HUD water and sewer program. While by no means meeting all existing needs for water and sewer facilities, these additional moneys appropriated by the amendment would certainly have helped.

An analysis performed by the NACO staff last year revealed that HUD has turned down more than $2.5 billion in local water and sewer grant applications since the program began in 1966. Total project costs of these grant applications amounted to approximately $5.5 billion. Most of these grant applications were returned to the counties and other local governments because of a lack of Federal funds. We have attached to our statement a table which shows the amounts of applications not funded for each State. The $2.5 billion figure does not reflect the real needs of counties and local governments for water and sewer assistance. Many local governments in the past 2 years have been strongly discouraged by HUD Area Offices from submitting further applications. It is our belief that if more Federal assistance were available most local governments could double the dollar amount of applications previously submitted to HUD and thereby begin to meet the critical need for these facilities on the local level. Thus, the authorization of $5 billion proposed in H.R. 13853 seems to us appropriate in light of what we estimate total national needs to be.

The committee is, of course, quite aware of the current impoundment of water and sewer funds by the Office of Management and Budget. In fiscal year 1971, the Congress appropriated $350 million of which $200 million was frozen. In fiscal year 1972, the Congress appropriated $500 million of which $300 million is currently frozen. Thus, a total of $500 million, although appropriated, is not being made available to meet critical needs. Rather, the administration is proposing to carry over and allocate $200 million of that which is frozen for fiscal year 1973. This simply does not meet the needs existing.

The House has recently passed a strong and far reaching water pollution control bill, authorizing $18 billion for the construction of badly needed sewage treatment facilities. But this legislative act will have no value unless funds are provided for the other parts of the system-the basic sewer lines. What purpose is served for a community to have a sewage treatment plant if it does not have the lines to provide for its effective utilization?

The availability of community facilities, especially water and sewer lines, is directly related to the construction of housing. How can we begin to meet our national housing goals if we don't provide the basic public facilities for the development of housing in newly urbanizing areas? With some communities around the country being forced to suspend housing construction because of a lack of sewer and water facilities, it seems unwise to cut back when the Nation is trying to meet critical housing needs. In addition, State health regulations, backed by court order, are taking an increasingly hard line in prohibiting housing construction in many urban areas unless there are adequate water and sewer systems. We believe the Congress and the administration should place water-sewer construction at the top of the priority list if the national housing goals which Congress has mandated are to be met over the next decade.

The need for greatly increased Federal water-sewer assistance is well documented in Oakland County, Mich.

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Oakland County is part of the Detroit metropolitan area, contiguous to the city of Detroit on the north. The county has grown rapidly since World War II. In 1950, it had a population of 396,000. By 1960, the county had increased to 690,000, and it now contains 990,000 people.

The Oakland County government provides water and sewer facilities for all the local governments in the county (25 cities, 16 villages, and 23 townships) at their request. Since the HUD water and sewer program began, the county has received approximately $2,118,000 in grants to assist us in the development of projects having a total cost of $282,000,000. We also have applied for five other grants for projects totaling $9 million which have not been funded by HUD.

In addition, we have 18 projects totaling $40 million for which we did not submit applications upon the advice of our HUD Regional Office. We were told that there simply were no funds for these projects and that it would not do us any good to submit applications.

We have some rural areas in Oakland County which could qualify for grants from the Farmers Home Administration, but we were also advised that there were no funds available for these projects, OMB having impounded $56 million.

We estimate that were H.R. 13853 promptly enacted by the Congress, at least one-half of the 18 projects ($20 million) referred to above fee which we did not submit applications to HUD, could be placed under construction within 60 days. Construction of the balance of these projects could begin within 6 months.

The facilities which we could begin construction on within the next 6 months would also have the effect of helping us reduce our county's unemployment rate, currently at 8.2 percent, compared to the national rate of 5.8 percent. These projects are not "make work." Rather, they would provide sound employment opportunities and have a lasting beneficial impact on their communities.

Frankly, ladies and gentlemen of the committee, we do not know where we will get the financing to meet the needs of our county unless additional Federal assistance is forthcoming. Because of State health requirements and court orders, we are definitely under the gun.

One of our communities, the village of Lake Orion, has been cited. for pollution and ordered through the courts to abate pollution of a nearby stream called Point Creek. With a sewerage project under construction now, without Federal assistance, but with $1 million in State aid, it is going to cost each homeowner $372.50 per year for the life of the bond issue. This borders on being confiscatory.

