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THE COST OF
CLEAN WATER
ECONOMIC IMPACT ON AFFECTED UNITS OF GOVERNMENT
U. S. Department of the Interior
Federal Water Pollution Control Administration
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $2.50
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PREFACE
This study presents and evaluates the available data dealing
with the requirements of State and local governments to achieve
the desired Water Quality Standards for beneficial water uses.
The study relates the requirements for sewage treatment plant
construction in perspective to other competing projects con-
fronting the affected units of government; and it appraises
the major financial and legal problems which will be encountered
in implementing the Water Quality Standards.
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THE ECONOMIC IMPACT OF THE CAPITAL OUTLAYS REQUIRED
TO ATTAIN THE WASTEWATER QUALITY STANDARDS OF THE
FEDERAL WATER POLLUTION CONTROL ACT
Prepared for
United States Department of the Interior
Federal Water Pollution Control Administration
FWPCA Contract Number 14-12-142
October 19, 1967
Federal Water Pollution Control Administration
January 10, 1968
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CONTENTS
INTRODUCTION 0 . . . 1
Summary of Findings 9
I. REQUIRED CAPITAL OUTLAYS: REQUIREMENTS
FOR STATE AND LOCAL FINANCING ASSUMING
VARYING LEVELS OF FEDERAL AID 17
Requirements of the Program. 19
Requirements by State 24
Capital Requirements by Community Size 27
Construction Cost Increases 29
Effects of Delays on Costs 34
Prospective on Requirements 1 35
Federal and State Assistance: Components
and Amounts 37
II. THE ABILITY OF STATE AND LOCAL GOVERNMENTS
TO FINANCE REQUIRED CAPITAL OUTLAYS 46
Sources of Financing Capital Outlays 47
Supply of and Demand for Municipal
Obligations 55
Patterns of the Municipal Securities
Market 58
The Prospects for Required Capital Outlays
by State and Local Governments 69
III. LEGAL CONSTRAINTS UPON STATE AND
LOCAL GOVERNMENTS IN FINANCING
REQUIRED CAPITAL OUTLAYS 88
The States 89
Local Governments 94
-ix-
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CONTENTS (continued)
APPENDIX I - TECHNICAL NOTES 104
Statement of the Limitations of Data
Provided in the FWPCA Cost Estimate
Study 105
Methodology Employed in Projecting
Construction Cost Increases 108
Sources of Data and Assumptions in
the JEC Series B Forecasts... 109
Federal Grants for Sanitary Sewers ans
Waste Treatment Facilities Through
Agencies other Than Federal Water
Pollution Control Administration 112
APPENDIX II - GENERAL NOTES 115
The Omaha Pollution Control Corporation 116
Trends in Municipal Bond Holdings 120
Analysis of Public Borrowings 129
APPENDIX III - STATE BY STATE ANALYSIS OF
FOND ISSUES FOR SEWER AND WASTE
TREATMENT FACILITIES 148
APPENDIX IV - TABLES 202
-ill-
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INTRODUCTION
The need for an effective water pollution control
program daily becomes more urgent. Facilities are inadequate
for the collection and treatment of the sewage and waste
water of our present population and industry. The resulting
pollution of our rivers, streams, and lakes has reached in-
tolerable levels. This present urgency is compounded by the
growth of population which, according to median estimates
of the U. S. Bureau of the Census, will increase from 200
million in 1967 to 235 million in 1980, and to 308 million
by the year 2000. With this indicated growth of population
and the commensurate growth in industrial activity, America
faces a water pollution crisis unless accelerated action is
immediately undertaken.
The occasion for this report is the requirement of the
Federal Water Pollution Control Act, as amended, that the
Secretary of the Interior —
.. .make a comprehensive study of the economic impact
of affected units of government of the cost of in-
stallation of treatment facilities; and a comprehensive
analysis of the national requirements for and the
cost of treating municipal, industrial, and other
effluent to attain such water quality standards as
established pursuant to this Act or applicable State
law. The Secretary shall submit such detailed estimate
and such comprehensive study of such cost for the five-
year period beginning July 1, 1968. [Italics supplied]
1.
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2.
The attainment of clean water goals is not a technical
or physical resource problem—what needs to be done and how
to do it are well known. The basic problem is that of mobi-
lizing the financial resources required. This problem is
particularly acute at the State and local levels of govern-
ment where the financing responsibility primarily rests.
By agreement with the Federal Water Pollution Control
Administration (FWPCA), "economic impact"—the subject of
this study—means both the measurement of the dollar amounts
required by the State and local governments to finance their
share of the program for meeting water quality standards,
and an evaluation of their ability to provide such outlays.
The term economic impact does not include a judgment of the
benefits to society arising from the program or of the social
costs of failure to implement it. Those judgments were
presumably made by the Executive Branch when it recommended
to the Congress and to the Nation that a water pollution
control program be undertaken, and by the Congress when it
authorized the program.
The costs to State and local governments of meeting their
share of the program can readily be measured. FWPCA estimates
indicate that over $8 billion are needed between 1969 and 1973
for the construction of sewage treatment plants to meet water
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quality standards. An additional sum of nearly $7 billion
is needed for sanitary collection sewers. While these col-
lection sewer costs cannot be considered a part of the direct
costs of water pollution control, they do involve necessary
expenditures for waste disposal by the communities involved.
The cost of separating storm and sanitary sewers is not
covered in tvse figures, nor are debt service or operating
costs. The Federal Water Pollution Control Act authorizes
the Federal government to provide $3.5 billion of the total
capital cost of waste treatment facilities. Minor additional
sums are available for sewers and waste treatment facilities
under other legislation. With the exception of that portion
which may be privately undertaken, the balance must be .net
by State and local governments. If the Federal Government
provides the fully authorized amount of $3.5 billion, State
and local governments will have to fund $4.7 billion for the
rest of the waste treatment program. If the sanitary col-
lection sewer costs are included, the total cost will be
$11.4 billion, or more than twice the amount invested during
the period 1962-66. If the Federal government funds less
than $3.5 billion, the costs to other government entities will
rise commensurately.
The question inevitably occurs: To what extent will the
ability and willingness of the State and local governments to
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fund their share of the program be affected if the Federal
government does not finance the program as authorized in the
Act? Federal funds are intended to act as a magnet to draw
contributions from State and local governments. The Federal
government can provide up to 30 per cent of the costs of
urban waste treatment facilities without requiring contri-
butions from the State governments. However, the Federal
government can increase its contribution to a maximum of 55
per cent if State governments provide at least 25 per cent
of the costs and meet certain other conditions. Thus, with
a possible 80 per cent covered by the Federal and State
governments, local governments need provide only 20 per cent
of the financing. Conversely, if the Federal contribution
is not forthcoming, the State contribution may lag, and the
incentive to local governments may diminish.
It should not be concluded that a partial, or even total,
shortfall in the Federal contribution to this program neces-
sarily prevents its implementation. There is no fixed limit
on the capacity of State and local governments to raise or
borrow additional funds to meet compelling public purposes.
This capacity will vary sharply among the different States and
communities. Further, community priorities can shift—past
inattention to pollution may be replaced by priority claims
on public funds.
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There are, however, serious constraints on what these
communities can do. Some entities of government face serious
legal limits on their authority to borrow, either through
general purpose or through revenue bonds. In many areas,
national programs for assuring clean water require actions
that cross jurisdictional lines, and it is a complex matter—
for Ifigal and other reasons—to develop comprehensive programs
which embrace multiple units of government. This problem
arises particularly for residents and industries in the
areas peripheral to cities that are, however, not rural.
There is, moreover, no doubt that these communities can
come to rely on user charges both for capital costs and
current costs, particularly those levied on industries that
are major contributors to the pollution problems. The
fixing of equitable user charges is a difficult and contro-
versial matter. It may be particularly costly to build sewers
to carry wastes long distances, and population densities may
be so low as to make per capita costs prohibitively high. The
FWPCA estimates that the per capita cost of primary treatment
plants is five times as high for cities of 1,000 or less as
it is in cities of 100,000 or more. This cost differential
is attributable to differences in unit costs and size effects,
i.e., economies of scale.
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We cannox: overlook the fact that the sharp rise in
the demands of the water pollution control program comes
at an extraordinarily complex time in national life. Public
needs exceed any experiences before, and priorities are
shifting radically: Clean water must compete with housing,
poverty programs, urban renewal, public health, public trans-
portation, education, and the requirements of Vietnam. Still,
certain very costly programs that captured public priorities
in the 1960's—roads and education in particular—may be
making reduced demands on the public funds in the early
1970's. Some latitude should exist, therefore, to meet needs
neglected or deferred in the past.
All levels of government will face these unprecedented
fiscal needs while encountering record high interest costs.
Clearly, some programs which the public recognizes as essential
vill be left undone, postponed, or cut back. The Congress and
State and local governments are making serious efforts to
limit outlays. For fiscal year 1968, the Congress has ap-
propriated only $200 million for clean water measures, com-
pared with the $450 million authorized just two years ago.
Postponement will ultimately prove more costly because programs
curtailed today will still have to be implemented, but at
tomorrow's higher costs.
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These factors suggest the complexity of judging the
impact on State and local governments of assuring by 1973
the water quality standards called for by the Congress. It
can only be said that if the State and local governments
are prepared to grant the clean water program extremely
high priority and, if necessary, to deprive other essential
programs of funds, then water quality standards can be
achieved reasonably on schedule. There will be opposition.
Advocates of education, roads, health, and housing will not
lightly set aside their demands for those of clean water.
Moreover, legislatures move slowly in changing constitutions
and in passing laws such as those that would permit clean
water programs to find their own financing through such
devices as revenue bonds and creation of special water
pollution control districts.
It should be noted, however, that the increases in
costs needed to control water pollution are not unparalleled
for State and local governments. In roads and eduction,
outlays in excess of the amounts called for by water pollution
control measures in the forthcoming period have increased in
past years just as rapidly.
This report did not attempt to forecast the public mind
or action. It will identify problems, which vary from one
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State to another, offer perspectives on costs and on financing,
and point the way towards needed action.
Chapter I of this report presents and evaluates data on
needs by States and by communities of varying size. It indi-
cates past rates of expenditures and future requirements for
water pollution control, and the implications for the program
and for the communities of varying Federal contributions. In
Chapter II, past sources of financing and reliance on general
revenues, borrowing, and Federal grants to meet public needs
are described. The ability of the affected governments to
finance the required outlays in the future is evaluated.
Chapter II provides perspective on the extent to which
State and local borrowings and Federal grants are necessary
if capital needs for the 1970's are to be met. It also
provides a profile of past borrowings by State and local
governments and by other public authorities—special districts
for example—to meet water needs and general purposes. The
holders of bonds, the interest rates paid, the security
offered, the size of communities involved, and other relevant
factors are discussed. Judgments are offered as to the
capacity of communities to incur debts for water purposes
well beyond those previously experienced, in both absolute
and percentage terms.
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Finally, Chapter III describes the legal capacities of
and constraints on State and local governments to borrow for
general purposes, of which water pollution control measures
may be one; to borrow specifically to finance such measures;
and to create special legal entities with borrowing capacity
to meet water pollution control needs.
Summary of Findings
Before turning to the body of the report, it would be
useful to summarize the principal findings. The underlying
data and accompanying analyses are, of course, developed
in the following text.
1. To achieve Federal water pollution control standards,
State and local governments need to spend $8.2 billion for
municipal waste treatment facilities during the period 1969-
73. An additional $6.7 billion will have to be invested in
the construction of sanitary sewers during that period,
bringing the grand total required capital outlays to nearly
$15 billion—more than three times the amount spent in 1962-66.
2. Federal grants of $3.5 billion have been authorized
for construction of waste treatment facilities, but virtually
no grants are available for sewers. If the full $3.5 billion
were appropriated, State and local governments would have to
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draw on their own funds in 1969-73 for collector sewers and
waste treatment facilities at a rate more than 2-1/2 times
that in 1962-66. (About $11.0 billion after allowing for
privately financed construction, compared with $4.3 billion.)
If appropriations for Federal grants continue 50% below
authorizations, State and local governments would have to
spend about $12.7 billions of their own funds, or nearly
three times such expenditures in 1962-66.
3. Needed increases in the outlays over 1962-66 vary
greatly among the States—from less than 50 per cent in eight
states to over 350 per cent in seven states.
4. Communities of small size account for a dispro-
portionate share of requirements. Cities of less than 25,000,
which had 20 per cent of U. S. population in 1960 and 21.2
per cent of sewer bond sales 1962-66, .account for 52 per cent
of 1969-73 capital outlay needs for collector sewers and
waste treatment facilities. Special problems will exist in
the placing of municipal obligations for water pollution
control facilities for small communities. Their credit ratings
are usually lower—and interest rates higher—than generally
prevail.
5. The required programs of construction and equipment
supply can be executed without a strain on physical or manpower
resources, or without abnormal increases in price. However,
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delays in execution of the program will still be costly.
If the program for 1969 and 1973 were phased over a ten-year
period, it would cost over $1.3 billion more for construction
and equipment, even if prices rise no more rapidly in the
future than since 1950.
6. The needed increases in the outlays for this sector
are not unprecedented. Capital outlays for highway and
education programs showed even larger increases in comparable
time periods, highways having increased from $20.5 billion
to $35.3 billion from 1953-57 to 1960-64, and education from
$14.1 billion to $20.2 billion. Substantial Federal grants,
an increase from $3.8 billion to $15.0 billion, helped finance
both programs.
7. The ability of the States to finance these programs
must be considered in the context of the total capital needs
of State and local governments and of the adequacy of invest-
able funds for municipal bonds. A comprehensive report dealing
with State and local public facility requirements and financing,
prepared in 1966 for'the Joint Economic Committee of the U. S.
Congress, anticipated that total needs will rise from $20.1
billion in 1965 to $31.6 billion in 1970 and to $40.7 billion
in 1975. Sewer and waste treatment programs historically have
been only a small part of total State and local capital
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expenditures. In the years 1955-65 they amounted to 5.1
per cent of such outlays—with Federal grants being insigni-
ficant.
Without Federal grants, State and local governments
will have to spend 9.0 per cent of their capital budgets as
estimated by the JEC for 1969-73 to meet the Federal water
quality standards. Federal grants of $3.5 billion would lower
the percentage to 6.9 per cent.
The problem of financing the program may be miti-
gated somewhat by the projected decline in the relative
claims of transportation and education on public outlays
as estimated by the JEC—from 68.7 per cent in 1965 to
62.6 per cent in 1975.
8. State and local governments have relied traditionally
on borrowings to finance about half of their overall capital
outlays. They have also used about $5 billion annually out
of general revenues for capital outlays. Rising Federal
grants-in-aid have accounted for an increasing share of total
State and local capital outlays. If State and local borrowings
remain at 50 per cent of capital outlays, if general revenues
provide $5 billion annually for capital purposes as in the
past years, and if Federal grants are divided equally between
capital and current purposes, as seems likely from recent
trends, then grants amounting to $21.9 billion in 1970 and
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$31.0 billion in 1975 will be necessary. If these amounts
are not forthcoming, State and local governments would have
to borrow in excess of their traditional proportion of
total capital outlays in order for the capital programs
foreseen by the JEC to be fully realized.
9. State and local governments have traditionally
relied on borrowings for by far the largest part of their
financing of sewer and waste treatment facilities. Outlays
amounting to an average of $3 billion annually in 1969-73
imply borrowings by State and local governments about 3-2/3
times the rate of such borrowings in 1966 ($818 million
as against $2.98 billion), and 16.1 per cent of total esti-
mated average municipal borrowings (of $18.6 billion),
against 7.4 per cent of borrowings of $11.1 billion in
1966. If Federal grants of $3.5 billion are available,
average annual municipal borrowings of $2.3 billion would
amount to about 2-1/2 times the 1966 level.
10. The JEC Report suggests that adequate funds from
the municipal bond market will be available to cover all
needs for municipal borrowings in the 1970-75 period. However,
the balance between supply of and demand for funds is very
close, and is dependent on assumptions that commercial banks
and casualty insurance companies, important holders of
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municipal bonds, will take increasing shares of municipal
bond offerings. If they should deemphasize municipal
lending in the face of credit tightness and high yields on
corporate securities, or a reduction in income tax rates
the availability of adequate funds to meet municipal demands
would be in jeopardy.
11. Greater reliance on user charges could reduce
the need for both grants and borrowings, but significant
increases in these charges in the years immediately ahead
are not likely.
12. By steadily increasing the rate of interest it
is theoretically possible that the increased demands upon
the municipal bond market could be absorbed. However, at
the higher rates of interest the economic feasibility the
desired projects may be jeopardized, statutory rate limitations
may be encountered, and a general reluctance by the borrower
to pay such rates may be anticipated—any one event may effect
a delay in the achievement of the FWPCA program in the sched-
uled time period. To assure a minimal impact upon required
borrowings in the municipal bond market, the level of interest
rates and the supply of investable funds, the availability of
Federal grants at the maximum authorized level is obviously
of great importance.
13. Debt service costs will run high. For local
governments receiving even the most favorable grant treatment—
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55 per cent Federal and 25 per cent State aid—a 4-1/2 per
cent interest rate and repayment over 30 years means an annual
debt service cost of $514 million after 1974. With only
$3.5 billion of Federal aid, instead of the $4.5 billion
implied by 55 per cent grants, debt service costs would run
proportionately higher. The ability to incur debt and to
handle the cost will vary from one community to another. A
Federal grant program of at least $3.5 billion will encourage
and help communities to incur debt burdens to control water
pollution.
