<DOC>
[108 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:96655.wais]
S. Hrg. 108-904
COST OF CLEAN WATER AND DRINKING WATER REGULATIONS TO MUNICIPALITIES
=======================================================================
FIELD HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
ON
__________
JULY 26, 2004--TULSA, OK
__________
Printed for the use of the Committee on Environment and Public Works
U.S. GOVERNMENT PRINTING OFFICE
96-655 WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512ÿ091800
Fax: (202) 512ÿ092250 Mail: Stop SSOP, Washington, DC 20402ÿ090001
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
one hundred eighth congress
second session
JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas BARBARA BOXER, California
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
CRAIG THOMAS, Wyoming THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado HILLARY RODHAM CLINTON, New York
Andrew Wheeler, Majority Staff Director
Ken Connolly, Minority Staff Director
(ii)
C O N T E N T S
----------
Page
JULY 26, 2004--TULSA, OK
OPENING STATEMENTS
Crapo, Hon. Michael D., U.S. Senator from the State of Idaho..... 4
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1
WITNESSES
Bourque, Rick, city manager, city of Wewoka...................... 12
Prepared statement........................................... 38
Carr, Robert, on behalf of the city of Owasso and the city of
Collinsville................................................... 8
Prepared statement........................................... 27
Hardt, Charles, public works director, city of Tulsa............. 6
Prepared statement........................................... 24
Responses to additional questions from Senator Inhofe........ 26
Komiske, Ken, public works director, city of Norman.............. 10
Prepared statement........................................... 33
Response to additional question from Senator Inhofe.......... 38
McAlpine, Clay, director of engineering, city of Muskogee........ 14
Prepared statement........................................... 40
Morgan, Arvil, district manager, Wagoner Water District Number 5. 9
Prepared statement........................................... 30
Response to additional question from Senator Inhofe.......... 30
ADDITIONAL MATERIAL
Charts:
Arsenic Rule Solution, Arsenic Rule Impacts.................. 36
Average U.S. City Revenues, 2003............................. 28
Existing System Assessment, Annual Average Water Demand
Projection................................................. 33
Existing System Assessment, Peak Day Water Demand Projection. 34
Oklahoma Municipal Expenditures, 2002........................ 28
Oklahoma Municipal Revenues, 2002............................ 28
Recommended Water Plan, Strategic Water Supply Plan
Recommendation............................................. 35
Wastewater Solution, Wastewater Master Plan Recommendations.. 37
Statement, Town Hall, city of Coweta, OK......................... 31
COST OF CLEAN WATER AND DRINKING WATER REGULATIONS TO MUNICIPALITIES
----------
MONDAY, JULY 26, 2004
U.S. Senate,
Committee on Environment and Public Works,
Tulsa, OK.
The committee met, pursuant to notice, at 1 p.m. in the
Price-Turpen Courtroom, John Rogers Hall, University of Tulsa
School of Law, Tulsa, OK, Hon. James M. Inhofe (chairman of the
committee) presiding.
Present: Senators Inhofe and Crapo.
OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM
THE STATE OF OKLAHOMA
Senator Inhofe. The hearing will come to order. One of the
few things that Mike and I do well is we always start on time.
Since he'll be leaving from here--I guess you're going down to
Fort Bliss, aren't you?
Senator Crapo. That's right.
Senator Inhofe. Then back to Idaho after that.
Senator Crapo. We have about 2,300 Idahoans headed to Iraq
here in a day or two, shortly. I'm going to go down and see
them.
Senator Inhofe. Well, let me, first of all, thank Mike
Crapo for coming here. He came all the way from Idaho to be
here with us today. I chair the Environment and Public Works
Committee of the U.S. Senate, and probably our most important
subcommittee is the subcommittee chair called Fisheries,
Wildlife and Water Subcommittee. If you want, at an appropriate
time, you can come; Kit Bond is--OK.
Senator Crapo and I recently introduced legislation to
provide you, the Nation's cities and towns, with some financial
assistance as your water infrastructure poses the ends of its
useful life and Federal regulations start kicking in. Our bill,
S. 2550, passed our committee just a few weeks ago. It's a
good, clean bill. It doesn't mandate anything on you guys. It
doesn't give you any new obligations, but it seeks only to help
you address the problems of aging infrastructure and new
regulatory requirements.
Senator Crapo, you know, like your State, our State is a
fairly young State. We didn't really start feeling the problems
and the pains of aging in this infrastructure until, oh, about
the time I was mayor of Tulsa 25 years ago. So now it's getting
to be just as serious as it is in some of the more mature parts
of the country.
Now this effort was inspired by a series of studies showing
pending crisis with our Nation's water infrastructure. The gap
between what we currently spend and what we need to spend as a
Nation, ranges from a few billion dollars a year to some $24
billion a year. Not only must the Federal Government fulfill
its financial obligations, but it must become more aware of the
actual costs being imposed by these regulations which are
contributing to this gap. It's important to note that this
hearing is not about rolling back protections. However, we do
need to ensure that our limited resources are put where they
are most critically needed to address real problems and real
health threats.
Today we're going to talk about costs, what the EPA says
these rules cost and what the real life experiences of you the
people who run these facilities, is. Several recent rules
finalized by the Administration have costs that may not be
justified by the benefits. Not only--so not only do we need to
closely look at the science behind them, but how the EPA
derived its cost estimates.
You know, when I first became chairman of this committee
about a year and a half ago, I made the announcement that we
were going to do two things that had never been done in the
history of the Environment and Public Works Committee. One, is
we were to try to make sure to base our decisions on sound
science, and the second thing is have a cost benefit analysis,
so that people really will know what that cost is. And that's
what we've been doing.
In 1995, Congress passed the Unfunded Mandates Reform Act.
I cosponsored this, and this Act--the idea of this Act was that
if we pass regulation, we pass the rules, we pass the laws in
Washington, that we realistically look and see what types of
financial hardships that poses on smaller- and mid-size and
large communities throughout the country. The Act required
agencies, before finalizing the rule that would benefit
resulting in more than $100 million annually to local and State
governments, to identify Federal funding sources and the least
expensive alternative or approach when it finalizes it
regulations. However, despite passage of the Unfunded Mandates
Acts, the Agency continues to promulgate rules that far exceed
$100 million that place financial strains on the Nation's
cities and towns.
The Agency tends to assume full compliance with and success
of existing regulations when calculating costs of new
proposals, which I think is wrong. The Agency also fails to
take into consideration the fact that all community water
systems and all treatment works are not the same. They service
various kinds of industrial and residential users which means
that wastewater they receive can differ dramatically from plant
to plant. This, in turn, affects not only the types and
quantities of chemicals used to meet discharge limits, but also
capital investments that may need to be made. All of which
result in very different resource pressures for facilities
across the country. They have different water resources,
different chemical makeups and different resource pressures.
Just as they cannot all be expected to use the same exact
levels of chemicals to treat their water, they do not all
experience the same level of cost. These differences must be
reflected more strongly in the Agency's cost analysis.
A critical issue related to the cost municipalities face is
how the Agency defines affordability. I think we need to take a
closer look at how affordability is defined and if there are
variance technologies available. EPA can, but has not, approved
a variance technology for drinking water rules if it finds the
rules are unaffordable to small communities. This hasn't
happened yet. The EPA defines affordability as 2.5 percent of
the annual median household income, or $1,000. The median
amount paid for water in 2001 was $31 a month. In order for the
EPA to find that this rule is not affordable it must cause that
rate to be increased to $83. That's an increase at $52, which
they say is not very great, but it is great to a lot of the
families that are so strained, and the communities that are
strained by these problems.
This speaks to one of the biggest problems we have with the
bureaucrats running these programs. Congress clearly told EPA
in the Safe Drinking Water Act to pay special attention to
small, disadvantaged systems and yet its affordability standard
reflects the median income, not that for the truly
disadvantaged, causing it to find all of its rule affordable
for systems of all sizes.
When we began planning for this hearing, the first thing we
did was look for existing reports and analysis of the
cumulative financial impact. We are working on this now. This
is what we are striving to find. You can say that you have a
problem with one type of treatment, and this problem is passed
on to the customers that you folks today are representing. But
when you have three or four that are passing on at the same
time, it's a much larger amount. What we're trying to do is
take a little bit of this in a cumulative affect. For instance,
the city of Coweta with a population of less than 10,000 people
is paying for a new wastewater treatment plant. If someone is
here, not on the panel, from Coweta, hold your hand up, please.
Oh, you're--OK. We flew over Coweta this morning. That is a
very famous place, that's the birthplace of Bill and Vonette
Bright. He was not even aware of that, were you?
Anyway, they're complying with both the disinfection
byproduct rule and storm water phase II regulations. The city
has also increased its rates every year for the past 5 years
and anticipates more increases if help is not forthcoming.
Unfortunately, in preparing for this hearing, we were
unable to find recent, comprehensive studies of the overall
cost of these regulations. Therefore, Senator Crapo and I are
going to ask the General Accounting Office to conduct a
thorough analysis of the cumulative cost to individual
communities and ratepayers of both clean water and drinking
water regulations. I think this study is critical to addressing
the cost issues at the Federal level and beginning a productive
discussion. A lot of the testimony that comes from you guys
today is going to be looked at by this effort, this study, in
order to try to determine what we can and cannot do.
So with that, before I turn it over to the chairman of the
subcommittee, I would like to mention that this morning we got
in a little airplane, and I flew Senator Crapo over all the
communities that are represented here today except for Norman.
We didn't get quite that far down. Then we kind of look at this
and see--so he has actually looked at your communities
firsthand and has an opportunity to know a little bit about
what the communities are.
With that, I will just turn it over to any comments you
might want to make.
OPENING STATEMENT OF HON. MICHAEL D. CRAPO, U.S. SENATOR FROM
THE STATE OF IDAHO
Senator Crapo. All right. Thank you very much, Mr.
Chairman. First of all, let me thank you for the invitation to
come here to Tulsa. I have been treated very warmly and
wonderfully by the people of Oklahoma. I certainly expected
that, having known so many great Oklahomans in my experience in
Washington, DC. But I just wanted to thank you for your
tremendous hospitality and to tell everybody here that you have
an outstanding Senator. I served in the House with my good
friend, Jim Inhofe, before he ran for the Senate, and then was
lucky enough to be able to join him in the Senate, and worked
with him on issue after issue for virtually the entire time
that I served in the U.S. Congress. It was an honor to be asked
by Senator Inhofe to come and join him today for this hearing.
He is an outstanding chairman. You're very fortunate to have
someone of his caliber to fight for you on these issues and
especially, to be the chairman. Now, he asked me--or told me it
would be OK if I told you a little story about the committee.
The committee as he indicated is the Fisheries, Wildlife and
Water----
Senator Inhofe. Subcommittee.
Senator Crapo. My subcommittee, that I chair. When I first
got to the Senate, it was actually called the Fisheries,
Wildlife and Drinking Water Subcommittee because the then
chairman, Senator Chafee, from Rhode Island, kept all the other
water jurisdiction except for the drinking water statute to
himself at the full committee level and didn't let the
subcommittee have it. So this chairman is confident enough in
himself that he's willing to let the subcommittee chairmen do
their jobs. The subcommittee is now the Fisheries, Wildlife,
and Water Subcommittee. But the story has to be told with the
other name, it was Fisheries, Wildlife and Drinking Water
Subcommittee. I had just gotten elected to the Senate. I served
in the House. In the House, you have to be in the House a long
time to be able to do a committee chairman. I wasn't thinking
about being a committee chairman, but (inaudible) came in the
first week I was in the Senate and said there are fewer
Senators and so you're going to get to be a chairman of the
Subcommittee for Fisheries, Wildlife and Drinking Water. I
thought that was great. Then the next day my staff came back
and said, ``well, there's a--maybe we spoke too soon, because
another Senator is going to challenge you for that
chairmanship. He wants it.'' It was Kit Bond from Missouri. He
had been there 20 years or plus, and I had been there 2 days,
and I figured that he had more friends in the caucus than I did
at that point, so I thought, ``oh, my chances of being a
chairman are kind of toast.'' But he already had a full
committee chairmanship and another subcommittee chairmanship on
the Appropriations Committee. So under the rules, you're
supposed to let some of us junior guys have a shot at it.
The caucus stuck with me and let me keep it. So the story
now is he came to me afterwards and said, ``Mike, it's no--you
know, nothing personal. I just think that that committee, that
subcommittee, is the best committee in the entire Senate.'' I
said, ``Well Kit, I'm really glad to know that it's not
personal, but what do you mean it's the best subcommittee in
the whole Senate?'' And he said, ``Well, just think about it.
It's fisheries, wildlife and drinking water. That's fishing,
hunting, and drinking.'' And I said, ``Well, that's true, Kit,
you have given me a whole new perspective of the committee, but
it is drinking water.''
He said, ``Well, we have this thing--this substance we get
out of Tennessee that we add to the water that helps kill the
germs, and it makes it much better.'' Anyway, we had some fun
with it. But the fact is that the committee has very, very
broad jurisdiction. We have the subcommittee. We have the
Endangered Species Act, the Clean Water Act, the Safe Drinking
Water Act, and many other very critical issues for having
resources. I will make this very brief because Senator Inhofe
has very, adequately and accurately explained the issue. We've
been working--that was 6 years ago. I'm in my 6th year as
Senator. We've been working on this issue for that entire 6
years trying to address a multiplicity of the issues that
surround our aging infrastructure for our water systems in this
country. We have big issues under both the Clean Water Act and
the Safe Drinking Water Act. There are lots of different
studies that try to guess and speculate as to how costly it
will be for us to upgrade our infrastructure in this country so
that we can maintain our clean water. It is the envy of the
world. In my opinion, this issue is one of the most, if not the
most important environmental issue that we have in the country.
