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Statement of G. Tracy Mehan, III
Assistant Administrator for Water
U.S. Environmental Protection Agency
Before the Subcommittee on Water Resources and Environment
Committee on Transportation and Infrastructure
U.S. House of Representatives
February 27, 2003
INTRODUCTION
Good Morning, Mr. Chairman and Members of the Subcommittee, I am Tracy Mehan, Assistant
Administrator for Water at the United States Environmental Protection Agency (EPA). I
appreciate the opportunity to be here today to speak to you about the President’s
fiscal year (FY) 2004 budget request for EPA’s water programs.
During these times of competing priorities for Federal funding – including the war
on terrorism and homeland security – the President’s budget request provides the
necessary funding for EPA’s Office of Water to carry out its mission to protect human
health and safeguard and restore the natural environment. The request provides the EPA
with funding to continue: improving protection of our Nation’s critical water
infrastructure; enhancing our core water programs; and, increasing the long-term
investment in the State revolving loan funds for drinking water and wastewater
infrastructure. Other areas of note in the President’s request include additional
funding for the Great Lakes, wetland protection, and nonpoint source pollution control
assistance to States.
PROTECTING CRITICAL WATER INFRASTRUCTURE
Protecting our nation’s critical water infrastructure, drinking water and
wastewater utilities, from terrorist and other intentional acts will remain a high
priority in FY 2004, and we are requesting $30.8 million and 16 full time positions. EPA
is continuing its responsibilities as lead Federal agency for the water sector. As you
know, the Public Health Security and Bioterrorism Emergency and Response Act of 2002
requires approximately 9,000 community water systems (those that provide drinking water to
more than 3,300 but less than 100,000 people) to assess their vulnerability to terrorist
or other intentional attacks, and to develop or revise response plans. The systems serving
more than 100,000 are to complete their assessments in FY ‘03. About 6,000 wastewater
systems serving more than 10,000 people are also conducting vulnerability assessments, and
developing or updating emergency response plans.
As in the past two years, we will work with drinking water and wastewater utilities to
provide technical assistance and tools as they assess their vulnerabilities to terrorist
and other intentional acts, and develop or revise their emergency response plans
accordingly. In addition, the Agency is supporting scientific and technical analyses on
methods and technologies that can detect and treat contaminants deliberately added to
water and wastewater systems.
CORE WATER PROGRAMS
Over the nearly thirty years since enactment of the Clean Water and Safe Drinking Water
Acts, we have worked together at all levels to make remarkable progress in improving the
quality of surface waters and the safety of drinking water. Despite measurable
improvements in the quality of water, serious water pollution and drinking water problems
remain. At the same time, population growth continues to result in increased water
pollution, and in greater demands on wastewater and drinking water systems.
The core water programs work together in stages to achieve safe sources of drinking
water, edible fish, swimmable beaches, and healthy watersheds. For every waterbody, the
building blocks necessary to achieve water quality goals in that waterbody are the same:
setting appropriate standards; monitoring; assessment; planning; implementation; and
reevaluation through more monitoring. The success of any one of these essential activities
depends on the quality with which the other activities are performed. For each core
program, there are critical inputs and outputs and interdependencies. For example, we
cannot set good standards without monitoring; we cannot monitor well without good
standards; we cannot assess without good monitoring data; we cannot plan without good
assessments; and we cannot implement programs efficiently and effectively without good
plans.
The Environmental Council of the States (ECOS) has reported that most State
environmental agencies are facing a second year of budget cuts. Thirty of forty reporting
States show a reduction in their FY ‘03 budgets and eight of the ten others had no
increase in their budget (ECOS Press Release, July 2002). These budget pressures have
resulted in: backlogs, several court challenges, 19 petitions to withdraw State program
authorizations, and recent reports from the EPA’s Inspector General and the General
Accounting Office on specific programs. We recognize the budget pressures facing States
and Tribes, and that we need to continue to work with them to improve our Nations’s
water quality. The 2004 President’s Budget provides an additional $50 million and 14
additional staff to help address water quality and drinking water issues. This
includes a $20 million increase for Clean Water Section 106 grants to States and Tribes,
and an additional $12 million for Drinking Water Public Water Supply Supervision (PWSS)
grants to States and Tribes. We are also increasing EPA resources to provide guidance,
training, and technical assistance. Following are additional details on other investments
in the core programs we oversee.
