Apart from the cost there is the issue of siting the expanded storage facility. You are looking at a man who bears permanent political scars by siting a wastewater facility in a neighborhood that used to vote for me three to one. I was willing to take the political hit because I believed that the project was necessary and beneficial to the environment and the City. Please do not force me to undergo another siting decision of that kind for no good reason. Or I should say, please do not inflict this on my successor. Make no mistake: a bill of this sort will undercut all of us on the municipal level who have been borne the battle for clean water.

The standards for CSO remediation should be established by state and regional planning agencies, such as the Buzzard's Bay Project. The standards should be result oriented. They should be designed to achieve water quality standards. They should be timed to insure that the highest priority waters are protected first. The EPA should participate in the development of these plans, should provide guidance and criteria, and should have the power to approve or disapprove plans, as it does in the bays and estuaries program.

With regard to economic ability, I would like to highlight the following language from S. 1081.

The availability of grant assistance pursuant to this subsection shall in no way affect the obligations of a State, municipality, or other responsible entities to comply with the requirements of this Act.

The implication of other sections of the bill is that inability to pay is not a defense for a municipal government. Perhaps the bill should specify how I as Mayor should begin slicing away at other programs. Should I cut the fire department before I cut the police or vice versa? I already have been forced to close one fire station. Should I close them all in order to raise money for CSO remediation?

Clearly, cities should be required to meet certain basic management practices. The elimination of dry weather overf lows should probably be the responsibility of all cities, although I know from experience that this can be costly. And perhaps states with CSO problems should be required to put more money into the revolving loan fund, as Massachusetts is doing. Street sweeping, storm water management, and industrial pretreatment are other reasonable requirements. And where the regional watershed plan or the state government has identified capital projects necessary to protect water quality in priority waters, the cities should be required to invest in them up to the reasonable limits of their credit and up the reasonable burden on their rate payers. A rate test of 2 percent of median per family income may be one way to measure the reasonableness of the burden.

The time has come to develop a serious strategy for financing the national needs for CSO correction. This strategy will necessarily involve a large Federal contribution, much larger than that contemplated by S. 1081. It will also involve more sacrifice from state and local government. Another element is improvement in technology. The methods we have for remediating CSOs are too few and too cumbersome. Watershed, ecosystem type planning is another key to really cleaning up CSOs. We cannot afford Federal programs that takes no account of local conditionS. The Bays and Estuaries Program, the Chesapeake program, and Great Lakes program are all examples of the future of water quality management. We need to encourage this type of planning and recognize that planning is a prerequisite to financing.

Perhaps the most important element of a national CSO strategy is to convince the American people of the benefits of CSO remediation, and to convince them that our programs are designed to win those benefits at the lowest possible cost. You can advance that objective today, by agreeing to invest in New Bedford's Clarks Cove and Outer Harbor CSO elimination plan, and to invest in other clean water plans in other regions of the country. I know that when we have accomplished our goals of opening the fishing grounds and expanding water recreation, every city in New England with a CSO problem will take note. We want to be the leaders in our region. There are other cities willing to take the lead in their regions. I urge you to find them and support them.

PREPARED Statement of AlbBERT F. APPLETON

Mr. Chairman and members of the subcommittee, I am Albert Appleton, Commissioner of the New York City Department of Environmental Protection. I appear before you representing the Association of Metropolitan Sewerage Agencies (AMSA) and the City of New York. AMSA's members represent over 115 of the nation's largest wastewater treatment agencies. AMSA's members serve well over 90 million of the 176 million total sewered population in the United States, and collectively treat

over 13 billion gallons of wastewater each day. New York City accounts for 1.7 billion gallons of that total, with 14 wastewater treatment plants and over 6,000 miles of sewers, 80 percent of which are combined sewers. My department is not only responsible for wastewater treatment, but also for ensuring the quality of the unfiltered drinking water which flows to the city from our upstate watershed. In addition, we are responsible for air pollution, hazardous waste, energy conservation, asbestos clean-up, noise control, natural resources protection, and environmental planning in New York City. We are the multi-media environmental agency of the future.

Compelling national interests, not only environmental and public health, but economic, social and political, make necessary an aggressive and comprehensive effort to preserve existing water resources from degradation and to restore polluted waterbodies and systems as rapidly as possible. This massive task means that we must intelligently and successfully target our clean water resources to give priority to the most serious problems and identify where we get the most environmental benefit for the least cost. Consequently, we must use this reauthorization to establish processes that will give the country an integrated and comprehensive strategy that establishes new priorities for achieving water quality goals. A new Clean Water Act must target point and nonpoint sources. It must encourage innovative multi-media strate gies as an indispensable component of clean water planning. Finally, it must consider not only our hopes and dreams for the future, but also the realities of funding needs and availability, and the constraints that will impose on the pace we can maintain.