14. Legal restrictions at the State and local level are
a major obstacle to borrowing for required capital outlays.
The primary restrictions upon the States are constitutional
debt limitations and referendum requirements for incurrence
of debt. A further restriction is the constitutional pro-
hibition against the loan, gift or grant of the State's credit.
15. Local governments historically have financed sewer
and waste treatment facilities by the issuance of general
obligation bonds secured by ad valorem taxes. However, the
capacity to undertake such borrowings is limited by ceilings
on such indebtedness or by referendum requirements. These
limitations are eased, in some instances, by an exemption
for sewerage construction, by creating special districts for
the sole purpose of financing such facilities, and by the
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use of revenue obligations which normally do not fall within
the statutory or charter limitations of such local govern-
ments.
16. Interest rate limits and prescribed terms and
conditions by which the obligations may be issued also res-
trict the ability to borrow. So does the requirement that
the local government have on hand funds sufficient to cover
the entire cost of the project prior to undertaking con-
struction. The ability of local governments to finance such
facilities is also hampered by the lack of authorization to
collect standby or availability charges from properties which
now, or in the future, may benefit from the facility but
currently do not receive any services.
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I. REQUIRED CAPITAL OUTLAYS: REQUIREMENTS
FOR STATE AND LOCAL FINANCING
ASSUMING VARYING LEVELS OF
FEDERAL AID
The purpose of this chapter is to evaluate both the
requirements of the program for the improvement of water
quality standards under existing legislation and to point
up the financing burdens they imply for State and local
governments. The relevant legislation is the Federal
Water Pollution Control Act of 1956 (Public Law 84-660
amended in 1961 by Public Law 87-88)/and its subsequent
amendments, the Water Quality Act of 1965 (Public Law
89-234), and the Clear Water Restoration Act of 1966
(Public Law 89-753). Altogether, these form the basis
of the present Federal Water Pollution Control Administra-
tion program.
Federal construction grants relating to waste treat-
ment facilities were first provided in 1956 by the Federal
Water Pollution Control Act. The Water Quality Act of
1965 increased the available sums from $100 million to
$150 million per year for the years 1966 and 1967. This
Act also gave the States the option of setting water
17.
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quality standards for interstate waters and to plan for
the implementation and enforcement of the proposed
standards. Far more extensive provision for Federal
construction grants was afforded by the terms of the
Clean Water Restoration Act of 1966, which amended the
previous Act to authorize a total of $3.5 billion for
municipal waste treatment plant construction grants, to
be made available over the five-year period beginning
fiscal 1967, with no limitation on the amount of an indi-
vidual grant, and with the Federal share varying from 30
to 55 percent.
There is no comparable legislation which provides
Federal grants for the construction of sanitary sewers.
The most significant Act in this area is the Housing and
Urban Development Act of 1965 (Public Law 89-117) which
authorized $200 million per year during 1966-69 for im-
proving basic water and sewer facilities. The uses to
which the HUD Act funds may be used include, but are not
restricted to, sanitary sewers, and are therefore not
considered in this study.
Although the Acts cited above represent great contri-
butions to the solution of water pollution problems, they
do not eliminate State and local government responsibility
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for implementing the established standards and providing
financing. Thus, the economic impact of the Federal pro-
gram on the various levels of government must be evaluated.
In this chapter we (1) examine the costs of the program in
terms of the previous capital outlays of State and local
governments for sanitary sewers and waste treatment
facilities; (2) ascertain the capability of the con-
struction and equipment industries to implement the pro-
gram; (3) project increases in construction and equipment
costs; (4) consider certain of the effects which would be
occasioned by a program delay; (5) place the requirements
in perspective in relation to competing demands and discuss
changes in emphasis in government outlays that would affect
the ability of State and local governments to finance out-
lays for water quality; and (6) measure the extent to which
the participation of the Federal and State governments,
through grant funds available for assistance, could relieve
the financial burden on the local communities.
Requirements of the Program
FWPCA has prepared a cost estimate study of the program
on a State-by-State basis. The material contained therein
has formed the primary body of information for this present
study.I/ According to these data, nearly $15.0 billion^/
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will have to be invested in waste treatment facilities
and sanitary sewers during the five-year period ending
mid-1973 to attain the quality standards which have been
established. This figure refers to capital investments
only, and excludes debt service, maintenance, and opera-
tional charges, which will have to be reckoned as additional
requirements. This also excludes costs of separation of
storm and waste sewers. A recent study prepared for FWPCA
estimates that the costs of such separation may run to
nearly $49 billion, more than three times the costs of
collection and treatment of wastes.2/
That this program is a prodigious undertaking can
be seen by comparing the requirements with the actual in-
vestments in such facilities during the five-year period
ending in 1966. Outlays from 1961-66 totaled about $5.3
billion; the proposed requirements, adjusted for construction
cost increases, call for an investment of nearly three times
that amount (table 1 and figure 1).
_!/ A statement, noting the limitations of the cost data on
which the cost estimate study was based, has been prepared by
FWPCA and is contained below as Technical Note 1 in Appendix I
2/ The equivalent of $13.6 billion in constant 1968 dollars,
as measured by the FWPCA. The methodology employed in
adjusting the data to a current dollar basis is described in
Technical Note 2, Appendix I.
3/ American Public Works Associations, The Problems of Com-
bined Sewer Facilities and Overflows in U.S. Communities, pre-
pared for Federal Water Pollution Control Administration,
Chicago, 1967.
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Table 1. Total United States Sanitary Sewers
And Municipal Waste Treatment Facilities
Construction Contract Awards, 1962-66
vs.
Required Capital Outlays, 1969-73
(in million current dollars)
Item
Construction ,
contract awards:—'
1962
1963
1964
1965
1966 (prelim.)..
5-year total. . .
Annual average
Required capital
outlays:—1'
1969
1970
1971
1972
1973
5 -year total. . .
Annual Average
Sanitary
Public-7
320.5
404.4
395.6
356.3
401.2
1,878.0
375.6
f Sewers
b/
Private—'
131.0
136.0
130.0
128 0
109.0*
634.0
126.8
Total
451.5
540.4
525 6
m3
510.2
2,512.0
502.4
1 OC7 7
-L i *D / . /
Ionc A
f JUD . 4
1"\AA •)
f J44 . £
1QQC 1
, JOD. JL
1A 1f\ t
f 4 JU . £.
6,733.6
1,346.7
Treatment
plants-/
545 2
679 2
513 4
522 6
554.7
2,815.1
563.0
1A Qfl O
, 4ou . o
1C C 1 C.
f D:> J . b
1C. "it C.
, b J J . o
1*7 O 1 C
, 721.5
10 1 C. A
, olo. 0
8,205.5
1,641.1
Total
996 7
1 219 6
1 039 0
Innfi Q
f VUU . 7
1,064.9
5,327.1
1,065.4
21 A O K
, / 'to .3
2Qff\ f\
, obU . U
2Q'7'7 O
, y / / . o
31 A C f
,106.6
3f\ A f *>
,246. 2
14,939.1
2,987.8
continued^
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Table 1. Continued — Total United States Sanitary Sewers And
Municipal Haste Treatment Facilities
*Estimated
a/ Source: U.S. Department of Interior, Federal Water Pollution
Control Administration, WP-15 series publications. Table 4.
b/ Source: U.S. Congress, Joint Economic Committee, State and
Local Public Facility Needs and Financing, 89th Congress,
2nd Session, 1966, Vol. I, p. 147.
c/ Source: U.S. Department of Interior, FWPCA, unpublished
data, with scheduled annual required capital outlays in
constant dollars adjusted to current dollars on the basis of
projected construction cost increases.
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Figure 1
23
SANITARY SEWERS AND WASTE TREATMENT FACILITIES
TOTAL UNITED STATES
CONTRACT AWARDS VS REQUIRED CAPITAL OUTLAYS
IN CURRENT DOLLARS
BILLIONS OF
CURRENT DOLLARS
3-25
3.00
2.75
2.50
2.25
2.00
1.75
1.50
1.25
1.00
0.75
0.50
0.2
0.00
TOTAL SEWER AND
TREATMENT PLANT!
TOTAL SANITARY™*
SEWERS
CONTRACT AWARDS
ACTUAL
TREATMENT =LANTS
PUBLIC SANITARY SEWERS
REQUIRED CAPITAL OUTLAYS
FROJECTcO
X
X
TREATMENT PLANTS
TOTAL SANITARY SEWERS
1962 1963 1961 1965 1966
1969 1970 1971 1972
1973
SOURCE: TABLE 1
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24.
Requirements by State
The national totals are an aggregate of widely vary-
ing State requirements. These have been determined by the
FWPCA through assessment of the requirements of each State
for provision of adequate sewers and waste treatment facili-
ties for urban populations presently provided with inadequate
facilities, and provision for anticipated increases in each
State's urban population. Annual State-by-State comparisons,
shown in table 26,=/ are summarized in table 2.
As shown in the tabulation below, there are seven
States that will have to increase capital outlays (measured
in current dollars) by more than 350 percent in the period
1969-73, as compared with the level of investment in 1962-
66. At the other extreme, there is one State, Wisconsin,
whose projected requirements for sanitary sewers and waste
treatment facilities are actually below the previous years'
outlay.
Number of States* Indicated percent increase
in outlays
1 - 10
7 0-50
10 51 - 100
6 100 - 150
6 151 - 200
10 201 - 250
4 251 - 350
7 over 351
51
* Including the District of Columbia.
Tables 26 through 29 are in Appendix IV
-------
25.
Table 2. Municipal Waste Treatment Facilities and Sanitary
Sewers, Construction Contract Awards, 1962-66, and
Required Capital Outlays, 1969-73, by States-'
(millions of current dollars and percentage change)
State
Alabama.
Alaska. . ...........
Arkansas
California. ........
Connecticut.
Delaware *.*...<....
District of
Columbia
Georgia.
Hawaii
Illinois
Indiana. ...........
Kentucky
Massachusetts
Michigan
Minnesota.
Mississippi
Missouri
Montana
Nebraska
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota. ......
Contract
con s t r uc t ion
awards. y
1962-67-7
58.6
10.0
42.0
45.0
350.9
49.0
99.4
14.4
44.8
146.5
66.9
31.9
8.3
242.7
136 3
58.4
56.0
85.1
105.1
20.0
119.4
112.5
224.8
123.0
37.8
146.6
11.2
41.6
18.9
18.4
183.0
27.3
341.9
113.7
9.0
Required
capital
outlays
1969-73
181.2
20.5
209.0
63.6
2,609.9
134.6
305.5
47.4
71 . 1
793.1
290.2
128,8
30.0
536.0
217. 3
63. 3
59.6
156.0
322.2
49.4
232.3
490.4
716.5
234.1
91.6
502.4
29.3
55.2
30.1
51.3
899.5
60.7
1,620.8
161.3
16.2
cont
Percent
increase
1962-66 to
1969-73
209.2
105.0
397.6
41.3
643.8
174.7
207.3
229.2
58.7
441.4
333.8
303.8
261.4
120.8
59.4
8.4
6.4
83.3
206.6
147.0
94.6
335.9
218.7
90.3
142.3
242.7
166.1
32.7
59.3
178.8
391.5
122.3
374.1
41.9
80.0
inued
-------
26.
Table 2. Continued —
Municipal Waste Treatment Facilities and
Sanitary Sewers, Construction Awards,
1962-66, and Required Capital Outlays,
1969-73 by States
State
Ohio
Oklahoma.
Pennsylvania. ......
Puerto Rico.
Rhode Island
South Carolina
South Dakota
Utah
West Virginia
Wyoming.
TOTAL U.S.
Contract
construction
awards
1962-67
236.4
37.5
55.3
292.3
13.9
24.0
39.7
9.0
103.4
195.5
18.5
17.6
96.3
152.2
41.6
167.2
2.3
4,693.1
Required
capital
outlays
1969-73
680.6
90.3
187.8
342.3
n.a.
72.9
119.6
15.0
200.8
651.9
174.7
18.9
288.8
384.7
64.7
151.5
13.8
14,939.1
Percent
increase
1962-66 to
1969-73
187.9
140.8
239.6
17.1
n.a.
203.8
201.3
66.6
94.2
233.5
844.3
7.4
199.9
152.8
55.5
-10.4
500.0
218.3
a/ See Table 26 (AppendixIVfcor breakdown by treatment facility
and sanitary sewer, and by year.
b/ Excludes privately financed sanitary sewers.
Source: Contract awards from U.S. Department of Interior,
Federal Water Pollution Control Administration, WP-15
Series Publication, Table 4. Required capital outlays
from U.S. Department of Interior, FWPCA, unpublished
data. Data in constant 1968 dollars have been ad-
justed to current dollars on the basis of projected
construction cost increase.
-------
27.
Capital Requirements by Community Size
Equally striking variations in capital requirements
also occur among communities of different sizes. Relevant
data (available only for municipal waste treatment facilities)
are shown for the Nation in table 3 and for the individual
States in table 27. One apparent feature of the data is
that the requirements for communities of less than 5,000 are
very large. These include communities which are presently
totally without waste treatment facilities. They account
for over $2 billion of projected requirements, or nearly
one-third of the total national waste treatment plant needs.
The other most pressing requirement is to improve
presently inadequate facilities for communities of over
100,000 population. This represents a financial requirement
of $1.3 billion over the period of the program for waste
treatment facilities alone. The entire FWPCA program is
designed to meet urban requirements. Many small communities
which are part of, or contiguous to, metropolitan areas would
therefore be covered by the program. The burdens of the re-
quirements of these small communities will be less than those
indicated in table 3 if their needs can be served through
metropolitan or regional undertakings.
-------
Table 3. Required Capital Outlays^/ for Municipal Waste Treatment Plants
by Function and Size of Community for Total United States,
5-Year Period, 1969-73-'
(in millions of current dollars)
| Size of community
Function Under
5,000
5
9
,000-
,999
10,000-
24,999
25,000-
99,999
100,
and
000
over
Unknown
Total
Total United States:
Upgrading less-than-
adeguate facilities...
Elimination of current
unmet needs
Provision for popula-
tion and industrial
increases
508.0
1,654.3
85.1
Total 2,247.4
138.3 493.9
211.3 221.5
84.6 236.1
208.5 1,307.8
813.7
327.1
253.1
2,656.5
3,153.9
193.1 237.2 1,163.2
434.2 951.5 1,349.3 1,754.0 237.2 6,973.6
a7Excluding depreciation allowances.
E/ For breakdown by States, in constant 1968 dollars, see Table 26.
Source: Compiled from U.S. Department of Interior, Federal Water Pollution Control
Administration, unpublished data, adjusted to current dollars.
to
-------
29.
Construction Cost Increases
The basic projections of needs prepared by the FWPCA
are expressed in terms of 1968 dollars. Conversion of
these into current costs raises the level of requirements
from $13.6 to $15.0 billion.
Cost changes in sewerage construction are, of course,
governed by fluctuations in the general level of prices,
but they could also reflect the special factors that may
be created by the size of the program itself. In this
latter regard, there are several key industries and pro-
fessions involved, including the manufacturers of relevant
equipment (pipes and piping, pumps, process equipment, etc.),
the construction industry, and the consulting engineers who
design the requisite facilities. In each instance, there
are two fundamental questions which must be posed before
the program can be objectively appraised from a cost point
of view. First, are these affected industries and pro-
fessions physically capable of undertaking the design and
construction of sewerage works at an annual rate nearly
three times that which prevailed during the past few years;
and second, if the absolute capacity does in fact exist
or can be created, is the magnitude of the program in and
of itself likely to drive up factor prices.
-------
30.
In an effort to answer these questions, the authors
of this report personally contacted a number of authorities
in these industries and professions.-/ There was virtual
unanimity in the view that all elements could respond to
the demand placed upon them by the program without being
forced into significantly higher cost positions. In the
field of general contracting, it was pointed out that
sewerage construction is not so specialized as to severely
impede the mobility of general contractors, as compared with
highway, school, or hospital construction. The present
FWPCA program in the waste treatment field is analogous to
the Federal highway program in the sense that both programs
entail rapid and large increases in outlays. Yet the
Federal highway program, immense as it is, has not been
accompanied by extraordinary cost increases which can be
traced to the program itself.
Similar investigations were made into the major in-
dustrial and professional areas which would be affected by
I/ Including representatives of the Water Pollution Control
Federation, Associated General Contractors of America, Con-
sulting Engineers Council, and the Water and Waste Water
Equipment Manufacturers Association.
-------
31.
the program, and similar conclusions emerged — the scope
of the program is not so large, the field so specialized,
nor the present extent of operations of the affected
participants so near physical capacity as to create an
increase in factor costs.
While the program itself may not cause increased
costs, the general level of prices will most certainly
rise during the period required to attain the waste water
quality standards called for by the Federal legislation.
Based on trends since 1950, construction costs for sanitary
sewers have been projected to increase by an average 3.0
percent per year for the period 1968-72, while the costs
of treatment plants are projected to rise on the average
by 3.3 percent per yeari' (table 4). A prediction of
future construction costs increases is beyond the scope of
this study, and the projections used here are not intended
to represent a definitive judgment on this question. It
should be noted, however, that both sanitary sewer and
treatment facility costs have increased with unmistakable
regularity in the 17-year period ending in 1966.