Water Quality Monitoring
Increased funding of water quality monitoring efforts will provide critical data for
States and others to: make watershed-based decisions; develop necessary standards and
total maximum daily loads (TMDLs); and, accurately and consistently portray conditions and
trends. A key component in FY ‘04 is the support of enhanced monitoring and
assessment – by working with the States with a particular emphasis on the
probabilistic approach and providing additional support to encourage the establishment of
State-level monitoring councils and local watershed monitoring consortiums. We are
requesting an additional $2 million for grants and contracts to assist States and Tribes
and an additional four positions over last year’s request.
Water Quality Standards
Water quality standards establish the environmental baseline used to measure success in
implementing clean water programs. In FY ‘04, EPA is increasing its funding request
by $3.8 million to work with State and Tribal partners to ensure that water quality
standards are effective and appropriate for use in developing TMDLs. The National Research
Council's 2001 assessment of the TMDL program found that the designated uses and criteria
in existing standards often need more detail and refinement before they can be used as a
firm basis for requiring load reductions through TMDLs. To address this concern, EPA in FY
2004 will conduct outreach to States and Tribes on approaches to analyze the attainability
of their designated uses and, if necessary, refine their standards to ensure that they
provide the appropriate targets for load reductions. In addition, EPA conducted a
customer-focused review of the National Standards program and developed a draft long-term
strategy that calls for improvements and streamlining in EPA’s program. EPA will
implement the high priorities in the strategy. EPA will also accelerate the technical
reviews necessary for EPA to approve new or revised State/Tribal standards on a timely
basis for use in TMDLs.
Total Maximum Daily Loads (TMDLs)
The Agency will continue to work with States and Tribes to carry out their TMDL
programs focused more, in FY ‘04, on a watershed basis to identify those waters not
meeting clean water goals. To assist States and Tribes in this effort, the Agency is
requesting four additional staff positions and $2.9 million in funds for grants and
contracts. The Agency will also continue to help restore impaired watersheds, and to meet
the many court-supervised deadlines for completing TMDLs. While increasing the pace of
TMDL development remains important, EPA must work with States to help assure
implementation of already-approved TMDLs, including targeting Clean Water Act (CWA)
Section 319 Nonpoint Source and Clean Water State Revolving Fund monies, and marshaling
Farm Bill conservation programs. EPA will assist States in revising their continuing
planning processes under CWA Section 303(e) to place more emphasis on assuring needed
watershed implementation.
National Pollutant Discharge Elimination System (NPDES)
In recent years the authorized State NPDES programs have been the object of an
increasing number of withdrawal petitions, citizen lawsuits, and independent reviews
suggesting potential noncompliance with Federal CWA requirements. EPA will continue to
work with States to address issues that have been raised regarding the performance of
State programs, including the need for more timely issuance of NPDES permits and greater
consistency in the application of standards and requirements in those permits, including
documentation of the basis for permit requirements. Specifically, in FY ‘04, EPA
– in partnership with the States – will work to establish environmentally-based
permitting priorities, including criteria emphasizing permit priorities for situations
such as: impaired waters/TMDLs, proximity to drinking water sources, newly-issued effluent
guidelines, and other criteria established by States. To improve program health and
accountability, EPA will work with States to ensure increased quality and quantity of data
necessary to assess and maintain program health and to implement permit quality reviews,
permit quality management tools, and technical training for State and EPA NPDES permit
writers. To assist States with this, EPA is requesting an additional $700,000 over last
year’s request.
