Mr. BEGIN. OK. I would say that they would not be overlooked at all. I would like to also yield to Bill Penn, who, you know, is the Administrator of the SRF, and he might just take a minute. I think he can expand on that quite well.

Senator CHAFEE. All right, because we have to go and vote right

now.

Go ahead, Mr. Penn.

Mr. PENN. Included in our priority assessment right now is the CSO project needs for the State. By putting additional funds into the SRF that would be earmarked specifically for CSO projects, we would identify and fund those projects that we have on our priority list, and it would not

Senator CHAFEE. You mean the money we would put in would be earmarked for the CSOs?

Mr. PENN. Just for the CSOs, yes, sir.

Senator CHAFEE. I didn't get that that was the approach that the Lieutenant Governor was taking. I thought he wanted this flexibility, and I can understand the flexibility, but we have our concerns,

too.

Mr. PENN. I think what we were looking for was the opportunity of using the SRF mechanism to make these low- interest loans and also to be able to leverage the monies that would come into the SRF in the tax-exempt bond market and to use that as opposed to reverting back to a construction grant program.

Senator CHAFEE. OK. We're short of time. Thank you.

Senator BAUCUs. Mr. Lautenberg has one very quick question. Senator LAUTENBERG. I wanted to welcome Mr. Keith from New Jersey. Of course, he presents the progressive point of view.

Very quickly, you heard Mr. Appleton talk about CSO controls in the Hudson River. He suggested that New Jersey and New York exchange them. What do you think would be the effect of CSO controls on the Hudson River if there were CSO controls on the New York side?

Mr. KEITH. There's no question that CSO control alone will not resolve the water quality problems in the Hudson River or other estuaries, but it's an integral part of the solution. You've got to take steps on all the different areas. We have to address the nonpoint source, we have to address treatment, and we've got to address CSOs. I would be concerned that if we don't address CSO as Mr. Appleton may have suggested and focus on other areas, when we're all done, we've still got a major problem. We have to address them all together.

Senator LAUTENBERG. Do we see any wash-ups on our shore as the result of CSOs or any shellfish bed closures?

Mr. KEITH. Yes, a lot of the floatables that come out of storm sewers come out of CSOs. It's the same problem. And, yes, we believe that a good portion of the floatables that we've had experience with in New Jersey come from New York City, and they are related to CSOs as well as storm sewers. It's a combined problem. Senator LAUTENBERG. Thank you, Mr. Chairman. Senator BAUCUS. Thank you very much.

We'll temporarily recess, and we'll come back to our final panel in about 10 minutes. Thank you.

[Recess.]

UGVINYLJ

Senator BAUCUS. The hearing will come back to order.

Our next panel includes Mr. Edward Osann, who is the Director of the Water Resources Division for the National Wildlife Federation; Mr. Bevin Beaudet, Director of Palm Beach County Water Utilities Department, representing the American Water Works Association; and Mr. Bruce Adams, who is the Water Conservation Coordinator for South Florida Water Management District.

I thank all three of you for your patience and forbearance. I apologize for that delay caused by the vote.

Mr. Osann, why don't you begin?

STATEMENT OF EDWARD R. OSANN, DIRECTOR, WATER RESOURCES PROGRAM, NATIONAL WILDLIFE FEDERATION Mr. OSANN. Thank you, Mr. Chairman.

I appreciate the opportunity to be here. My name is Edward Osann. I'm the Director of the Water Resources Program of the National Wildlife Federation.

I would like to begin with a word of thanks for the record for Senator Fowler and his leadership over a number of years in calling attention to the benefits and importance of water conservation, and we appreciate very much this subcommittee's willingness to entertain the concepts and ideas that we're here to present you with today.

I'm testifying on behalf of a number of environmental organizations that, under the aegis of the Clean Water Network, have come together to develop proposals for the Clean Water Act in general and for water conservation measures in particular, including the Natural Resources Defense Council, the Environmental Defense Fund, the National Audubon Society, Friends of the Earth, the Conservation Law Foundation, and the Watershed Association of the Delaware River.

