Clean Water Infrastructure Financing: State and Local Perspectives and Recent Developments
2167 Rayburn House Office Building
This is a hearing of the Subcommittee on Water Resources and Environment.
Opening remarks, as prepared, of Water Resources and Environment Subcommittee Chairman David Rouzer (R-NC) from today’s hearing, entitled “Clean Water Infrastructure Financing: State and Local Perspectives and Recent Developments”:
I’d like to first thank our witnesses for being here today – I am excited to hear from the members of this panel on the issues communities are facing in addressing the nation’s water and wastewater infrastructure needs. Specifically, I am interested in hearing your insights on water infrastructure financing, especially the current condition of the Clean Water State Revolving Funds (SRFs).
Our clean water infrastructure is something most Americans don’t think about every day but rely on 24/7. Just ask anyone who has ever dealt with a sewer backup how important our wastewater infrastructure is.
Indeed, in many communities, these water and wastewater systems are long past their design life and in need of critical repairs, upgrades, or total replacement. As a result, leaks and blockages are all too common across the nation and represent a massive waste of a vital resource. These needs are especially urgent for hundreds of communities trying to fix the problems of combined sewer overflows and sanitary sewer overflows.
Needs for improvement in wastewater infrastructure are especially the case for many small and rural communities. There are more than 16,000 private and public wastewater treatment systems nationwide, and approximately 80 percent serve communities with populations of 10,000 or fewer. In my district, there are 95 communities with less than 10,000 residents, including the Town of Chadbourn in Columbus County. Chadbourn has wastewater systems as old as its date of incorporation: 1883. The Clean Water SRF program has allowed them to maintain their systems while they pursue long-term solutions.
According to EPA’s last “Clean Water Needs Survey” report to Congress in 2016, the total documented needs for sustainable wastewater infrastructure, combined sewer overflow and sanitary sewer overflow correction, and stormwater management nationwide are at least $270 billion over the next two decades.
In my home state of North Carolina alone, there is a documented need of $11 billion for clean water projects. To further demonstrate these needs, coastal and low-lying inland communities in southeastern North Carolina experience frequent storms resulting in flooded rivers and watersheds, often times leaving water and drainage systems in need of total repair and future mitigation.
Even by congressional standards, these investments are expensive and cannot be handled by simply authorizing and appropriating the same or larger amounts of federal funds. The Infrastructure Investment and Jobs Act (IIJA) recognized the importance of the Clean Water SRF program, but just threw money at the problem without addressing the shortfalls of the current programs. While federal, state, and local investments are necessary, new approaches are required to solve these problems.
Novel methods such as integrated planning and greater regulatory flexibility can help communities struggling to address needs and meet compliance mandates while also reducing financial burdens currently levied on ratepayers.
When the Clean Water SRF program was created in 1987, the authors understood states and localities are the experts in addressing their own clean water infrastructure challenges. By setting up loan programs, states and localities would be able to leverage more financial resources for decades to come, easier than relying on direct appropriations. It is important that we maintain the longstanding loan structure to continue responsibly addressing wastewater infrastructure needs decades into the future. To do otherwise will make the program unsustainable.
The current set-asides for grants and grant substitutes passed in IIJA will ultimately be harmful to the program, slowly draining the funds states have been able to leverage for decades under the traditional low-interest loan structure. When combined with unfunded mandates and burdensome regulations driving up baseline costs, the long-term viability of the Clean Water SRF is in doubt.
The bottom line is that wastewater infrastructure is incredibly important for my constituents and for my colleagues here today. The Clean Water SRF is an example of good public policy that helps keep wastewater costs down and provides reliable service to those around the country. In order to maintain robust clean water infrastructure now and in the future, a robust and effective program is critical.
I look forward to hearing from our witnesses today about how we can improve our clean water infrastructure, protect against environmental degradation, keep wastewater costs low for ratepayers, and address the challenges brought about by recent legislative changes surrounding the Clean Water SRF program.