I/ Methodology is discussed in Technical Note 2, Appendix I
-------
32
Table 4. United States Sewerage Construction Cost
Indexes, August Values 1950-67,
and Projections, 1968-72
Year
Actual :
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
Projected:
1968
1969
1970
1971
1972
Actual :
1950-67
1957-67
1965-67
Projected:
1968-72
Sanitary
sewers
Municipal waste
treatment facilities
index: 1957-59 * 100
68.5 69.3
74.0 73.9
76.3 76.8
80.6 80.8
83.1 82.8
86.7 87.2
92.5 91.9
96.8 98.0
100.4 101.5
104.8 103.7
106.2 105.0
108.2 105.8
109.7 107.0
113.1 108.5
115.1 110.5
117.3 112.6
121.2 116.9
125.4 120.3
129.0 124.0
132.9 127.6
136.8 131.8
140.9 136.5
145.6 141.5
Average annual percent change
(compounded)
+3.6
+2.6
+3.4
+3.0
+3.3
+2.1
+3.4
+3.3
continue
-------
33.
Table 4. Continued — United States Sewerage Construction Cost
Indexes, August Values 1950-67, and
Projections, 1968-72
Source: 1950-67 from Public Health Service, Division of Water
Supply and Pollution Control, Sewer Construction Cost
Index, PHS Publ. No. 1132, 1964, Appendix E, p. 27,
and Sewage Treatment Plant Construction Cost Index,
PHS Publ. No. 1069, 1953, Appendix G, p. 31; and U.S.
Department of Interior Federal Water Pollution Control
Administration, "Sewerage Treatment Plan and Sewer
Construction Cost Index," mimeographed monthly re-
port. Projected Indexes 1968-72, see text.
-------
34.
The Effects of Delays on Costs
The issue of increasing construction costs plays a
crucial role in evaluating the effects of a delay in the
timing of the program. Continuing escalation of con-
struction costs will increase total project costs under
any assumed delay. Modest capital outlays during the early
years of the presently assumed timespan, accompanied by
comensurately larger expenditures in subsequent years so
as to obtain the quality standards by 1973, will result in
higher total costs. A rephasing of the program over ten
years instead of five would result in higher costs for
both sewers and waste treatment facilities of well over $1
billion. This is attributable solely to the continued in-
crease in construction costs at the projected rates. If
the entire program is implemented during the coming five
years, cost increases are expected to result in total
capital outlays which are $1.3 billion higher than the
same real figure expressed in constant 1968 dollars. This
represents a rise of 9.7 percent, attributable to con-
struction cost increases. Prolongation of the same pro-
gram over an additional five years, accompanied by rising
costs at the same projected rates, would place the total
-------
35.
cost at approximately $16.2 billion instead of the
presently indicated figure of $14.9 billion, an increase
of $1.3 billion or 8.5 percent. This is nearly 20 percent
greater than the same cost on a constant 1968 dollar basis.
In this evaluation of the effect of delay on costs,
we have not attempted to project changes in interest
charges. Such changes cannot be foreseen or projected in
the same manner as construction costs, because they are
dependent on political, military, and international con-
ditions which are highly uncertain.
Perspective on Requirements
The cost of the water pollution control program is
great, but not unprecedented in total size or even in terms
of the respective shares of Federal, State and local govern-
ment requirements. The Federal government and the State
and local governments have, in the recent past, increased
capital outlays in a brief timespan by sums larger than those
indicated by present water quality programs. For example,
State and local capital outlays for highways amounted to
over $20 billion during the five-year period 1953-57. They
increased by nearly $15 billion during the period 1960-64.
During that time the Federal contribution to the highway
-------
36.
program increased to a total of nearly $15 billion, more
*
than three times the previous contribution. Of course
these highway programs far exceed those which are called
for to provide clean water, and their financing has been
greatly facilitated by the creation of a special fund
using gasoline tax revenues. The Federal government con-
tribution to the highway program during the period 1960-64
was more than four times as large as the existing authori-
zation for Federal construction grants for water pollution
control. For the State and local governments, the increases
in their outlays for highway construction during those five-
year periods was 50 percent greater than the sum which they
would be required to invest for clean water, even assuming
no Federal contribution whatever.
Similarly, capital outlays by State and local govern-
ments for education increased by well over $6 billion be-
tween 1953-57 and 1960-64. This exceeds the sums required
from such governmental units for sanitary sewers and waste
treatment plants under the present program, provided Federal
authorization for grant funds is fully appropriated.
It is noteworthy that certain capital programs with
which the water pollution program competes are likely to
taper off in the 1970's. For example, estimates prepared
-------
37.
for the Joint Economic Committee show total capital outlays
by State and local governments amounting to $13.6 billion
in 1970 and $40.7 billion in 1975, compared with $20.1
billion for 1965- (table 5). But the share of such out-
lays allocated for transportation and education is estimated
to decline from 68.7 percent in 1965 to 62.6 percent in
1975.2/ Funds "liberated" for other activities are esti-
mated at $2.3 billion in 1970 and $2.5 billion in 1975.
Some of these funds may be available for water pollution
control.
Federal and State Assistance: Components and Amount
Under the provisions of the Clean Water Restoration
Act, varying levels of Federal grant funds may be available
to assist in financing the cost of municipal waste treatment
facilities in urban areas. In the absence of State partici-
pation, the maximum level of Federal aid is 30 percent of
I/ U.S. Congress, Joint Economic Committee, State and Local
Public Facility Needs and Financing, 1966. Vol. 1, p. 14.
2/ The JEC statement of needs in education, referring to
Bureau of Census projections, reckons that the school-age
population (between 5 and 21 years of age) , will increase at
an annual rate of 1.1 percent per year in the period 1966-75
against 3.2 percent in the prior decade. (JEC, State and Local
Public Facility Needs, Vol. 1, p. 45.) Also, the major part
of the Interstate Highway System will also have been completed
by the early 1970's.
-------
38,
Table 5. Comparison of State and Local Capital Outlays for
Public Facilities in 1965 with Estimated Capital
Requirements in 1970 and 1975
(Values in billions of dollars)
Facility
1965
Value
Percent
1970
Value
Percent
1975
Value
Percent
Water and sewer . .
Electric and gas.
Transportation. . .
Education
Health
Recreation and
cultural
Other public
buildings
Total j
1
i
2.7
.8
8.9
4.9
.8
1.5
.5
20.1
13.4
4.0
44.3
24.4
4.0
7.5
2.5
100.0
5.5
1.3
13.5
5.9
1.3
3.4
.7
31.6
17.4
4.1
42.7
18.7
4.1
10.8
2.2
100.0
Source: U.S. Congress, Joint Economic Committee,
Public Facility Needs and Financing, Vol
6.8
1.4
17.7
7.8
1.7
4.4
.9
40.7
16.7
3.4
43.5
19.1
4.2
10.8
2.2
100.0
State and Local
. 1, 1966,
pp. 13,14.
-------
39.
construction costs. If a State agrees to match this 30 per-
cent contribution. Federal aid can increase to 40 percent,
which relieves the local government of 70 percent of the
burden of financing the requiaite facilities. Metropolitan
areas are eligible for Federal aid of 55 percent, with the
State contribution 25 percent, leaving only the residual
20 percent to be borne by the recipient local government.
To date, 20 States- have adopted legislation providing a
minimum of 25 percent matching grants, of which 13-' have
authorized grants of up to 30 percent. Only 9 States- have
appropriated such funds.
The effects of such maximum Federal participation
on overall requirements for both sewers and waste treatment
facilities are the following (in billions of dollars):
_!/ California, Colorado, Connecticut, Georgia, Indiana,
Maine, Massachusetts, Michigan, Missouri, New Hampshire, New
Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island,
Tennessee, Texas, Vermont and Wisconsin.
2/ Connecticut, Maine, Massachusetts, Michigan, New Hamp-
shire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island,
Texas, Vermont, and Wisconsin.
3/ Indiana, Massachusetts, Michigan, New Hampshire, New
Jersey, New York, Oregon, Rhode Island, and Vermont.
-------
40,
Outlays Requirements
1962-66 1969-1973
Total 4.7 14.9
Financed by Federal
grants for water
treatment 0.4 4.5
Remainder for State
and local govern-
ments 4.3 10.4
An increase in expenditures of this magnitude does not seem
unmanageable in view of the probable shifting in the compo-
sition of government outlays described in the previous
section. If we assume that the Federal contribution will
be less than 55 percent (because only $3.5 billion has been
authorized thus far). State and local outlays would have to
rise to $11.4 billion. This represents an average annual
amount of $2.3 billion and accounts for between 33 and 42
percent of the total figure which the JEC estimates may be
available for sewers and water capital outlays between 1970
and 1975 (see table 5) .
For waste treatment facilities alone, the prospect
for achieving scheduled goals seems brighter than for the
program as a whole. The Federal contribution of 55 percent
is specifically confined to such facilities; if the full
-------
41
55 percent were forthcoming, State and local outlays for
waste treatment would have to rise to only $3.7 billion,
compared with $2.8 billion in 1962-66. If only $3.5
billion were appropriated, the affected communities would
have to finance the shortfall, raising their outlays from
$2.8 to $4.7 billion. The absence of funding to meet
substantially all the needs for sewers could, of course,
inhibit the program for waste treatment. Needless to say,
both sewer and treatment programs would face enlarged
problems if appropriations were substantially less than
the authorized $3.5 billion.
Table 6 portrays the requirements for State and
local financing for municipal waste treatment facilities
under varying assumptions of Federal grants: 55 percent
of waste treatment costs; up to present authorizations of
$3.5 billion; 30 percent of waste treatment costs; and 50
percent of present authorizations. It is this last figure
which should command particular attention. If Federal
grants fall well below authorizations, which seems likely,
the State and local governments will have to carry heavy
additional burdens. Specifically, if the Federal govern-
ment provided only 50 percent of the present authorization,
rather than 55 percent, the added burden for the affected
-------
Table 6. projected Municipal Waste Treatment Facilities costs, Assuming
No State Grants and Varying Levels of Federal Grants, 1969-73
(in millions of current dollars)
Year
1969..
1970..
1971..
1972..
1973..
Total.
Annual
Required
capital
outlays
1,480.8
1,553.6
1,633.6
1,721.5
1,816.0
8,205.5
avg. 1,641.1
Federal
30 per-
cent of
costs
444.2
466.1
490.1
516.5
544.8
2,461.7
492.3
55 per-
cent of
costs
814.4
854.5
898.5
946.8
998.8
4,513.0
902.6
contributions
Present-
ly auth-
orized^
150.0
450.0
700.0
1,000.0
1,250.0
3.550.0
710.0
50 percent
of present-
ly auth.
153^
203*/
350.0
500.0
625.0
1,831.0
366.2
Net cost to State and local gov't*.
assuminq Federal contributions
30 per-
cent of
costs
1,036.6
1,087.5
1 , 143 . 5
1,205.0
1,271.2
5,743.8
1,148.8
55 per-
cent of
costs
666.4
699.1
735.1
774.7
817.2
3,692.5
738.5
Present-
ly auth ^
orized^/
1,330.8
1,103.6
933.6
721.5
566.0
4,655.5
931.1
50 percent
of present-
ly auth.
1,327.8s/
1,350.6s/
1,283.6
1,221.5
1,191.0
6,374.5
1,274.9
a/ Assumes Federal grants authorized during the five years to which the present legislation
refers will be made available during the five years of the program, 1969-73.
b/ Actual appropriations.
c/ Based on actual appropriations.
-------
43
communities would be $2.7 billion in the years 1969-73.
The States and local communities would then have to
finance $13.1 billion in 1969-73, against actual outlays
of $5.3 billion in 1962-66. The costs to the communities
for both sanitary sewers and municipal waste treatment
facilities in 1969-73, assuming 55 percent Federal contri-
bution for treatment plant construction outlays, are shown
in table 28. The reader can make appropriate adjustments
to these figures according to his assumption of the likely
level of Federal financing. In California, for example,
where total capital requirements amount to $2.6 billion
(see table 26), the maximum Federal contribution of 55
percent of municipal waste treatment plant costs ($724
million) will oblige the State and the local governments
to contribute the remaining $1,886 million (table 28);
if the Federal contribution were reduced to 30 percent,
the residual requirement would rise to $2,215 million over
the five years.
Thus far, we have emphasized the Federal contribution.
The fact is that the burden on local governments of meeting
the program's requirements would be very significantly
eased by State government financial participation. This is
shown on a national basis in table 7; a companion series in
-------
Table 7 . Municipal Waste Treatment Facilities, Required Capital Outlays,
Assuming Varying Levels of State and Federal Grants, 1969-73
(in millions of current dollars)
Item
Required capital outlays
Assuming 30 percent Federal
grants:
Cost to local government....
Assuming 40 percent Federal,
30 percent State grants:
Cost to local governments...
Cost to State governments...
Assuming 50 percent Federal,
25 percent State grants:
Cost to local governments...
Cost to State governments...
Assuming 55 percent Federal,
25 percent State grants:
Cost to local governments...
Cost to State Governments...
1969
1,480.8
1,036.6
444.2
444.2
370.2
370.2
296.2
370.2
j 1970 ;
i
1,553.6
1,087.5
466.1
466.1
388.4
388.4
310.7
388.4
1971 1
1,633.6
1,143.5
490.1
490.1
408.4
408.4
326.7
408.4
1972 j
1,721.5
1,205.0
576.5
576.5
430.4
430.4
344.3
430.4
1973 j
1,816.0
1,271.2
544.8
544.8
454.0
454.0
363.2
454.0
Total
8,205.5
5,743.8
2,461.7
2,461.7
2,051.4
2,051.4
1,641.1
2,051.4
Source: Required capital outlays from U.S. Department of Interior, Federal Water Pollution
Control Administration, unpublished data in constant dollars, adjusted to current
dollars on the basis of projected construction cost increases.
-------
45.
table 29 presents similar data for the individual States.
These tables illustrate the effect of this added assistance
to the local governments. If the Federal government provides
55 percent financing because the States have provided their
25 percent matching funds, the local requirement for financ-
ing of waste treatment plants would amount to only $1.64
billion over the five years of the program, $1.2 billion
less than the amount which was actually paid out for capital
undertakings in the past five years.
There is, of course, great latitude for questioning
the extent to which the Federal government will contribute
funds up to the amount provided by the legislation. Serious
questions also arise in regard to the ability of the State
governments to make available $2 billion matching funds
for the construction of municipal waste treatment facilities.
If these governmental units fall short in their financial
contributions, the added burden will fall on the local
governments. The extent of the burdens on State and local
governments for capital needs overall, for clean water pro-
grams in particular, and the possibility of their satisfy-
ing them are the subjects of Chapter II.
-------
II. THE ABILITY OF STATE AND LOCAL GOVERNMENTS TO FINANCE
REQUIRED CAPITAL OUTLAYS
In the preceding chapter the magnitude of the required
capital outlays to meet the water quality standards by 1973
was discussed. These capital expenditures were shown under
various assumptions as to the level of Federal grants. To
appreciate the relative importance of these outlays, overall
capital requirements of State and local governments were also
discussed.
The purpose of this chapter is to examine the sources
of financing for both aggregate capital outlays and sewer
and waste treatment facilities. The availability of these
sources—current revenues, Federal grants, user charges and
borrowings—and the effect they have on each other are
examined. Attention is given to the supply of and demand
for municipal bonds, to the historical patterns of the
municipal securities market and to the methods of public
borrowings. The chapter- concludes with an analysis of
the capacity of the municipal securities market to absorb
the required borrowings. This will permit a forecast
as to the continued ability of State and local governments
to finance the required capital outlays from borrowings
46
-------
47.
for sewer and waste treatment facilities to attain the water
quality standards of the Federal Water Pollution Control
Program.
Sources of Financing Capital Outlays
Before discussing the ability of State and local govern-
ments to finance the necessary capital expenditures for sewer
and waste treatment facilities, it is useful to review the
pattern of total capital outlays and the methods by which
the sources of financing were provided. It is also helpful
to project future capital outlays and gauge their effect upon
the available sources of financing.
In the 1956-66 decade, State and local capital outlays
doubled, growing from $11.4 billion to $22.3 billion (Table 8).
Anticipated outlays of State and local governments for capital
purposes are estimated to be $31.6 billion for 1970 and $40.7
billion for 1975—the latter figure being virtually twice as
large as it is today.— Historically one-half of these outlays
have been financed through borrowings, a trend which the study
prepared for the Joint Economic Committee assumes will con-
tinue.—/ This would indicate borrowings for capital outlays
of $15.8 billion in 1970 and $20.4 billion in 1975.
I/ JEC Report, Vol. 2, Table B4, p. 35.
2/ JEC Report, Vol. 2, p. 32.
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48.
Table 8. Total Federal Grants to State and Local Governments
Including Grants Specifically for Capital Outlays, 1956-66
and
Projections of Total Federal Grants Including Grants Specifically
for Capital Outlays, 1970 and 1975
(in million dollars)
Fiscal
Year
Total
State &
local
capital
outlays
Sources of funds for capital outlays
State
& local
borrowing
State
& local
general
revenues
Federal grants
specifically
for capital
out lays
Total
Federal
grants
(1)
(2)
1956..
1957..
1958..
1959..
I960..
1961..
1962..
1963..
1964..
1965..
1966..
1967*
1968*
1970..
1975..
