MEMPHIS, TENNESSEE AN EXAMPLE OF FEDERAL GRANT DISCRIMINATION AGAINST A LARGE CITY INVESTMENT IN PL 660 TYPE PROJECTS DURING THE 1956-1966 PERIOD-BEALE STREET, LOOSAHATCHIE, AND WOLF RIVER INTERCEPTORS $0.00 MILLION FEDERAL GRANTS RECEIVED -$2.04 MILLION POSSIBLE $6.8 MILLION INVESTED $2.04 MILLION BELOW 30% LEVEL HOW $2.04 MILLION WOULD BE RECOVERED VIA A 20% MAXIMUM INCENTIVE GRANT ON NEW PROJECTS SEATTLE, WASHINGTON AN EXAMPLE OF FEDERAL GRANT DISCRIMINATION AGAINST A LARGE CITY SEATTLE METROPOLITAN AREA FIRST AND SECOND STAGE CONSTRUCTION $9.9 MILLION FEDERAL GRANTS RECEIVED $ 44.4 MILLION POSSIBLE FEDERAL GRANTS AT 30% 34.5 MILLION BELOW 30% LEVEL $ 148 MILLION INVESTED HOW $34.5 MILLION WOULD BE RECOVERED VIA A 20% MAXIMUM INCENTIVE WATER UTILITIES THE CITY OF SAN DIEGO CITY ADMINISTRATION BUILDING 202 C STREET SAN DIEGO, CALIE 92101 March 10, 1971 Mr. Kerry W. Mulligan, Chairman State Water Resources Control Board Room 1140 1416 Ninth Street, Resources Bldg. Dear Kerry, Subject: Grants for Capital Buy-in Contracts This is a request for a new interpretation or perhaps new As you know, the San Diego Metropolitan Sewerage System was When a new agency is accepted as a participant in the Metro We now have cases coming up where an agency would have to spend Appendix B Fr. Korry W. Mulligan -2 March 10, 1971 The local agency is under a terrific political and economie aqueeze to choose between a possibly poor solution, 80% paid by grants, vs. a good solution for which grant assistence is not available. The effect on the total picture is, in our opinion, a destructive one. The grant program is hit for the same or perhaps more cost to build a new system from patch, whereas joining the regional system is a better program for society in general. Grants were made for the original Metro construction. E ch agency es granted a maximum of $250,887, for a total grane of $2,146, 3/0 (see attached Statements dated 3/1/65). This grant total alrency has been accounted for in a reduction of the "buy-in" e bacity charge, both for original participants and for Luyter ores. Therefore, any grants at this time would not be duplicating grants of several years ago. Your To would be greatly appreciated if your Board and Staff could review this problew and perhaps find a way to correct it. PRSictance vill be greatly appreciated. STATEMENT OF CHARLES V. GIBBS, PRESIDENT AND DIRECTOR, ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES, AND EXECUTIVE DIRECTOR, MUNICIPALITY OF METROPOLITAN SEATTLE Mr. GIBBS. Thank you, Mr. Chairman. Before I go into some other considerations that we feel are important to the Federal commitment for water pollution control, I would like to refer to exhibit 1 which we put up before you and which, incidentally, is a part of my testimony. We have developed a hypothetical case of two essentially equally sized cities, which in 1960 had the same water pollution control need, $395 million apiece. City "A" spent $170 million in the next 10 years largely through issuance of local bonds, $145 million, as shown in the example. City "B" did nothing. The local sewer service charge to customers in city "A" is currently $2.75 a month. The charge in city "B" is nothing. If city "A" and "B" were treated equally for the remaining work that they had to accomplish and each got a 50-percent Federal grant for all remaining work, you can see that total local bonds required for city "A" would be $257 million and for city "B" only $197 million. In effect, city "A" would have used another $60 million in its bonding capacity. This is $60 million not available for other needs in that community. Let's further assume that the cities grew to the same point in size. At some point in the future, say, in about 15 years when all required pollution control work is completed, the sewer service charge in city "A" would be $4.50 a month per customer and in city "B" $3 per month, a 50-percent differential or inequity. That may not sound like much money per customer, but if you expand that to the annual revenue requirements, you will find that city "A" must produce $13.400,000 more per year than city "B" to satisfy its pollution control needs. This is their reward for moving early to meet the national goal of clean waters. I think this is a graphical representation of the problem that Mr. Kaiser has just described and a problem that many of the large cities of the country find themselves in. Senator EAGLETON. I take it you describe these as being two hypothetical cities. There are cases in actuality? Mr. GIBBS. Yes; there are. The Senator may remember last year he presided at a hearing where we presented much of the material in my testimony and I will not repeat that. There are two or three other points we would like to amplify and a couple of others we would add to last year's testimony. On the incentives for river basin planning, we feel strongly this is an important consideration for Congress to support and, in fact, to support more strongly than it has been in the past. We think at this stage in the game when the Nation is far behind in meeting pollution control needs, that governmental policy at all levels should be geared to getting the most good for the money we are spending. Because we do not have absolutely unlimited funds, we feel the Federal Government must not enact legislation providing for national effluent standards. We feel to |