Consolidated Farmers Home Administration Act of 1961, I conducted a survey of the New Prospect Utility District, within which I live, and I believe the information developed by this survey will prove very interesting to the committee. The New Prospect District contains about 8 miles of pipeline of which 29,300 feet-or nearly 70 percent is 4-inch pipe. The small size and extreme length of this pipeline immediately restricts it from any further expansion, if it were ever deemed necessary or desirable by those in the fringe areas not presently being served. This waterline cost $118,500, of which $3,000 was paid by subscription fees, and $115,000 was borrowed from FHA. Senator AIKEN. If I might interrupt you there, this bill would not let them make guaranteed loans for systems where the size of the pipe is too small to block future development and increase in use. Mr. MILLER. This district has a total of 93 customers, and 115 watermeters, or taps. Several customers, as you can see, bought more than one tap. The average cost of this system on a per tap basis, then, is about $1,030. Our survey, however, indicated that the figure of $1,000 per tap is not a true reflection of the actual circumstances. In the first place, we found that out of the 115 taps on this system, 41-or 35 percentare dry taps. In other words, only 74 of the 115 taps are actually being used today to obtain water. The remainder represent investments by property owners for the purpose of increasing their land value. Even more significant, however, is the fact that of these 74 so-called wet taps, only 56 have been connected into the customers home for domestic use; 18 of the 74 taps-or 24 percent-are not being used to supply domestic water needs. Thus, if the average per tap cost of the system is figured on the basis of those taps which are actually being used for the purposes for which the system was designed, each tap cost an average of $2,116 or more than double the $1,030 average which is obtained from a view of all taps on the system. Mr. Chairman, I believe that the conclusion to be drawn from this survey is obvious: The investment of $118,500 in the New Prospect District was a misallocation of resources because no need existed for a central water supply in the locality now served by the district. This conclusion is further borne out by the fact that only 13 customers stated that the source of water they had used previously had been inadequate, and only 2 of these persons had drilled well systems, the remaining 11 having previously used hand-dug wells, cisterns, and the like. It appears clear that the primary motivation of persons who hooked on to the water district was to increase their property value. This, of course, explains the large number of dry taps. Moreover, as a part of the survey, these people were asked why they had signed up for the district. The three most common answers were as follows: (i) to increase the value of their property; (2) to insure against a possible failure of their private system at some future date; and (3) to help their neighbors get the waterline. This utility district was conceived, planned, and sold to the public by FHA and a few of the 13 people who did not have a satisfactory private system, and others who wished to subdivide a piece of prop erty, at the taxpayers' expense. Many of the customers signed up reluctantly, with serious doubt about the feasibility of the project and only after repeated calls from those doing the promoting. Pressure was exerted on some hesitant individuals by telling them that they would be held responsible for defeating the water district if they did not go along and sign up. Several were misled as to the exact charges and costs, are unhappy with the size of the monthly bills, and have stated that they plan to discontinue using the services when the time limit expires. I submit to you that this type of water utility district was not intended by Congress, and that it does not meet the basic objectives of section 306 of the act which is: To encourage and promote the development, conservation, and best use of water and land resources in rural areas. Moreover, the water supplied by the district is purchased from the city of Lawrenceburg public water system, which draws its water from Shoal Creek. The added burden of serving the New Prospect district and several other of the new districts-is liable to seriously overtax this water source. Assuming that all of the customers on these rural lines used the water district as their only source of water, then a tremendous amount of nature's own good water would be lying dormant underground, while a small stream running above ground, and subject to every source of contamination, would be overloaded. It is not inconceivable that in some extremely dry and droughtstricken year, this stream could become so low that only emergency water would be available. It should be noted here, too, that our underground water is the only source we have that is safe from radioactive fallout. The numerous private water systems throughout the country could easily supply the drinking water in this event, provided they are encouraged and kept intact. The areas in my county, and the surrounding counties with which I am familiar, that need help in securing a safe and adequate supply of water, are not the prosperous suburban areas which can well afford a private water system, or can be served by a municipal system whenever it is economically feasible and necessary. The areas that need help are the remote backwoods sections where the land is cheap and the incomes low. These people cannot be reached with a pipeline, even with a 40-percent grant from the Federal Government. Nor is it necessary even to consider this expensive and impractical method of water distribution, when we have