These studies, in terms of the amount of dollars that it will
take nationwide, range from several hundred billion dollars to
up to a trillion dollars of need depending on whose numbers you
use. The point being that it is a massive issue of critical
importance to Americans. So we have now just a few weeks ago
put out legislation that, like I say, it's taken us 6 years to
get to the point where we can get it to this point. This
legislation will address the issues from multiple perspectives.
We will look at the standards. We will look at efficiencies, if
you will in the administration of the accounts. We will look at
the questions of unfunded mandates and try to make sure that we
reduce those to the maximum extent possible. We will strengthen
and reform the revolving loan funds to try to get resources to
the ground where they're needed as quickly and efficiently as
possible. But we will need to do that with help from the people
throughout the country. Because there are--as I said, there are
tremendous battles in this country over how to do this and
whether to add more bureaucracy, more requirements, more
mandates or whether to streamline the process. It's one of
those issues where I'm very interested today to see what these
witnesses will tell us. I have seen your communities. I have
not visited with you yet about that. I can tell you that Idaho
has very similar communities and very similar circumstances.
It's one of the most common problems that we face now with
communities who don't have the ability to generate the
economies of scale that larger population centers do, facing
very, very expensive Federal mandates that don't come with the
resources to accomplish them. I expect that we're going to get
that kind of information to us today. But Mr. Chairman again, I
thank you for your support and your interest in this issue. I
also again thank you for the invitation to be here and look
forward to the testimony.
Senator Inhofe. Thank you very much. So that you know how
we are going to do it, we have as witnesses today Mr. Charles
Hardt, public works director of the city of Tulsa. I might add
that 25 years ago when I was mayor--was it 25 years ago or
longer?
Mr. Hardt. A long time.
Senator Inhofe. Yes, a lot longer than that. Charles Hardt
was there. He hasn't changed any. So nice to have you back,
sir. Robert Carr on behalf of the cities of Owasso and
Collinsville. Mr. Arvil Morgan, Wagoner. We went over Wagoner
this morning. Mr. Ken Komiske. Am I pronouncing that correct?
Mr. Komiske. That's correct.
Senator Inhofe. Komiske, from Norman. Rick Bourque, city
manager of Wewoka, and Clay McAlpine, the director of
engineering for this city of Muskogee. Clay, I have to say that
when we were coming down over Muskogee, I pointed out the
submarine, the USS Batfish, and that was my project in 1969, I
think it was, when I was a State Senator showing tons of
stories that we are navigable in Oklahoma. A picture does that
better than a report. There it was on the cover of all these
industrial publications coming across the State line of
Arkansas into Oklahoma. So not many people would know that we
can bring a 300-foot submarine all the way from Orange, TX to
Muskogee. We are going to--in order to stay on schedule, we
have some questions we want to ask you but your opening
statements are going to be probably the most critical part.
You've been instructed as to what types of problems we want you
to talk about. The information you give us is going to be used
in studies that we're talking about performing. You may well
serve as a model in helping us serve as a model for the State
of Oklahoma for getting some of these problems resolved. What
we will do is take you in the order that I just read your
names, instead of having two panels, I'm going to do you all as
one panel. I'm to ask you to confine your opening statement to
5 minutes, but the most you can go over is 2 minutes, all
right? So if you try to do that, and then we--give us a chance
to respond to some of your questions. We will start, Charles,
with you.
Charles Hardt, the city of Tulsa.
STATEMENT OF CHARLES HARDT, PUBLIC WORKS DIRECTOR, CITY OF
TULSA
Mr. Hardt. Thank you very much. On behalf of this group, as
well as the other communities in Oklahoma, we want to thank you
Senators for taking your time to hold these hearings. We also
want to express our appreciation for the State revolving fund
program and the continuation of that as well as the expansion.
Tulsa has participated in to the tune of $250 million so far,
in the wastewater program and lending process. It's absolutely
critical for us to be able to implement our infrastructure
upgrades. We also want to thank you, Senator Inhofe, for your
tremendous effort on the reauthorization of the Transportation
bill and the significance it has to the city of Tulsa. It's
absolutely vital to meet Tulsa's growing needs and continuing
to keep up with our infrastructure capacity. Tulsa's water
supplies are primarily surface water. We get our water,
drinking water from two reservoirs. One coming out of the
mountain areas over in Arkansas and the other to the north from
Kansas. The greatest threat we've had today has been the
challenge of nonpoint source pollutants. These are primarily
agricultural water sheds with virtually no urban development,
and therefore, we haven't had the point source issues that
normally plague and cause the problems for our surface water
supplies. Since the 1970's, the regulatory process has really
focused on point source discharges. As a part of that, we have
made major efforts in communities in the Nation in dealing with
our discharges and our surface runoff protections through
development processes and other treatment needs.
But the city of Tulsa found itself in the early 1990's with
an increasing problem that we were unable to deal with from the
standpoint of having the capability of handling it ourselves.
We actually had to discontinue the use of our water supply for
over a month because of the taste and odor problems relating to
new green algae from the high nutrient loading in our water
shed. So as a result, we finally--we had considerable
negotiations with poultry industries. As a result, we finally
went to litigation. Are nearing the first year of a 4-year
settlement agreement and in the process of trying to identify
best management practices and through the use of Federal
programs, as well as the 319 funds, to deal with erosion--I
mean, the pollutant problems. But we find ourselves with the
problem of trying to change behavioral practices in a very
competing industry in a very short time period. Three years
seems like quite some time, but really, whenever you consider
that we really are trying to change, fundamentally, the
behavioral practices of mom and pop farmers and the people who
grow the chickens and dispose of the litter, we find that
that's really a very tough situation dealing with two States,
two different regulatory processes and the tremendous
differences that we incur. So, therefore, we strongly encourage
the development and implementation of regulatory enforcement
mechanisms to control nonpoint source pollutants discharges of
the Nation's water. We really need that overall umbrella that
helps us all work to a common goal.
For water quality standards, we think the great issue
that's challenging, probably more to Oklahoma than any other
one State, is the issue of tribal designation for setting
standards. In Oklahoma, we have 38 tribes that could
theoretically--that these are all recognized Federal tribes
that could impact, then, our water quality standards, both for
our drinking water standards as well as other projects such as
transportation projects that go through multiple boundaries,
both for clean water, as well as, then, the issues of air
quality standards. So we would strongly encourage the
legislative amendment of Section 401 of the Act, which
authorizes certification of water quality standards developed
by Native American tribes. We certainly want to meet all water
quality standards that provide safe drinking water to all of
our citizens, but we feel that there's a better way of doing it
than each individual jurisdiction being able to set their own
standards.
In the process--well, the questions did ask for cost
estimates. We have spent over $5 million on the nonpoint source
pollutant discharge problems with everything from setting up
our test, as well as ongoing, we are spending $250,000 a year
annually just to deal with that issue. On the issue of the
Water Quality Standards for Tribes, that could be very
significant to someone involved in multiple jurisdictions.
Water Quality Standards implementation of the issue of sound
science, we are meeting--the staff is meeting in Oklahoma City
this afternoon with the Water Resource Board to try to deal
with establishing acceptable analytical methodologies,
requiring strict adherence to industry-standard, quality
assurance, and quality control protocols when monitoring water
quality compliance with standards. Since my time says stop, and
I'm into my 2 minutes, I won't get into the detail. But this
issue, just for monitoring one factor that there was a
parameter that it was identified by an invalid, erroneous third
party testing--a field screening test, we wound up having to
spend $20,000 just to deal with the fact that we had several
streams that became invalidly, erroneously listed on the
State's list. So these kind of things, if multiplied to a
variety of other perimeters, could cost us a hundred times that
kind of costs.
Senator Inhofe. Thank you, Mr. Hardt.
Mr. Carr, just because you represent two communities does
not mean you get twice the time. We went over both communities
this morning, to show where the home of the Rams was.
STATEMENT OF ROBERT CARR, ON BEHALF OF THE CITY OF OWASSO AND
THE CITY OF COLLINSVILLE
Mr. Carr. Well, we want to thank you also for taking your
time to come and be able to hold this hearing here in Tulsa.
I'm representing also the Oklahoma Municipal Utility Providers
as the chair of the Technical Advisory Committee, as well as
the cities of Owasso and Collinsville. The Oklahoma Municipal
Utility Providers was established in January 2003, by the
Oklahoma Municipal League to represent the water and wastewater
interests of municipalities. Since it's inception, 1\1/2\ years
ago, 214 Oklahoma municipalities have become members of OMUP.
This rapid organization growth is indicative of the collective
magnitude of concerns, with respect to water related issues in
the State of Oklahoma. Data collected by the OML indicate that
rural and urban communities in Oklahoma have long-term
financial concerns. The OML reports that 43 percent of the
average year 2002, Oklahoma municipal revenues were the result
of utility fees. Average expenditures for utilities were
reported to be 39 percent. Therefore, the average revenues and
expenditures for Oklahoma utilities are essentially equal. But
the expenditures that were reported do not reflect depreciation
or unbudgeted out-of-pocket expenses or unfunded mandates.
Sales tax revenues largely in Oklahoma have been extremely
volatile for the past few years. Municipalities have determined
that they cannot count on sales tax revenue for stability.
Many of the municipal budget short-falls experienced have
had to be subsidized by utilities revenues. As a result,
utilities operations have been stressed to achieve consistent
results with limited or nonexistent additional funds to meet
changing operational conditions and to meet new regulations.
Data compiled from work done by various consulting
engineers in Oklahoma, U.S. Environmental Protection Agency
fact sheets, information from the Association of State Drinking
Water Administrators and the Oklahoma Department of
Environmental Quality staff, indicate all water customers can
expect higher monthly bills as a result of recent regulations.
The construction needed may increase water bills as much as 60
percent per customer.
Changing regulations have complicated the abilities of
municipalities that they have to make long-term financial
decisions to provide quality water to customers.
We design our capital improvements to make investments in
facilities that are based on the requirements and regulations
that we know of today. When requirements become more
restrictive, then alternatives are expected to become more
costly.
Few options are available to the small utility, however. To
have control of their own operation, the small utility may be
faced with locating new sources of supply. Economies of scale
are more favorable to the larger utility that can absorb
additional treatment costs among more customers. In addition to
fiscal impacts, the Oklahoma Municipal Utility Providers
questions whether cost versus benefit have been adequately
addressed prior to implementation of regulations. For example,
in a January 16, 2004, letter to the U.S. Environmental
Protection Agency from the American Water Works Association
commenting on the proposed Stage 2 Disinfectants and
Disinfection Byproducts Rule, the following was stated: ``In
reviewing the EPA cost benefit analysis, the AWWA found
significant issues affecting the reasonableness and credibility
of the final conclusion in nearly every step.''
They went on to say that the EPA may have overstated total
benefits considerably. Similarly in a January 9, 2004, letter
commenting on the proposed Long-term 2 Enhanced Surface Water
Treatment Rule, AWWA stated they were very concerned that the
Agency's economic analysis documents have created an
unrealistic expectation and implied a significantly greater
benefit that will actually be realized through implementation.
These comments are concerning to the Oklahoma Municipal Utility
providers, as it is members municipalities that are faced with
more restrictions and increased costs. Municipal water
suppliers are charged with the fiscal responsibility of
investing public funds in a manner that protects their
investments, where there are no uncertainties pertaining to the
need for additional improvements to meet future regulations.
Senator Inhofe. Thank you, Mr. Carr. Thank you very much.
Mr. Morgan, you are representing the Wagoner County
district, so that incorporates several communities.
STATEMENT OF ARVIL MORGAN, DISTRICT MANAGER, WAGONER WATER
DISTRICT NO. 5
Mr. Morgan. Yes. Again, I thank you for hearing what we
have to say. I live in Coweta. You were talking about being a
small town, I represent a rural water district that is a lot
smaller than that, so everything that--you know, we get our
water from the Verdigris River. We have about 2,550 tap
holders. Back in 1989, 1990, we decided it's better for us to
build a plant, operate our own deal. So we did. We built what
was--what we were told was the latest and greatest thing on the
market package plants. It worked real good until the
disinfectant bylaw changed. Our plant will not produce water
that will get us in compliance.
Because of that, we're going to have to spend--I've visited
with the engineer. It's going to cost us about $1.5 million.
That don't sound to be--that's not a whole lot for these big
cities, but when you talk about the rural and a lot of them are
low income houses, you divide that up among 2,550, it's going
to be very expensive. We have tried every way in the world to
get what we've got to work, and it just won't. We've got to
build on to our plant to make it work. There's probably about
250 plants in the State that's going to be--that's just about
like we are, small plants. So statewide, this is going to be
very expensive. And that's our biggest concern, is where do we
get the money and how can we afford to make these changes.
The rural--the Water Resource Board has been real good
about helping us out financially, Rural Development, but
because Wagoner County, there is a consensus. They ran an
economic study, I guess. Anyway, we don't qualify for any
grants. So it's all going to have to be borrowed money. So
we're kind of up against the wall. We need some help from
somewhere, whether it be some time on our--bylaw, disinfectant
bylaw change, or money, you know, we need some help from
somewhere. That's what we're doing here.
Senator Inhofe. Well, good. Before proceeding on to Mr.
Komiske, let me just make a comment on something that Mr. Hardt
said. I know this community was interested in this same thing.
On the Transportation bill, what we did--the last thing we did
before we left, was have a conference. I chair the conference
between the House and the Senate. There are 72 members of the
House and Senate on that conference.
Our problem has been--and I have to be critical of our own
Administration in this respect--that without any regards to how
it's being paid for, they wanted to have a reauthorization of a
Highway bill for the next 6 years to be under $256,000 billion.