Drinking Water Implementation
The proposed increase of $4.6 million and 6 positions over last year’s request for
the drinking water program will strengthen EPA’s ability to meet States’,
Tribes’, and systems’ increasingly complex implementation assistance needs. This
assistance is critical for the national program to meet its long-term objective of
providing drinking water that meets all priority regulations, within five years of the
effective date of each standard, to at least 95 percent of the population served by
community water systems. The increased resources are targeted toward developing more
effective State programs and increasing the technical and managerial capacity of drinking
water systems to comply with drinking water regulations, especially the arsenic and
microbial, disinfectant and disinfection byproducts rules. In addition, EPA will focus
increased resources on the Area-Wide Optimization Program which is designed to reduce
consumers’ exposure to microbial contaminants by improving the performance of small
systems' filtering technology.
Oceans and Coastal Protection
To strengthen protection of the nation’s ocean resources, EPA is requesting an
additional $4 million over the previous request to address significant gaps in ocean and
coastal protection in specific high priority issues. Recent legislation regarding cruise
ships in Alaskan waters, and General Accounting Office and other reports have demonstrated
the need to enhance cruise ship regulation and address continuing violations of existing
standards. In response, EPA will enhance its regulation of discharges of pollution from
vessels, including: sewage discharges; cruise ship discharges; and, operational discharges
from vessels of the Armed Forces -- Uniform National Discharge Standards – taking
into consideration the concerns of the Armed Forces. In addition, EPA will place a strong
emphasis on developing ballast water standards for aquatic nuisance species. EPA will also
bolster its Marine Protection, Research, and Sanctuaries Act responsibilities regarding
site evaluation, designation and monitoring, and permit review and concurrence.
These core programs are fundamental underpinnings for taking a watershed approach to
environmental protection. This approach calls for setting watershed goals, assessing
conditions, determining the sources of concern, addressing them using regulatory and
voluntary tools, and then reevaluating and adapting plans as new information becomes
available. By focusing and integrating the work of EPA with sister agencies, States,
Tribes, local governments, industry and nonprofit organizations in watersheds, we are able
to pool information, resources and authorities and focus our collective energies on our
common environmental objectives. In watersheds, we can better understand the cumulative
impact of activities, determine the most critical problems, better allocate limited
financial and human resources, engage stakeholders, win public support, and make real
improvements in the environment.
Using the watershed approach through the Targeted Watershed Grant program we proposed
last year has gained the support of hundreds of State and local watershed groups across
the country. Once awarded, the grants will provide needed funding to assist communities in
implementing on-the-ground restoration and protection projects designed to achieve real
environmental results quickly. In August 2002, EPA invited Governors and Tribal Leaders to
nominate their most meritorious watersheds with protection or restoration plans. Since
then, EPA has received 179 nominations including projects in every State, Puerto Rico and
the Virgin Islands. EPA is poised to begin the selection process. The Agency will be
hosting several review panels to evaluate and rank the submitted watershed proposals. We
hope to be able to award the grants and allocate the funds as soon as possible so that the
selected organizations can begin their work by late summer.
In FY ‘04, we will devote a portion of the requested $20 million for targeted
watershed grants to the Mississippi River Basin to address Gulf of Mexico hypoxia or the
"dead-zone" that continues to grow larger each summer. The Mississippi River
basin encompasses over 40% of the United States and is affected by human-induced
activities in 31 States. The hypoxia, or "dead-zone" that occurs each summer in
the Gulf is of great concern and we are working hard to address this issue.
Besides the Targeted Watershed Grants, the Water Program has joined other agencies in
successfully promoting this watershed approach as a way of integrating and focusing our
efforts on environmental results for several years. Our "Adopt Your Watershed"
database now reports the existence of over 4,000 watershed groups across the country. Yet,
we have learned through program evaluations that our watershed partners do not always have
the CWA products they need to work efficiently and effectively (appropriate standards,
monitoring, assessments, appropriate plans, up-to-date permits). With the strengthening of
these core building blocks, EPA will have a better chance at succeeding with important
program innovations that focus on managing water resources at the watershed level,
including trading, watershed permitting, and watershed-based TMDLs.