11,407
12,616
13,986
15,351
15,104
16,091
16,791
17 , 946
19,087
20,771
22,330
31,600
40,700
6,307
6,779
7,825
7,542
7,286
7,479
8,351
9,391
10,982
9,258
—
15,800
20,350
(3)
4,157
4,665
4,384
4,840
4,465
5,519
5,183
5,022
3,652
6,478
4,836
4,836
(4)
943
1,172
1,777
2,969
3,353
3,093
3,257
3,533
4,453
5,035
10,964
15,514
(5)
3,724
4,039
4,935
6,669
7,040
7,112
7,893
8,634
10,141
10,904
12,960
15,366
17,439
21,928
31,028
*Estimated
Sources:
Col. (1) 1956-65: JEC, State and Local Public Facility Financing/
Vol. 2, p. 33.
1966: U.S. Department of Commerce, Governmental Finances,
1965-66, GF-13, p. 21.
1970 and 1975: JEC, State and Local Public Facility Needs,
Vol. 1, p. 14.
-------
49.
Table 8. Continued — Total Federal Grants to State and Local
Governments Including Grants Specifically for Capital Outlays, 1956-
66, and Projections of Total Federal Grants Including Grants Specifi-
cally for Capital Outlays, 1970 and 1975
(2) 1956 and 1957: JEC, Vol. 2, p. 34.
1958-65: JEC, Vol. 2, p. 59.
1970 and 1975: 50 percent of Column (1) in accordance
with procedure contained in JEC, Vol. 2, p. 35, Columns 1
and 4. Actual JEC figures of $16.3 billion in 1970 and
$21.0 billion in 1975 contain small Housing and Urban
Renewal component.
(3) 1956-65: Columns (1) minus (2) minus (4).
1970 and 1975: Average 1956-65. The chief obstacle to
substantial increases in State-local contributions to
capital outlays out of general revenues is the simultane-
ously rising demands for funds for current operations.
The JEC report comments on the fact that State and local
governments must resort to their general revenues for
partial funding of their capital outlays as follows:
"There is no basis for estimating in detail the origin of
the 'other financing sources'. ...It is reasonable to
presume that a considerable portion came from tax collec-
tions, in view of the important place of taxes in the
revenue structure of State and local governments. How-
ever, nontax revenue sources are relatively more signifi-
cant than seems to be recognized, and these have also,
directly or indirectly, financed an indeterminate portion
of State-local capital spending." JEC, Vol. 2, p. 63.
(4) 1956-65: JEC, Vol. 2, p. 61.
1970 and 1975: Columns (1) minus (2) minus (3).
(5) 1956-68: JEC, Revenue Sharing and Its Alternatives,
Vol. 1, p. 159.
1970 and 1975: Column (4) x 2. In 1965, Federal grants
specifically for capital outlays represented 46.2 percent
of total Federal grants. It is assumed that Federal grants
specifically for capital outlays will rise to 50 percent
of total Federal grants in 1970 and 1975.
Note
The above projections of total Federal grants in 1970 and 1975 are
in the same order of magnitude with those from other sources cited
below.
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50.
Table 8. Continued — Total Federal Grants to State and Local
Governments Including Grants Specifically for Capital Outlays, 1956-
66 and Projections of Total Federal Grants Including Grants Specifi-
cally for Capital Outlays, 1970 and 1975
Projected Total
Federal Grants
(in dollars billion)
1970 1975
National Planning Association 19.5 31.0
G. Washington Univ. Project '70,
I (High Revenue Proj.) 21.8
G. Washington Univ. Project '70,
II (Low Revenue Proj.) 18.1
Tax Foundation 20.3 30.0
Sources:
For JEC figures, see U.S. Economic Growth to 1975: Potentials and
Problems, 1966, p. 26 (reprint). For other projections, see JEC,
Revenue Sharing and Its Alternatives. Vol. Ill, Federal, State,
Local Fiscal Projections, July 1967, p. 1244 and 1248.
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51.
The balance of State and local outlays for capital pur-
poses, $15.8 billion in 1970 and $20.3 billion in 1975, would
have to be met from two sources: general revenue and Federal
grants. The JEC report observes that expenditures for current
needs will continue to rise as rapidly as current revenues,
so that revenues cannot be expected to finance capital out-
lays to any greater degree than has been the case in recent
years. General revenues available for capital outlays have
averaged $4.8 billion annually from 1956 to 1965 (Table 8).
The $4.8 billion figure is therefore assumed in this analysis
to be the annual amount of funds available from general
revenues through 1975 to finance capital outlays.
With borrowing and general revenue capabilities accounted
for, the balance of the required capital requirements ($11.0
billion in 1970 and $15.5 billion in 1975) would have to be
raised through Federal grants. In 1956, Federal grants for
capital outlays came to $943 million, or 8.3 per cent of State
and local capital outlays. However, Federal grants for State
and local capital outlays have been steadily rising as a per-
centage of total Federal grants for both capital and current
needs—from 25.3 per cent in 1956 to 46.2 per cent in 1965.
It is reasonable to project that Federal grants specifically
for capital outlays will rise by 1970 to 50 per cent of total
Federal grants (Table 8).
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52.
There is, nevertheless, a divergence of opinion as to
the future level of Federal grants. A JEC study prepared
in 1966 estimates total Federal grants as low as $17.5 billion
in 1970 and $25.0 billion in 1975. A later study prepared
by the Bureau of the Budget includes an estimate of $17.4
2/
billion for FY 1968." Thus the 1970 figure appears conser-
vative. Others estimate the range of Federal Grants in 1970
from a low of $18.1 billion to a high of $21.8 billion and
in 1975 from $30.0 billion to $31 billion (See footnote to
Table 8) , The ultimate level will determine the extent of
the need for additional State and local borrowings.
As set out in Table 8, total Federal grants are projected
to a level of $21.9 billion in 1970 and $31.0 billion in 1975,
upon the assumption that one-half of State and local capital
outlays will come from borrowings and that general revenues
will provide approximately $4.8 billion for capital outlays
as in the past. It is further assumed that of these total
Federal grants, 50 per cent, or $11.0 billion in 1970 and $15.5
billion in 1975, will be made available specifically for capi-
tal outlays. Should Federal grants not exceed the low estimates
made in the JEC Report on Economic Growth, borrowings would
have to rise to $18.0 billion in 1970 and $23.5 billion in
!_/ JEC, U.S. Economic Growth to 1975: Potentials and Problems,
Dec. 1966, p. 26 (reprint).
2_/ JEC, Revenue Sharing and Its Alternatives: What Future for
Fiscal Federalism? July 1967. Vol. I, pp. 156-170.
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53.
1975, which in either case represents 57.9 per cent of capi-
tal outlays.—/ In the past twenty-year period, the ratio of
borrowings to capital outlays has been approximately 50 per
cent. However, borrowings as a percentage of capital outlays
did reach 57.5 per cent in the 1963-64 period and averaged
56.2 per cent in the years 1952-57.—'
A greater reliance upon user charges, especially for
commercial and industrial enterprises, would in many instances
reduce the pressure for Federal grants as well as ease the
strain on general revenue and property taxes to support
borrowings. An example of what one municipality, Omaha,
Nebraska, has done to provide sewer and waste treatment faci-
lities for its packinghouse industry with user charges and
revenues from recovered wastes as the principal sources of
financing, is discussed in General Note 1, Appendix II.
Further study concerning the potential for employing
user charges in the next decade is needed. Currently the
unfamiliarity of municipalities and industry with such tech-
niques means that the user charge financing can be expected in
I/ If total Federal grants are $17.5 billion in 1970, the
portion for capital outlays would be $8.8 billion. If
total Federal grants are $22.0 billion (Table 8), the
portion for capital outlays would be $11.0 billion. Adding
the difference of $2.2 billion to borrowings of $15.8
billion in 1970 yields $18.0 billions.
2/ JEC Report, Vol. 2, Table 8, p. 62.
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54.
the near future. Such a study would be highly useful.
Sewer and waste treatment programs historically have been
only a small part of total State and local capital expendi-
tures. In the years 1955-65 they amounted to 5.1 per cent
of such outlays—with Federal grants being virtually insigni-
ficant. ~ Absent Federal grants for the program. State and
local governments will have to spend 9.0 per cent of their
capital budgets in 1969-73 to meet the Federal water quality
standards. Federal grants of $3.5 billion would lower the
percentage to 6.9 per cent.
It is essential to note a difference between the JEC
estimate of outlays for water pollution control in the 1970's
and the FWPCA estimate of required outlays. The latter exceeds
the former by about $1.0 billion annually in the early 70's
and implies, of course, a greater financing burden for the
State and local governments. —' The foregoing measurements
of 9.0 per cent and 6.9 per cent are derived from JEC esti-
mates of total capital outlays unadjusted for the difference
of $1.0 billion annually.
I/ JEC Report, Vol. 2, Table B, p. 67
_2/ The JEC estimates outlays at $1.6 billion in 1970 and
$2.3 billion in 1975, an average of about $2.0 billion.
FWPCA estimates needs in the 1969-73 period at $3.0
billion annually.
-------
55.
Supply of and Demand for Municipal Obligations
In examining the ability of the affected units of govern-
ments generally to finance capital outlays, and more parti-
cularly to attain the water quality standards established by
the Federal program, it is necessary to consider the pro-
jected supply of borrowings and the availability of investable
funds from institutional sources to meet these demands.
The estimates prepared for the Joint Economic Committee
of required net additions to the volume of municipal obligations
and the supply of net new investable funds for the period
1966-75 appear in Table 9. The figures in Series B are slightly
lower than the figures in Series A as a result of more con-
servative estimates of municipal bond holdings by banks and
personal trust funds. The first column shows the net bor-
rowings required by State and local governments after allow-
ances for general revenues, Federal grants and estimated
retirements. A comparison of the respective figures indicates
that funds available for investment in municipal bonds will
be more than sufficient to meet the required borrowings by
State and local governments after 1968.
As shown in Table 10, the increase of State and local
indebtedness over the current level is estimated to be $111
billion by 1975. Obligations representing $68.8 billion of
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56.
Table 9. State and Local Government Obligations: Projected
Net Borrowings, 1966-75, and Funds Available
(Billions of dollars)
Year
1966
1967
1968
1969
1970.
1971
1972
1973
1974
1975
Net
required
borrowings
8.5
8.7
9.0
9.3
9.7
10.0
10.3
10.9
11.1
11.3
Funds available
Series A
8.0
8.8
9.3
10.2
10.8
11.2
12.1
12.6
13.7
14.3
Series B
7.2
8.0
8.6
9.3
9.9
10.3
11.1
11.5
12.6
13.0
Source: JEC, State and Local Public Facility Financing, Vol. 2
p. 21.
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57.
Table 10. Holdings of State and Local Government
Obligations by Investor Groups, 1946-75
(Billions of dollars)
Investor group
Commercial Banks
Mutual Savings Banks
Life Insurance Companies....
Fire and Casualty Insurance
Companies
State and Local Retirement
Funds
State and Local Governments.
Municipal Bond Investment
Funds
Personal Trust Funds
Other Financial Institutions
Other Corporations
Federal Credit Agencies
Individuals and Others
Total^/
Year-end
1946
4.4
.1
.6
.2
.8
1.6
a/
3.0
.8
.3
.4
3.4
15.6
1955
12.7
.6
2.0
4.2
2.7
2.5
.§/
6.7
.9
1.2
.7
10.6
44.8
billings
1965
1975
38.7 107.5
.3 .4
3.5 3.8
11.4 21.4
2.6 .5
2.1 1.1
.2 2.6
13.2 33.0
1.6 2.2
3.6 6.0
2.8 5.4
20.0 27.1
100.0 211.0
Change
1965-75
68.8
0.1
0.3
10.0
-2.1
-1.0
19.0
19.8
0.6
2.4
2.6
7.1
111.0
a/ Nonexistent, 1946-60.
b/ Totals may not equal sum of figures due to rounding,
Source: JEC Report, Vol. 2, pp. 17-18.
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58.
the increased indebtedness — 62 per cent of the expansion —
will be accounted for by commercial banks; $19.8 billion —
18 per cent — will be absorbed by personal trust funds; $10
billion — 10 per cent — by fire and casualty companies; and
$7.1 billion — 6 per cent — by "individuals and others". In
other words, of the projected increase in municipal obli-
gations, these four investor groups will account for 96 per
Patterns of the Municipal Securities Market
Up to this point we have discussed the requirements for
public borrowings and the availability of investable funds
without looking at the municipal securities market itself.
It is relevant to inquire to what extent market patterns will
change with the offering of such substantially increased
volumes of sewer bonds, leaving for the last section the
questions whether the effect of such changes may operate as
a constraint on State and local governments.
New issues of municipal securities reached an all-time
2/
high in 1967 of $14.2 billion.— The volume of new issues
for that year was 28.4 per cent more than the previous high
_!/ For a detailed analysis of municipal bond holdings by
significant investor groups and their projections, see
General Note 2, Appendix II.
2/ The Daily Bond Buyer, January 2, 1968.
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59.
in 1966 of $11.1 billion.— Annual increases in the volume
of municipal bond sales have shown a strong upward trend.
Over the 20-year period from 1947 to 1967, municipal bond
sales jumped from $2.4 billion to $14.2 billion. The JEC
study indicates that State and local government borrowings
will continue at an accelerated rate. By its projectsions,
the amount of municipal obligations outstanding, now more
than $100 billion, will double by 1975.-
The findings of the JEC study with regard to the sale
of municipal bonds generally are noteworthy. An analysis of
the municipal bonds sold during 1957-66 discloses that:
(1) competitive bidding (as contrasted to negotiated sales)
represented an increasing proportion of general obligations
and revenue bond issues; (2) general obligation bonds are
used for most of the shorter maturities with revenue bonds
favored for the longest maturities; (3) there has been no
significant change in the distribution of purposes for which
bonds have been issued; (4) while school district borrowings
have been stable, borrowings by special districts and statutory
authorities have greatly risen; and (5) among the major regions
I/ This is an abnormally high rate of increase for one year—
the full significance of which cannot be determined. Does
it mean, for example, that borrowings are covering a greater
share of financing now than in the past, or that the public
facility programs are growing at a more rapid rate than
projected?
2/ Table 10.
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60.
of the country, the South has increased most rapidly in
terms of other volume of bonds.—
A more particularized analysis of public borrowings for
sewer and waste treatment facilities is set out in General
Note 3, Appendix II. It is logical to project certain trends
in the sale of sewer bonds which emerged from the five-year
period of 1962-66 over the next five-year period: (1) general
obligation bonds will continue to be the principal method by
which such facilities are financed, although with the interest
rates between revenue and general obligation bonds narrowing,
revenue bonds can be expected to increase in relative impor-
tance; (2) municipalities will continue to be the major
issuers, while special districts will remain a large issuer
2/
and authority financing will assume a larger role;— (3) issues
in the $2-5 million range will continue to predominate; and
(4) communities under 25,000 population will continue to
execute the largest volume of bond sales.
At the same time it can be anticipated that the percentage
of the municipal bond market previously representing sewer
and waste treatment bonds will have to change. Municipal
obligations provide by far the largest source of financing
I/ JEC Report, Vol. 2, p. 8.
2/ General Note 4, Appendix II.
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61.
for sewer and waste treatment facilities.— Therefore,
anticipated capital outlays provide a guide for the likely
need for new issuances of municipal bonds to finance the
water pollution control program. Public borrowings for such
purposes were $818 million in 1966 (Table 11), with the high
for such borrowings, $939 million, occurring in 1963. To
comply with the Water Quality Act of 1965, annual borrowings
required by State and local governments, exclusive of Federal
grants, must average $2.98 billion.— This represents a
requirement that is more than 3.6 times the present market
3 /
level for such bonds— and would represent 26.9% of the 1966
bond market for all purposes.
In estimating required borrowings in the municipal bond
market for waste treatment and sewer facilities, no adjust-
ment has been made for reductions in borrowings that may
I/ Table 11 shows that sales of sewer bonds and combination
sewer/water bonds have averaged about 90 per cent of con-
tract awards for sewers and waste treatment facilities in
the period 1958-1961. There have been few significant
variations from one year to another. The series are not
strictly comparable and the figure of 90 per cent must,
therefore, be treated with caution.
2/ It is estimated that of the $2.98 billion needed for waste
treatment and sewer facilities, approximately $100 million
represents the demand for private sewer construction.
Since this outlay is a small proportion of the total, no
adjustment on the total amount of demand was made for the
purpose of this study.
3/ This utilizes for comparative purposes the 1966 municipal
bond market volume of $11.1 billion, of which $818 million
is estimated for sewer and waste treatment facilities.
-------
Table 11. Sewer Bond Sales and Contract Awards, 1958-67
(in millions of dollars)
Year
Sewer Bond Sales
Sewer—'
Sewer water.
Combination-
Total
sewer^/
Adjusted
total sewersS/
Construction Contract Awards
for Sanitary Sewers and Mu-
nicipal Waste Treatment
facilities .
1958
1959
1960
1961
1962
1963
1964
1965
1966
(1)
526
433
389
570
594
524
551
560
515
413
398
(2)
114
110
115
111
107
181
165
200
184
(3)
606
510
469
648
669
651
667
700
644
(4)
620
627
635
767
797
939
828
819
818
(5)
699
685
718
827
862
1,083
909
879
956*
£/
AS reported to the Investment Bankers Association, including waste treatment facilities.
Combination sales, as reported by the Investment Bankers Association, include water and
sewer bond sales.
Assumes 70 percent of Column 2 represents waste treatment and sewer bond sales. Total
sewer equals Column 1 plus 70 percent of Column 2.
Differential (2/3) between reported sewer bond sales (Column 3) and contract awards.