Now, if it doesn't--if it's done user fees and it's not--and
the users are not complaining about it, it would seem to me
that it would be unnecessary or unwise to veto a bill merely
because the number, even though it doesn't add to the deficit,
is higher. Quite frankly, the House went all the way down in
their bill from $270-$375 billion down to $284 billion. We're
trying to get that back up to about $289 billion, in which case
we will be able to do something about such things as
(inaudible) states and other problems. Right now Oklahoma is
tied with Missouri, dead in last, in our condition of our
bridges. So we have to do something about it. I just wanted to
say that to you, Charles, I know you're interested. We fully
intend to go back after this recess. The staff is working on
coming up with the elements of the bill that we have left in
their hands. We, hopefully, will be able to pass one when we
get back in September.
Mr. Hardt. Very good. Thank you.
Senator Inhofe. Mr. Komiske, excuse me for the interruption
there.
STATEMENT OF KEN KOMISKE, PUBLIC WORKS DIRECTOR, CITY OF NORMAN
Mr. Komiske. That's fine. Thank you for the opportunity to
be here. My name is Ken Komiske. I'm the director of the
utilities for the city of Norman. With me in the audience is
Bryan Mitchell. He's one of our lead engineers. He's been with
Norman about 6, 8 years. I've been with the city of Norman
about 10 months.
Senator Inhofe. Hold your hand up, Bryan. There you are.
OK.
Mr. Komiske. So if there is any historical references or
anything, Bryan can probably answer that. But I think he's here
to make sure I don't say something stupid.
Senator Inhofe. Well, let me interrupt you at that point
and stop the clock and introduce Michele Nellenbach, who is
behind me. Michele, she is the one who came here from
Washington to keep me from looking stupid, so we all have that.
Mr. Komiske. Fair enough.
Senator Inhofe. Start the clock.
Mr. Komiske. Well, Norman is well aware of the importance
of wastewater and water issues, and as such, an important piece
of finding more water, finding additional water, and treating
water, is water conservation measures.
We do have a lot of measures in place, and we're
aggressively continuing that. We have, of course, the newspaper
ads and the educational pieces, and we also provide
conservation kits to homeowners, so the homeowner or residences
can use less water. But the very important piece, is the
residents and citizens voted for an inverted rate block, which
means that the more water a residential customer uses the more
expensive it gets per unit. So that helps keep conservation in
check. By going over 20,000 gallons per month, the water rate
per thousand gallons actually doubles. So with that in mind,
Norman historically has enjoyed economic diversity, and as
such, in this graph here, you can see that we have grown and
our water usage has increased. We get our water from two
sources. We have--the turquoise band on the bottom is from Lake
Thunderbird. It's a manmade reservoir. Then the yellow band
across the middle is from our well fields. So we have 31 wells,
and you can imagine, the wells vary in age and size, and so at
any one time, there's probably 27 of them that are working. So
that's our average day demand. If you look at our peak day
demand, which I think we have done a very good job in keeping
in check or under control, is our peak day demand is about
twice our average day demand. That's not really bad for a
community our size, because a lot of communities in an area as
this, such as, Idaho and the Boise area, I used to live there,
or Oklahoma where it's very, very warm, you can have peake day
demands of sometimes three, three and a half times your average
day. So we have twice the average day demand, but if you look--
the point of this is we are looking at what are--where it was
and what we will need in the future. If you go out to 2040 to
meet the peak day demands, we will be needing about 60 million
gallons a day. Our average day right now is 11. Our peak day is
about 23. So we are going to need a considerable amount of
water. As such, we did a water plan in 1999 to get our arms
around this monster and, essentially, say where are we going to
get this water from. We came up with a plan that is on Figure
3. It looks like it would cost about $80 million to supply the
growing needs of Norman. That would be with additional water
treatment plant capacity and, perhaps, a buffer reservoir,
essentially, attached to the Lake Thunderbird and definitely to
increase the well supply that we have. So we're looking at
that, and in Figure 4, along came the Arsenic Rule. This is the
important figure.
If you can look at that picture, that diagonal line across
which is actually Route 77, has a whole bunch of little white
dots. Those white dots are wells that have been working--some
of them for quite some time, that will be put out of service
because of the Arsenic Rule. So out of 31 operating wells, or
at least 28 operating at any one time, we'll be losing half of
our supply of well water due to the arsenic rule.
If you have a colored picture you can see that some of the
other wells are grouped in clusters. That's our way of getting
around this monster, is that some of the wells can be combined,
so we can put some wells with good water in with some of the
wells with bad water and mix the water together and still end
up below the arsenic level. So we'll use 15 wells. Seven wells
will be combined and blended and seven wells will actually have
to have all their water transported back to the water treatment
plant, mixed with the surface water, and then released back
into the system. So that's where we are on that. This expansion
or this change that we really weren't expecting prior to 1999,
I suppose, will cost about $9 million.
So before I go into the wastewater thing, I'm running out
of time. That's really what we wanted to talk about in terms of
water supply and where we were. We have a $9 million elephant
looking at us, and we have to get our arms around that.
Senator Inhofe. All right, sir.
Mr. Bourque.
STATEMENT OF RICK BOURQUE, CITY MANAGER,
CITY OF WEWOKA
Mr. Bourque. I would first like to take this opportunity to
thank Senator Inhofe and Senator Crapo for holding this hearing
and for giving the city of Wewoka a chance to speak out about
these important issues. Senator Inhofe, as you know, when you
served as mayor of Tulsa, managing a city is never an easy
task. Unlike the Federal Government, we do not have the
capacity to run deficits. We should always balance our books.
This is difficult enough in the best of times, but when these
outside factors like unfunded mandates come into play, it is
almost impossible.
This is especially true in a small town like Wewoka. Wewoka
is a very diverse town. It was founded by a former Indian slave
in the Seminole Nation, has lived through the booms and busts
of the oil industry, and has suffered many hardships along the
way. Seminole County, where we reside, currently has one of the
highest unemployment rates of the State, almost 20 percent.
Population has been steadily declining for the last several
years and so have sales tax revenues.
This is true not just in Wewoka, but in small towns across
the State. I tell you this not to be pessimistic. Actually, we
are very optimistic about our future. I merely want to point
out that small towns like ours have dwindling resources and
cannot afford the cost of heavy-handed regulations and unfunded
mandates. There are many examples of this that I can speak
about. But in the interest of time, I have limited it to just a
few.
One example of how unfunded mandates complicate the
business of city government is in the area of excessive and
constantly changing regulations in our drinking water. Most
cities have a sizable investment in their water treatment
facilities. Wewoka is no exception. We take very seriously our
duty to provide safe, clean, and affordable drinking water to
our citizens. However, city management and budgeting requires
not only making the books balance to date but budgeting for the
future as well. This is extremely difficult when the EPA and
DEQ constantly change the standards. Some of the changes are
dubious, at best. Take for example, the issue of turbidity.
Turbidity, as you no doubt have heard, relates to the
cloudiness of water. Just as the lake that supplies our
drinking water turns over every year, becomes cloudier or
changes slightly in color or transparency, so too does our
drinking water. This is turbidity. It does not indicate that
there are any chemicals or trace elements that affect our water
quality and public health in any way. Neither are these
standards remaining static. They are constantly changing. The
turdibity standard has changed recently. It will only change
and reduce in the future. Those arbitrary standards are having
a considerable impact on the ability of small towns to continue
providing water to their citizens, without enormous capital
expense. This is not the only example of such standards only
one of the more recent.
Another problem I would like to speak to you about today,
concerns our city's sewer treatment plant. The city of Wewoka
is currently under a consent order for water infiltration into
our system. The consent order states that we will build another
facility to replace the existing one and correct infiltration
problems in the sewer distribution system. The current project
price is around $4 million. In trying to comply with the
consent order, there have been numerous problems that have only
served to delay and complicate the issue and to add to the
already excessive cost. For example, DEQ and EPA require that
the city commission do a study to determine needs and costs
involved in making the necessary changes. However, they
required that we hire an outside engineer to do the study
rather than use the city engineer. Rather than completing the
study in-house and with minimal cost, the city had to hire a
consultant and pay nearly $400,000 to complete the study.
So, with the prospect of $4 million worth of repairs
looming over our heads, which we cannot afford, the
bureaucratic requirements are only adding to the problem.
Another factor that adds to this problem is that in the 6
years that I have been the city manager of Wewoka, I've worked
with four different regulators from DEQ and EPA. Each time
employment changes, delays occur, because the new employees are
unfamiliar with our city or the consent order it operates
under. Furthermore, regulations change so often that when
preparing a final engineering report, we have to amend our
plans several times. Furthermore, they have requested
additional information on three separate occasions and they
still have not approved our report. All of these factors have
delayed the process and have made it more costly.
We estimate that by the time we begin construction of the
new treatment plant, we will already be looking at regulations
that will put us out of compliance. Once we are under a consent
order, we have no other avenues to pursue other than seeking
funding to help pay for these improvements. Naturally, these
costs will be passed on to our consumers. We estimate that a
surcharge--a minimum surcharge of $20 could be accessed to
every water meter in Wewoka. When one out of every five
citizens is unemployed and the average income is near or below
the poverty line that cost is excessive. I'll just stop with
that.
Senator Inhofe. All right. Mr. Bourque, thank you very
much.
STATEMENT OF CLAY McALPINE, DIRECTOR OF ENGINEERING, CITY OF
MUSKOGEE
Mr. McAlpine. As a member of the Oklahoma Municipal League
Technical Advisory Committee on Water Issues and the director
of engineering for the city of Muskogee, I would like to thank
you and your committee for this opportunity to speak with you
concerning growing costs associated with the new provisions of
the Safe Water Drinking Act. The city of Muskogee operates a
regional water treatment plant supplying water to approximately
55,000 people. Although our water plant is quite old, the city
has made numerous modifications and upgrades to meet the needs
of the customer and maintain compliance with the treatment
regulations. Our water system was in compliance with all of the
provisions of the Act prior to 2002.
January 2002, ushered in new regulations that include the
Interim Enhanced Surface Water Treatment Rule and the Stage 1
Disinfection Byproducts Rule. Compliance with these regulations
have placed a significant burden on our plant and our budget.
We began making modifications to our treatment process in 2000.
We were looking for the best treatment method using existing
equipment and different treatment chemicals to achieve
compliance.
Prior to the recent change in regulations, utilities and
chemical costs represented about 50 percent of our overall
treatment costs. Utility and chemical cost fluctuate the most
and consequently are the hardest to control. Labor, upkeep of
equipment and insurance represent the remaining costs. The cost
of chemicals has changed as a result of the new regulations.
Before the regulations went into effect, chemicals represented
about 21 percent of the overall treatment cost. With the
addition of the new treatment regulations, we have seen this
cost go as high as 37 percent of our overall cost.
In your handout, I've included a table that outlines our
costs for the last 5 years. Just to briefly tell you that the--
prior to the regulations in 1999, our chemical costs were
$259,000 per year.
That represented a cost of about five cents per thousand
gallons of water produced. Last year in 2002, 2003, those
chemical costs have gone up to $537,000 and that drove the
chemical cost per thousand up to 12 cents per thousand gallons,
so you can see that the cost almost doubled.
Unfortunately, changing chemicals and increasing their feed
rate has not brought about compliance. We are in compliance
with regards to Trihalomethane, Haloacetic Acids, and
Turbidity, but we are still having problems with the Total
Organic Carbon Removal Rule. Recent plant trials have shown
positive results, and we are confident that within a short
period of time we'll be able to achieve compliance even with
this.
When the treatment costs increase, other items are
sacrificed. In this case, funds that could have gone to replace
old and aging water system infrastructure have been diverted to
treatment. I can't help but question if we are best serving the
public's interest by reducing the level of Trihalomethane from
100 parts per billion to 80 parts per billion, or should we be
replacing the old, 2-inch water line in front of someone's
house with a 6-inch water line that provides fire protection.
I'm very concerned with the provision of the Stage 2
Disinfection Byproducts Rule. These proposed regulations will
eliminate the utility's ability to average the Trihalomethane
and Haloacetic Acids across the system. The regulations will
require the company to identify the hot spots with the highest
readings and start monitoring these areas for compliance.
The preamble for these regulations, with regard to the
Disinfection Byproducts dated October 17, 2001, do not really
make a compelling case for the risk associated with the long-
term exposure to byproducts. Page 45 of the report states ``As
in the Disinfection Byproducts Rule, the assessment of the
public health risk from disinfection byproducts currently
relies on inherently difficult analyses of incomplete empirical
data.'' The tone of the preamble ``it is appropriate and
prudent to err on the side of public health protection.'' I
really wonder if the question is, are we truly serving the
public health's interest in the most cost effective manner.
Especially, since the cost--the added cost is preventing the
utility companies from doing more basic improvements than have
proven their worth over time. Of course, our goal is to provide
customers and citizens with an abundant, safe and dependable
quality drinking water that meets all health and environmental
guidelines at a cost that they can afford. Please keep this in
mind when reviewing the need for these additional regulations.
Thank you very much.
Senator Inhofe. Thank you, Mr. McAlpine. I would like to
see a show of hands of how many people are here representing a
community that is not on the panel? All right. There are about
five, six, seven, out there. We're going to leave a little time
afterwards to visit with you individually, and then we'll have
some instructions on how to get something into the record that
might serve to be beneficial to you. Let me ask all of you the
same question and then I have some specific questions. But I
will turn it over to Senator Crapo for his questions first. As
I mentioned in my opening statement, one of the requirements of
the Mandates Reform Act is that the EPA identified Federal
resources to assist the local government to pay for--that's the
law. We passed that law. The legislation that Senator Crapo and
I have introduced seeks to provide a Federal share of this
cost. Now, I'd like to ask each one of you, so that we will
have it on the record, how much financial assistance has each
of you received from either the Federal or the State
governments. If you don't have that figure, you can do it for
the record, which means you can followup with a letter later on
and give us that information, perhaps, you can give us an
approximate amount.
Mr. Hardt.
Mr. Hardt. On the wastewater side, we have spent $250
million to date in round numbers. We've had no loans on the
water treatment side.
Senator Inhofe. So the answer is nothing, then?
