quality data.

On the plus side, the National Streamflow Information Program will see a small increase (from $20.1 million to $23.8 million). The new money will allow USGS and other agencies to continue operating almost 200 streamgages in 31 states, many with more than 70 years of data.

B. Earthquake Hazards Reduction Program

ASCE is especially concerned at the FY 2009 request for the USGS component of the National Earthquake Hazards Reduction Program (NEHRP) of $53.1 million, which is a $5 million cut from FY 2008 and would take it to $2.3 million below the FY 2007 level. The USGS component of NEHRP is authorized for FY 2009 at $88.9 million.

For the past 25 years, NEHRP has provided the resources and leadership that have lead to significant advances in understanding the precise risk earthquakes pose and the best ways to counter those risks. Full funding will not only allow this important work to continue, but provide an opportunity to strengthen NEHRP and permit further improvements in the nation’s effort to mitigate the impact of earthquakes.

ASCE urges Congress to reject the President’s proposed cuts and to fund the USGS functions of NEHRP at the full authorized funding level of $88.9 million.

Elimination of the congressionally added $2 million multihazard increase, discontinuing activities that are improving delivery of USGS information to support emergency management in Southern California and which expanded the initiative to high-hazard areas of the Pacific Northwest and Central United States. In additionally, there would be a $3 million cut to earthquake hazards research grants.

That concludes my statement, Mr. Chairman. I would be happy to answer any questions the Subcommittee might have.