James R. Ellis

Clean water has become everybody's thing. A mass movement has developed which demands results. The task of leadership is to channel this great popular push into effective action pro

grams.

The nation has come a long way since passage of the Federal Water Pollution Control Acts of 1956 and 1966. These pioneering federal acts recognized an imperative national commitment. But the nation must do much more in dollars and effort and must do it better-with new legislative and regulatory approaches-if the goal of elean water is to be achieved.

Credible Commitment

At a bare minimum the credibility of the existing federal commitment must be re-established by backing words of authorization with monies of appropriation. Whenever the nation seeks to encourage cities to plan and ecnstruct improvements which require many years to complete, the Congress must build reliability into its federal grant incentives. Major facilities cannot be stopped in midstream. change in federal grant policy to establish a reliable commitment is vital bat is not the only change that can and should be made in the federal legislative and regulatory approach to water pollution abatement.

A

James R. Ellis is General Counsel, Municipality of Metropolitan Seattle, Wash.

The paper was presented at the 1970 Legislatere Seminar of the Water Pollution Conrol Federation in Washington, D. C., February 24, 1970.

Shameful Large City Neglect

The massive pollution problems of the large metropolitan areas have been shabbily neglected. The 1956 federal act was aimed primarily at the construction of waste treatment facilities for small communities. Federal grants could not exceed $250,000 for any one project. This could easily amount to 30 percent of the cost of a small city treatment plant, but only amount to 1 percent of the cost of a large city's $25 mil counterpart. Dollar ceilings on grants were removed in 1966 but a decade of federal discrimination against the heavily populated metropolitan areas has left serious gaps in their capacity to clean up some of the nation's dirtiest waters. A comparison of small cities and large metropolitan areas as to sewerage needs, financial capability, and federal assistance reveals the serious disparities that have developed and the necessity for corrective action.

Municipal sewerage needs for a community of any size are a function of three primary elements: catch-up needs caused by a backlog of prior neglect, growth needs caused by new population and industries, and needs arising from higher water quality standards.

Metropolitan Catch-Up Needs

Since 1956 federal grants have helped many small cities catch up with their backlog needs, but the more massive needs of the large cities have been From left largely to local resources. 1956 to 1969, municipalities of over

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Percent of

Grants (cumulative)

250,000 population which contain more than 35 percent of the sewered population of the U. S. received less than 8 percent of all federal grant dollars for wastewater treatment. During the same period, cities under 50,000 in population with less than 35 percent of the sewered population of the U. S. received more than 70 percent of all federal wastewater treatment dollars (Table I) (1).

An important element of the catchup needs of large cities is the presence of combined storm and sanitary systems requiring extensive improvements in separation and storage to prevent overflows of raw wastewater during wet weather. These needed improvements have not been eligible for construction grants under the Federal Water Pollution Control Acts, except as demonstrations.

grant dollars derived from the total tax base of the U. S. to meet the backlog of waste treatment needs for people who live in small cities and has spent relatively little to meet the backlog of pollution abatement needs for people who live in large metropolitan areas, particularly the central cities.

Metropolitan Growth Needs

On

Cities under 50,000 population located outside of metropolitan areas have grown substantially less than the national average in the last decade. On balance they have maintained essentially a static population level. the other hand, metropolitan areas of 500,000 or more have grown faster than any other segment of the nation. This simply means that total sewerage facility needs for large metropolitan systems are far greater due to the requirement to serve new population and industrial growth.

Metropolitan Financial Capability

What about the relative financial ca pability of small and large cities? The same disparities exist. Big cities have more and bigger problems and they are more costly. Per capita expendi ture for general municipal services in Ohio cities of more than a quarter o a million population is 60 percen

greater than similar per capita expenditure for Ohio cities under 50,000 population (2). On the other hand, the median per capita income in the large urbanized areas of the nation is, on the average, only 20 percent greater than in nonmetropolitan small cities. 2). The large central cities also have a larger proportion of the high-cost eitizens. Baltimore, with 27 percent of Maryland's population, has 72 percent of the aid for dependent children expenditures of the state. Boston, with 14 percent of the Massachusetts population, has 40 percent of the total aid for dependent children expenditures (2).

Cost of Metropolitan Pollution
Abatement

Large city water pollution problems are as great as, and in some cases far greater than, those of the small cities. The construction problems in high density areas are massive and costly and desirable water quality seems almost to defy attainment. A sample of 26 large metropolitan complexes in the United States showed a need for more than $10 bil in the next 10 yr for wastewater treatment facilities alone.