Mr. Hardt. Zero on the water.
Senator Inhofe. All right. Fine.
Mr. Carr.
Mr. Carr. The city of the Owasso has received $21,176,000
from the Oklahoma Water Resources Board through loans for
improvements on the wastewater treatment facilities and
improvements within our wastewater collection system. We have
received no funds for water. We do not have a water treatment
facility in Owasso. We purchase our water wholesale from Tulsa.
The city of Collinsville has received $915,000 for water
treatment facility expansion and some improvements in the
wastewater collection system.
Senator Inhofe. Is that Federal?
Mr. Carr. No. Again, that's through the Water Resources
Board.
Senator Inhofe. OK. That's a loan?
Mr. Carr. Yes. There has been a $55,000 emergency grant
received from the Oklahoma Water Resources Board for some
repairs to raw water pipeline.
Senator Inhofe. All right.
Mr. Morgan.
Mr. Morgan. We've got two loans with the Oklahoma Water
Resources Board for just updating our system that we have in
the regional plant that we built. It's $4.1 million.
Senator Inhofe. Now, I assume that some of those loans you
are getting from the State are--involve Federal moneys. If you
have that backup on that, maybe we should know that too.
Mr. Komiske.
Mr. Komiske. Yeah. We have received two emergency grants
for $200,000; $100,000 apiece. These were really particularly
for subdivisions, essentially, where there would be a
particular subdivision that their wells were all going bad, and
so they needed emergency grant to be able to run the pipeline
connection to our water system. That's what both of these
issues were. As far as the State water revolving--the State
revolving fund, we received about $12 million for wastewater
projects. I think what's unique to Norman is Norman cannot
change the rates for its utilities unless it's voter approved.
So when we do receive a revolving fund like this, or a loan, it
can only be for 40 percent of the project, because we can't
have revenue bonds, because we can't guarantee the revenues,
because the citizens may not vote for the increase in rates. So
that's kind of a unique situation.
Senator Inhofe. Do any of the rest of you have that same
problem? That's one that I was not aware of so--where it has to
be voted in order for the rates to go up? I know you don't in
Tulsa. Is anyone--Mr. Komiske?
Mr. Komiske. We do have some stag grants EPA for wastewater
projects that total $3.9 million.
Senator Inhofe. OK. Good.
Mr. Bourque.
Mr. Bourque. We have received about $18,000 for emergency--
through emergency funds for repairs to the water distribution
system. We have incurred debt in the amount of about $200,000
to bond indebtedness to do improvements on our water system.
Currently, we're waiting on approval of our final engineering
report, which we will be seeking a loan of about $4 million
through rural development through the Oklahoma Water Resources
Board.
Senator Inhofe. All right.
Mr. McAlpine.
Mr. McAlpine. The city of Muskogee has received 11 loans on
our wastewater side from the Oklahoma Water Resources Board,
totaling $57 million. Most of these loans were backed through
the Federal Government. That breaks down to six loans from the
Clean Water State Revolving Fund for $35 million and five FAP
bond loans. We haven't had any loans with regard to our water
system.
Senator Inhofe. All right. Thank you very much.
Senator Crapo.
Senator Crapo. Thank you very much, Mr. Chairman. I want to
go over just a couple of questions. I was interested in a
statement that you made, Mr. Bourque. Several of you have
indicated--in fact, I suspect in one context or another, I can
safely say all of you have said that new regulations have put
previously existing--previously--the system that was previously
in compliance, out of compliance.
But Mr. Bourque, you said it in a way that was just
striking actually. You said we estimate by the time we begin
construction on the new treatment plant, we will already be
looking at regulations that will put us out of compliance.
Mr. Bourque. Yes, sir. They change so often. There's
already been things that we've had to change within our
engineering report that's changed since we submitted the
engineering report. They keep asking for more information.
Senator Crapo. I can understand the frustration of that. It
frustrates me to hear you say that.
Let me expand this question to the rest of the members of
the panel. Is that a common experience? Anybody else?
Mr. Hardt.
Mr. Hardt. Well, we certainly try to project whenever we do
an improvement to a plant, what's being discussed as
anticipated requirements as well. So we probably go beyond the
limit at that time just to insure that we don't become
noncompliance.
Senator Crapo. If you're just right, you're OK?
Mr. Hardt. If we're just right, we're all right otherwise,
we may have been--provide a little bit more treatment capacity
than was needed.
Senator Crapo. Does anybody else want to comment on that in
general?
Mr. Carr?
Mr. Carr. Yes, Senator, the city of Owasso, city of
Collinsville, and two of the surrounding rural water districts
are presently looking at a regional water plant. I had
neglected to also indicate that that was some funding through
EPA of about $100,000 to fund this study. This study is going
to potentially impact decisions that will be very long-range
decisions that could be made. With the change of regulations,
it's like shooting at a moving target trying to determine what
your cost of operation and cost of construction may be. So I'm
expecting that we're going to have some very difficult
decisions to be making in the next few months.
Senator Crapo. Anybody else on the panel want to weigh in
on that particular issue?
Mr. Komiske.
Mr. Komiske. It's not exactly the same, but our issue in
Norman, because the citizens do have to vote on rate increases,
which affects all the utilities, it's a little bit difficult to
address multiple funds. So we have--you have to educate the
customers and the citizens that this is a wastewater issue and
these are things that are needed.
These are things that are mandated. They're good for the
environment. You get them to vote for an increase in their own
rates. You say, OK, that's over, but really that's not over
because you have the same thing on the water side. So you have
the wastewater side over here. We just got through with a
sanitation rate increase. It's like you're constantly going
back saying we need you to raise your own rates, and for
different issues, but all the citizen says is my utility bill
is going up.
Senator Crapo. Let me ask you, that's maybe a good segue
into the next issue I want to get into.
Senator Inhofe. Before you go there, let me reflect those
communities back here who have--you might have some testimony,
we're going to ask for your testimony to become part of the
record, but, specifically, that--I was going to ask the same
thing that Senator Crapo asked. Changes, either the standards
from EPA or from other groups, the particular hardships, that's
very important for us to have a good background on this. So if
you would take notes as we go along so we can get the
information from your respective communities, that would be
helpful. Excuse me.
Senator Crapo. Certainly. Each of you testified and as I
went through your written testimony, I tried to just do some
math and calculate what it meant to the customer to each of
these particular issues that you may have highlighted.
I'm not going to go through all that with you. Anybody who
is interested can go through the testimony and do that.
But Mr. Komiske, let me followup with you. What happens in
your community, if the voters don't approve the increase in
their rates? I mean, you still have to upgrade your system.
Where does the money come from?
Mr. Komiske. Luckily, we have enough of an education
process and enough lead time that you actually have to go
through this with all of your customers. You have to let
everybody understand the concept and reason why we're doing
this. In some places we would have some options, like the
sanitation rate increase. If that did not go through, we would
just have to cut services, so the services they would have
would go down. In wastewater issues, we wouldn't have the
option of providing less water, but it would have to probably
come out of the general fund. It's one--and those are one of
the things we wrestle with on the city council side constantly,
is some of the citizens think it should come out of the general
fund, but we have enterprise funds that we think that the
utilities should pay for itself. You use the water, you should
pay for the water, you use the wastewater service, you should
pay for it.
Senator Crapo. I think that's a principle that we all agree
with throughout the country, that the systems ought to pay for
themselves, except as the systems continue to grow in expense.
Whether it's the system--whether it's the procedure you have or
the voters get to approve or whoever gets to approve it, at
some point, the utility rates that we charge simply exceed what
we see communities able to charge in their communities. I'm
assuming that that creates pressure on the general fund?
Mr. Bourque. Absolutely.
Senator Crapo. Is that correct in each of the communities?
Do you, in any of your communities, utilize general fund moneys
to supplement these budgets?
Mr. Hardt. Speaking of Tulsa, we do on the capital
improvement side. We would go to the voter for capital and bond
issues or sales tax for capital projects, but for operating the
enterprise funds, no.
Senator Crapo. Any others? Is anybody here at this point,
utilizing general funds? I don't see any responses in the
affirmative, although, I did see some head shakes that there
was pressure on that as we move ahead with these increase
costs. What this gets to, in my mind, is sort of two points.
Mr. McAlpine, you identified one, that is, you said you weren't
sure it wasn't better to be using these dollars to put in 6-
inch pipes instead of 2-inch pipes.
It could not only address the water, but it could address
fire protection and other safety and quality of life issues for
your citizens, that's one thing. In other words, are we using
the money in the best place in our water system. The other
question is are we draining money out of other important
services. I don't know that we are yet, although, there are
pressures around the country, and there are communities around
the country in which we are. That means it could be taken out
of health care, out of police protection, roads, whatever it
may be. We are starting to see a competition for the tax
dollars and fee dollars that are available there. The cost of
this is starting to get very high. I would just like to ask any
of you if you would like to weigh in on this as to whether you,
in the process by which you try to separate and figure out how
to obtain necessary resources to deal with the mandates that
you face, whether the questions of competing needs in the
Government, competing services that are needed to be provided
come up in those discussions? Is that--that is not an issue
that--Mr. Carr, you look like you're about to say something?
Mr. Carr. I don't think it necessarily is competing against
these on other--on other areas. It's what--I think what I've
experienced is that when we have a demand on the resources,
financial resources, then we've had to find ways that we could
cut back and still provide the basic services, but that doesn't
necessarily mean that we're able to go beyond the basics. We
may not be able to do everything as completely as we would like
to, because we don't have all of the financial resources
available to do the complete package. We do what we have to do,
but we are not--I don't think in a lot of cases--providing the
routine so that we protect our infrastructure investments the
way that they need to be protected and do the maintenance that
we need to do.
Senator Crapo. Mr. Hardt.
Mr. McAlpine. Senator, I would like to say, you know in
that regard, one of our biggest concerns is keeping up our
infrastructure. Our repair and replacement funds for doing that
work is being cut almost to nothing. All that money went into
treatment. That was the point I was trying to make. I have
water lines in our system that are undersized. People don't
have enough pressure, don't have fire protection. I'm
sacrificing that so that they can have water that has 80 parts
per billion Trihalomethanes or less. I really question, you
know, are we really doing the customer, you know, a service in
this area. It's very difficult to also explain to them why
prior to 2002 it's OK to drink that water, it was OK, met all
regulations. After 2002, now we've got a problem.
Senator Crapo. Mr. Hardt.
Mr. Hardt. On the water side, our rates structure does pay
for our capital and operations, and really is relatively
competitive with similar size cities in terms of fee
structures. On the wastewater side, the system was a much more
deteriorating state. We have had to, through consent orders and
administrative orders, spend a considerable amount of money,
and, therefore, the rate structure could not. Our rates more
than doubled on the sewer side, we were not able to fund the
capital program even at that pace. That's why we had to go to
the State revolving loan fund for the borrowing of some $250
million plus the ad valorem taxes and other means. Those do
compete, either ad valorem community approved taxes or one cent
sales tax for capital projects compete against fire stations,
police facilities, roads, and all the other infrastructure,
flood protection, so it is a very competing and difficult issue
to fund on the wastewater side particularly.
Senator Crapo. All right. Thank you.
Senator Inhofe. Mr. Bourque, you were talking about the
average income near poverty level in some 20 percent; is that
correct?
Mr. Bourque. Yes, sir.
Senator Inhofe. I would just--in my opening statement, I
will go back and reread it for you here. It's talking about
drinking water. EPA defines affordable as 2.5 percent of the
annual median household income, which is $1,000--that would be
$1,000. The medium amount paid for water in 2001, was $31. Now,
if you take what they consider to be affordable, that would be
$83. Now, in your community with the strapped conditions that
you just described, that would mean that each individual, if
they were average and they're not, would have to come up with
an additional $52 a month. What kind of a hardship would this
impose on people in your area?
Mr. Bourque. It's an extreme hardship. Right now they're
having a hard enough time paying their bills as it is. When
they're not paying their bills, we are having to find some
other way to supplement paying for all these improvements. If
we went to $83 a month just on our water utility bills, we
would just about have to shut our doors. Our people couldn't
afford to pay for it.
Senator Inhofe. What I would like to do for each of you and
those representing other communities that are not at the table,
is to--granted, if we end up with clean drinking water we
didn't have before, that might be different. I'm not sure
that's always the case. I would like to have you give to us--
not right now, unless it comes to your mind--in your written
testimony or something you will submit to us for the record,
regulations that you feel honestly, in your own heart, in your
own mind, are superfluous, don't really accomplish anything,
and yet pose the hardship that I just described from the
opening statement. Does anything come to mind right now as to
what ridiculous types of requirements that might be there that
is expensive and yet is not accomplishing its stated goal?
Because we get--when I go around and have town meetings, I can
tell you at every meeting they come up and say why are they
requiring this. So I know you have some testimony in your mind
and I would like to have you come forth. We need this. If you
expect Senator Crapo and me to help resolve this problem, you
have to help us too. So we need to know these things.
Mr. Hardt, you--well, first of all, you mentioned the sales
tax increase for capital improvements. I wasn't proud that we
had to do it. But when I first was elected there, you were
there, and you remember this. I had to do a one cent sales tax
increase for the capital improvements. I'm conservative, and
I've always been a conservative. Yet we sold that idea after
losing it once and people understood that that's what the
Government is supposed to be doing. When they are convinced
that the--that you have water lines that are leaking into sewer
lines, and we have obvious things that have to be done, they
will come forward. We demonstrated that in the city of Tulsa.
That program that set the stage for a way of measuring the
results you got from that.
But, something I think has been very successful. I would
like to have you comment on that for the benefit of some of the
others here.
Mr. Hardt. We still use the same sales tax package--the
concept that you developed in 1980. That is basically a list of
projects criteria-based for 5 years worth of sales tax revenue,
and then have a sales tax overview committee to provide regular
reporting to the elected official's office of how that money is
being spent.