Today I will provide our perspective concerning both the reauthorization of the Clean Water Act and the recently introduced S. 1081, the Water Pollution Prevention and Control Act of 1991. We appreciate the opportunity to share with you our thoughts and recommendations as environmental practitioners dedicated to improving the purity of the nation's waters.

We believe the Clean Water Act's historic focus on technology-based standards, end-of-pipe treatment, aggressive compliance schedules and significant Federal funding, has achieved enormous reductions in the pollutants discharged to our nation's waters. We commend you and your colleagues for your long-standing support of the nation's clean water program. Federal clean water expenditures have topped $50 billion in the nearly 20 years since the Clean Water Act was enacted. The Clean Water Act construction grants program is a great governmental success story. But the clean water problems of the nineties are a different challenge, and we will not obtain tomorrow's successes using yesterday's tools. We must expect to find clean water solutions to be less straightforward, more difficult to achieve and with new players at the table. Moreover, you cannot fight a war without an army, and the Federal funding needed to deploy our future clean water efforts and forces is not yet in place.

AMSA will continue its key role in this process by working with you, by providing you with recommendations as the Clean Water Act reauthorization unfolds, and then by implementing the programs that the Act ultimately mandates.

AMŠA commends you, Chairman Baucus, and the subcommittee, for developing a wide ranging bill addressing a long list of critically important water quality issues. It is obvious that much thought, time and attention have been dedicated to the drafting of this bill. We hope to contribute to this process, not only in this testimony today, but also by providing more detailed comments addressing both the structure and the specific provisions of the bill. We would like to submit these comments in early July, and we hope that the record of this hearing can be left open so as to allow their inclusion in the hearing record at that time.

Like many newly introduced pieces of legislation, S.1081 contains numerous provisions, some which we can support, and some about which we have significant concerns. As partners in the improvement and preservation of our nation's waters, we believe we have an obligation to point out our concerns and offer to work diligently with you.

COMPREHENSIVE WATERSHED MANAGEMENT

The key element of AMSA and New York City's Clean Water Act proposals is locally developed comprehensive watershed management strategies. These strategies would address water quality priorities and create schedules for implementation of both point and nonpoint requirements on a watershed-specific basis.

We believe that our focus must shift toward a more holistic approach to clean water goals. Addressing the control of more complex and diverse sources of pollution in coastal and inland waters will require creativity and flexibility. Attainment of water quality goals will depend on a variety of individual decisions by local, State

and Federal agencies. Rising capital costs make it imperative that cost-effective alternatives for pollution control and prevention be fully analyzed and that comprehensive management strategies be established for prioritizing water quality decisions on a watershed-specific basis.

To support this approach, AMSA has developed recommendations that would establish the statutory basis for Comprehensive Watershed Management Strategies (CWMS) that would guide local, State and Federal water quality decisions. An outline of AMSA's proposal is attached to my testimony.

Comprehensive watershed management planning must emphasize establishing priorities, maintaining flexibility and empowering local and regional government to solve their unique problems. We are encouraged that aspects of S. 1081, such as the provisions in Section 16, the National River Assessment and Protection Program, point in the direction of a comprehensive approach.

We also support the concepts of pollution prevention and waste minimization woven throughout this proposed legislation. AMSA believes strongly that these significant issues are deserving of considerable national attention, and our upcoming Summer Technical Conference will have pollution prevention as its focus.

WATER QUALITY CONTROLS

We have continuing concerns regarding staff and funding constraints that the U.S. Environmental Protection Agency (EPA) faces in effectively promulgating water quality criteria. Similarly, many States find themselves unable to develop water quality standards. Your bill, S. 1081, addresses many of our concerns in Sections 3, 4, and 5 addressing Water Quality Research and Technology Demonstration Programs and State Grant Assistance.

The 1987 revisions to the Clean Water Act signified an important beginning in changing our clean water approach from technology- to water quality-based controls. States were mandated to adopt water quality standards for receiving waters to insure that toxic pollutants would no longer be a problem. This change in approach mandated significant changes in the way the EPA has regulated pollution control. Many of the water quality problems that remain are uniquely region-specific. The resolution of these problems requires a change in the Federal Government's regulatory strategy, from one of "command and control" to one of a local/State/Federal partnership that provides the States and localities with an incentive to implement innovative solutions to water quality problems. The reauthorization of the Clean Water Act must complete the transition to a results-oriented, flexible approach that preserves the primary role of the States.