In another rural area, the village of Clawson, we are just completing construction of a sewerage system. In order to meet principal and interest payments, it has been necessary to levy a tax of 22 mills on each property owner. These two examples are not the exception but rather the rule. Notwithstanding the fiscal crisis on the local level, property taxpayers are simply refusing to pay any more.

Mr. Chairman, we strongly urge this committee to approve this legislation as quickly as possible. We believe the Members of Congress will act decisively on this bill if they are given an opportunity.

We thank you for this opportunity to appear before you today, and we will be happy to answer any questions you may have.

(The table referred to by Mr. Alexander in his statement follows:)

LOCAL GOVERNMENT GRANT APPLICATIONS FOR WATER AND SEWER ASSISTANCE NOT FUNDED BY
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

The CHAIRMAN. Thank you very much, sir.

The next witness will be Mr. Wilcox. Mr. Wilcox, you may proceed, sir, and you may identify anyone accompanying you.

Mr. BARRETT. I want to welcome Mr. Wilcox here. Of course, everybody knows Mr. Wilcox comes from the great State of Pennsylvania. He is secretary of the department of community affairs and I want to commend him this morning, Mr. Chairman, because since he has become the secretary of the department of community affairs, Pennsylvania has started to look up. We are accomplishing many things that we heretofore had not been able to accomplish and I want to congratulate Mr. Wilcox, for this fine job you are doing for Pennsylvania.

The CHAIRMAN. We are delighted to have you, sir, and you may proceed in your own way.

STATEMENT OF WILLIAM H. WILCOX, SECRETARY, PENNSYLVANIA DEPARTMENT OF COMMUNITY AFFAIRS, ACCOMPANIED BY JOHN ROSSO, COMMUNITY SERVICE CONSULTANT

Mr. WILCOX. Thank you very much, Mr. Chairman. It is always a special pleasure to be before a committee of which Representative Barrett is a member because he is always very kind in his hospitality to us.

I am, as Representative Barrett has indicated, the secretary of the department of community affairs in the Commonwealth of Pennsylvania and I have Mr. John Rosso, community service consultant of our local government services bureau in the department and Mr. Rosso will be available to deal with any of the technical aspects which we might want to cover.

Mr. Chairman, I have filed a statement with the committee and I think perhaps I can be more useful in my brief visit here this morning if I were to speak largely extemporaneously and perhaps summarize those comments rather than actually read the statement.

The CHAIRMAN. That will be satisfactory and your statement may be inserted at this point in the record.

(Mr. Wilcox's prepared statement follows:)

PREPARED STATEMENT OF WILLIAM H. WILCOX, SECRETARY, PENNSYLVANIA DEPARTMENT OF COMMUNITY AFFAIRS

We are coming to realize that the provision of community sewage treatment facilities is one of the major problems we are facing in this decade. We know it is one of Pennsylvania's biggest problems; we also know that although it is a serious situation all over the State, its hardest impact is in those areas which we can identify with rural poverty.

We can show this by pointing out that the U.S. Department of Labor has classified 30 of Pennsylvania's 67 counties within labor markets either of "substantial" or "persistent" unemployment, or granted eligibility under Title I of the Public Works and Economic Development Act of 1965. We are talking about nearly half the land area of Pennsylvania, with slightly more than one-third of our population; these areas generally show as a southwest to northeast diagonal across the State, following the Appalachian chain, and including most of our declining coal regions. This is primarily the area which could benefit from the bill under consideration, if it were shown that sewage facilities, especially were needed.

To indicate need, we can turn to Pennsylvania's own efforts to require municipalities to install sewage facilities. These efforts have spanned more than half a century; Pennsylvania has seen the lack of adequate facilities as a health and environmental problem for a long time, and has enacted and implemented increasingly stronger laws as the seriousness of the situation increased.

The Sewage Facilities Act of 1965, puts real muscle into this effort. Under this new law, the Pennsylvania Department of Environmental Resources has issued new orders to 74 municipalities to construct treatment facilities; we can expect literally hundreds more, with administrative and enforcement capacity the only limiting factor.

Yet we find that, of those 74 local governments, only six lie outside the areas of serious unemployment-the areas of "hard core" rural poverty.