Senator Inhofe. After the sun sets, then people will know
that it did what they said it would do 5 years before, is
that----
Mr. Hardt. That's correct. You are trying to fund a
specific list of projects. Then to--if you wish to extend it 5
years later, you provide an additional list of projects.
Senator Inhofe. OK. Mr. Hardt, I think the problem is
resolved now, but you brought it up, the tribal designation
problem. Here a few months ago, we weren't sure how it was
going to turn out. Now, Senator Crapo, we have a lot of tribes.
I think I told you when we were flying around this morning, the
largest--the capital base is the largest native American
population in the country. We have a number of tribes. As I
recall, I'm going from memory now, Mr. Hardt, wasn't it just
one tribe that was applying for that treatment as a state or
was it more than one tribe?
Mr. Hardt. My understanding, there are several that have
applied. I wasn't aware that the problem has been resolved.
Senator Inhofe. Right. How would you handle that, I mean,
as complicated as this is, if you had three tribes making that
application, where would you draw the lines? Who would you
apply with? What would that do to your current system as we
know it now, that's a State system?
Mr. Hardt. I think it would be unmanageable. We have a
number of tribes that are in Tulsa that would fall in that
distance in terms of their boundaries. We--if they were allowed
to have different water quality standards, we would have to
meet the most critical standard and apply it to probably our--
because we have two water plants that serve the entire region.
So we would most likely have to meet the most compelling severe
criteria and go with it.
Senator Inhofe. Yeah, I don't know if you have that problem
or not.
Mr. Hardt. Sir, if you have a problem that's been mentioned
with changing regulations on the Federal level with EPA our--
you really are going to have a changing moving target if you're
looking at each tribe being able to adopt their own standards.
Senator Inhofe. Mr. Morgan and Mr. Bourque, I think judging
from your opening statements you probably represent the two
lowest income areas that are on the panel today. Did you come
with any specific figures that you could share with us, as to
an individual family rate payer, as to what it was a period of
time ago, maybe 5 years ago, and due to a lot of these things,
or 10 years ago, and to date?
Do you have any figures you can share with us?
Mr. Morgan. I don't know--right now I'm going to imagine
that our average water bill is $35 a month. What it was 5 years
ago, I really don't know. The affect of having to have a
million and a half dollar loans, plus engineers are telling us
it's going to cost us about $3,000 per month in additional
chemicals. It's going to go up a lot. We haven't run a study on
that yet, so I don't know how bad it's going to affect us, but
it will. We don't have any source of income like other cities.
The only income we get is from sales water.
Senator Crapo. I did a little math provided by the numbers
in your testimony. One issue that you raised it's going to go
up $590 a year, and it's $35 a month now, which is about $420 a
year. So it's going to go up over 140 percent on just that one
issue.
Senator Inhofe. OK, but, see, that's drinking water alone,
and that's also an average, and they're below average.
Mr. Morgan. That's right.
Senator Inhofe. How about you, Mr. Bourque?
Mr. Bourque. In the year 2000, our minimum water bill which
encompasses sanitation and sewer, was about $20. We just
increased the rates this year. We're going to be at a minimum
bill--this is a minimum standard, which is, I think, based on
1,000 usage, which is what the most elderly deal with, is a
minimum bill. We will go to $30.50, we just passed those
increases. So we're $30.50. We don't know what we're going to
have to go to until we seek our funding.
Like I said, we're waiting on our final--we are looking at
$4 million divvied up between 2,500 people.
Senator Inhofe. Well, it sounds like we are intentionally
here trying to paint scenarios that are very very difficult or
impossible and, quite frankly, that is what we are doing,
because we are responsible for trying to do something to lessen
that burden and new ways of doing it.
You are right, Norman made up--may be the fastest growing
community or in the top three, anyway, right now. You are
anticipating by 2040, what you would do and, of course, losing
half of your wells. Now, what is your population today and what
are you guessing it will be in 2040?
Mr. Komiske. Our population today 102,000. But probably
85,000 of them are served by our water system. The rest are out
east toward the reservoir and are on private wells. I don't
have that information as far as what our population will be in
2040.
Senator Inhofe. OK. But it is rapidly growing?
Mr. Komiske. Yes.
Senator Inhofe. In fact, Senator Crapo asked me as we were
flying around this morning about the different sizes of
communities. I said it was the largest one, other than Tulsa,
that would be represented would probably be Norman. I was
guessing at 80,000. That figure--it was pretty accurate just a
few years ago.
Let's see. Mr. Bourque, you said something kind of
interesting. You said you had to hire a consultant in lieu of
using your city engineer. Tell us why.
Mr. Bourque. Well, dealing with the CDBG funding when we
received the CDBG grant, you have to go out and take proposals,
requests, for qualifications. Then based on that, then you go
back in, you accept one of the qualifications, then you work on
a contract with them, try to work out the contract, approve
that, and then you go back to work on this. This is after
you've already used an engineer to put this all together and
submitted it.
Senator Inhofe. But was yours the case where your engineer
did not have the academic requirements or what was it?
Mr. Bourque. Right. There was some things they didn't have,
they weren't able to do, yes.
Senator Inhofe. So you had to incur the expense of going
after a consultant to do that when you had an engineer that, in
your mind, would have been able to do, at least, an adequate
job?
Mr. Bourque. Yes, sir.
Senator Inhofe. How about the rest of you? Have you had--
that's a cost that could be considerable. Any of the rest of
you have that experience? (No response.) All right.
Mr. Crapo, we're at an hour and a half right now. So we are
drawing near to the time that you are going to have to be
leaving. Did you have any further questions of this panel?
Senator Crapo. I just have one quick one, if I might, Mr.
Chairman.
Senator Inhofe. Yes.
Senator Crapo. Mr. Morgan, you indicated in your testimony
that your city doesn't qualify for grants. Could you tell me
why?
Mr. Morgan. Just, we are below income. We asked for rural
development.
Senator Crapo. I see.
Mr. Morgan. The whole county did, the Wagoner County.
Senator Crapo. Just doesn't qualify.
Mr. Morgan. Doesn't qualify.
Senator Crapo. Well, let me just ask the whole panel very
briefly for a few brief responses. One of the issues that's
been raised here by several of you and that we face nationwide,
is that a lot of the very small communities just don't have the
economies at scale to be able to make the necessary investments
and make the financing all work out on a long basis. So one of
the proposals that we are heavily considering is for those
kinds of communities providing grants as opposed to loans, so
that we can help them comply with these mandates. My question
is, simply, do you think that's a good idea as opposed to the
loan? There is some--I am just curious as to what was----
Mr. Bourque. That's excellent news to hear. I mean, any
time you can receive free money to help with your problem yes,
that is a big step forward. You know, everybody has incurred
debt at one time or another or will continue to incur debt. But
a lot of times these grants that we hear about, they're so hard
to compete or they're so many people vying for them, you get on
a waiting list, that I would--you know, anything that you send
our way, we appreciate. As long as it doesn't have--as long as
it doesn't say unfunded mandate.
Senator Inhofe. Let me--you know, there is this concept in
Washington, no decision is a good decision unless it's made in
Washington. I--that's why I ask and remind you once again, not
just you folks, but others represented here today, to give us
ammunition. If you have regulations that have been imposed upon
you, either by statute or rules that you look at logically and
scratch your head and say that's not going to correct any
situation, yet, we have to pay for it, I need your feel on my
already growing and large list, so I expect you to do that for
us. I thank you, the members of this panel, for your
straightforward answers. I look forward--we are going to leave
the record open for 1 week. How would they do that? My office?
OK. Use my--one of my offices--I see Ryan is holding something
up in the back. We have some forms back there so--and that goes
for those of you who are not on this panel also. I would like
to ask those of you that raised your hands and represent a
community that's not on the panel today, to come up to the
front row and Ellen and I would like to visit with you a little
bit, hear any additional things you would like to add to what
has already come from this panel. We thank you very much for
that. Do you have anything further, Senator Crapo?
Senator Crapo. I just want to apologize for having to leave
so quickly. It's been a pleasure to be here with you and I will
continue to work----
Senator Inhofe. These are great people here with serious
problems, not unlike those in Idaho.
Senator Crapo. Right.
Senator Inhofe. Thank you. We are adjourned.
[Whereupon, at 2:55 p.m., the committee was adjourned, to
reconvene at the call of the chair.]
[Additional statements submitted for the record follow:]
Statement of Charles Hardt, Public Works Director, City of Tulsa
NON-POINT SOURCE POLLUTION (NPSP)
We strongly encourage development and implementation of regulatory
enforcement mechanisms to control NPSP of the Nation's water. Since the
early 1970's the regulatory emphasis has been aimed at controlling
point source contribution of pollutants to protect and restore the
waters of the United States. Whereas, NPSP controls have been
implemented on a voluntary basis only, and predominately funded through
Federal grant programs. EPA studies and reports identify NPSP as the
major cause of water quality impairments nationwide. In the early-
1990's the city of Tulsa became cognizant of water quality impairments
in one of our primary drinking water sources. The City commissioned
numerous studies to identify causes and sources for this degradation in
water quality. NPSP from agricultural activities was identified as the
primary source. Absent any regulatory control mechanisms to address
these NPSP, the City was required to seek litigious relief. To date the
City has spent > $5 million identifying, monitoring and treating NPSP
in this valuable drinking water source.
WATER QUALITY STANDARDS--TRIBAL TREATMENT AS STATES
We strongly encourage legislative amendment to Section 401 of the
Act, which authorizes Certification of Water Quality Standards
developed by Native American Tribes. Water Quality Standards serve a
dual role: they establish water quality benchmarks and provide a basis
for the development of water-quality based pollution control programs,
including discharge permits, which dictate specific treatment levels
required of municipal and industrial wastewater dischargers. The State
of Oklahoma alone has 38 federally recognized tribes with noncontiguous
tribal lands checker boarding the state. Regulatory permit writers and
permittees will have to negotiate a labyrinth of differing water
quality standards to establish appropriate pollutant limits to protect
water quality. This potentiality appears laborious and onerous for both
the regulators and the regulated community.
WATER QUALITY STANDARDS IMPLEMENTATION--SOUND SCIENCE
We strongly encourage the EPA to establish minimum acceptable
analytical methodologies, requiring strict adherence to industry-
standard quality assurance and quality control protocols, when
monitoring water quality for compliance with standards. States are
faced with a daunting, and fiscally challenging, requirement to monitor
and assess all waters within their jurisdictions to ascertain
attainment of standards and designated uses. Due to EPA's ambiguous
guidance too often analytical methodologies are selected based on costs
instead of quality of data generated. This penny-wise pound-foolish
approach to assessing compliance with standards has resulted in waters
being erroneously listed as impaired. Water Quality standards and
criteria are the regulatory and scientific foundation for a multitude
of CWA Programs, such as, total maximum daily loads, national pollutant
discharge elimination system, non-point source pollution and source
water protection just to name a few. Designated use impairments and
subsequent listing of waters has significant social and economic
impacts for both the regulatory agencies and the regulated communities.
Recently, the City expended $20,000 collecting and analyzing samples of
our urban streams to invalidate erroneous listings due to use of data
generated by a third party using a field screening kit. This concern
was echoed in a GAO Report ``Watershed Management--Better Coordination
of Data Collection to Support Key Decisions'' June 2004.
BLENDING POLICY
We strongly support a national Blending Policy that would allow
POTW to operate their systems as necessary to meet the effluent
standards in their NPDES permits. Current restrictions in NPDES permit
language prohibit bypassing secondary treatment processes. Forcing all
flow through the secondary process during peak inflow events (storm
related) can cause effluent water quality degradation due to solids
washout of the secondary processes. Blending and disinfecting partially
treated wastewater with high quality secondary wastewater often will
improve the overall quality of the POTW effluent. Here again, the POTW
should be given the discretion of when it is appropriate to blend as
long as they comply with their NPDES effluent limits. The city of Tulsa
has spent approximately $50,000,000 on basins to store excess flow and
has an annual cost of approximately $200,000 for operation and
maintenance of these facilities. Tulsa will have to continue to invest
in additional excess flow storage unless a blending policy is adopted.
404 PERMITTING--WETLANDS TAKING
We strongly encourage the U.S. Army Corps of Engineers to
reconsider implementation policy in urban settings regarding this
Section of the Act. Currently, the City is required to provide in-kind
replacement of wetlands at a 3 to 1 ratio, or provide a pond when
removing a riverine environment. We are required to design channels
that have enough tree cover to protect aquatic habitat and provide
enough pools to allow for mobility of biota. This is not very conducive
to providing flood and erosion control in limited right of way
situations. As we are moving into areas that have developed along side
waterways it will become even more challenging to design flood control
projects, to protect public health and property, while attempting to
maintain rural aquatic habitats. Concurrently, our citizens expect us
to protect public health from vectors and pathogenic organism that
accumulate in and around these stagnant pools.
SAFE DRINKING WATER ACT
DISINFECTION/DISINFECTION BY-PRODUCT RULE STAGE 1 (D/DBP1)
We encourage the EPA to return to establishing health-based
standards to ensure safe drinking water and abandon their new course of
prescriptive regulations as ``treatment techniques''. The D/DBP1 has
established a treatment technique requiring removal of a surrogate
precursor, i.e., total organic carbon (TOC), which may produce DBPs,
that has no health-based criterion. If a water system fails to meet
this percent removal requirement, then they are required to notify the
public within 30 days that there water may not be safe to drink, even
though the water system may be in compliance with the health-based
standards for the DBPs. This requirement could result in; loss of
public confidence in the safety of their drinking water, when no
health-based standard has been violated; and dilute the impact of
public notification of violations that really are a public health
concern.
proposed long-term 2 enhanced surface water treatment rule (lt2eswtr)
We encourage the EPA to reconsider the 2-year pathogen-monitoring
requirement designed to categorize source water's potential risk and
delineate specific levels of treatment required to protect safety of
its drinking water. Many large water systems were required to monitor
for these same pathogens in compliance with the Information Collection
Rule, which was designed for the purpose of balancing microbial risks
against disinfectants, and their resultant by-products, risks. This
monitoring redundancy will cost the city of Tulsa $40,000.
