By Judy Sheahan
March 31, 2003

Holyoke (MA) Mayor Michael Sullivan testified on March 19 before the House subcommittee on Water Resources and the Environment on behalf of the Conference of Mayors and the Urban Water Council. Sullivan outlined the tremendous financial burden that faced communities as they replaced their water and wastewater infrastructure and complied with environmental mandates.

Sullivan described the problems facing his own community of Holyoke, a former industrial town with a population of about 40,000 people. Holyoke is facing severe economic hardship with an unemployment rate of 6.8 percent and an average per capita income of $11,108.

Sullivan told the committee that the city sewer system was built over 125 years ago. He also said that below the Holyoke Dam, there are more than a hundred combined sewer overflows (CSOs). "The federal government has been pushing eight western Massachusetts communities, including Holyoke, to eliminate these CSOs at a collective cost of nearly a half billion dollars," Sullivan said.

"Holyoke's estimated cost to take care of its own CSO problem is between $44 and $78 million," Sullivan said, adding that this would cost every sewer-using customer in my city $833, up from $200 to foot the bill.

Sullivan highlighted the Conference's three basic approaches to help cities finance water and wastewater development which include:

• Providing grants to municipalities where there is an affordability issue or when a community faces severe environmental problems;
• Expanding the current 20-year loan category to include a 30-year, no interest loan category under the State Revolving Fund for water and wastewater infrastructure investment; and
• Modifying the current tax law by removing Private Activity Bonds (PABs) used for water and wastewater infrastructure from state volume caps.

Committee members sympathized with the tremendous costs facing communities but said that there were few federal resources. Representative Vern Ehlers (MI) said, "There is no disagreement that there is a tremendous need but the question is how to meet that need. We will fund the State Revolving Program but it is a mistake to look to the feds to solve the problem. Local must make the investment with user fees, not taxes."

William Schatz of the Northeast Ohio Regional Sewer District testified on behalf of the Water Infrastructure Network. He told committee members that currently less than 10 percent of investment in wastewater infrastructure comes from the state revolving funds and that most of the money invested was through municipal and other types of bonds.

Schatz told committee members that in order to meet their needs, his sewer district has decided to raise user rates by 7 percent every year for the foreseeable future. He advocated for a dedicated trust fund to fund wastewater infrastructure investment.

Subcommittee Chairman John Duncan (TN) told the panel that a wastewater infrastructure bill would be released later on this year but it would be similar to last sessions bill, H.R. 3930.