— ' Nine months.
* Preliminary
Sources:
Columns (1) (2), and (3) from Federal Water Pollution Control Administration, Water
and Sewer Bond Sales in the United States, January-December, 1958-65, WP-16, formerly
PHS publ. #965; Column (5) from FWPCA, WP-15 series publications.
-------
63.
occur as a result of State grants through appropriations.
However, were each State to provide 25% matching grants for
waste treatment facilities through appropriations, borrowings
would be reduced by $410.3 million annually (Table 12).
Table 13 discusses the average annual volume of muni-
cipal bonds that will be underwritten and purchased by the
investment community under varying levels of Federal financial
assistance. The table also relates projected volume of
municipal borrowings under varying levels of Federal grants
to estimated 1966 bond sales for waste treatment and sewer
facilities.— and the percentage it would represent to
borrowings for all purposes. Thirdly, from the JEC pro-
2/
jections of average borrowings for the years 1969-73,
$18.6 billion, the table shows what the percentage borrowings
for waste treatment and sewer facilities would be in relation
to the total municipal bond market.
The importance of Federal grants becomes apparent in
analyzing the impact of their curtailment. Without such
grants, required borrowings for sewer and waste treatment
facilities during the period 1969-73 will have to average
3.6 times the 1966 level. It would represent 16.1% of the
estimated average bond market for the years 1969-73.
I/ Table 11.
2/ JEC Report, Vol. 1, p. 35.
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Table 12. Relation between State Government General Revenues, 1966, and
Required Capital Outlays for Municipal waste Treatment Facilities
(in million current dollars)
State
Average annual
required capital
outlays
1969-73
State
government
general rev-
enues, 1966
Increase in 1966 State revenues
necessary to provide 25 percent
grants for municipal facilities
Million dollars
Percent
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida ,
Georgia ,
Hawaii ,
Idaho ,
Illinois ,
Indiana ,
Iowa ,
Kansas
Kentucky ,
Louisiana
Maine
Maryland
22.3
2.3
12.7
7.3
263.1
15.4
33.5
5.3
2.5
79.1
35.6
9.5
4.1
61.6
28.9
10.0
7.5
20.6
33.0
9.0
21.1
539
87
330
298
3,917
403
523
162
926
689
232
139
1,547
904
500
413
506
881
157
680
5.6
0.6
3.2
1.8
65.7
3.8
8.4
1.3
0.6
19.8
8.9
2.4
1.0
15.4
7.2
2.5
1.9
5.2
8.2
2.3
5.3
1.0
0.7
1.0
0.6
1.7
0.9
1.6
0.8
2.1
1,3
1.0
0.7
1.0
0.8
0.5
0.5
1.0
0.9
1.5
0.8
Continued—
-------
Table 12. Relation between state
ent General Revenues, 1966 ,
and
, -,2 Relation toetween s-ca-ue ^0-v«==.i-»iii"=" •- «^— ...
Required Capital Outlays for Municipal Waste Treatment Facilities
(in million current dollars)
—Continued
State
Massachusetts..
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire..
New jersey
New Mexico
New York
North Carolina.
North Dakota. . .
Ohio
Oklahoma
Oregon
Pennsylvania..,
Puerto Rico...
Rhode Island..
South Carolina
South Dakota..
Average annual
required capital
outlays
1969-73
54.6
101.7
30.5
9.2
36.2
4.7
7.3
2.5
6.2
95.1
4.9
183.9
15.9
2.2
81.7
8.9
22.9
58.4
7.5
16.5
2.1
State
government
general rev-
enues, 1966
Increase in 1966 State revenues
necessary to provide 25 percent
grants for municipal facilities
Million dollars
Percent
884
1,724
749
342
650
121
169
96
80
753
280
3,839
886
141
1,339
495
387
1,870
161
416
107
13.7 1.5
25.4 1.5
7.6 1-0
2.3 0.7
9.1 1.4
1.2 1.0
1.8 1.1
0.6 0.6
1.6 2.0
23.8 3.2
1.2 0.4
46.0 1.2
4.0 0.5
0.6 0.4
20.4 1.5
2.2 0.4
5.7 1.5
14.6 0.8
1.9 1.2
4.1 1.0
0.5 0.5
Continued—
en
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Table 12. Relation between State Government General Revenues, 1966, and
Required Capital Outlays for Minicipal Waste Treatment Facilities
(in million current dollars)
—Continued
State
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Average annual sta
required capital goverj
outlays genera
1969-73 enues,
te Increase in 1966 State revenues
nment necessary to provide 25 percent
1 rev- grants for municipal facilities
1966 Million dollars
25.8 533 6.4
48.9 1,572 12.2
23.7 210 5.9
3.4 87 0.8
33.6 656 8.4
36.1 809 9.0
9.9 306 2.5
20.6 939 5.2
1.8 7ft n K
Percent
1.2
0.8
2.8
0.9
1.3
1.1
0.8
0.6
n -7
Total U. S
1,641.1
34,511
410.3
1.2
Sources:
Average annual required capital outlays calculated from U. S. Department of
Interior, Federal Water Pollution Control Administration, unpublished data in
constant dollars, adjusted to current dollars on the basis of projected con-
struction cost increases.
1966 State Government General Revenues from U. S. Bureau of the Census,
Statistical Abstract of the United States: 1967, Washington, D. C., 1967
Table No. 592, p. 425.
-------
Table 13. Average Annual State and Local Bond Financing Requirements
for Sanitary Sewers and Municipal Waste Treatment Facilities,
Assuming Varying Levels of Federal Grants for Waste
Treatment Facilities
(Values in millions of dollars)
Level of Federal con-
tributions for munici-
pal waste treatment
facilities
0 Percent
30 Percent
55 Percent
Presently authorized-/.
Residual^ required borrowings
Total
Value
2,987.8
2,495.5
2,085.2
2,278.8
Multiple
of 1966
level— ^
3.65
3.05
2.55
2.79
As percent of 1966
(all-purpose
borrowings )— '
26.9
22.5
18.8
20.6
As percent of
average total
estimated
borrowings
16.1
13.4
11.2
12.3
50 Percent of present-
ly authorized
2,621.6
3.20
23.6
14.1
a/ Assumes average annual bond financing equals average annual required capital outlays; waste
treatment facilities, $1.641 million; sewers, $1,346.7 million.
b/ The residual sum includes the level of State and municipal obligation remaining plus the
cost of sanitary sewers.
c/ Estimated 1966 level of borrowings for waste treatment and sewer facilities was $818 million
(table ).
d/ Borrowings of $818 in 1966 for waste treatment and sewer facilities represented 7.4 percent
out of total municipal borrowings of $11 billion.
e/ Borrowings will average $18.6 billion for the years 1969-73 (JEC, Vol. 2, p. 35).
f/ Assumes Federal grants authorized during five years to which the present legislation refers
will be made available during the five years of the program, 1969-73.
-------
68.
Under the most favorable conditions, a 55% Federal grant,
required borrowings by State and local governments would be
2.55 times the 1966 level for such facilities and would repre-
sent 18.8% of total borrowings. On the basis of the JEC
estimate of the average 1969-73 bond market, borrowings for
waste treatment and sewer facilities at this level of Federal
grants would represent 11.2% of the total borrowings. It
is quite clear neither extreme will apply.
The Congress authorized $3.5 billion in Federal grant
assistance. This past year, however, the Congress appropriated
only 50% of the authorized Federal grants. This level of
appropriations would require borrowings for sewer and waste
treatment facilities at 3.2 times current bonding patterns
and would represent 14.1% of the projected average municipal
bond market over the 1969-73 period.
It is worthwhile to contrast these varying demands on
the bond market for sewer and waste treatment facilities with
those estimated in the JEC study. The JEC study estimated
capital outlays for these facilities, before any Federal
grants, at 10.6 per cent of the projected bond market over
the 1969-73 period. Under the FWPCA program, using a 55 per
cent Federal grant factor, the demand would represent 11.2
per cent of the bond market. If it were assumed that the
-------
69.
level of Federal grants would only be 50 per cent of the
authorizations, the demand, as indicated earlier, would be
14.1 per cent of the market in this period.
By steadily increasing the rate of interest it is
theoretically possible that the increased demands upon the
municipal bond market could be absorbed. However, at the
higher rates of interest the economic feasibility the desired
projects may be jeopardized, statutory rate limitations may
be encountered, and a general reluctance by the borrower to
pay such rates may be anticipated—any one event may effect
a delay in the achievement of the FWPCA program in the sched-
uled time period. To assure a minimal impact upon required
borrowings in the municipal bond market, the level of interest
rates and the supply of investable funds, the availability
of Federal grants at the maximum authorized level is obviously
of great importance.
The Prospects for Required Capital Outlays
by State and Local Governments
The question to be answered is whether State and local
governments will be able to finance their required capital
outlays to comply with the water quality standards and what
are the significant factors which could alter or interfere
with their ability.
-------
70.
The previous chapter reviewed the estimates for total
capital outlays for the years 1970 and 1975—indicated as
$31.6 billion and $40.7 billion, respectively. Borrowings
were estimated at approximately 50 per cent of total capital
outlays, or $15.8 billion in 1970 and $20.4 billion in 1975.
Public borrowings must, however, rise to $18.0 billion in
1970 and $23.4 billion by 1975 if total Federal grants are
$17.5 billion by 1970 and $25.0 billion by 1975 (and if 50
per cent of these grants is allocated to capital outlays).
User charges have been mentioned as an alternate source of
financing, lessening the dependence on Federal grants, gen-
eral revenues and the property tax to support borrowing. We
must nevertheless come back to the ability of State and local
governments to borrow the remainder of the required funds
for public facility capital requirements once allowances are
made for Federal grant assistance and State and local general
revenues.
As was seen in Table 9, the average annual surplus of
investable funds in the period 1968-75 would be $1.57 billion
under Series A and $580 million under Series B. It follows
that given the JEC estimate of assumed levels of capital
demand for municipal securities, State and local governments
will be able to continue to provide their required capital
outlays through borrowings. However, the JEC report observes
-------
71.
that there could prove to be no surplus of investable funds
if, as some believe, state and local government capital out-
lays rise more rapidly than is now foreseen—and the sewer
and waste treatment facilities program may be a case in
point. And if the Federal government should scale down its
grant program with a consequent increase in the demand for
public borrowing, there could be a substantial shortage of
financial resources available to State and local governments
for capital outlays.
A shift in investment attitudes by institutional inves-
tors away from municipal bonds could aggravate the shortage.
Commercial banks are projected to supply 68 per cent of the
expansion funds available for capital outlays. If for any
reason commercial banks find alternative investments more
attractive (such as business and consumer loans or mortgages),
a shortage of credit resources for State and local government
debt financing would develop. Any period of credit tightness
would also serve to limit the ability of commercial banks to
purchase municipal bonds.
Aside from these considerations, it is possible that
commerical bank asset expansion may be less than projected.
Or it is conceivable that the credit authorities may be
reluctant to permit large-scale commercial bank credit ex-
pansion, if a sizable portion of the expansion were to be
-------
72.
invested in tax-exempt municipal securities.
Similar conjectures could be made regarding future
investments by other institutional sources. For instance, a
series of catastrophes or disasters (fires, earthquakes,
hail, sinkings, civil disorders, wind, automobile accidents
and explosions) in any one year could significantly affect
the investment programs of insurance companies. The possi-
bility of lower Federal income tax rates may occur, which
would cause a wholesale re-examination of the value of tax-
exempt income to the respective investor groups. However,
with such qualification, it is reasonable to conclude that
total capital outlays as estimated by the JEC study are
attainable.
Turning to the water pollution control program we should
note that the JEC estimate of needs may be too low by about
$1.0 billion annually in the 1970's.— If this proves to be
the case and if the JEC estimates of total State and local
capital outlays need to be increased commensurately, the
projected surplus of investable funds would turn an overall
deficit. In this event, any funds available for water pollution
control might shrink along with funds for other capital pur-
poses.
I/ Supra, p. 8.
-------
73.
Whatever materializes, a far more important determinant
of the outcome of the water pollution control program is the
availability of Federal grants. If they amount to $3.5
billion, it could be said with some degree of confidence that
State and local governments in the aggregate will be able to
finance in the required capital outlays for sewer and waste
treatment facilities.
Nevertheless, particular local communities are still
likely to encounter difficulty. For example, Table 3 indi-
cates that 52 per cent of the needs are found in munici-
palities of less than 25,000, a population category that
historically pays a higher rate of interest for its bonds.—
This occurs in spite of the fact that the amount of credit
risk involved is not directly attributable to size alone.
However, the overhead costs in marketing an issue of small
amount is not proportionally less than that incurred in
marketing a larger sized issue. Furthermore, major investors
are reluctant to purchase smaller issues for reasons of
marketability or liquidity, and generally the detailed fi-
nancial data required for proper analysis is unavailable.
Moreover, influential bond rating agencies will not rate
I/ No estimate is currently available on the proportion of
communities in the less-than-25,000 population range for
which services will be provided by larger metropolitan
areas (by annexation or other means).
-------
74.
bonds of a locality unless that locality has a minimum amount
of debt outstanding.!./ The absence of a rating, in turn,
decreases investor demand.
Such factors, severally or in combination, operate to
increase the interest cost of borrowed funds to small muni-
cipalities and, accordingly, jeopardize the economic feasi-
bility of such projects and discourage the issuers from
undertaking the commitments. The proportionate share of the
overall requirements for waste treatment facilities which
communities under 25,000 population must assume amounts to
$3.6 billion. In other words, more than one-half of the total
burden must be financed by a class of municipalities least
able to bear the burden without assistance.
In analyzing their ability to finance waste treatment
and sewer facilities, local governments must also consider
costs associated with the capital outlay. This debt carries
a substantial interest burden. The facilities must be
maintained and operated—adding additional expenses to the
overall commitment. As shown by Table 14, under the most
favored terms—80 per cent Federal and State grants with debt
service over a 40-year term at 4-1/2 per cent interest rate—
local governments will be required to provide $680.1 million
I/ Moody's has followed a policy of not rating debt of gov-
ernmental subdivisions unless debt outstanding totals
$600,000 or more. Standard & Poor's does not rate govern-
mental subdivisions having less than $1 million debt out-
standing.
-------
Table 14. Annual Level Debt Service and Operating and Maintenance Costs for Local Governments,
Resulting from Required Capital Outlays for Municipal Waste Treatment Facilities
and Sanitary Sewers, Assuming Varying Levels of State and Federal Grants
Total United States, 1969-73
(in millions of dollars)
A. Required Capital Outlays, 1969-73
Year
Waste treatment facilities
Total
Net cost to local governments, as-
sumed combined levels of State and
Federal grants of —
30
percent
70
percent
80
percent
Sanitary
sewers
Total
Total waste treatment facilities
and sanitary sewers
Net cost to local governments, as-
suming combined levels of State and
Federal grants* of —
30
percent
70
percent
80
percent
1969
1970
1971
1972
1973
Total
1,480.8
1,553.6
1,633.6
1,721.5
1,816.0
8,205.5
1,036.6
1,087.5
1,143.5
1,205.0
1,271.2
5,743.8
444.2
466.1
490.1
516.5
544.8
2,461.7
296.2
310.7
326.7
344.3
363.2
1,641.1
1,267.7
1,306.4
1,344.2
1,385.1
1,430.2
6,733.6
2,304.3
2,393.9
2,487.7
2,590.1
2,701.4
12,477.4
1,711.9
1,772.5
1,834.3
1,901.6
1,975.0
9,195.3
1,563.9
1,617.1
1,670.9
1,729.4
1,793.4
8,374.7
-J
Ul
* for waste treatment facilities.
Continued—
-------
Table 14. Annual Level Debt Service and Operating and Maintenance Costs for Local Governments,
Resulting from Required Capital Outlays for Municipal Waste Treatment Facilities
and Sanitary Sewers, Assuming Varying Levels of State and Federal Grants
Total United States, 1969-73
(in millions of dollars)
—Continued
B. Annual Level Debt Service and Operating and Maintenance Costs
Capital outlay assuming
combined levels of State
and Federal grants for
municipal waste treat-
ment facilities of —
Annual level debt service on
total costs, assuming interest
rate of 4.5 percent/year and
amortization of— ^ —
25 years 30 years 40 years
Increase
in O & M
costs
Total costs, assuming interest
rate of 4.5 percent/year and
amortization of —
25 years 30 years 40 years
30 percent:
1969
1970
1971
1972
1973
Total 1969-73
1974+ per annum
70 percent:
1969
1970
1971
1972
1973
Total 1969-73
1974+ per annum
80 percent:
1969
1970
1971
1972
1973
Total 1969-73
1974+ per annum
2,
77.
236.
400.
572.
759.
046,
841,
.7
.1
.7
.0
.9
.4
.5
70.
214.
364.
520.
683.
1,854.
766.
7
9
8
7
1
2
6
62
190
322
460
604
1,641
678
.6
.3
.9
.9
.7
.4
.1
1,
57.
175.
296.
422.
557.
510.
620.
7
2
8
8
8
3
1
52
159
270
384
507
1,375
564
.6
.5
.2
.9
.8
.0
.5
46
141
239
340
449
1,217
499
.5
.2
.2
.7
.5
.1
.7
1,
52.
156.
270.
385.
504.
369.
564.
7
0
9
5
3
4
8
48
145
246
351
459
1,250
514
.0
.6
.6
.0
.1
.3
.1
42.
128.
218.
310.
406.
1,106.
455.