______
Responses by Charles Hardt to Additional Questions from Senator Inhofe
Question 1. Tulsa was required to complete a vulnerability
assessment of its drinking waste facility by the Bioterrorism Act of
2002. Tulsa, though not required to, also completed an assessment of
its wastewater treatment facility. It is also my understanding that the
City is coordinating the security of these two facilities with other
critical infrastructure. Can you elaborate on the security activities
the City has undertaken, including the cost of the assessments to water
and sewer facilities and why the City addressed the wastewater plant
without Federal mandate calling on it to do so?
Response. The city of Tulsa has developed a coordinated,
comprehensive plan and program for reducing vulnerability of city
buildings and occupants to losses and disruption from natural,
technological, or manmade disasters. Following the events of 9/11, the
City initiated threat or risk assessments of city owned or operated
facilities deemed critical to the continued operations of the City.
This program was limited to buildings containing critical city
services, large numbers of occupants, or hazardous chemicals. Emergency
operations plans were updated or developed for all city functions. The
water and wastewater systems, in whole, were included in these initial
assessments. Hardening, or physical protection measures, at these
facilities was implemented at all treatment facilities by placing
concrete barriers at entrances, installing automatic gates, clearing
vegetation from fence lines, and installing/upgrading electronic
security and surveillance systems. Employees have received training in
the areas of operational security (OPSEC) and vehicle inspections.
Newly adopted guidelines were provided to vendors that routinely
deliver to these facilities. Deliveries to plants must be preplanned.
Employees are provided regular security briefings and updates of
information received from ISAC or other intelligence sources. The City
joined the Water ISAC to keep abreast and informed of threats to the
water industry. The City received two grants, each $115,000, to conduct
assessments of the Mohawk and A.B. Jewell Water Treatment Plants and
ancillary systems. The cost of assessing both water systems was
$230,000. Due to our concern of hazardous chemicals located onsite at
the four City operated wastewater treatment facilities, the wastewater
systems were assessed as well. Some of these facilities are located
near densely populous areas. This additional work was funded locally at
a cost of $118,000.
Question 2. In you written testimony, you discuss the issue of
blending. I have been following the issue because as Chairman of the
Committee, as I mentioned, I am trying to find ways to fill this
funding gap and am quite concerned about anything that will increase
it. EPA has issued draft guidance to clarify that blending is not an
illegal bypass as has been alleged. However, it is my understanding
that the guidance wouldn't necessarily help Tulsa because the state of
OK prohibits blending? Is that not the case?
Response. Currently the Oklahoma Department of Environmental
Quality (ODEQ) position is that blending is not in accordance with EPA
policy. For this reason, and other concerns, they therefore prohibit
blending. Lacking resources to conduct sound scientific investigations
to determine the effects blending would have on public health, and the
environment, ODEQ has taken the conservative position of prohibiting
this practice. EPA's guidance accepting blending will strengthen
Tulsa's position to allow blending in future OPDES discharge permits.
Question 3. Also, you may recall that during the hearing, I asked
each of you to provide the Committee with those regulations that you
believe are not justified by their costs and not achieving its stated
goal. I gave each of you the opportunity to respond in writing for the
record. I believe it is our shared objective to ensue that our limited
Federal resources are used to solve our biggest, most significant
threats to human health and to ensure, to the maximum extent possible,
that our actions will provide clean, safe water. It is imperative to
hear from those of you on the ground, implementing these requirements,
which of them are not consistent with this goal.
Response. The Disinfection/Disinfection By-Product I Rule has
established a treatment technique requiring removal of a surrogate
precursor, i.e., total organic carbon (TOC), which may produce DBPs,
that has no healthbased criterion. The goal of this treatment technique
is to reduce the propensity of water disinfected with chlorine from
forming disinfection by-products (DBP), i.e., trihalogenated methanes
(THM) and haloacetic acids (HAA), both of which have health-based
standards. However, there are treatment processes that can effectively
disinfect drinking water, thereby providing protection from microbial
threats, which do not produce the aforementioned DBP. As a result of
this paradox a water system could be in violation of the treatment
technique without posing any threat public health. The city of Tulsa
spends--$100,000 annually to comply with this treatment technique.
__________
Statement of F. Robert Carr, Jr., on behalf of Oklahoma Municipal
Utilities Providers and Cities of Owasso and Collinsville
INTRODUCTION
The Oklahoma Municipal Utilities Providers (OMUP) is an
organization established in January 2003 by the Oklahoma Municipal
League (OML) to represent the water and wastewater interests of
municipalities. Since inception one and one-half (1\1/2\) years ago,
two hundred fourteen (214) Oklahoma municipalities have become members
of OMUP. This rapid organization growth is indicative of the collective
magnitude of concerns relating to water-related issues in the state.
Both the city of Owasso (population 22,500) and the city of
Collinsville (population 4,300) are members of OMUP.
PRESENT FINANCIAL CONCERNS
Data collected by the OML indicate that rural and urban communities
in Oklahoma have long-term financial concerns. As shown below, the
Oklahoma Municipal League reports that average 2002 Oklahoma municipal
revenues were less than 1 percent (1 percent) derived by property tax
(comparatively the 2003 national average was 26 percent).
[GRAPHIC] [TIFF OMITTED] T6655.006
In addition, thirty-two percent (32 percent) of municipal revenues
were from sales tax (national average was 13 percent), and forty-three
percent (43 percent) were the result of utility fees. No Oklahoma
municipality had income tax as a revenue source (whereas the national
average was 7 percent).
Average expenditures for utilities were reported to be thirty-nine
percent (39 percent) of municipal budgets and, most importantly,
comparative revenues and expenditures for Oklahoma utilities are
essentially equal. It is also significant to note, the expenditures
indicated do not reflect depreciation or any unbudgeted out-of-pocket
expenses.
[GRAPHIC] [TIFF OMITTED] T6655.007
Sales tax revenues have been extremely volatile for the past few
years. Municipalities have determined that they cannot count on sales
tax revenue for stability.
Many of the municipal budget short-falls experienced have had to be
subsidized by utilities revenues. As a result, utilities operations
have been stressed to achieve consistent results with limited or non-
existent additional funds to meet changing operating conditions. The
city of Owasso fiscal year 04-05 Public Works Authority Fund ending
balance is budgeted to decrease, as expenses will slightly exceed
revenues by year end.
PROJECTED INCREASED COSTS DUE TO REGULATIONS
Data complied from work done by consulting engineers in Oklahoma,
U.S. Environmental Protection Agency fact sheets, information from the
Association of State Drinking Water Administrators and Oklahoma
Department of Environmental Quality staff indicate the following costs
can be anticipated based on new Federal regulations:
------------------------------------------------------------------------
------------------------------------------------------------------------
Arsenic rule.............................. $1.25/gallon (construction)
Surface water treatment................... $2.25/month (per connection)
Stage 1 Disinfectant/Disinfection $2.00/month (per connection)
Byproducts.
Groundwater rule.......................... $0.10/month (per connection)
------------------------------------------------------------------------
These data indicate the result is higher costs to each customer.
The construction needed may increase water bills by as much as 60
percent per customer.
LOSS OF SECURITY
Municipalities have had the security of being able to make long-
term decisions to provide quality water to customers based on the
stability of regulations. Changing regulations have complicated that
ability. The security of capital investments may be severely impacted
with changing regulations.
We design treatment facilities based on the requirements/
regulations known today. When the requirements become more restrictive,
the alternatives are expected to become more costly. Fewer options are
available to the small utility. Economies of scale are more favorable
to the larger utility that can absorb additional treatment costs among
more customers. To have control of their own operations, the small
utility is faced with locating new sources of supply.
The city of Owasso presently is a wholesale customer of the city of
Tulsa. Under this scenario, conformance with these new regulations
largely rests with Tulsa and costs can be allocated to many users.
The city of Collinsville, on the other hand, operates its own water
treatment plant. Costs to achieve regulations conformance by
Collinsville must be paid only by its customer based.
A study of the feasibilities of constructing a regional water
treatment plant to serve the cities of Owasso and Collinsville (along
with two adjacent Rural Water Districts) is presently underway and
funded by a $100,000 grant from the U.S. Environmental Protection
Agency. The purpose of the study is to evaluate means for the
communities to have fiscal control over the water provided to their
customers. Changing regulations can severely impact the results of this
study and the long-term decisions being made today.
COST-BENEFIT CONCERNS
The OMUP questions whether costs versus benefit have been
adequately addressed prior to implementation of the regulations. In a
January 16, 2004 letter from the American Water Works Association
(AWWA) to the U.S. Environmental Protection Agency commenting on the
proposed rule for Stage 2 Disinfectants and Disinfection Byproducts
Rule (Stage 2 DBPR), the following was stated:
The Stage 1 FACA [Federal Advisory Committee] members
recognized the preliminary nature of much of the science
surrounding disinfection byproducts and jointly committed
themselves to pursuing a demanding research agenda to fill in
the significant gaps.
AWWA, like EPA, looks forward to seeing scientifically
defensible health effects data to support formal risk
assessments that meet EPA's guidelines and that address
stakeholder concerns. With this information, we can help
advance an effective and timely research agenda.
AWWA looks forward to the preparation of formal risk
assessments that meet agency guidelines for possible DBP-
related health effects.
In addition, the AWWA stated:
The EPA cost/benefit analysis supporting the Stage 2 DBPR
entails an analytical process with 13 distinct steps. In
reviewing this analysis AWWA found significant issues affecting
the reasonableness and credibility of the final conclusion in
nearly every step.
They went on to say that ``EPA may have overstated total benefits
considerably.''
Similarly, in a January 9, 2004 letter from the American Water
Works Association (AWWA) to the U.S. Environmental Protection Agency
commenting on the proposed rule for Long-Term 2 Enhanced Surface Water
Treatment Rule (LT2ESWTR), the following was stated:
AWWA is very concerned that the agency's Economic Analysis
documents and preamble text have created an unrealistic
expectation and implied a significantly greater benefit that
will actually be realized through implementation of the
LT2ESWTR.
These comments are concerning to OMUP and its member municipalities
that are faced with more restrictions and increased costs. OMUP water
suppliers are charged with investing public funds in a manner that
protects their investments--where there are no uncertainties pertaining
to the need for additional improvements to meet future regulations.
__________
Statement of Arvil Morgan, District Manager, Wagoner Water
District No. 5
Mr. Chairman and members of the Committee I am Arvil Morgan,
manager of Wagoner County Rural Water District No. 5 at Coweta,
Oklahoma. I appreciate the opportunity to appear before the Committee
today to discuss the impact of increasingly stringent Federal Safe
Drinking Water Act requirements on our water district.
Our water district serves 2,550 rural households in southwestern
portions of Wagoner County, through 230 miles of distribution line. We
operate a 1.5 million gallon per day water treatment plant that was
constructed in 1991. Water supply for the district comes from the
Verdigris River. We also have emergency backup connections with the
city of Broken Arrow, Wagoner County Rural Water District No. 4 and the
Town of Coweta.
We currently have an escalating water rate. Our customers pay an
average of $3.20 for each 1000 gallons used and an average monthly
water bill of $35.00.
The Environmental Protection Agency's new Disinfection/Disinfection
By-Products Rule went into effect on January 1, 2004. This rule reduced
the allowable level for Trihalomethanes (THM's) from 100 parts per
billion to 80 parts per billion and set a new level of 60 parts per
billion for Haloacetic Acids. To comply with the new regulations, it
will be necessary for Wagoner No 5 to upgrade its water treatment
process. Improvements that will be required include installation of a
pre-sedimentation basin and a clarifier that will treat up to 2 million
gallons of water per day. Our engineer estimates that it will cost
approximately $1.5 million to make the necessary improvements.
Our district does not qualify for grants, therefore our project
will be completed entirely with loan funds. We expect to apply for
financing with USDA Rural Development. Repayment of a $1.5 million
Rural Development loan at 5 percent interest over 40 years will cost
approximately $87,000.00 per year. The district will not be able to
absorb these costs and it will be necessary to increase rates to our
customers by approximately 10 percent, which would equate to about
$36.00 per user per year. Additionally, our operating costs have
increased $1,500.00 per month. These costs include chemicals and
additional labor for water treatment.
In January 1, 2003 systems were required to meet the new Stage 1
Filter Backwash Recycle Rule. Next year we will be required to comply
with new turbidity requirements. The allowable level for turbidity will
be lowered from .5 NTU's to .3 NTU's and continuous monitoring will be
required on each filter. The Stage 2 Disinfection--Disinfection
Byproducts Rule will also be implemented next year. This rule will
require additional monitoring and reporting on THM's and Haloacetic
Acids, increasing system operational and monitoring costs.
There are approximately 250 water systems in Oklahoma that operate
water treatment plants. Most of these systems serve less that 3,300
people. For many of these small and very small systems the cost of
compliance is an extreme hardship. We also have a shortage of qualified
operators in the state. According to the Department of Environmental
Quality, we have a 20 percent turnover in operators each year. There
are 1,500 new operators annually that need training and assistance to
assure proper system operation, maintenance and compliance.
Each new EPA rule has a cost. Compounding of these costs make it
more and more difficult for systems to maintain reasonable and
affordable water rates. Wagoner County Rural Water District No. 5 is
committed to providing safe, potable water to our members. We drink the
water that we produce and the quality of our product is very important
to us. We want to do what is necessary and reasonable to assure that
our water is safe. However, we believe that regulations should be based
on sound science and the ratio of cost to benefits should be an
important consideration in setting drinking water standards. What we
need are practical, reasonable and affordable regulations.