only to take advantage of the water resources furnished by mother nature. Underneath the surface of the ground in these areas flows an abundance of pure, clear water is more than adequately recharged annually with over 50 inches of rainfall. These underground acquifers can transport and store more water-more efficiently-than any manmade pipeline. If it is the intent of this committee to pass some legislation that will help to provide a pure, safe, and adequate supply of water to all of our people, then certainly we should not overlook those who are past the practical limits of a utility district and who are sitting on top of the best pipeline and the best water supply in the country. If a Federal grant is practical in supplying water for the more prosperous and thickly populated areas, then it should be practical in supplying water for the more remote areas, which can be done with private water systems at less expense to the Government and at less expense to the individual, and at the same time give people considerably more water. Some standards should be established by this committee whereby it could be determined which type of water supply system is the most practical for any given area. Then the necessary aid could be channeled along those lines. Even we in the water-well industry will admit that some sections of our country are not blessed with an everpresent supply of ground water, but we do maintain that pipelines should not be constructed over an abundant supply of pure water lying unused underground. Senator AIKEN. Thank you, Mr. Miller. I think that concludes all the witnesses this afternoon. I will say though that since we have started this hearing I have been handed several more communications. I think four of them are from your community, Mr. Miller, in support of the bill S. 1766, one by William Gresham, president of the New Prospect Utility District. You referred to that. And from William Newton, county judge, Lawrence County; John Roberts-I do not know what his business is though you probably do-and Dr. Lumpkins, the mayor of the city of Lawrenceburg. (The telegrams are as follows:) Senator GEORGE AIKEN, LAWRENCEBURG, TENN., June 18, 1965. Senate Office Building, Washington, D.C.: WILLIAM E. GRESHAM, President, New Prospect Utility District, Lawrenceburg, Tenn. LAWRENCEBURG, TENN., June 18, 1965. Senator GEORGE AIKEN, Senate Office Building, Washington, D.C.: WILLIAM T. NEWTON, LAWRENCEBURG, TENN., June 18, 1965. Senator GEORGE AIKEN, Senate Office Building, Washington, D.C.: As an interested citizen of Lawrence County, Tenn., I would like to express my wholehearted support of Senate bill 1766. We can see the advantages of this bill here in Lawrence County. Your support will be greatly appreciated. JOHN ROBERTS. LAWRENCEBURG, TENN., June 18, 1965. Senator GEORGE AIKEN, Washington, D.C.: I would like to solicit your support of Senate bill 1766. We in Lawrenceburg have seen the benefits to our rural communities through the efforts of the Farmers Home Administration in rural water developments. Dr. M. L. LUMPKINS, Mayor, City of Lawrenceburg. Senator AIKEN. Also, I have just been handed a statement by Senator Ross Bass, of Tennessee, in support of S. 1766 and a letter to Senator Ellender from Senator Bass asking him to insert in the record a statement by the Tennessee Municipal League in which Senator Bass says he does not necessarily endorse all the views set out but he would like to have it made part of the record. And finally I have a statement giving very strong support to S. 1766 from a Senator that lives in the largest village in this country, Senator Javits, of New York, in which he states among other things that there are 800 rural communities in New York that are in need of this legislation. I would also like to include in the record the remarks of Senator Javits to the Senate, June 15, in which he invites attention to articles in the New York Herald Tribune and New York Times. (The documents referred to are as follows:) STATEMENT OF HON. Ross BASS, A U.S. SENATOR FROM THE STATE OF TENNESSEE Mr. Chairman, as a cosponsor of the bill and as a member of this committee, I would like to take this opportunity to give this statement in support of S. 1766. It is my belief that passage of this bill is essential to the survival of the rural areas of our country for it will help many farm and rural families obtain all the good water they need for the first time. The profound importance of this bill must be considered. There remain vast rural areas of our country where families continue to haul and pump contaminated water. Sporadic outbreaks of hepatitis and other water-borne diseases handicap otherwise dynamic rural areas and industrial sites remain unoccupied. The lack of good water may well account for much of the sickness, poverty, and bleakness that characterizes our rural areas. Mr. Chairman, in our country today there are some 30,000 rural communities with inadequate water systems. To carry the burden of the entire cost of water systems without loans and other assistance is often impossible for rural communities. The building of modern water systems, including the costs of locating and developing acceptable water supplies, and the inevitable problems arising from great distances between rural families, has proven to be tremendously expensive. S. 1766 is designed to alleviate these problems. It provides for a more adequately funded insured loan to partially satisfy this ever-increasing demand for good water. Such loan funds will provide capital to buy sites, drill wells, erect storage tanks, buy pumps, lay pipelines, and pay for legal and engineering services. More water systems will become available to homes, churches, small businesses, schools, and community buildings. S. 1766 increases the maximum size