5
9
3
7
4
8
1
22.5
68.1
114.6
160.4
205.8
571.4
225.0
100.2
304.2
515.3
732.4
965.7
2,617.8
1,006.5
93.2
283.0
479.4
681.1
888.9
2,425.6
991.6
85.1
258.4
437.5
621.3
810.5
2,212.8
903.1
22.5
68.1
114.6
160.4
205.8
571.4
225.0
80.2
243.3
411.4
583.2
763.6
2,081.7
845.1
75.1
227.6
384.8
545.3
713.6
1,946.4
789.5
69.0
209.3
353.8
501.1
655.3
1,788.5
724.7
22.5
68.1
114.6
160.4
205.8
571.4
225.0
75.2
224.1
385.5
545.9
710.1
1,940.8
789.8
70.5
213.7
361.2
511.4
664.9
1,821.7
739.1
65.0
197.0
332.9
471.1
612.2
1,678.2
680.1
Continued—
-------
Table 14. Annual Level Debt Service and Operating and Maintenance Costs for Local Governments,
Resulting from Required Capital Outlays for Minicipal Waste Treatment Facilities
and Sanitary Sewers, Assuming Varying Levels of State and Federal Grants
Total United States, 1969-73
(in millions of dollars)
—Continued
Assumes borrowing for capital outlay in each year of the period 1969-73 will be spread evenly over the
year; i. e., total debt which must be serviced in a given year equals total capital outlay of pre-
ceding years plus one-half outlay in the given year.
Sources: A: Totals for Waste Treatment Facilities and Sanitary Sewers from Table 1.
B: Increase in O & M costs, U. S. Department of the Interior, Federal Water Pollution Control
Administration, unpublished data.
-j
-j
-------
78.
annually after 1973 for debt service and operating and
maintenance costs. Table 15 provides a State-by-State
analysis of the annual debt service cost alone, assuming the
same interest rate but a 25-year spread.
Demands for capital outlays vary quite substantially
State-by-state and among communities within a State. As
was pointed out in Chapter I, indicated percentage increases
in required capital outlays by States range from a low of
10 per cent to highs of over 350 per cent. Some difference
in the response to the Federal program can be anticipated
by the variance of the size of the capital requirements for
such facilities. Also, while recognizing the need for
pollution abatement programs, some affected units of govern-
ment will have higher priorities, or encounter legal con-
straints as discussed in the following chapter. In short,
any conclusion about the ability to finance capital outlays
will be governed by whether one speaks in the aggregate or
with reference to a particular unit of government.
This report did not examine the growth prospects of
State and local government tax revenues or user charges to
support borrowings for waste treatment and sewer facilities,
nor did it consider the possible expansion of Federal grant
assistance for these facilities beyond current authorizations,.
-------
79.
Table 15. Annual Debt Service for Local Governments
from Required Capital Outlays for Municipal
Waste Treatment Facilities and Sanitary
Sewers, Assuming Various Levels of
State and Federal Grants
(in millions of dollars)
State and
level of com-
bined State
and Federal
GrantsS/
Required Capital Outlays for
Local Governments . 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
$ 4.5* p. a. and 25-
year amortization)
Alabama:
30 percent
70 percent
80 percent
Alaska:
30 percent
70 percent
80 percent
Arizona:
30 percent
70 percent
80 percent
Arkansas:
30 percent
70 percent
80 percent
California:
30 percent
70 percent
80 percent
Colorado:
30 percent
70 percent
80 percent
78.2
33.5
22.3
8.3
3.5
2.4
44.4
19.0
12.7
25.8
11.0
7.4
920.9
394.7
263.1
54.0
23.1
15.4
69.5
8.7
145.6
26.8
147.7
103.0
91.8
17.0
12.2
11.1
190.0
164.6
158.3
52.6
37.8
34.2
2,215.2
1,294.3 1,689.0
1,557.4
111.5
57.5 80.6
72.9
10.0
7.0
6.2
1.1
0.8
0.7
12.8
11.1
10.7
3.5
2.5
2.3
149.4
113.9
105.0
7.5
5.4
4.9
continued -
-------
Table 15. Continued
80.
State and
level of com-
bined State
and Federal
Grants!/
Required Capital Outlays for
Local Governments. 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4.596 p. a. and 25
year amortization)
Connecticut:
30 percent
70 percent
80 percent
Delaware:
30 percent
70 percent
80 percent
117.3
50.3
33.5
18.5
7.9
5.3
District of Columbia:
30 percent 8.6
70 percent 3.7
80 percent 2.5
Florida:
30 percent
70 percent
80 percent
Georgia:
30 percent
70 percent
80 percent
Hawaii:
30 percent
70 percent
80 percent
Idaho:
30 percent
70 percent
80 percent
276.9
118.7
79.1
124.7
53.4
35.6
33-3
14.3
9.5
14.2
6.1
4.1
137.9
21.0
58.8
397.5
112.1
81.2
9.7
255.2
188.2
171.4
39.5
28.9
26.3
67.4
62.5
61.3
674.4
516.2
476.6
236.8
165.5
147.7
114.5
95.5
90.7
23.9
15.8
13.8
17.2
12.7
11.6
2.7
1.9
1.8
4.6
4.2
4.1
45.5
34.8
32.1
16.0
11.2
10.0
7.7
6.4
6.1
1.6
1.1
0.9
continued -
-------
Table 15. Continued
81.
State and
level of com-
bined State
and Federal
Grants §/
Required Capital Outlays for
Local Governments. 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4,5% p. a. and 25-
year amortization)
Illinois:
30 percent
70 percent
80 percent
Indiana:
30 percent
70 percent
80 percent
Iowa:
30 percent
70 percent
80 percent
Kansas:
30 percent
70 percent
80 percent
Kentucky:
30 percent
70 percent
80 percent
Louisiana:
30 percent
70 percent
80 percent
Maine:
30 percent
70 percent
80 percent
215.6
92.4
61.6
101.0
43.3
28.9
34.9
14.9
10.0
26.3
11.3
7.5
72.0
30.9
20.6
115.4
49.5
33-0
31.6
13.5
9.0
443.6
228.0 320.4
289.6
174.0
73.0 116.3
101.9
48.4
13.5 28.4
23.5
48.3
22.0 33.3
29.5
125.1
53.1 84.0
73.7
272.7
157.3 206.8
190.3
35.9
4.3 17.8
13.3
29.9
21.6
19.4
11.7
7.9
6.9
3.3
1.9
1.6
3.3
2.2
2.0
8.5
5.7
5.0
18.4
14.0
12.8
2.4
1.2
0.9
continued -
-------
Table 15. Continued
82.
State and
level of com-
bined State
and Fader a 1
Grants §/
Required Capital Outlays for
Local Governments. 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewars
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4.596 p. a. and 25-
year amortization)
Maryland:
30 percent
70 percent
80 percent
Massachusetts
30 percent
70 percent
80 percent
Michigan:
30 percent
70 percent
80 percent
Minnesota:
30 percent
70 percent
80 percent
Mississippi:
30 percent
70 percent
80 percent
Missouri:
30 percent
70 percent
80 percent
Montana:
30 percent
70 percent
80 percent
73.7
31.6
21.1
191.2
81.9
54.6
355.9
152.6
101.7
106.7
45.8
30.5
32.2
13.8
9.2
126.8
54.4
36.2
16.6
7.1
4.7
200.7
127.0 158.6
148.1
408.5
217.3 299.2
271.9
207.9
81.6
45.6
321.2
6.1
563.8
360.5
309.6
188.3
127.4
121.1
77.8
59.4
54.8
448.0
375.6
357.4
22.7
13.2
10.8
13.5
10.7
10.0
27.5
20.2
18.3
38.0
24.3
20.9
12.7
8.6
7.6
5.2
4.0
3.7
30.2
25.3
24.1
1.5
0.9
0.7
continued -
-------
Table 15. Continued
83.
State and
level of com-
bined State
and Federal
Grants §/
Required Capital Outlays for
Local Governments. 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
9 4.5% p. a. and 25-
year amortization)
Nebraska:
30 percent 25.5
70 percent j 11.0
80 percent 7.3
Nevada:
30 percent 8.7
70 percent 3.7
80 percent 2.5
New Hampshire:
30 percent 21.6
70 percent 9.2
80 percent 6.1
New Jersey:
30 percent 333.0
70 percent 142.7
80 percent 95.
New Mexico:
30 percent 17.1
70 percent 7.4
80 percent 4.9
New York:
30 percent 643.5
70 percent 275.8
80 percent 183.9
North Carolina
30 percent 55.5
70 percent 23.8
80 percent 15.9
44.2
18.7 29.7
26.0
17.7
20.5
26.4
21,4
20.2
42.1
29.7
26.6
756.8
423.8 566.5
518.9
53.3
36.2 43.6
41.1
1,345.0
701.5 977.3
885.4
137.5
82.0 105.8
97.9
3.0
2.0
1.7
1.8
1.4
1.4
2.8
2.0
1.8
51.0
38.2
35.0
3.6
2.9
2.8
90.7
65.9
59.7
9.3
7.1
6.6
continued -
-------
Table 15. Continued
84
State and
level of com-
bined State
and Federal
Grants a/
Required Capital Outlays for
Local Governments, 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4.5% p. a. and 25
year amortization)
North Dakota:
30 percent
70 percent
80 percent
Ohio:
30 percent
70 percent
80 percent
Oklahoma:
30 percent
70 percent
80 percent
Oregon:
30 percent
70 percent
80 percent
Pennsylvania:
30 percent
70 percent
80 percent
Rhode Island:
30 percent
70 percent
80 percent
South Carolina:
30 percent
70 percent
80 percent
7.6
3.2
2.2
285.9
122.5
81.7
31.2
13.4
8.9
80.2
34.4
22.9
204.5
87.7
58.4
26.1
11.2
7.5
57.7
24.7
16.5
5.4
272.2
73.2
50.1
35.6
37.2
13.0
8.6
7.6
558.1
394.7
353.9
76.9
45.7 59.1
54.6
153.4
107.6
96.1
254.6
137.8
108.5
61.7
46.8
43.1
94.9
61.9
53.7
0.9
0.6
0.5
37.7
26.6
23.9
5.2
4.0
3.7
10.3
7.3
6.5
17.2
9.3
7.3
4.2
3.2
2.9
6.4
4.2
3.6
continued -
-------
Table 15. Continued
85.
State and
level of com-
bined State
and Federal
Grants a/
Required Capital Outlays for
Local Governments. 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4.5% p. a. and 25-
year amortization)
South Dakota:
30 percent
70 percent
80 percent
Tennessee:
30 percent
70 percent
80 percent
Texas:
30 percent
70 percent
80 percent
Utah:
30 percent
70 percent
80 percent
Vermont:
30 percent
70 percent
80 percent
Virginia:
30 percent
70 percent
80 percent
Washington:
30 percent
70 percent
80 percent
7.5
3.2
2.1
90.4
38.7
25.8
171.1
73.4
48.9
82.9
35.5
23.7
11.8
5.0
3.4
117.5
50.4
33.5
126.5
54.2
36.1
4.3
71.7
407.4
56.3
2.1
121.0
204.0
11.8
7.5
6.4
162.1
110.4
97.5
578.5
480.8
456.3
139.2
91.8
80.0
13.9
7.1
5.5
238.5
171.4
154.5
330.5
258.2
240.1
0.8
0.5
0.4
10.9
7.4
6.6
39.0
32.4
30.8
9.4
6.2
5.4
0.9
0.5
0.4
16.1
11.6
10.4
22.3
17.4
16.2
continued -
-------
Table 15. Continued
86.
State and
level of com-
bined State
and Federal
Grants a/
Required Capital Outlays for
Local Governments, 1969-73
Waste Treatment
Facilities,
net costs
Sanitary
Sewers
Total
Cost
Annual Debt Service
on Total Net Cost
(assuming interest
@ 4.5% p. a. and 25-
year amortization)
West Virginia;
30 percent
70 percent
80 percent
Wisconsin:
30 percent
70 percent
80 percent
Wyoming:
30 percent
70 percent
80 percent
Total U.S.:
30 percent
70 percent
80 percent
34.8
14.9
9.9
72.1
30.9
20.6
6.2
2.6
1.8
5,743.9
2,461.7
1,641.1
15.0
48.5
5.0
49.8
29.9
24.9
120.6
79.4
69.1
11.2
7.6
6.8
12,477.5
6,733.6 9,195.3
8,374.7
3.4
2.0
1.7
8.1
5.4
4.7
0.8
0.5
0.5
841.5
620.1
564.8
a/ 30%: 30 percent Federal qrants, no State grants.
70%: 40 percent Federal grants, 30 percent State grants.
80%: 55 percent Federal grants, 25 percent State grants.
Source: Required capital outlays for local governments calculated
from U.S. Department of Interior, Federal Water Pollution
Control Administration, unpublished data in constant
dollars, adjusted to current dollars on the basis of
projected construction cost increases.
-------
87.
or $3.5 billion. To do so would have required a compre-
hensive analysis of State and local fiscal resources and
judgments as to the willingness of the Congress to appro-
priate Federal grants for water pollution control. Nor
did the report attempt to establish criteria by which a
categorical judgment could be made as to the ability of
any particular State or local government to finance its
water control program. These also would have extended the
report beyond its designative objective. What this study
has done is point out that, with the stimulus of Federal
financial assistance as authorized by the Clean Waters
Restoration Act, both the ability and propensity of State
and local government to meet the required standard will be
considerably enhanced.
-------
III. LEGAL CONSTRAINTS UPON STATE AND LOCAL GOVERNMENTS
IN FINANCING REQUIRED CAPITAL OUTLAYS
Until recently, sewer and waste treatment facilities
were financed almost entirely by political subdivisions and
instrumentalities of the States (herein referred to as
local governments).i/ The magnitude of the present water
pollution control program has required State governments
to reconsider past practices and to examine the necessity
and feasibility of financial participation with local
governments. At present more than one-half of the States
have authorized, undertaken, or authorized subject to
referendum, financial assistance to their local governments
for installation of sewer and waste treatment facilities.
Only a limited number among such States have provided, or
currently propose to provide, moneys sufficient to carry out
a substantial financial assistance program. Such financial
assistance is customarily in the form of grants, but some
States provide loans or prepayments of the anticipated
Federal grant.-/
_!/ See JEC report, Vol. 2, p. 87. It is stated that four
States offered aid for sewage treatment works and that the
total amount of aid in 1962 was about'$6 million.
2/ For a recent compilation of State assistance to local
governments for water pollution control, see Community Action
Program For Water Pollution Control, National Association of
Counties, Research Foundation, Revised July, 1967, pp. 114-5.
88.
-------
89.
In view of the present and prospective State financial
assistance to local governments for the financing of sewer
and waste treatment facilities, the problem of legal con-
straints must be considered with respect to States and their
local governments.
The States
The primary constraint upon provision of State financial
assistance to local governments is the State constitutional
debt limit or referendum requirement for incurrence of debt.
When the magnitude of the program and the time scheduled
for its accomplishment are considered, along with the
budgetary problems for other purposes, it is apparent that
most States will have to look to borrowed funds to carry
out a realistic program of financial assistance. However,
their ability, in many instances, to borrow money for such
purpose is severely impeded by constitutional limitations.
Approximately one-third of the States have constitutional
prohibitions against incurrence of any debt or have limita-
tions on the amounts that may be incurred to an extent that
would not permit the funding by incurred debt of a reason-
able portion of the applicable program (table 16). In
addition, over 40 percent of the States require a referendum
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90.
Table 16. Constitutional Limitations on Long-Term General Obli-
gation Debt. (Expressed as percentage of assessed
valuation of taxable property.)
State
(1)
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Limit
$300,000
Vote required; no limit
$350,000
Vote required
$300,000, plus voted debt
$100,000
None
(2)
Prohibited
$500,000
15 per cent
$2,000,000, plus voted debt
$250,000, plus voted debt
Prohibited
$250,000, plus voted debt
$1,000,000, plus voted debt
$500,000, plus voted debt
Prohibited
$2,000,000, plus voted debt
None
. . .do
Vote required
None
. . .do
$1,000,000, plus voted debt
$100,000, plus voted debt
$100,000
1 per cent
None
1 per cent of appropriation
for fiscal year, plus voted
debt
$200,000, plus voted debt;
also State and county debt
may not exceed 1 per cent
Vote required
Vote required
$2,000,000*3)
$750,000
Vote required
; no limit
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Table 16. continued
91.
(4)
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
$50,000
$1,000,000
$50,000, plus voted debt
Vote required
$100,000, plus 0.50 per cent
to develop resources
None
$200,000
1.50 per cent
None
1 per cent; vote required
$400,000, plus voted debt
Prohibited
$100,000
1 per cent; vote required
(1)
(2)
(3)
(4)
When the debt limit is expressed as a dollar amount, this
amount is usually an authorization of debt to meet casual
deficits. In addition, State constitutions almost uni-
versally authorize unlimited debt "to repel invasion or
suppress insurrection."
A proposed amendment relates the debt limit to the revenues
of the State. Debt service on all debt must not exceed a
certain percentage of the State's revenues. The percentage
declines from 30 per cent of gross revenues in 1963 to
20 per cent after 1971.
Proposed amendments would authorize State debt equal to 5
per cent of the taxable value of the property within the
State.
Proposed amendment authorizes State debt if authorized by
popular vote.
Source: JEC Report, Vol. 2, pp. 153-155.