In short, it is time for the Congress to turn its sights toward correction of the long neglect of the large cities. The people who happen to live in these large complexes are not really any different from any other people in their desire for clean water. Is there a rational basis for continued second-class eitizenship in the area of federal wastewater treatment grants?

Incentive Grants

To correct the damage caused by grant discrimination, the Congress should establish a new system of incentive grants. It is not enough to Lave removed the old dollar grant ceilings or to delete the appropriation favoritism of the Act. It would not ven be enough to require that grants pass through states to cities on the

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basis of population. Such changes, although desirable, have not and will not redress the backlog of imbalance. We must compensate for the fact that past federal grant constraints have caused many large cities to consume their local financial capacity to provide solutions to pollution abatement problems. By new, additional compensating grants we can restore a strong capacity to perform.

Specifically, a special 20 percent incentive grant should be authorized for new construction of pollution abatement facilities by any municipality which has built sewerage projects since 1956 that qualified for federal assistance at the time they were built but did not, in fact, receive the minimum 30 percent federal grant then authorized. The total of these incentive grants for new construction would be limited to the total amount of federal grants for which such municipalities were shortchanged over the period since 1956. This suggestion will permit the same per capita local resource commitment to produce the same pollution abatement capability for people who happen to live in the large metropolitan areas as for people who happen to have lived in small cities.

Combined Sewer Eligibility

Most of the large cities are older cities with serious problems of pollution caused by overflows of combined sanitary and storm sewers. These problems usually are not solved by building wastewater treatment facilities. To stop these raw wastewater overflows requires either separation of combined flows to make it feasible to transport all of the sanitary wastewater flow to treatment plants, or requires storage of heavy combined sewer flows during rainstorms to spread out the peak volumes which are delivered to treatment plants. At the present time, such works are not eligible for federal grants. The Federal Water Pollution Control Act should be amended

to include "combined sewer overflow abatement" facilities within the definition of "waste treatment" facilities for federal grant eligibility. This suggestion has been made before, but it is now clear that the large cities cannot deal effectively with the problem of raw wastewater overflows unless facilities for their abatement are eligible for federal grants.

Reliable Commitment

Many critics of the existing program have hit the fact that its words of authorization have not been matched by appropriations. Simply stated, the amount of the federal commitment to clean water must be sufficient in scale and reliability to permit local agencies to plan and build long-term projects. This basic point applies, of course, to all kinds of cities, both large and small. It is especially important for metropolitan areas, because area-wide or basin-wide sewerage facilities take years to complete and require large sums of money. President Nixon's proposal for long-term contract authority addresses this problem head on for the first time. This proposal will constitute a major advance unless its impact is diluted by unrealistic limitations on the cash required to liquidate contracts. A cash limitation to $50 mil in Fiscal Year 1971 would be a very poor trade for a $1.25 bil appropriation under existing authorization. It would, however, be a welcome supplement to such an appropriation. In view of the accumulated requirement for cash to reimburse state and local prefinancing, the clean water program cannot now afford a 1-yr moratorium on federal cash.

Municipal Bond Problem

A very significant element of the pollution abatement equation which has not received constructive federal attention is the cost of the municipal financing needed to pay the local share of pollution abatement facilities. The

May 1970

cities need help to market local bonds for a large backlog of capital improvements. High interest rates have inhibited seriously the development of local projects. In fact, as far as the local taxpayer or rate payer is concerned, the increase in interest costs in the last 3 yr has wiped out substantially the net value of 30 percent federal water pollution control grants. A good quality 40-yr municipal revenue bond sold in 1965 at approximately a 4 percent interest rate; the same bond in late 1969 sold at approximately 7 percent. This fact could increase the actual charge to the av erage person paying taxes or waste water service charges by 40 percent Such an increase would more than off set a 30 percent federal grant contri bution to the program. The abortive attempt by the U. S. Treasury Depart ment and the Congress to tamper with the tax exemption of state and loca bonds was a costly blunder which ha hurt the demand for municipal bonds City residents are going to pay fo this blunder for many years in highe local taxes and utility charges-ironi cally a highly regressive side effect o this misconceived "tax reform."

The federal government could bo ster the demand side of the municipa bond market by buying municipa bonds at reasonable interest rates.

is not clear whether President Nixon Environmental Financing Authorit may make a significant impact on th supply-demand equation in the munic pal bond market or simply assist th very few localities which are unabl for reasons of poor credit, to finan their local share of pollution abat ment facilities at any cost.

Regulatory Standards

Clean water, of course, is a bas goal of both legislative and regulato policy. Regulatory standards whi allow serious pollution to go uncheck while forcing limited resources in costly but marginal improvements