INFRASTRUCTURE COMMITMENTS
Even during these times of competing priorities, the President is proposing higher
long-term levels of revolving funds for infrastructure. These higher levels can be
achieved through the President’s proposal to lengthen the Federal government’s
support for both clean water and safe drinking water beyond earlier commitments. The
President proposes to do this through an increased commitment to the revolving loan fund
programs over time.
Specifically for clean water, with funding previously proposed by the President and
appropriated by Congress, we have now reached the goal of having $2 billion available
annually through the Clean Water State Revolving Fund (CWSRF) for building new sewage
plants and other infrastructure to keep our waters clean. Nonetheless, the President
proposes to increase this annual target level to $2.8 billion, a 40 percent increase. This
projected revolving level can be met by appropriations of $850 million a year through FY
2011. This proposal extends the funding well beyond the previous commitment, which would
have ended in FY 2005. In total, the Bush Administration is proposing to invest $4.4
billion above what would have been invested in the CWSRF from FY 2004 to 2011 based on
previous commitments. Based upon current leveraging assumptions which are periodically
revised, the monies available for loans are projected to increase from $42 billion to $63
billion under this proposal, which means that States will be able to finance an additional
15,000 new projects over the next 20 years.
The President also proposes to extend Federal support for the Drinking Water State
Revolving Fund (DWSRF) so that it can revolve at a higher projected level of $1.2 billion
per year, even after Federal capitalization ends, an increase of 140 percent over the
current annual average of $500 million. To realize this increased level of revolving
funds, the President proposes an appropriation of $850 million for each year from FY 2004
to FY 2018. This proposal extends the commitment for the DWSRF well beyond the FY 2003
authorization period.
EPA and several other organizations have done assessments of the difference between
hypothetical flat spending at current levels and what would be required to meet projected
clean water and drinking water needs over the next twenty years. The estimates of the size
of the gap or investment challenge differ, but we know that under flat levels of spending
it is large and it stems from an aging infrastructure, a growing population, development
pressures, and regulatory mandates.
With the Federal government doing its fair share to help close the gap including
increasing the long-term investment in the revolving loan funds, we need to see greater
investment from municipalities and other utility operators. This investment is needed in
both capital and in operations and maintenance (O&M). EPA estimates that utilities, in
aggregate, could increase their own revenues and investment at a real rate of growth of 3%
per year, consistent with a reasonable expected rate of growth for the U.S. economy,
resulting in a reduced investment shortfall. This was one of the scenarios identified in
EPA's recent report on the infrastructure investment gap.
I should note, at least in passing, that EPA also manages the Special Needs Projects
(i.e. earmarks). The number of these projects has grown exponentially through the
appropriations bills beginning with 7 projects in 1992 to a total of 490 projects this
fiscal year alone at a cost of over $323 million. Since 1992, a total of $4.182 billion
has been appropriated for 1566 projects.
In addition to increased funding, we believe closing the infrastructure gap will
require actions and innovations to reduce the demand for infrastructure. As
representatives of various stakeholder groups discussed during the Administrator’s
recent infrastructure forum, these actions include: better management, conservation (or
smart water use), full cost pricing, and intergovernmental cooperation through the
watershed approach.
In the Office of Water, we have been looking at the potential for sustainable
management systems including environmental management system and asset management
techniques to reduce a utility’s long-term costs and improve performance. Asset
management is a structured management approach that is based on information about the
condition of a system’s assets. Knowing the condition of your assets and linking that
information to inventory, service levels, useful life, and repair costs will provide the
information needed to make optimal management decisions -- including decisions about
funding future renewal and replacement.