This is especially applicable to the standard setting process. To date, more than four years after the revisions to the Act, far fewer that half the States have EPAapproved water quality standards. This is in part attributable to the difficulties encountered by States in adapting and implementing Federal standards for toxic pollutants in an effective and relevant manner.

The use of biological assessment methods, which measure effluent toxicity by testing impacts on organisms naturally occurring in the ecosystem, is a key element of the regulatory program for the measurement and control of toxic pollutants. The EPA is now aggressively promoting the implementation of numeric permit limits on whole effluent toxicity and has identified four additional priority areas for future assessment criteria planning: the development of sediment criteria; bioassessment criteria; water quality criteria for the protection of wildlife; and effluent criteria for bioconcentratable pollutants.

Taking these more sensitive and advanced biological and chemical assessment techniques out of laboratories and academic institutions and using them for regulation is a necessary step in the water pollution control program, but the transition process will be lengthy, as much needs to the learned. Implementation of absolute numerical limits in point source discharge permits cannot be rushed without good science and sound understanding of what assessment testing means. Rather than selectively applying these tools where there is demonstrable use impairment or adverse water quality impact, EPA is instead encouraging their application to all major dischargers and all types of receiving waters. The States have recognized that the science is in its infancy. Pressures to accelerate from EPA and from proposed legislation such as S. 1081 takes us significantly beyond what we know. Furthermore, the EPA's policy of applying each control measure independent of others means that the new types of biological and chemical criteria will be added as five additional, separate, regulatory layers. This policy often results in effluent limits that are developed with no prior knowledge about the characteristics of the effluent or the site, with no consideration given to the use and value of the waterbody, and no evidence of use impairment.

Congress should direct the EPA to adopt a "weight of evidence" approach to pollution control, in which different types of information from biological and chemical measurements are compared and evaluated to determine whether there is enough combined evidence to support a specific conclusion about pollution impacts and appropriate control techniques. As mentioned, aquatic toxicity testing is now being actively utilized in the regulatory program for point source discharges. We support the use of such tests only as part of a weight of evidence approach.

We would like to stress that there is even a longer way to go before we know how to apply these concepts to intermittent discharges, i.e., storm sewers, combined sewer overflows (CSO's) and other nonpoint sources, for example, sediment_resuspension, and wet and dry atmospheric deposition. EPA must be directed to do the research necessary to incorporate use attainability analysis and site-specific water quality standards in comprehensive management plans. Continuing to focus on more and more stringent controls for point sources is not only unfair, but will prove to be inordinately expensive. We have to target new clean water expenditures on water quality improvements, not just permit standards that have no integral relationship to water quality improvements.

FUNDING

Even with a comprehensive approach to water pollution control, continued Federal funding supporting programs mandated by the Act is critical to the ultimate achievement of national clean water quality goals. I mentioned earlier that Federal funding for clean water so far totals $50 billion. But estimates of funding needs just to implement the remaining existing Clean Water Act requirements total over $85 billion above and beyond the $90 billion that State and local government plan to invest in clean water within this decade. We need help. Local and State government simply cannot afford to go it alone. The Federal Government has an obligation to adequately fund national water policy and it will not be a Clean Water Act without clean water funding.

We are encouraged to note some recognition of this need in S. 1081. We believe that the bill moves in the right direction in terms of fulfilling the Federal commitment made to the State Revolving Loan Fund (SRF) program. But this is not enough. We appreciate the intent expressed in S. 1081 to meet the Federal commitment in dollars, but we are cognizant as well of the goal of the SRF program-that the fund be perpetually self-sustaining. Federal funds must be made available until there is certainty that this goal will be achieved.

To this end, AMSA and New York City believe that continued capitalization of the State Revolving Loan Fund program through FY 1994 and beyond is essential Capitalization of the SRF program, at a minimum level of $2 billion per year, is necessary to address continuing Clean Water Act requirements.

In order to improve the SRF program, we recommend that Congress streamline program administration by eliminating "construction grants" type reviews. In effect, the SRF program should be structured as a loan program, consistent with Clean Water Clean Act goals, with a simplified approval process based on project eligibility and capability to repay the loan. We also recommend that Congress require a "hard, real dollar" State match at a minimum of 20 percent and encourage the leveraging of State loan monies to maximize the capacity of the program. Finally, given emerging needs such as combined sewer overflows, stormwater management, and nonpoint source controls, we strongly suggest that Congress expand the SRF program's eligibility criteria to include support for these critical projects.

Over the coming weeks, AMSA will conduct a survey of it members to identify the funds necessary to complete the job outlined in the current Clean Water Act. We hope to do this as expeditiously as possibly, and we will provide the survey's results to this Subcommittee to assist in your deliberations.