Earlier in the hearing today, Senator Lieberman asked previous witnesses, "Can we creatively perform some miracles with limited resources?," and I think we're here to suggest to the committee that water conservation and efficiency improvements are indeed a way to get more mileage out of limited resources. A number of the communities that have been the earliest and most active proponents of water conservation at the local level have done so out of concerns for water quality. San Jose, California, Los Angeles, and to a considerable extent, New York City, all have had water quality problems of one sort or another for which they have formulated ambitious water conservation programs deemed to be cost effective in their response to those problems.

Conservation can contribute directly to the achievement of a number of water quality goals: reduced diversions from streams and rivers, with water quality benefits during periods of low flow; improved performance and longevity of septic systems, which serve about 20 percent of the households in this country; decreased reliance on overdrafted groundwater supplies, reducing the likelihood of saltwater intrusion in coastal areas and groundwater depletion in rural areas; and reduced likelihood and duration of combined sewer overflows, which we've heard a lot about this morning.

Conservation is also essential to make efficient use of the limited funds that are available, and we have heard various estimates about what the mission of cleaning up the Nation's waterways will cost. The Environmental Protection Agency, in the most recent published report, in the 1988 Needs Survey, estimated the total cost to be $83.5 billion to meet the requirements of current law and to sustain compliance over a period of 20 years. An earlier witness this morning estimated that clean water compliance was going to cost $138 billion.

We suggest that there are a couple ways that the committee could tackle this opportunity of incorporating conservation within the Clean Water Act: to weave conservation requirements and opportunities into the existing permitting program, and to incorporate some new ideas as simply new additions to the Clean Water Act.

With regard to permitting, we're recommending that applicants for 402 and 404 permits under the act, permits that would be necessitated by expanding capacity-in essence growing systems, systems with growing loads, growing bases of customers that come in for permits under that act-meet a specified, enumerated list of conservation measures. They should demonstrate that they are employing or they are committed to employing these measures and that the sizing of the facilities for which they are seeking permits has taken the benefits of the conservation program into account. We may not be able to say with complete assurance, Mr. Chairman, that water conservation is always cost effective for systems with a static or even a shrinking customer base, but it is most assuredly cost effective for systems that have an expanding customer base.

The measures that we have proposed are listed in my testimony. I won't dwell on them. They involve concepts such as metering of all customers, recovering costs based on metered use, accelerated leak detection and repair, and so on. These are not novel concepts. They're recognized by the Nation's water and wastewater utility industry as signs of a well-run system. In many cases, the majority of systems are already employing these measures. So we think that a very sound basis has been laid for technology-based requirements such as this.

Our testimony also makes reference to a comparable set of recommendations for agricultural permit applicants-again, those seeking permits that involve expansion of their water supply system.

Senator BAUCUs. I'm going to have to ask you to summarize as best you can, Mr. Osann.

Mr. OSANN. Yes.

I would conclude by supporting the remarks of Senator Fowler this morning on the Municipal and Industrial Water Conservation Act and also call the committee's attention to the Plumbing Products Efficiency Act, which is not directly within the jurisdiction of this committee, but we would hope that by the time the Clean Water Act leaves the Senate, the National Plumbing Products Efficiency Act would be part of it.

Senator BAUCUS. Thank you very much.

Mr. Beaudet.

STATEMENT OF BEVIN BEAUDET, DIRECTOR, PALM BEACH COUNTY WATER UTILITIES DEPARTMENT, REPRESENTING THE AMERICAN WATER WORKS ASSOCIATION

Mr. BEAUDET. Thank you, Mr. Chairman, Senator Graham.

My name is Bevin Beaudet. I'm Director of Palm Beach County, Florida Water Utilities Department, and I'm here representing the American Water Works Association. Our membership includes over 3,500 utilities nationwide that supply over 75 percent of the Nation's drinking water.

Many of our member utilities face significant source water problems, both in quantity and in quality; therefore, we're keenly interested in conservation. Many of our members have pioneered most of the active programs and successful programs in the United States, and so we're very familiar with the topic of water conservation. We strongly believe that conservation and efficient use of water supplies is not only needed to conserve the resource, but we also agree that it will result in a reduction of waste water volumes, with a concomitant savings in the ultimate cost of waste water treatment.