Thank you again for the opportunity to address the Committee. I
would be happy to answer any questions.
______
Response by Arvil Morgan to Additional Question from Senator Inhofe
Question. Provide the Committee with those regulations that you
believe are not justified by their costs and are not achieving its
stated goal.
Response. Of immediate concern to our district is the Disinfection/
Disinfection By-Products Rule. We believe that the new Maximum
Contaminant Level (MCL) established for Trihalomethanes (THM's) and
Haloacetic Acids are excessive and unwarranted. A person drinking ten,
eight (8) ounce glasses of water a day for 90 years would only
accumulate 1.8 ounces of THM and 1.5 ounces of Haloacetic Acids.
Compliance with these requirements is extremely costly and we question
whether the benefits of the rule actually justify the high cost. In
reality, people do not drink this much water from the same source every
day. Other drinks, such as coffee, tea and coca cola contain much
higher THM levels than drinking water.
We suggest that EPA be required to justify the regulation by
proving that THM's cause health problems.
Another concern is the EPA requirement concerning Total Organic
Carbons (TOC's). The rules require a 50 percent reduction in raw water
TOC's. The rule does not take into account the difference in raw water
quality from system to system. Our raw water TOC's range from 4 ppm to
8 ppm. Other systems may have much higher levels. For example, a system
with raw water TOC's of 20 ppm has to reduce its levels to 10 ppb. This
is higher than our historic levels and easier to achieve. Our system is
being treated unfairly, reduction of low levels of TOC's, like those on
our system, requires a lot of chemicals and man hours and substantial
expense. The rules need to be sensible and realistic, not a one size
fits all approach. EPA also should consider impacts of its rules. The
use of large amounts of alum for TOC removal creates excessive amounts
of hazardous sludge that could have negative environmental impacts.
The Disinfection/Disinfection By-Products Rule is just one of many
EPA regulations that are in the process of implementation, or which
will be implemented in the near future. If small water systems are
going to meet the continuous stream of Federal mandates and remain
financially viable, we must have access to grants and low interest
financing to assist in compliance. If water rates get too high, some
customers will be forced back to unsafe and unreliable individual water
supplies and the public health will be undermined rather than enhanced
by Federal regulation.
We appreciate your efforts to ensure that our limited Federal
resources are used to solve our biggest, most significant threats to
human health. We are committed, as you are, to ensuring that all our
members have clean, safe water at affordable rates.
______
Statement of Town Hall, City of Coweta, OK
The city of Coweta appreciates the opportunity to respond to the
request, by Senator Inhofe, concerning the impact of the Safe Drinking
Water Act, the Clean Water Act, Security and Bioterrorism Act, and the
Stormwater Phase II requirements, which has a tremendous impact and
costs on smaller communities.
First, let us address the issues in a global view. It is the city
of Coweta's responsibility to provide safe, dependable and cost
effective services to the citizens we serve. To provide these services,
user fees are traditionally employed to cover the costs associated with
the service in question. In smaller communities, especially the bedroom
cities, sales tax revenues generally do not generate sufficient revenue
to properly fund non-revenue services, such as fire, EMS and police
services, just to name a few. The funding gap, from the sales tax
revenue to operational costs of these services, is made up through
transfers from the water and wastewater revenue stream. Generating the
proper operating revenue to support the public works programs has
always been of concern, now with so many new programs, it is
catastrophic.
The number of unfunded Federal mandates that have recently been
enacted are forcing cities into a series of very difficult funding
decisions. The result of these decisions can affect the safety and
security of its citizens. For example, the potential impact of the
Security and Bioterrorism Act may force the city of Coweta to add
additional staff just to man the water and wastewater plants, not to
mention the additional capital cost associated with additional security
measures. Where do these funds come from? For the city of Coweta, they
come from other programs, such as public safety, library services,
planning and zoning, streets, parks and recreation and the list goes
on.
SAFE DRINKING WATER ACT
No one is questioning the need to provide an adequate and safe
drinking water supply to its citizens. Potable water, that is in
compliance with the public health concerns, is a responsibility that we
do not take lightly. However, the shear plethora of the recent
regulations on the Safe Drinking Water Act is a classic example of the
frustration felt by many communities. Coweta, a community under 10,000
in population, has just recently been faced with compliance. Fact of
the matter is that due to the complexity of these regulations, the
Oklahoma Department of Environmental Quality could not clearly define
to the city of Coweta what steps are required (until late 2003). This
timeframe gave the city of Coweta less then 6 months to comply. Now the
city of Coweta is faced with the reality that the existing water
treatment facility was never designed for, nor can it meet, the new
requirements spelled out in the recent revisions to the Safe Drinking
Water Act. Even though the water treatment facility has not served out
its design life and the city of Coweta still has bond debt to pay on
the original loan.
In addition, the city of Coweta is now faced with the real
possibility of having to explain to the public that the water they
consumed last year may now out of compliance and continued consumption
of this water may lead to cancer or other dreadful diseases or
illnesses. Couple this with the adverse publicity and you can only
imagine the distrust citizens will now have in a local government that
is supposed to be in place to protect them, not harm them with basis
services. The end result is that not only is the community facing the
need for a new treatment facility, one that will be more complex and
costly to operate, but a finished water that will be tested more
frequently with an additional sophisticated chemical and biological
testing program that has not even been identified. We have not even
spoken to the cost of the public notification program to the community,
nor the impact of a Watershed Protection Program that is being milled
about by EPA.
The city of Coweta is faced with an upgrade and yet do not truly
understand what the final requirements are. It is expected that over
the next few years that the number of contaminates (MCL's) will
increase. This increase will certainly result in additional monitoring,
but could also impact the treatment process as well. How do we convey
to the public that the new water treatment plant that was just
completed may have to be modified again? And that you, the citizens,
will be required to pay for the new plan, again.
The only saving grace for the city of Coweta, is the fact that we
are not alone. From what ODEQ states, over 60 percent of all surface
water treatment plants in Oklahoma will fail to meet the new
requirements of the Safe Drinking Water Act.
CLEAN WATER ACT
It is the city of Coweta's duty to properly treat its wastewater
before it is discharged back into the environment. Because of the
discharge requirements promulgated by EPA, the community has already
felt the impact on the Clean Water Act. Now we are paying off the debt
from a new treatment plant and waiting for EPA to decide if additional
regulations concerning the collection system, CMOM and Fats Oil and
Grease will be implemented. The cost for treating wastewater will
increase and, as such, will be passed unto the customer.
STORMWATER
Add the above-mentioned to stormwater and you can determine how
costly compliance will be on the city of Coweta. Compliance to these
unfunded mandate has burdened the city of Coweta in such a detrimental
way that recovery may never occur. And, as such, the citizens of this
great community loose hope for additional services that will be far
outside the funding ability of a community that they call home.
In closing, I would direct your attention to the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. Sec. Sec. 658-658g and 1501-1571) which
specifically addresses the very issues stated above. Under the Act,
Congress and Federal agencies are required to consider the costs and
benefits to state, local and tribal governments and to the private
sector before imposing Federal requirements that necessitate spending
by these governments or the private sector. The purposes of the Act are
to: strengthen the partnership between the Federal Government and
state, local and tribal governments; end the imposition, in the absence
of full consideration by Congress, of Federal mandates on these
governments without adequate Federal funding; provide for the
development of information to assist Congress in considering
legislation containing Federal mandates; promote informed and
deliberate decisions by Congress on the appropriateness of mandates;
require Congress to consider whether to provide funding to enact
Federal mandates; establish a point-of-order vote on the consideration
in Congress of legislation containing significant intergovernmental
mandates without providing adequate funding; require Federal agencies
to consider the budgetary impact of Federal regulations on state, local
and tribal governments; and, begin consideration of the effects of
previously imposed Federal mandates.
Congress should be very concerned about shifting costs from Federal
to state and local authorities and should be equally concerned about
the growing tendency of states to shift costs to local governments;
cost shifting from state to local governments has forced local
governments to raise property taxes or curtail essential services.
Accordingly, the sense of the Senate is that: the Federal Government
should not shift certain costs to states, and states should end the
practice of shifting costs to local governments; states should end
imposition of mandates on local governments without adequate state
funding; taxes and spending at all levels should be reduced and the
practice of shifting costs from one level of government to another with
little or no taxpayer benefit should end. Passage of the Safe Drinking
Water Act, the Clean Water Act, Security and Bio-terrorism Act, and the
Stormwater Phase II requirements, without funding, will bankrupt
communities and that's a fact.
__________
Statement of Kenneth Komiske, Public Works Director, City of Norman
The citizens of Norman, Oklahoma, realize the importance of water
and its role in the continuation of a successful community. The role of
water, both potable and non-potable, amounts to our view of the future.
The city of Norman continues to plan and address issues faced with
adequate supplies of water. Planning for the future resulted in
Norman's identification of extended water and wastewater needs that
exemplify the situations faced by municipalities around this Nation.
Following is a brief review of the water and wastewater planning
occurring in Norman:
STRATEGIC WATER SUPPLY PLAN
In 1999 the city of Norman initiated the development of our
Strategic Water Supply Plan. This plan provided a comprehensive
overview of Norman's water resources, projected water demands, and
identified needed long term steps to meet resource projections. In
Figure 1, it is observed that by 2040 Norman will need water supply
resources capable of meeting an annual average demand totaling 30
million gallons of treatable water per day. At this time, the citizens
of Norman consume an annual average water demand totaling over 11
million gallons per day. The Strategic Water Supply Plan identified
steps necessary to achieve this long-term water supply shortfall.
[GRAPHIC] [TIFF OMITTED] T6655.001
Establishing projections of long term resource needs allowed for
the associated projection of peak day water demand capabilities. In
Norman, the peak day demand may be as much as 2.0 times the annual
average supply needs. This increase in consumption rates is moderately
low when compared to other cities our size and larger. The reduced
peaking rate is reflective of our community's desire to use water
resources wisely. Although, even with conservation being planned in our
future, projections show that by 2040 Norman will need the ability to
treat and deliver as much as 60 million gallons of water per day.
Figure 2 reflects the projection of peak day water needs.
[GRAPHIC] [TIFF OMITTED] T6655.002
In the past, Norman has not been able to meet the experienced
demands whereby requiring the implementation of water rationing
measures. These actions did not fare well with the citizens in general.
In 1999, the city of Norman constructed a waterline connecting our
system to that owned and operated by the Oklahoma City Water Utility
Trust Authority. This connection provides an emergency supply only and
does not operate on a day to day basis. This line plays a vital role in
the city of Norman's Strategic Water Supply Plan, but is not considered
the solution to our water needs due to the high cost of the supply
source.
The recommended solution to Norman's water needs, as identified in
the Strategic Water Supply Plan, includes an additional 30 water wells,
construction of a terminal reservoir in east Norman, increasing water
withdrawals from Lake Thunderbird and the purchase of raw water from
the Oklahoma City Water Utility Trust Authority. Associated with this
eventual expansion of Norman's water treatment plant from 14 to 44
million gallons per day capacity. The capital cost of this option
totals over $80.5 million. This does not include water distribution
line improvements or the impact of the Arsenic Rule.
[GRAPHIC] [TIFF OMITTED] T6655.003
ARSENIC RULE IMPACTS
Completion of the Strategic Water Supply plan occurred prior to the
Arsenic Rule's enactment. Improvements identified in this report are
absent of any impact associated with the Arsenic Rule. Upon the signing
of the Arsenic Rule into law, the city of Norman initiated an Arsenic
Study to determine the impacts expected from the new allowable limits.
[GRAPHIC] [TIFF OMITTED] T6655.004
The additional cost to the citizens of Norman, in order to be
compliant with the Arsenic Rule, was estimated to be $9 million.
The waters from the wells now deemed unfit for drinking have been
in service since prior to World War II. These wells have provided
adequate drinking water supplies with no compliance issues until the
ratification of the Arsenic Rule. The sudden shift from suitable to un-
suitable has solicited fear in many of our citizens. Since being placed
on the nations ``Need to Know Danger Zone'' by Scientific America calls
have been received ranging from ``Should I bathe my newborn daughter in
bottled water?'' to ``Is the high Arsenic levels causing my 15-year old
son to be so unresponsive to his father and I?''. Both of these quotes,
from actual conversations, reflect the range of citizen concern over
the announcement that our once safe water is no longer suitable. It is
commonly asked why the water is now bad and all we have to say is the
rule was changed after 50 plus years of operation.
In Oklahoma there are 28 public water supplies that will be non-
compliant when the Arsenic Rule goes into effect on January 1, 2006.
Norman is the largest water supplier in the state to be impacted by
this rule, but we are not alone. As a result of the Arsenic Rule and
other water regulations coming into effect, the Oklahoma Municipal
League formed the Oklahoma Municipal Utility Providers group to focus
on water issues and address technical issues through their Technical
Advisory Committee. This group of cities represents both large and
small water suppliers and together they are working for solutions to
water problems faced throughout the state. With the inclusion of the
Arsenic Rule, the Oklahoma Department of Environmental Quality has
estimated that over 75 percent of Oklahoma's water suppliers will be
out of compliance with one of the many rules coming into effect, all in
the name of protecting the public. The Arsenic Rule impacts Norman the
most, but other problems exist across the state.
WASTEWATER MASTER PLAN
In 1999 the city of Norman initiated the development of a
Wastewater Master Plan to identify the improvements necessary to
accommodate the community direction established in the Norman 2020 Land
Use and Transportation Plan. The Wastewater Master Plan looked at both
sewer line and treatment needs expected as Norman advances into the
planned future. These needs resulted in the recommendation that Norman
build a new wastewater treatment plant to take advantage of the natural
break in terrain existing in the northern region of town. This decision
has been very contentious with certain community groups, but has been
voted upon by the public twice and each time been supported by the
majority.
[GRAPHIC] [TIFF OMITTED] T6655.005
The Wastewater Master Plan identifies sewer line and treatment
needs and a work plan has been developed to address the long-term
needs. The total cost of these planned improvements equals $95,500,000.