Recently, working with Australian and U.S. consultants, the Orange County Sanitation
District approved an investment of $22-38 million, over a six year period, to implement
its Asset Management Plan, as part of a $2 billion investment strategy over the next
twenty years. This front-end investment in manpower, planning and assistance, information
systems, software, training and other process changes will yield a 20 year return on
investment in the range of 9:1 to 16:1. This translates into a reduction of $150 million
in their capital improvements program and a total life cycle cost savings of at least $200
million. This 10% savings from just one utility, admittedly a very large one, is
equivalent to the current full amount of the Federal contribution to California’s
Clean Water State Revolving Fund over two years!
Another innovative idea EPA is pursuing is Watershed-Based Trading. Watersheds are
ideal for experimenting with market-based incentives; and our Water Quality Trading Policy
released on January 13th of this year renews our efforts to pursue
water-quality trading for nutrients, sediments and other pollutants to reduce the cost of
compliance with water-quality based requirements. With this policy, we are supporting
States and Tribes in developing trading programs that meet the requirements of the Clean
Water Act. A water quality "credit" could be created by reducing pollution loads
beyond the level required by the most stringent technology requirement. For example, an
unregulated landowner or a farmer could create credits by changing cropping practices and
planting shrubs and trees next to a stream, reducing nutrient runoff and sedimentation. A
municipal wastewater treatment plant then could purchase and use these credits to meet
water quality limits in its permit. Trading for TMDL implementation offers particular
promise for its water quality and economic benefits. Our policy supports trading among and
between regulated and unregulated sources.
In its analysis of the Clinton Administration’s Clean Water Initiative, EPA
concluded that the total potential savings from all types of trading range from $658
million to $7.5 billion annually. A current example of a successful trading effort,
between point sources only, can be found on Long Island Sound where nitrogen trading among
publicly owned treatment works in Connecticut is expected to save over $200 million in
control costs.
A study of three watersheds in Minnesota, Michigan and Wisconsin by the World Resources
Institute (2000) found that the cost of reducing phosphorous from point sources,
traditional pipe-in-the-water dischargers, was considerably higher than those based on
trading between point and non-point, or diffuse, sources of runoff which are not regulated
by the Clean Water Act. The estimates for point source controls ranged from $10.38 per
pound of phosphorus in the Wisconsin watershed to $23.89 in the Michigan watershed. Using
trading between point and non-point sources, these costs could be lowered to $5.95 per
pound in Wisconsin, a reduction of over 40%, and to $4.04 in Michigan, a reduction of over
80%.
An additional specific infrastructure investment in the President’s request
includes improving the drinking water in Puerto Rico. During 2001, 74% of Puerto
Rico’s community water supply systems – affecting 80% of the population –
had intermittent violations of drinking water standards. Puerto Rico is unable to afford
critical drinking water infrastructure improvements to consistently meet existing drinking
water standards without Federal support. Nearly 60% of the population lives in poverty,
and compared to the national average, Puerto Ricans spend twice as much of their median
income on drinking water. In addition, given island poverty rates, most people served by
San Juan’s Metropolitano community water system cannot afford the infrastructure
improvements needed to consistently meet existing drinking water standards. To help
address these problems, the FY 2004 budget request provides $8 million for the design of
upgrades to Metropolitano’s Sergio Cuevas treatment plant in San Juan. When all
upgrades are complete, EPA estimates that about 1.4 million people will enjoy safer,
cleaner drinking water.
GREAT LAKES LEGACY ACT
Sediment contamination is a significant source of toxic pollutants impacting benthic
organisms, fish, and wildlife in Great Lakes Areas of Concern. Human health can also be
impacted via the bioaccumulation of toxic substances through the food chain. In support of
the Great Lakes Legacy Act, EPA’s FY ‘04 request includes $15 million in funding
for contaminated sediment cleanup activities. In FY ‘04, the Agency plans to begin
cleanup on two or three new sites, which will lead to the remediation of over 100,000
cubic yards of contaminated sediments. EPA will actively coordinate on site selection and
remedial efforts internally with Superfund, and externally with States, Tribes and other
stakeholders.
