As the leader of one of the largest public water utilities in the country and a member of the Association of Metropolitan Water Agencies Board of Directors, Philadelphia Water Department Commissioner Randy E. Hayman, Esq. testified before the United State Senate’s Environment & Public Works Committee about implementing the Bipartisan Infrastructure Law on March 15th.
Watch Commissioner Hayman’s Statement to Senate Environment and Public Works Committee (or the full committee hearing)
Chairman Carper, Ranking Member Capito, and members of the Committee: Thank you for the opportunity to testify on the critical new resources and assistance being delivered by the Infrastructure Investment and Jobs Act and the Drinking Water and Wastewater Infrastructure Act — commonly known as the Bipartisan Infrastructure Law, or the BIL.
As the Commissioner and CEO of the Philadelphia Water Department, and as a member of the Board of Directors of the Association of Metropolitan Water Agencies, I know that the nation was long overdue for a landmark investment in water infrastructure.
So I want to begin my testimony by commending this Committee for its leadership in developing the drinking water and wastewater components of the BIL, and the cooperative, open-door engagement with AMWA and other water sector stakeholders that was a hallmark of this process. This bill was the model of how both parties and sector stakeholders can work together to find common ground, and this is why the initial DWWIA legislation passed the Senate by a vote of 89 to 2 before being incorporated into the larger BIL.
But that is all about how we got here.
Today I want to focus my comments on the on-the-ground benefits that resources provided by the infrastructure law are providing to my community. For background, in 2019 Philadelphia completed its Water Revitalization Plan, a 25-year, multi-billion-dollar strategic vision for upgrading our city’s core drinking water infrastructure. The plan includes an estimated 400 necessary projects including rebuilding water treatment plants and replacing pumping stations and transmission mains, while leveraging low-cost financing opportunities to keep rates affordable for our customers.
And to be honest, the financing component represents one of the hardest aspects of our plan. We know what kind of work we need to do to strengthen the city’s water infrastructure. What is not as apparent is how the city can pay for it without raising our water and sewer rates to unsustainable levels.
Fortunately, passage of DWWIA and the larger BIL came at an opportune time as our city was working to implement this plan. And last month, President Biden announced that Philadelphia will receive $500 million in financing through several different programs authorized and funded by this law. This includes $160 million through Pennsylvania’s share of Bipartisan Infrastructure Law funds to upgrade treatment facilities and replace more than 19 miles of water mains and any lead service lines discovered during the work.
Additionally, in January Philadelphia closed on a $19.8 million-dollar loan from the EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) program. This will support the replacement of 15 miles of water mains and approximately 160 lead service lines throughout the city, at lower financing costs than we otherwise would have faced.
This loan represents just the first stage of $340 million worth of WIFIA assistance promised to Philadelphia by EPA. These future investments will be paid for by subsequent rounds of WIFIA loans, so that is why it is so essential that Congress reauthorized WIFIA as part of DWWIA and set a course for the program’s stability in the years ahead.
And while WIFIA has been consistently funded by Congress, DWWIA established or extended multiple other water and wastewater infrastructure funding programs — many of which are still waiting for meaningful investments of appropriations by Congress, or implementation by EPA.
One such program is EPA’s Midsize and Large Drinking Water System Infrastructure Resilience and Sustainability Program that will help drinking water systems prepare to withstand the effects of natural disasters and cyber threats. AMWA championed creation of this program alongside Senator Ben Cardin, and we were pleased to see it receive an initial $5 million appropriation in the final fiscal year 2023 spending legislation.
However, the national need is much greater than $5 million, and water systems across the country are still waiting for EPA to stand up the program. AMWA urges the EPA to move with urgency to make this program operational, and to request full funding in future budget requests.
Finally, let me conclude with a few areas where I think the funding and programs provided by DWWIA and the BIL can be made even made even more effective.
First, we greatly appreciate that the law authorized a new low-income water and wastewater assistance pilot program at EPA. Water affordability is a national need, and it should be part of the federal safety net. AMWA urges EPA to quickly complete its required national water affordability needs assessment so the pilot program can be funded and put to work.
We would also appreciate more clarity and consistency in relation to which communities are eligible to receive additionally subsidized SRF funding provided by the BIL. EPA has specified that this is available to “disadvantaged communities,” but due to serval factors, PWD cannot access grants or principal forgiveness through the PENNVEST State Revolving Fund, most prominently due to the affordability methodology used.
This means that the loans currently being provided through the BIL funding will have to be repaid through higher water bills in Philadelphia and other communities facing similar hurdles. AMWA would be interested in working to establish clear and consistent baseline standards to ensure low-income populations can benefit from this aid – no matter what size community they are in.
And we also hope for help with navigating the law’s expansion of Buy America mandates that apply to any manufactured products that are used in water projects. As many of these components are not manufactured domestically, there should be a clear path for funding recipients to avoid project delays and ensure that the new mandates allow for the timely expenditure of critical water infrastructure dollars.
Again, thank you for the opportunity to testify before you today. AMWA was honored to work with the committee on development of the infrastructure legislation, and the Philadelphia Water Department is proud to be among its first recipients. I have submitted my full statement for the record, and I am happy to answer any questions you may have.