We can see that this is a continuing trend. Two years ago, of 105 cases being prosecuted under Pennsylvania's Clean Streams Law, 76 were against municipalities (or authorities created by them); of these, 54, or 71 per cent, were located in these same "rural poverty" counties.

We should make it clear that we are not critizing Pennsylvania's Department of Environmental Resources, which has absorbed the State's enforcement function. We certainly don't think its people, who are charged with the responsibility for bringing some order to this critical problem, are engaged in any directed effort to intensify the financial plight of our rural poor. We do think that what these figures show is that the most critical need for environmental facilities exists in those areas least able to pay for them.

It must also be understood that Pennsylvania has not callously passed off to its municipalities the whole burden of cost. As the problems have become more critical, State aid has become more generous. Beginning July 1, 1954, the State has made annual payments to municipalities of up to 2 per cent of the construction cost of sewage treatment plants and facilities, to be used for operation and maintenance. The 1965 Sewage Facilities Act provides for State grants of 50 per cent of planning costs; a 1970 amendment to our Clean Streams Law requires that all fines and permit fees for stream pollution be directed to a Clean Water Fund, to be used for alternative treatment facilities.

Meanwhile, beginning in 1968, Pennsylvania has been directed $20 million every two years into matching funds under Pub. L. 84-660. These funds come from our 500-million dollar Land Conservation bond issue, and pay 10 or 20 per cent of the cost of eligible treatment facilities to bring the combined FederalState share currently to 60 per cent of the cost of eligible facilities; one year, during 1969, we were paying enough to bring this share to 70 per cent. The Department of Environmental Resources has offered this State matching grant to 206 municipalities since July of 1968; cumulatively, under this program, the State has been instrumental in offering "660" money to about 600 of our local governments. We hope the current proposed amendments to Public Law 660, which would further increase the Federal matching grants under this program, will be adopted.

But two problems have developed which show the need for the kind of Federal aid which the bill under current consideration could provide. Both problems hit hardest at our poorest rural communities.

The first is that generally, in Pennsylvania, the "660" program affects only about one-third of the total cost of a community sewage system. This is because the collection system, which except for some interceptor lines, is not eligible for Federal matching funds. On the average, Federal funding extends to about onehalf the cost of installing the treatment facility. This aid, coupled with State assistance, is providing to our communities 60 per cent of about one-third of the total system costs. (Treatment facilities comprise about one-third of the total system costs.) The more scattered or sparse the development, the higher the proportion of the ineligible costs.

The other is that our poor communities-and generally, that means our rural communities are not helped by a matching grant program because they cannot find that inevitable "local share." It just isn't there. How can we realistically expect a municipality with nearly 30 per cent of its population on public assistance to launch a sewerage program? We have municipalities where the stumbling block is the simple requirement in the grant program that "prevailing wages" be paid; there are plenty of local citizens who would be glad to get the work for less, but this requirement drives the costs beyond the communities' reach.

What seems to be the result, therefore, is that these funds will be concentrated in those communities, primarily new suburban developments, which can afford the "local share." Now we need a program-this kind of program-which will specifically help the poor communities which can't.

We said that the problem of providing sewage treatment facilities is becoming one of our most serious problems. In Pennsylvania, it is having far-reaching implications. The environmental problem is obvious; what is less obvious, but perhaps as serious, is that it is beginning to affect our total housing supply, and most seriously the supply of housing for low- and middle-income citizens.

Our Sewage Facilities Act gives the Department of Environmental Resources the duty to prohibit additional connections to systems which are inadequate or overloaded. Under this provision, the State has forbidden any further connections to the sewer lines in 80 of our municipalities; this means no new housing construction until the systems are improved or expanded.

The prohibition on new connections is a relatively new program; but we can see serious implications if other trends continue. We will have to expect that wealthier suburbs, where land costs are high and building codes encourage expensive homes, will come to be the only ones open to new construction. The implications are serious for those large numbers of our citizens who cannot afford to buy into these communities.

Nor do we want to let the absence of adequate sewage collection and treatment facilities become a new excuse for some municipalities to keep out denser development or multi-family uses. Pennsylvania has established its policy of ultimately requiring adequate swage treatment facilities in every community, and of giving substantial help, backed with legal enforcement.

Fortunately, this is one problem that money alone can solve. We have the technology and the administrative machinery. We do not have to fear any adverse