WETLANDS
In October 2002, a Presidential Proclamation stated that, "Recent studies show
that we are close to achieving our goal of halting overall wetlands loss, and we are
hopeful that in the near future we will begin increasing the overall function and value of
our wetlands." EPA will continue to work toward reversing historic trends of wetland
losses and restoring some of the 54 percent of the Nation’s wetlands already drained
or filled. EPA will contribute to this wetlands quantity goal by helping to improve
compensatory mitigation success, supporting wetlands restoration efforts, and building
State and Tribal capacities to monitor and protect wetland resources.
EPA is committed to protecting America’s wetlands and watersheds to the full
extent possible under the Clean Water Act and the Supreme Court’s 2001 decision in Solid
Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC).
Although the SWANCC decision limits Federal CWA jurisdiction over isolated,
intrastate, non-navigable waters and wetlands, other Federal and State laws and programs
still cover these waters and wetlands. The President’s budget increases Wetland
Program Grants by $5 million to a total of $20 million to help States, Tribes, and local
governments address the wetlands which may be impacted by the SWANCC decision.
States and Tribes also will use the new resources to assume more responsibility for
comprehensive protection of wetlands and other waters, including those affected by SWANCC.
Some States including the New England States, Michigan, New Jersey, and Wisconsin are now
protecting some or all of these waters. In addition, States and Tribes will use wetlands
grants to assume more decisionmaking authority in waters that remain under the CWA.
NONPOINT SOURCE POLLUTION
Nonpoint source pollution (NPS) is the leading cause of water quality impairments in
our Nation’s rivers and streams, lakes, and estuaries. Agriculture alone has been
identified by States as a leading cause of impairment in 48 percent of the river miles
surveyed; other leading nonpoint sources identified by States include urban runoff,
forestry, streambank erosion, and hydro- and habitat modification. EPA is requesting
$238,500,000 for the Nonpoint Source Grants in FY 2004.
The new Farm Bill affords EPA and the States an enhanced opportunity to significantly
accelerate national efforts to control NPS pollution from agriculture. In light of the
Farm Bill, EPA and the States will address non-agricultural activities, foster pollution
prevention, and re-focus our efforts to support the agricultural community’s efforts
to help them target their work effectively on the highest priority water quality needs.
States will increase their focus upon NPS categories and activities that are not funded
under the Farm Bill (e.g., urban runoff, forestry, abandoned mines, and a variety of
stream and streambank restoration activities), while continuing to work with the
agriculture community to solve problems on a watershed basis.
Using Section 319 dollars, States will focus more of their efforts on providing the
monitoring and watershed planning support needed by the agricultural community to target
their work most effectively on the highest-priority water quality needs. Section 319
dollars will also provide support for hiring watershed coordinators who can provide a
focus for identifying the highest priority needs in the watershed and promoting
producers’ adoption, with support of USDA’s and other programs, of practices
that will best solve water quality problems in the watershed. EPA will also continue to
encourage States to use the resources of the Clean Water State Revolving Fund to finance
projects to address polluted runoff. As of mid-2002, States had invested about $1.6
billion in nonpoint source controls through the CWSRF. Furthermore, States will continue
to use a variety of program tools to foster an ethic of pollution prevention in their
nonpoint source watershed programs, such as low impact development techniques, source
prevention, and public education, to assure that water quality improvement and protection
become a permanent outcome of the program.
CLOSING
In conclusion, I look forward to working with the Subcommittee to address the needs of
the water programs entrusted to EPA. The President’s request supports the Office of
Water’s work and will allow us to continue to improve the protection and investment
in water infrastructure as well as strengthen the core programs that are so vital to the
improvements that we have achieved, and will continue to achieve in the quality of our
surface and drinking waters.
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