In terms of S. 1081, we are pleased that this bill continues to allow the eligibility for State revolving loan funds for developing and implementing water conservation and watershed management plans. I would like to correct an error that is in our written testimony. There we incorrectly linked a requirement for these plans to the State Revolving Fund Program, and we recognize that that was an incorrect reading of the act, and I would like to make that correction.

In terms of implementing this policy, we feel that we must be realistic in drafting water conservation legislation. Full consideration must be given to the true cost implications of water conservation plans, and realism is needed in addressing and assessing the reductions and per capita consumption which can be achieved through conservation programs.

Palm Beach County suffered through the severe Florida drought the past two years. We were mandated a number of restrictions by my friend to the right, Mr. Bruce Adams, from the South Florida Water Management District, and many of these measures that were mandated during that period our county retained through ordinance as permanent measures.

These include the low-flow plumbing fixtures, which are of the same nature as those proposed in Senator Fowler's bill, I believe; a zero-scaping and planting ordinance, an ordinance that requires the use of low-water-need plants and drought- resistant-type plants for a certain percentage of our plantings; permanent restrictions on lawn watering during daytime hours and restrictions against watering impervious areas, like streets and driveways; also an active public education campaign.

These are all features of the program that we implemented in Palm Beach County, Florida. These measures resulted in about a 7 percent net reduction in our water consumption per capita and about a 4 to 5 percent reduction in our waste water volumes.

Other AWWA members have had similar experiences. In California, where there has been an even more severe drought, the East

Bay Municipal Utility District has achieved about a 30 percent reduction in water use over the past two years with some very herculean efforts in water conservation.

We also support many of the measures for conservation that are in the testimony by the National Wildlife Federation, and we have a lot of experience with these. For instance, the desalination, which we are doing in Florida and also in California. The Metropolitan Water District of Los Angeles is very significantly experimenting with high volumes of desalination, and we also support S. 481, which is Senator Simon's Water Research Act.

The use of reclaimed water-we're very supportive of this. In fact, we suggest that more emphasis be placed in this legislation encouraging the EPA to amend their rules to encourage the use of reclaimed and treated waste water for irrigation. Currently, those rules do not encourage the use. Although there is some lip service to that concept, the rules themselves actually hinder the implementation of a water reuse program.

We're also very supportive of full metering of all systems, both the water that is taken in by the system and then distributed. We're supportive of inverted block rates, which means the more you use, the more you pay, and these are very effective if they have teeth. We're very supportive of public education, and, again, I can't stress enough how important that is. The clearinghouse concept that is in Senator Fowler's bill we strongly endorse. It's a concept that we can offer considerable experience to from our resources in AWWA.

We did get a chance to review a draft of the bill that Senator Graham submitted to us very briefly, and we believe that that bill has some good public policy in it which would ensure that conservation-oriented alternatives are included in water resources facility planning. We have some concerns about including a requirement for least-cost analysis in the Federal permit process. We feel that more flexibility and better decisions can be made if they're made at the local and State level in some of these matters.

Tying that to the Federal permit process does give us some problems, particularly in light of this least-cost analysis. We find the wording of that in several bills to be somewhat vague and very subjective, and we, again, support the concept of including conservation alternatives in water resource planning, but we'd like to see something a little more definitive about that, and we'd be willing to offer our services to help improve that language.

In summary, again, I appreciate being here. We're very pleased to offer these comments to the subcommittee.

Senator BAUCUS. Thank you very much, Mr. Beaudet.
Mr. Adams.

STATEMENT OF BRUCE ADAMS, WATER CONSERVATION COORDINATOR, SOUTH FLORIDA WATER MANAGEMENT DISTRICT

Mr. ADAMS. Good morning, Mr. Chairman, Senator Graham. I'm Bruce Adams, and I'm the Water Conservation Coordinator for the South Florida Water Management District, which is an agency of the State of Florida.