of loans to $4 million so that communities may jointly build larger, more efficient water systems. Many communities have been unable to design and install a satisfactory system because of the $1 million maximum loan limitation now in effect. S. 1766 will reach communities with a population up to 5,000. Heretofore, rural water loans could only be made in communities smaller than 2,500. The need to extend water loans to these larger rural communities has been shown in the past few years since many communities have had nowhere to turn for credit. By the provisions of S. 1766, the Secretary of Agriculture, through the Farmers Home Administration, will continue to administer these loans. The outstanding success of this agency, along with its willingness to accept new and added responsibilities, convinces the sponsors of S. 1766 that high standards will be maintained. The success of the FHA water program is shown on the record. This continued success is assured by the diligence and diversity of FHA supervisors connected with the some 1,600 FHA county offices throughout the country. I have no doubt that rural America will profit handsomely from the enactment of this bill. Mr. Chairman, my State of Tennessee provides a shining example of progress and prosperity which can be derived from these loans. In the past 3 years, Tennessee has received over $9 million in FHA loans to develop and distribute water. These loans bring water to communities formerly supplied by ponds, creeks, cisterns, and contaminated shallow wells. With the new, sanitary water systems has come economic growth, new homes, new businesses, and renewed confidence. Recently, Lawrence County, Tenn., held a water festival to dedicate nine community water systems in one area. These are all financed by FHA and will serve 9,000 rural Lawrence County people with central water systems approved by the State health department, which constitutes more than 80 percent of all the county population. Also recently, we received a $900,000 water development loan in Rutherford County, which will serve the largest number of families financed to date by FHA. When in operation, this area will provide piped-in water for 900 farm and rural families, 54 businesses, 11 churches, 3 schools, and an orphanage. Water development in Tennessee has long been the hallmark of progress. With the passage of S. 1766, water development will continue and so will our march toward the Great Society. We have seen in 3 short years the value of new water systems and the economic enrichment each system brings. Mr. Chairman, S. 1766 is a vital bill. Its passage spells new opportunity and hope for rural Americans. If offers rural America a new dimension for expansion. I join with my colleagues in asking your approval and endorsement of this bill. STATEMENT FILED BY HERBERT J. BINGHAM, EXECUTIVE SECRETARY, TENNESSEE MUNICIPAL LEAGUE, NASHVILLE, TENN. The Tennessee Municipal League, a voluntary cooperative association representing the municipal governments which serve some 99 percent of the incorporated population of Tennessee, considers orderly urban growth and provision of adequate urban services as the principal governmental problem in this Nation today. This concern about the actions we take now to prepare for the projected 100-percent increase in urban population by the end of this century is evident also in the policy positions of the National League of Cities and the National Association of Counties, which together speak for the preponderant majority of local general-purpose governments in America. As a member of the Joint Task Force on Substandard Urban Expansion of NLC and NACO, I respectfully ask that the attached report of this task force be included in the record at the end of my testimony. We respectfully commend to the attention and examination of this committee policy statements adopted unanimously by the delegates to the 25th Anniversary Conference of the Tennessee Municipal League held at Nashville, June 6-8, 1965. Part I of this policy addresses itself to the objective of defining substandard urban growth, and recommending ways to lessen and finally to halt it. It identifies federally supported water utility systems in suburban and presently rural areas as a major cause of substandard urbanization, and specifically recommends, as does the joint task force report referred to previously, that Federal contracts with local agencies constructing water utilities intended and designed to serve rural areas prohibit the servicing of new urban development "where utility systems and public facilities and services are rural in character unless those utilities, services, and facilities are upgraded to urban standards.” I respectfully ask permission to have the attached "Part I: Tennessee Municipal Policy on Preventing Substandard Urban Growth" included in the record of this hearing at the end of my testimony. "Part II: Tennessee Municipal Policy-Federal program," includes a general statement of philosophy on Federal-municipal relationships, and some specific recommendations for action by the Congress. As this committee deliberates on S. 1766, we invite your thoughtful consideration of: 1. The statement in this policy under the heading "Duplicating Programs Opposed," which declares: "We oppose that portion of S. 1766 which would give the U.S. Department of Agriculture jurisdiction to aid in financing water systems in incorporated municipalities up to 5,000 population. This would constitute an unnecessary. wasteful, and confusing duplication of the completely adequate programs for municipal water systems now administered by the Housing and Home Finance Agency, or proposed in the 1965 housing bill, including interest-free loans for employment of engineers to design water utilities and other public facilities: |