As we focus our sights on our remaining water pollution problems, consumers must not be forced to bear this burden alone. The Federal Government must share the financial burden of clean water. AMSA recently published it "1990 Wastewater Treatment Agency Financial Survey". This survey documents substantial increases in major metropolitan area sewer rates during the period from 1987 to 1989. In New York City, we just raised our water and sewer rates over 18 percent, largely to pay for current clean water obligations.

Rate payers are clearly going to pay their share of the financial burden of water quality. But their ability to absorb the cost, particularly in metropolitan areas which include large numbers of low income, and frequently poverty level, residents, is not unlimited. The Federal Government has to help.

We encourage the identification and development of financing systems to support States and the U.S. Environmental Protection Agency in the development of water

quality standards, permit issuance and the establishment of scientifically based national water quality criteria. We believe that the availability of tax-exempt financing for investment in public purpose environmental facilities must be maximized by removing current restrictions and lowering borrowing costs. We encourage the evaluation of creative financing mechanisms to assist communities in their efforts to meet federally mandated requirements.

With respect to S. 1081's permit fee provisions, in principle we support the enactment of wastewater permit fees where they are used to fund the management of point source programs. We believe that both good policy and equity requires that a system targeting nonpoint contributors be developed to supply revenue for nonpoint programs as well. It is our observation that State progress has been slow in performing the necessary scientific and water quality work to support the standards setting and permit writing required by the Act. This is due in large measure to insufficient funding at the Federal and State levels of government. States with delegated NPDES authority are particularly hard-pressed to meet the new permitting demands imposed by combined sewer overflow and stormwater permits. Its the old story of getting what you pay for. Without support, the system is bogging down.

COMBINED SEWER OVERFLOWS

Members of this Subcommittee heard form many AMSA members last year with regard to the combined sewer overflow (CSO) provisions contained in the proposed Marine and Great Lakes Protection Act of 1990 (S. 1178). The approach taken in S. 1178 would have imposed billions of dollars in facility costs with no corresponding gain in water quality, and would have jeopardized the ongoing efforts of many municipalities who have already initiated programs to responsibly and effectively address CSO problems. It was a poorly thought out proposal that resorted to a simplistic application of the secondary treatment strategy of the 1970's and 80's, to a very different problem.

To our great disappointment and concern, the provision contained in S. 1081 is basically unchanged from those in S. 1178. Senator Chafee superbly summed up what is wrong with this approach in comments he made upon the introduction of S. 1081 on May 15, 1991. To quote the Senator, "To require the blanket elimination of all CSO's in the event of a 1-year, 6-hour storm, does not take into account the legitimate constraints on local resources or the great variability associated with each combined sewer system. Depending on the constituents in the overflow, the quality and use of receiving waters and the particular geology, climate and hydrology of the CSO area, total elimination may be unnecessary and certainly will be costly.'

CSO's are often a significant environmental problem. But CSO's are only one water quality problem among many. CSO strategies need to be designed as part of a broader, comprehensive analysis addressing an array of costly, complex and diverse sources of pollution, or they will become the tail that wags the dog. The fact that the CSO program proposed in S. 1081 would cost us far more than secondary treatment has should tell us something important.

CSO's are an issue that many AMSA members, as environmental practitioners, have addressed. In New York City, $1.2 billion to implement CSO abatement is now in the City's ten-year capital budget and our first two major CSO projects are about to go through land use review. AMSA's collective experience with CSOs has taught us many things, not the least is that CSO facilities are not treatment works and their specific design cannot be successfully dictated by the imposition of a uniform technology-based standard. The use of the six-hour storm event S. 1081 proposed is arbitrary and without any water quality justification. An approach that assesses the impact of combined discharges on water quality and identifies for each individual area what measures are needed is the only defensible program.

The New York City experience illustrates this perfectly. Our water quality studies indicate that in our individual tributaries with little tidal influence, we will need CSO controls and can get major water quality improvements by building them. But, with the successful introduction of secondary treatment, in waters like the Hudson, CSOs are such a minimal component in the broad context of the water's dynamics and biological action. On the Hudson, CSO capture would have, quite literally, no water quality effect. And just as New York has unique conditions even within its own harbor, so do the many cities and estuaries this bill would cover each have its own unique CSO story and response.

We have determined that the costs of the S. 1081's CSO provisions for New York City alone to be in excess of 16 billion dollars. Contrary to reports during last year's consideration of S. 1178, this does not represent a sewer separation cost. It is a conservative estimate of New York City's costs to build storage and treatment facilities to comply with the storm event requirement included in the CSO section of this bill.