-------
92.
to authorize the incurrence of debt to provide requisite
funds for such purposes. The balance of the States may
contract debt by legislative action. The constitutional
prohibitions against the incurrence of debt by the States
applies similarly to the guarantee of obligations of
local governments of the States.
The constitutional prohibitions against the incurrence
of debt and the referendum requirements before incurrence
of debt, in almost all instances, have been in effect for
many years and have been found difficult, if not impossible,
to change. There is a definite reluctance on the part of
State officials to tamper with long-standing constitutional
limitations upon the creation of general obligation debt.
Further, in the case of most constitutions, the amendment
process requires passage of a proposed amendment by two
succeeding legislatures and ratification by the electorate.
A secondary constraint upon the provision of such
financial assistance is the constitutional prohibition
against the loan, gift, or grant of the credit of the State.
In many States this constitutional prohibition does not
apply to public corporations. In other States it applies
to both public and private corporations. In some States
a judicial construction of the pertinent constitutional
-------
93.
provision has not taken place. In States where the pro-
hibition is applicable, the State would be prohibited from
borrowing money to make grants, loans, or advances to its
local governments. Factors relating to the amendment of
constitutional debt prohibitions and limitations noted above
applies equally to the prospects of amending the constitu-
tional prohibitions against the loan, gift, or grant of
credit.
To summarize, the prospects of local governments re-
ceiving State financial assistance by way of grants, loans,
or the prepayment of the anticipated Federal grants in
meaningful amounts and at the times required, are as follows:
1. While the States may legally appropriate funds from
current revenues for the required purposes, it cannot be
anticipated that a substantial number of the States will
make such appropriations.
2. Approximately one-third of the States are without
constitutional authority to borrow funds for the required
purposes, and the prospects for many States obtaining con-
stitutional amendments are not encouraging.
3. Over 40 percent of the States would require the
approval of the electorate to borrow funds for the required
purposes. While some States have obtained such approval
-------
94.
and others are in the process of submission to the electorate,
it cannot be anticipated that a very large number of States
will obtain the requisite electorate approval during the
timespan being considered.
4. In the balance of the States where funds may be
borrowed for the required purposes by legislative action,
based upon the number of such States that have acted to
date and the programs provided, it can be reasonably antici-
pated that most of these States will provide a reasonable
proportion of the required funds.
5. The constitutional prohibitions against the loan,
gift, or grant of credit of the States is likely to place
a further limitation upon the provision of borrowed funds
for the required purposes in a number of States.
Local Governments
The most frequently used method of financing sewer
and waste treatment facilities of local governments is the
issuance of general obligation bonds secured by ad valorem
taxes (See Appendix III). The magnitude of the prospective
program raises the question of the available borrowing
capacity of such entities in view of the legal limits on
the incurrence of such indebtedness under constitutional,
-------
95.
statutory, and charter limitations. The traditional debt
limit is expressed as a percentage of the assessed valuation
of the taxable property within the boundaries of the issuer.
However, in some instances the same result is obtained by a
limitation upon the amount of taxes that may be levied for
debt purposes by the local governments.
The prospects of revising constitutional debt limits
of local governments are similar, in most cases, to the
constitutional debt limits of the States. However, statutory
limitations on local indebtedness can readily be changed by
legislative action since such limitations are merely authori-
zations to local governments to create debt up to the new
limitations, and the burden of the actual increase in indebted-
ness is the responsibility of the local officials or electorate
Limitations in home rule charters generally are more diffi-
cult to change since they require the vote of the electorate.
The effect of debt limitations and referendum require-
ments on the ability of local governments to finance sewer
and waste treatment facilities can only be determined by
considering the existing debt of each unit of government,
their prospective requirements for other capital purposes,
the scope of their existing sewer and waste treatment
facilities program, and the possible requirement of the
-------
96.
prefinancing by a Federal or State grant.
Debt limit and referendum requirement constraints
in relation to the financing of sewer and waste treatment
facilities have been eased by a number of procedures which
will undoubtedly be used more extensively as additional
financing is required. The most direct approach has been
to remove the application of the debt limit for obligations
issued for sewerage purposes or to provide an additional
borrowing capacity for sewerage purposes. Approximately
one-fifth of the States have recognized the necessity of
additional borrowing capacity by local governments for
sewerage purposes and have provided the necessary exceptions
(Appendix III). Other means of avoiding the debt limit and
referendum requirement constraints are the creation of
special districts for the sole purpose of financing sewer
and waste treatment facilities or water and waste facilities
and the use of revenue obligations which normally do not
fall within the constitutional limitations.
The practice of creating special districts to provide
limited public facilities, such as sewer and waste treatment
facilities, has been sanctioned in most of the States under
pertinent constitutional provisions, since such constitutional
limitations upon indebtedness do not take into consideration
-------
97.
the debts of overlapping jurisdictions and such districts
either have separate or no debt limits. Special districts
are used in more than half of the States to accommodate
their various problems (Appendix III) . An additional reason
for the use of special districts is that their boundaries,
within a larger county or municipal area, may correspond
better to the physical problem and, accordingly, those
receiving the service or benefit may contribute a more
equitable share of the cost of providing the facility.
Constitutional debt restrictions have also been over-
come in increasing instances by the use of revenue obliga-
tions to provide funds for the purpose of financing sewer
and waste treatment facilities. Local governments in
approximately three-quarters of the States have now issued
revenue bonds to finance such facilities. The extent of the
use of this method of financing varies widely within such
States. The exercise of this power of authorization by
State legislatures is not unrestricted. The courts of a
limited number of States have refused to approve or have
limited the application of special fund theory which excludes
revenue bonds from constitutional debt limits. In cases of
limited application, the courts have permitted the exclusion
of bonds which are payable from the revenues of the facility
-------
98.
constructed from the proceeds of the bonds, but have not
permitted the exclusion if revenues from existing facilities
which were being added to or extended were also pledged.
Even in States where constitutional limitations do not
exist, local governments have not always been given full
authority to issue revenue bonds to finance sewer and waste
treatment facilities. This condition will undoubtedly be
corrected as constitutional limitations begin to impinge
on their borrowing power and as the benefits of revenue
bond financing become more apparent.
A further constraint presently impairing the ability
of some local governments to issue obligations is the
interest rate limitation in the authorization pursuant to
which such obligations must be issued. Most such authoriza-
tions have been enacted over the past 20 years when the
cost of borrowing was considerably less than at present —
the representative averages of the cost of municipal borrow-
ing presently being at or near an all-time high. Fortunately,
most of the interest rate limitations are statutory and may
be removed or increased by appropriate legislation. Such
legislative action is presently under consideration in some
jurisdictions.
The terms and conditions under which the obligations
-------
99.
may be authorized frequently constitute additional con-
straints. These authorizations, generally applicable to
general obligation bonds, limit the period over which the
obligations mature and prescribe principal maturities that
result in unequal and heavy payments in the early years of
amortization. These limitations and requirements prohibit
the use of a fiscal plan which could be related to the
period of probable use of the facility and to debt service
requirements reflecting the productive use of the facility.
Many of the limitations are statutory and can be corrected
by legislative action. In instances where such limitations
are constitutional and not subject to ready change, the
further use of revenue bond financing may solve the problem
since, in most instances, the legislation authorizing the
issuance of revenue bonds will contain terms and conditions
that will assure the most appropriate plan of financing.
The financing of sewer and waste treatment facilities
under a program contemplating Federal and State grants, in
some instances, is constrained by the requirement that the
local government undertaking the program have on hand the
required funds prior to the undertaking of the contract
obligation for the construction of the facility. The
specifics of this type of requirement vary widely, some
-------
100.
arising from constitutional and some from statutory pro-
visions. Assuming that a local government is able to
finance its share of the cost of the facility, the problem
most frequently arising is the failure of the local govern-
ment to have on hand by the required date the funds repre-
senting the Federal and State grants. The obvious solution
to the problem would be for the local government to borrow
temporarily the required funds against future payment of the
grants. However, the constitutional debt restrictions come
into operation where the local government is carrying out
its financing program through general obligation bonds. In
the case of revenue bond financing, the same constitutional
problem normally does not exist, but another problem does in
connection with the requirement that all funds allocated to
the cost of a facility be on hand when revenue bonds are
issued. This requirement is based on the fact that the
revenues to pay the bonds are estimated with respect to a
completed and fully financed facility.
Furthermore, a factor existing in many States that also
detracts from the ability of local governments to carry out
a perfected plan of financing is the lack of authorization
to collect standby or availability charges from properties
that may now or in the future benefit from the facility, but
are not presently receiving service. A properly designed
-------
101.
facility should anticipate future growth and provide the
requisite capacity. On the other hand, current customers
should not be required to pay present carrying charges on
a capacity that will benefit future users who, upon con-
nection and use, will only be required to pay a lesser
overall sum. In most States, this constraint can be re-
moved by the passage of appropriate legislation. In others
there exist constitutional implications requiring individual
consideration of limitations on the powers of local govern-
ments to impose taxes and other charges.
To summarize the effect of existing legal constraints
on the ability of local governments to finance sewer and
waste treatment facilities and the prospect of the removal
or avoidance of such constraints:
1. Debt limitations and referendum requirements will
continue to impede the ability of many local governments
to issue general obligation bonds, although relief may be
expected in some States through expansion of debt limits
with respect to obligations issued for such facilities.
2. Greater use of special districts, not subject to
conventional debt limits, will provide additional borrowing
capacity for the purpose of financing sewer and waste treat-
ment facilities.
-------
102.
3. Where debt limitations and referendum requirements
are so restrictive as to impair the ability of local govern-
ments to finance such facilities, the increased use of
revenue bonds will enable local governments to avoid such
limitations and requirements.
4. Where constraints exist with respect to interest
rate limitations and with respect to restrictive requirements
on the terms and conditions upon which bonds may be issued,
such constraints, if statutory, will be removed by appropri-
ate legislation and, if constitutional, will be avoided by
the employment of other means of financing.
5. Where local governments are prohibited from under-
taking construction contracts until all funds required are
on hand, such prohibitions, if statutory, will be removed
by appropriate legislation and, if constitutional, will be
avoided by the employment of other means of financing.
6. As user charges for sewer service become more
extensively employed to support revenue bond financing,
further authorizations for the collection of standby or
availability charges will be provided.
Full consideration of the various methods available to
local governments for the financing of sewer and waste treat-
ment facilities leads to the conclusion that, in most if not
-------
103.
all jurisdictions, legal constraints can be removed or
avoided by appropriate action to permit the undertaking of
the requisite financing. The justification of the use of
some of these methods, as in the case of revenue bond
financing, depends upon the economic feasibility of the
project which, in turn, is directly related to Federal and
State financial assistance.
-------
APPENDIX I—TECHNICAL NOTES
104.
-------
105.
TECHNICAL NOTE 1
Statement of the Limitations of Data Provided
in the FWPCA Cost Estimate Study
Estimates of costs of treating municipal effluent to
attain water quality standards which are used in this report
have been adopted from the FWPCA Cost Estimate Study author-
ized by the Clean Water Restoration Act of 1966.
The estimates developed by the Cost Estimate Study are
based upon the total costs of treatment works eligible for
Federal grants assistance. it was assumed that financing
of this construction to attain water quality standards will
take place in the five-year period 1969-73, and that all muni-
cipal effluent will be treated in compliance with the individual
State standards by 1973. Prior to the actual setting and
approval of standards for all States, it was assumed that
secondary types of waste treatment would be required.
Estimates of the costs of treatment works are based on
the need to provide service to the total urban population of
the United States and the industries discharging waste water
to public sewers. Treatment works include the plant, inter-
cepters and outfalls.
The cost of construction was phased proportionately over
the five-year period. This procedure was used to illustrate
possible annual increments, and as a basis for estimating annual
-------
106.
depreciation and annual construction cost increases, although
it is recognized that construction would not actually occur
at a fixed rate.
Since the preparation of this report of economic impact
on the effected units of government, the FWPCA Cost Estimate
Study has made some revisions in the data, principally to
reflect the setting and approval of primary waste treatment
in some areas. Costs to states having substantial metropolitan
populations for which primary waste treatment has been approved
will therefore be reduced in complying with the standards.
These States are California, Massachusetts, Missouri, and
Nebraska. In other States where some primary waste treatment
has been approved, total costs are not substantially affected.
The basic data were also subsequently revised to incorporate
a construction cost increment for additional capacity, which
is normally included when treatment works are constructed.
This would provide capacity for five years of population
growth in each State beyond the 1969-73 period of the Cost
Estimate Study.
These revisions have not resulted in a substantial alter-
ation of total national costs or the associated economic impact.
However, the total costs of treatment works required to attain
water quality standards and the economic impact of these costs
in the States of California, Massachusetts, Missouri, and
-------
107.
Nebraska are considered to have been substantially changed by
the approval of primary waste treatment in certain metropolitan
areas.
The cost estimates for sanitary sewers are based upon
providing service to the urban population of the United States
by 1973 in order to put these needs on the same basis as
treatment works. The economic impact of the cost of controlling
storm water overflows has not been assessed in this study
because no time schedule for achieving such control was
included in the FWPCA Cost Estimate Study.
Source: U.S. Department of the Interior, Federal Water
Pollution Control Administration.
-------
108.
TECHNICAL NOTE 2
Methodology Employed in Projecting
Construction Cost Increases
These projections were first made for each of the 20
cities for which sewer and treatment plant cost indexes are
calculated by the FWPCA. The period 1950-67 was used as the
historic base for the projections, with trends since 1960
given particular emphasis. A constant rate of increase for
sewer construction costs was assumed for each of the projected
five years. Treatment plant indexes were projected to increase
at a slightly increasing rate for the five years, as suggested
by the patterns observed for the national average index and
for many of the State indexes since the year 1961. Index
figures for the States were constructed by allocating the
States among the various cities on the basis of the FWPCA
"Areas of Influence". The resulting figures, each independently
arrived at, were then converted to an index (1968 = 100), and
the FWPCA projections of required capital outlays for the States,
expressed in terms of constant 1968 dollars, were estimated
accordingly, summed and divided by the national 1968 constant
dollar totals to arrive at the national index, and then re-
converted to the original index (1967-59 = 100). Thus, the
national index figures shown in Table 3 were weighted by the
relation of each State's program requirement to the national
total.
-------
109,
TECHNICAL NOTE 3
Sources of Data and Assumptions in the JEC
Series B Forecasts
A number of reports dealing with the question of State
and local finances in the near future have been reviewed
during the course of the present analysis. Several of these
reports deal explicitly with or refer to Gross National Product
projections. Of the various studies examined, including those
prepared by or for the Joint Economic Committee of the Congress,
National Planning Association, Center for Economic Projections,
George Washington University (for the Council of State Govern-
ments) , the Committee for Economic Development and the Tax
Foundation, the projections prepared for the JEC are considered
to be the most realistic and have been employed in this analysis.
The JEC's Series B forecasts of GNP are dependent on the
following key assumptions: (1) The War ±n Vietnam will subside
by the end of 1967, allowing some reductions in the size of the
Armed Forces and the rate of expenditures thereafter; (2) The
Civilian labo_r force will rise from 75.6 million in 1965 to
83.3 million in 1970, and to 91.0 million in 1975; (3) Average
factory-hours will decline by 30 minutes per week between 1967
and 1970 and by an additional 30 minutes between 1970 and 1975;
(4) Wage rates will rise at the rate of the average annual gain
-------
110.
in output per man-hour in the private economy plus an allowance
for the annual gain in consumer prices in both public and
private employment; (5) Productivity—output per man-hour—
will increase by 3.0 per cent per year between 1966 and 1975;
(6) The unemployment rate will be 4 per cent of the labor
force; (7) Prices—the GNP deflator—will rise at an annual
average rate of 1.5 per cent; (8) Personal savings—the ratio
to disposable income—will average 5.5 per cent.
In addition, information has been drawn from a wide variety
of sources, the primary source being the unpublished date
provided by the FWPCA. This consists of a series of three
computer tapes on which the projected capital outlays for both
sanitary sewers and municipal waste treatment facilities are
phased over the five years 1969-72. These data, compiled for
each State, represent the Authority's reckoning of the total
construction costs necessary to attain the standards of waste-
water quality called for by the Federal Water Pollution Control
Act and by relevant State legislation and to accommodate the
three areas of need (i.e., presently inadequate facilities,
presently unmet needs, and population and industrial growth).
In addition, these tapes contained information regarding the
operational and maintenance expenses and depreciation charges
of the required waste treatment facilities. The Authority has
prepared a detailed explanation of the underlying concepts and
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111.
the methodology employed in the preparation of the computer
program. A great deal of information was also obtained by
interviews with professionals in the Authority, particularly
from the following Divisions: Construction Grants, Financial
Management, and Program Review and Evaluation.
Much authoritative material regarding construction costs
was obtained through discussions with various authorities
from among the following organizations: The Associated General
Contractors of America, the Water Pollution Control Federation,
the Consulting Engineers Council, and the Waste Water and
Waste Water Equipment Manufacturers Association. Personnel
from the U. S. Department of Health, Education and Welfare
were also extremely helpful in providing special information
regarding sanitary sewer construction costs.
Other sources of information which were of particular
benefit in the preparation of this study include the following:
U. S. Department of Health, Education, and Welfare, Public Health
Service, Division of Water Supply and Pollution Control, Sewage
Treatment Plant Construction Cost Index, 1963.
, Sewer Construction Cost Index, 1964.