Funding for these needs originates from two sources: 5-year 1/2 percent
Sales Tax and Excise Tax on all new construction using the sewer
system. The Excise Tax, referred to some as an Impact Fee, was the
first such established fee in the State of Oklahoma. Challenged in
court, the Excise Tax has succeeded in providing a means for growth to
pay its own way in Norman.
One of the first steps associated with the new treatment plant in
north Norman is to establish the levels by which the wastewater has to
be treated. The process of completing a Total Maximum Daily Load (TMDL)
study of the receiving stream has begun. Combined efforts of
professional engineers from CH2M Hill and the University of Oklahoma
are working together in establishing the level of treatment necessary
prior to release into the South Canadian River. This effort will last
approximately 18 months following a strenuous review to ensure that the
stream's health is maintained for the benefit of the public.
SUMMARY
Today, Norman's population is over 104,000 persons. Over 88,000
persons of the total citizenry receive water and sewer service. The
needs identified between water and wastewater total $185,000,000.
Funding for wastewater needs are partially established through voter
approved sources. No funding is available to meet water supply needs or
to become compliant with the Arsenic Rule.
REFERENCES
The complete Strategic Water Supply Plan document is available on
the city of Norman web site at: http://www.ci.norman.ok.us/utilities/
water--treatment/2040WaterPlan/default.htm a printed copy of the
executive summary is attached for the record.
The complete Arsenic Report document is available on the city of
Norman web site at: http://www.ci.norman.ok.us/utilities/water--
treatment/arsenic--study.htm a printed copy of the executive summary is
attached for the record.
The complete Wastewater Master Plan document is available on the
city of Norman web site at: http://www.ci.norman.ok.us/utilities/
waste--water/masterplan/default.htm a printed copy of the executive
summary is attached for the record.
______
Response by Kenneth Komiske to Additional Question from Senator Inhofe
Question. While our committee has generally dealt only with water
quality issues and not quantity issues, we are seeing more and more how
interrelated these issues are. The situation Norman is facing is an
excellent example. With regard to the supply problem, one way to help
but certainly not solve the problem that is often discussed is water
rationing and incentives to keep water use down. Can you explain more
about what Norman did and what exactly the citizen concerns were?
Response. The city of Norman has a water conservation program in
effect. All the normal means of communication are used to convince and
encourage improved water conservation; such as flyers, hand out
materials, media advertisements, educational programs and public
discussions. However, when the cost of water is relatively inexpensive,
the public perception is that there is not a strong necessity or reason
to conserve.
To change utility rates in Norman (water, wastewater or sanitation)
it takes a majority vote of the public. Often, this requires a special
election. In May 1999 the voters of Norman approved changes to the
Water Utility rate structure. The new `inverted block' rate was
established where the more water you use, the higher the commodity
rate. The new rate structure accomplished three goals. 1. For low and
moderate water users, the rates remained the same; 2. The new higher
commodity rates for large residential users strongly encouraged
conservation; and 3. The additional revenues help support water supply
and distribution enhancements.
----------------------------------------------------------------------------------------------------------------
Gallons Old Rate New Rate in 1999
----------------------------------------------------------------------------------------------------------------
0-1,000..................................................... $2.01 $2.01
1,001-2,000................................................. $1.73 $1.73
2,001-15,000................................................ $1.14 $1.14
5,001-20,000................................................ ........................ $2.00
Over 20,001 ........................ $4.00
----------------------------------------------------------------------------------------------------------------
The new inverted rate structure accomplished the goal of
encouraging conservation. In 1998, over 29 percent of residential
customers used in excess of 15,000 gallons per month. There was no
financial incentive to conserve. In 2003, with higher rates for large
users, fewer than 11 percent of residential customers used in excess of
15,000 gallons per month. Financial incentives help drive conservation.
__________
Statement of Rick Bourque, City Manager, City of Wekoka
I would first like to take this opportunity to thank Senator Inhofe
and Senator Crapo for holding this hearing and for giving the city of
Wewoka the chance to speak out on this very important issue. As Senator
Inhofe knows from when he served as the Mayor of Tulsa, managing a city
is never an easy task. Unlike the Federal Government, we do not have
the capacity to run deficits. Our books must always balance. This is
difficult enough in the best of times, but when outside factors like
unfunded mandates come into play, it is almost impossible. This is
especially true in a small town like Wewoka.
Wewoka is a very diverse town: racially, economically and
historically. It was founded by a former Indian slave in the Seminole
Nation, has lived through the booms and busts of the oil industry, and
has suffered many economic hardships along the way. Seminole County,
where we reside, currently has one of the highest unemployment rates in
the state, almost 20 percent. Population has been steadily declining
for the last several years and so have sales tax revenues. This is
true, not just in Wewoka, but in small towns all across the state. I
tell you this not to be pessimistic. Actually, we are very optimistic
about our future. I merely want to point out that small towns like ours
have dwindling resources and cannot afford the cost of heavy-handed
regulations and unfunded mandates.
There are many examples of this that I could speak to you about.
But in the interest of time, I have limited it to just a few. One
example of how unfunded mandates complicate the business of City
Government is in the area of excessive and constantly changing
regulations in our drinking water. Most cities have a sizable
investment in their water treatment facilities. Wewoka is no exception.
We take very seriously our duty to provide safe, clean and affordable
drinking water to our citizens. However, City management and budgeting
requires, not only making the books balance today, but budgeting for
the future, as well. This is extremely difficult when the EPA and the
DEQ constantly change the standards. Some of the changes are dubious,
at best. Take for example, the issue of turbidity. Turbidity, as you no
doubt have heard, relates to the cloudiness of water. Just as the lake
that supplies our drinking water turns over every year and becomes
cloudy or changes slightly in color or transparency, so too does our
drinking water. This is turbidity. It does not indicate that there are
any new chemicals or trace elements that affect water quality and
public health in any way. Neither are these standards remaining static.
They are constantly changing. The turbidity standard was recently
changed from a level of 1.0 to satisfy the standard to a level of 0.5.
It is currently scheduled to be further reduced to a level of .3. These
arbitrary standards are having a considerable impact on the ability of
small towns to continue providing water to their citizens, without
enormous capital expense. This is not the only example of such
standards, only one of the more recent.
Another problem I would like to speak to you today concerns our
City's sewer treatment plant. The city of Wewoka is currently under a
consent order for water infiltration into our system. The consent order
states that we will build another facility to replace the existing one
and correct infiltration problems in the sewer distribution system. The
current project price is around $4 Million. In trying to comply with
the consent order, there have been numerous problems that have only
served to delay and complicate the issue and add to the already
excessive cost. For example, DEQ and EPA require that the city
commission a study to determine the needs and costs involved in making
the necessary changes. However, they required that we hire an outside
engineer to do the study rather than use the city engineer. Rather than
completing the study in-house and with minimal expense, the City had to
hire a consultant and pay nearly $400,000 to complete the study. So,
with the prospect of $4 Million Worth of repairs looming over our
heads, which we cannot afford, the bureaucratic requirements are only
adding to the problem. Another factor that adds to this problem is that
in the 6-years that I have been City Manager of Wewoka, I have worked
with 4 different regulators from DEQ and EPA. Each time employment
changes, delays occur because the new employee is unfamiliar with our
City or the consent order it operates under. Furthermore, regulations
change so often that when preparing a final engineering report, we have
had to amend our plan several times. Furthermore, they have requested
additional information on 3 separate occasions, and they still have not
approved our report. All of these factors have delayed the process and
have made it more costly.
We estimate that by the time we begin construction on the new
treatment plant, we will already be looking at regulations that will
put us out of compliance. Once we are under a consent order, we have no
other avenues to pursue, other than seeking funding to help pay for
these improvements. Naturally, these costs will be passed on to our
consumers. We estimate that a surcharge of $20 could be assessed to
every water meter in Wewoka. When one out of every five citizens is
unemployed, and the average income in near or below the poverty line,
that cost is excessive.
Another unfunded mandate that has caused us problems in the past is
in the area of security. Wewoka was recently asked by DEQ to erect an
eight-foot security fence around our water treatment facility. By
itself, this would not be a crippling requirement. But, considered
against the backdrop of so many other costly regulations and over $5
million in needed upgrades in our water and sewer system, it certainly
is. Furthermore, the directives that were issued concerning the fence
were constantly changing. The representatives that I met with were
certain that I needed a fence immediately. But, when asked, they could
not tell me what kind or type of fence was required. They also couldn't
point out the regulations that required us to put up a fence. After
several conversations with the DEQ's staff, I was more confused than
ever. Finally, I asked that they send someone to Wewoka to tour the
site and explain exactly the fence I should build and where to put it.
In the end, the security fence cost the city of Wewoka over $10,000.
Because it was deemed an urgent need, it had to be done right away. So,
this expense to the city was not budgeted. I wish I could say that this
situation is unusual, but it isn't. All too often, government
regulations are enacted without regard to how they will effect the
people on the other end.
That is why I am thankful to have the opportunity to speak with you
today and share my concerns over these important issues. I am also
grateful to Senators' Inhofe and Crapo for taking the time to meet with
us today and giving us an opportunity to express our views. With your
help, I know that we can get a handle on our problems. We sincerely
hope that you can lessen the burden that is placed on our cities by
excessive regulation and unfunded mandates.
Statement of Clay McAlpine, Director of Engineering, City of Muskogee
Senator Inhofe, as a member of the Oklahoma Municipal League
Technical Advisory Committee on Water Issues and the Director of
Engineering for the city of Muskogee, I would like to thank you and
your committee for this opportunity to speak with you concerning the
growing cost associated with the new provisions of the Safe Water
Drinking Act. The city of Muskogee operates a regional water treatment
plant supplying water to approximately 55,000 people. Although the
water treatment plant is old, the City has made numerous modifications
and upgrades to meet the needs of the customers and to maintain
compliance with the treatment regulations. Our water system was in
compliance with all of the provisions of the Act prior to 2002.
January 2002 ushered in new regulations that include the Interim
Enhanced Surface Water Treatment Rule and the Stage 1 Disinfection
Byproducts Rule. Compliance with these regulations has placed a
significant burden on our plant and our budget. We began making
modifications to our treatment system in 2000. We were looking for the
best treatment method using existing equipment and different treatment
chemicals (coagulants) to achieve compliance with the new regulations.
Prior to the recent change in regulations, utilities and chemical
costs represented about 50 percent of our overall treatment cost.
Utility and chemical costs fluctuate the most and consequently are the
hardest to control. Labor, upkeep of equipment and insurance represent
the remaining costs. The cost of chemicals has changed as a result of
the new regulations. Before the new regulations, chemicals represented
about 21 percent of the overall treatment cost. With the addition of
the new treatment regulations, we have seen this cost go as high as 37
percent of our overall cost.
As shown in Table I, our cost of treatment chemicals has almost
doubled in recent years.
Table I
Annual Cost of Utilities & Chemicals for Water Treatment, Muskogee, OK
----------------------------------------------------------------------------------------------------------------
FY 99-00 FY 00-01 FY 01-02 FY 02-03 FY 03-04
----------------------------------------------------------------------------------------------------------------
Chemicals...................................... $259,571 $410,260 $570,004 $537,558 $428,046
Electrical..................................... $336,909 $508,331 $362,658 $351,296 $381,684
Total.......................................... $596,480 $918,591 $932,662 $888,854 $809,730
Million Gallons of Water Produced.............. 5,227.588 5,680.448 5,005.641 4,378.118 4,296.087
Chemical Cost per 1000 gals.................... $0.05 $0.07 $0.11 $0.12 $0.10
Electrical Cost per 1000 gals.................. $0.06 $0.09 $0.07 $0.08 $0.09
----------------------------------------------------------------------------------------------------------------
Unfortunately, changing chemicals and increasing their feed rate
has not brought our treatment plant into total compliance. Although we
are complying with the requirements for Trihalomethane, Haloacetic
Acids, and Turbidity, we are still having problems with the Total
Organic Carbon (TOC) Removal Rule. Recent plant trials have shown some
positive results, and we are confident that we will be able to comply
with all of the new regulations within a short period of time.
When treatment cost increase, other items are sacrificed. In this
case, funds that could have gone to replace old and aging water system
infrastructure have been diverted to treatment. I can't help but
question if we are best serving the public's interest by reducing the
level of Trihalomethane from 100 part per billion (ppb) to 80 ppb, or
should we replace their old 2'' water main with a new 6'' main that
provides fire protection?
I am very concerned with the provisions of the Stage 2 Disinfection
Byproducts Rule. These proposed regulations will eliminate the
utility's ability to average the Trihalomethane and Haloacetic Acid
readings across the system's distribution system. The regulations will
require the utility company to identify the areas of the system that
have the highest readings and start monitoring these areas for
compliance. Complying with these regulations will place an additional
burden on the utility company, require changes in the treatment and
disinfection process, and once again add additional cost to the
treatment process.
The preamble for these regulations, prepared by EPA dated October
17, 2001 do not make a compelling case for the risk associated with the
long term exposure to these byproducts. Page 45 of the report states
``As in the Stage 1 DBPR, the assessment of public health risk from
DBPs currently relies on inherently difficult analyses of incomplete
empirical data.'' The tone of the preamble states ``it is appropriate
and prudent to err on the side of public health protection.'' I
therefore, question if these proposed regulations are truly serving the
public's health interest in the most cost effective manner? Especially,
since the added cost is preventing the utility companies from doing
more basic improvements that have proven their worth over time.
Our goal is to provide our customers and citizens with an abundant,
safe and dependable quality drinking water that meets all health and
environmental guidelines at a cost they can afford. Please keep this in
mind when reviewing the need for these additional regulations.
Thank you for the opportunity to share our concerns regarding these
new and proposed provisions of the Safe Water Drinking Act.
<all>