U. S. Department of Interior, Federal Water Pollution Control
Administration, Sewage and water Works Construction, WP-15
publication series (formerly Public Health Service Publication
No. 758), various years.
, "Sewage Treatment Plant and Sewer Construction Cost
Index", (monthly mimeographed publication), various months and
years.
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112.
TECHNICAL NOTE 4
Federal Grants for Sanitary Sewers and Waste Treatment
Facilities Through Agencies Other Than Federal
Water Pollution Control Administration
1. The Appalachian Regional Development Act of 1965 (PL 89-4,
amended by PL 90-104).
Grants available for public works, including waste treat-
ment facilities under the following arrangements:
Section 212 permits the U. S. Department of Commerce to
increase contributions from other Federal programs in
Appalachia up to 80 per cent of project costs. These
funds are disbursed through the FWPCA and have been
included in FWPCA data.
Section 214 permits the U. S. Department of Commerce to
give supplemental grants to communities in Appalachia
to help meet their local share for public works projects
in which they are eligible for other Federal funds.
2. The Public Works and Economic Development Act of 1965
(PL 89-136).
Directs the U. S. Department of Commerce to make grants
and loans for public works in economically distressed
areas. EDA makes grants up to 50 per cent of project
costs in designated "redevelopment areas." Supplementary
grants up to 80 per cent of the pr6ject cost are avail-
able for areas which cannot meet the required matching
share. The Economic Development Administration receives
a total appropriation for grants to public works, which
it allocates to projects which include sanitary sewers
and waste treatment plants. Authorization allows $500
million to be appropriated annually for public works
projects from fiscal years 1966-69.
The Housing and Urban Development Act of 1965 (PL 89-117),
permits the U. S. Department of Housing and Urban Develop-
ment to make grants and loans for basic water and sewer
facilities in areas of more than 5,500 population. Grants
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113.
may be up to 50 per cent of the cost of the projects,
which must be consistent with a unified urban-area
development program. Authorization allows a total of
$800 million to be appropriated from fiscal years
1966-69.
4. Amendments of 1965 to the Consolidated Farmers Home
Adminstration Act of 1961 (PL 89-240).
Authorizes the U. S. Department of Agriculture to make
grants and insure loans for water supply and waste
treatment facilities in areas of fewer than 5,500
inhabitants. Grants may be up to 50 per cent of the
cost of the project.
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Table 17. Federal Grants for Sanitary Sewers and Waste Treatment Facilities
Through Agencies Other than the Federal Water Pollution Control Administration,
Fiscal Years 1966-68
Item
Sanitary sewers
1966
1967
1968
Total
1966-67
Waste treatment facilities
1966
1967
1968
Total
1966-67
PL 89-14 (ARD)
Section
PL 89-136 (EDA)
PL 89-117 (HUD)
PL 89-240 (FHA)
Total
51.5H/ 41.7_c/
48.O^/ 48.O®/ 79.
99.5
89.7
93.2
96.0
189.2
5.23/
1.5
10.
16.7
2.
13.2
28.4
13.Of/ 15. Ol/
7.4
14.7
23.0
45.1
-/ Approved by Appalachian Regional Commission out of appropriations for public works projects.
Appropriations for 1968 not approved by November 9, 1967.
Approved by Economic Development Administration out of appropriations for public works; includes
grants for combined sewer and water supply projects.
$175 million for total public works projects appropriated for 1968. $18.5 million has been ap-
proved for sanitary sewers and related projects in first three months of 1968. In 1967, 32 per-
cent of appropriated $170 million for public works went to sanitary sewers, combined sewer and
water supply, and waste treatment plant projects.
Assumes 48 percent of appropriations for sanitary sewers and water supply projects goes for
sanitary sewers.
Assumes 50 percent of appropriations for water supply and waste treatment facilities goes for
waste treatment facilities.
£/
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APPENDIX II—GENERAL NOTES
115.
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116.
GENERAL NOTE 1
The Omaha Pollution Control Corporation
The major and independent meat packinghouses in the City
of Omaha slaughter and process over 4 million head of cattle,
sheep, and hogs annually. Considerable quantities of animal
waste, resulting from the slaughter, dressing, cutting and
preparation of meat products, are discharged into the muni-
cipal sewers. Grease and paunch manure constitute most of
the animal waste material. Lesser quantities of meat scraps,
stock-pen manure, and normal processing wastes further con-
tribute to the total amount of annual matter transported by
the sewers.
The sewage from all but one of the packinghouses flows
directly into the Missouri River essentially without treat-
ment of any kind. The Omaha Sewage Treatment Plant is com-
pletely bypassed because it cannot handle the large quantities
of annual waste material (daily kill-day discharges of sewage
from the packinghouses are estimated to contain at least 40
dry tons of animal fats and 70 dry tons of suspended solids).
To comply with the directive of the FWPCA to stop polluting
the Missouri River with such packinghouse wastes, the City was
faced with the requirement of providing a system which could
process the wastes and remove the grease and solids content.
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117.
The system had to permit an efficient operation of the City's
main sewage treatment plant as well as preserve the advantage
to its meat industry of the traditional waste water disposal
methods and be economically feasible itself.
The solution devised by the City was a separate system
which collected and processed— the sewage flow from the
packinghouses so that the effluent could easily be taken by
the main sewage treatment plant. The process selected met
all of the criteria suggested for an ideal solution: it was
reliable, permanent, economical now and in the future, sanitary,
and, for functional continuity, relatively independent of
labor strikes, weather, and other potential disruptions. The
total cost for the plant and facilities incorporating the
Carver-Greenfield process was estimated to be $6.7 million.
Omaha was approaching its debt limitation and the required
capital expenditure was more than it could assume when con-
sidered together with other City needs. The packers at the
same time felt that they were in no position to underwrite such
an amount.
By means of a cooperative venture, the objective became
attainable. A non-profit corporation was organized called the
Omaha Pollution Control Corporation. It issued $5.5 million
I/ By a method of solids and fat processing developed by the
Carver-Greenfield Corporation, Summit, New Jersey.
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118.
revenue bonds to construct the collector sewer system and
treatment facility. The City contributed $1.2 million through
the issuance of its general obligation bonds.— The cor-
poration entered into a 30-year lease-purchase agreement with
the City at a rental sufficient to retire its bonds. As soon
as the bonds are retired, the facility will revert free and
clear to the City. The advantages of using a non-profit cor-
poration were that the lease-purchase agreement was deductible
in figuring debt limitation, the City avoided further erosion
of its borrowing power, and it was not required to increase
its mill tax levy.
It is anticipated that the City will not be required to
appropriate any lease payments from its general revenues.
Such funds will be obtained in part from contributions of
the packers based on a fixed charge for the treatment of
their wastes and, in part, from the proceeds of the sale of
recovered waste products (grease and dry solids) in the market.
A feasibility study prepared by the Steams-Roger Corporation,
Denver, Colorado, indicated that the revenues from the sale
of recovered wastes, together with the packer charges, will
be sufficient to service the bonded indebtedness and provide
a profit to the City after the bonds are retired.
I/ Applications were made by the City for Federal grants to
assist in the financing of the collector sewer and the
gravity separation basins. Both applications—one to the
Department of Housing and Urban Development for 50% of the
cost of the collector sewer system and the other to the
FWPCS for 30% of the gravity basin costs except for land
and easements—have been approved.
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119.
Omaha accomplished more than it really set out to do.
It wanted to find a technically and economically feasible
solution to its water pollution problem. In addition to
developing a packinghouse waste treatment system, the cost
of which has been split among the benefiting parties, Omaha
found a successful way of converting an industrial and com-
munity liability into a revenue generating resource. What
the City has done, in other words, from a technical and
financial standpoint is record a unique pollution control
achievement.—
I/ For a detailed discussion of the Omaha project, see Meier
and Korbitz, Unique Profit Potential Through Central Pre-
treatment of Omaha Packinghouse Waste Water, a paper
delivered to the Water Pollution Control Federation, New
York City, on October 12, 1967.
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120.
GENERAL NOTE 2
Trends in Municipal Bond Holdings
Among the holders of municipal securities at the end of
1965, the largest were commercial banks, personal trust funds,
fire and casualty insurance companies, and "individuals and
others". Altogether, such holders accounted for 83.3 per
cent of total holdings of $100 billion (Table 18). Of these,
commercial banks have become the largest source of municipal
bond financing, accounting for 28 per cent of the net expansion
of State and local government debt between 1946 and 1955 and
47 per cent of the growth during 1956-65. Fire and casualty
insurance companies accounted for 14 per cent of the increase
in net loans during the 1947-55 and 13 per cent during 1956-65.
Personal trust funds accounted for 12 per cent during each
decade, while "individuals and others" (excluding personal
trust funds) declined in relative importance from 25 per cent
during 1947-55 to 17 per cent during 1956-65.
The step-up in acquisitions of municipal bonds by com-
mercial banks is attributable, to a large extent, to the effects
of the amendments of Federal Reserve Regulation Q in 1961, 1963,
and 1964 which raised the maximum interest rate that can be
paid by commercial banks on deposits.
Municipal bonds, in relation to commercial bank loans and
investments, rose from 3.8 per cent in 1946 to 12.1 per cent
-------
Table 18.Holdings of State and Local Government Obligations
by Investor Groups, 1946-75
(in billions of dollars)
Investor group
Mutual savings banks
Fire and casualty insurance companies .
State and local retirement funds . . .
Municipal bond investment funds ....
Personal trust funds
Other financial institutions .....
Other corporations
Federal credit agencies
Individuals and others
Total
Year-end holdings
1946
4.4
.1
.6
.2
.8
1.6
a/
3.0
.8
.3
.4
3.4
15.6
1955
12.7
.6
2.0
4.2
2.7
2.5
a/
6.7
.9
1.2
.7
10.6
44.8
1965
38.7
.3
3.5
11.4
2.6
2.1
.2
13.2
1.6
3.6
2.8
20.0
100.0
1975
107.5
.4
3.8
21.4
.5
1.1
2.6
33.0
2.2
6.0
5.4
27.lv
211.0
Percent change
1946-55
189
500
233
2,000
238
56
123
13
300
75
212
187
1955-65
205
(-50)
75
171
(-4)
(-16)
97
78
200
300
89
123
1965-75
178
33
9
88
(-81)
(-48)
1,200
150
38
67
93
36
111
Nonexistent, 1946-60
Source: Joint Economic Committee Report, Vol. 2, p. 17
-------
122.
in 1964. Analysis of the municipal security investments by
commercial banks shows (1) a growing interest in revenue bonds,
(2) a rising trend (especially in recent years) in investments
in long-term municipal obligations (maturities over ten years),
and (3) a decline since 1960 in the proportion of municipal
bonds holdings represented by holdings of speculative issues
or issues in default.
For fire and casualty insurance companies, municipal
security investments have become increasingly important,
accounting for 30 per cent of their assets in 1962. Since
then the proportion of municipal securities to assets decreased
to 27.4 per cent in 1965. Analysis of the municipal security
investments by fire and casualty insurance companies shows
(1) rising proportions of such investments in revenue bonds
(almost 50 per cent in 1965), (2) a tendency to purchase longer
maturities, (3) that while bond ratings are considered by
some companies, many prefer to perform their own credit analysis
on municipal borrowers, and (4) that intended use of bond
proceeds influences purchases, but the geographical location
of the borrower has little effect.
While personal trust funds have expanded their holdings
of municipal bonds over the past two decades, municipal
obligations as a proportion of assets have varied but little,
rising from 10.4 per cent in 1946 to 13.2 per cent in 1955,
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123.
and to 13.7 per cent in 1965. However, in recent years many
of the commercial banks which administer these personal trusts
have established common trust funds for investments in muni-
cipal bonds, with the number of such "tax-exempt" funds
rising from 24 in 1962 to 104 in 1965. Analysis of personal
trust holdings of municipal securities indicate (1) an in-
creasing trend in revenue bond investments, (2) considerable
investments in maturities over 20 years, (3) that while there
is some reliance upon bond ratings, most trust departments
prefer to do their own credit analysis, and (4) neither
intended use of proceeds nor geographical location of borrower
have much influence on municipal security investment decisions.
"Other corporations" have expanded their holdings of
municipal securities, mainly short term, from $0.3 billion
in 1946 to $1.2 billion in 1955, and to $3.6 billion in 1965.
Holdings of "individuals and others", a residual calculated
by subtracting all identifiable investor groups from total
holdings, have grown from $3.4 billion in 1946 to $10.6 billion
in 1955, and to $20 billion in 1965.
State and local public agency capital requirements for
public facilities for the decade 1966-75 are estimated at
$327.8 billion, of which $31.6 billion is estimated for 1970
and $40.7 billion for 1975. Annual net changes in debt are
projected to rise from $8.5 billion in 1966 and to $11.3 billion
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124.
in 1975. The outstanding debt is projected at $198.8 billion
by 1975.
Projected holdings by investors are estimated to rise
from $100 billion at the end of 1965 to $211 billion at the
end of 1975 (Table 19). Annual net changes (after retirements)
on these projected holdings will rise from $8 billion in
1966 to $14.3 billion in 1975. The projections for each
investor group shown in Table 19 were made independently of
the other projections.
The JEC study projects commercial bank holdings of
municipal bonds as an average of two periods of experience,
1944-64 and 1954-64. Municipal bond holdings of commercial
banks rose from $38.7 billion, or 12.6 per cent of total loans
and investments, in 1965 to $115 billion, or 24.2 per cent
of total loans and investments amounting to $475 billion,
in 1975, on the basis of the 1944-64 experience. Based on
the 1954-64 experience, total loans and investments rose to
$525 billion, and municipal obligations to $100 billion.
Averaging these two projections, it is estimated that by 1975
total loans and investments will amount to $500 billion, of
which $107.5 billion, or 21.5 per cent, will reflect holdings
of municipal securities.
It should be recognized that implicit in these projections
are certain assumptions regarding the flow of savings, the
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Table 19.
Projected Holdings of State and Local Government Obligations,
by Significant Investor Groups, 1968-75
(in billion dollars)
Investor groups
Total holdings
Commercial banks—/
Mutual savings banksH/
Life insurance companies—/.
Fire and casualty insur-
ance companies—/
State and local public
retirement funds—/
State and local govern-
ments—/
Municipal bond invest-
ment f undsH./
Personal trust funds—/
Other identifiable fin-
ancial instituti9nsi/....
Other corporations-!/
Federal credit agencies^/..
Individuals and others^-/...
Projected
1968
55.6
0.2
2.8
13.8
1.7
1.8
0.5
18.0
1.8
4.3
3.5
22.1
1969 1970
1971
1972
1973 1974
61.9
0.3
2.7
14.7
1.5
1.7
0.7
19.8
1.8
4.6
3.8
22.8
68.5
0.3
2.8
15.7
1.3
1.6
0.9
21.7
1.9
4.8
4.1
23.5
75.5
0.3
2.9
16.7
1.1
1.5
1.2
23.7
1.9
5.0
4.3
24.2
82.9
0.3
3.0
17.8
0.9
1.4
1.5
25.8
2.0
5.3
4.6
24.9
90.7
0.3
3.2
18.9
0.7
1.3
1.8
28.0
2.1
5.5
4.8
25.7
2.2
30.4
2.1
5.8
5.1
26.4
1975
126.1 136.3 147.1 158.3 170.4 183.0 196.7 211.0
98.9 107.5
0.4 0.4
3.5 3.8
20.1
0.6
1.2
21.4
0.5
1.1
2.6
33.0
2.2
6.0
5.4
27.1
a/ $68.8 billion net increase in holdings ($107.5 billion in 1975 less $38.7 billion in 1965) pro-
rated over 10 years, assuming 5.5 percent annual rate of increase.
Continued—
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(2)
Table 19. Actual and Projected Holdings of State and Local Government Obligations,
by Significant Investor Groups, 1966-75
—Continued
k/ Estimated net decreases of holdings of $70 million in 1966 and $30 million in 1967; thereafter,
net increases of holdings of $20 million per year.
£/ Estimated net decreases of holdings of $430 million in 1966, $200 million in 1967, and $100 mil-
lion each in 1968 and 1969; thereafter, net increases of holdings at annual increments of $50 million,
$/ Estimated net increase in holdings rising from $700 million in 1966 to $1 billion in 1970 and
$1.3 billion in 1975.
£/ Estimated net increase in holdings of $300 million during 1966-68, $200 million during 1969-73,
and $100 million during 1974-75.
I/ Estimated net decrease in holdings of $100 million per year, 1966-75.
2/ Estimated net increase of $50 million in 1966, and rising trend of increases from $120 million in
1967 to $470 million in 1975.
h/ $19.8 billion net increase in holdings ($330 billion in 1975 less $13.2 billion in 1965) prorated
over 10 years, assuming 5.5 peraent annual rate of increase.
i/ Estimated net increase by $60 million per year.
I/ Holdings estimated at $4.8 billion in 1970 and $6 billion in 1975, or an annual increase of
$240 million per year.
Estimated net increase by $260 million per year.
Calculated as a residual by subtracting municipal bond investment funds and personal trust funds
from annual increase in holdings of "households and nonprofit organizations."
Source: Joint Economic Committee, State and Local Public Facility Needs and^Financing, Vol. II, p. 50
NJ
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127.
extent to which our economy becomes a "checkless society"
(which would affect the volume of demand deposits), as well
as rates of growth and alternative lending opportunities.
Since 1958, mutual savings banks have progressively reduced
their holdings of municipal bonds so that by the end of 1965
they amounted to $320 million, compared with $729 million
in December 1958. For the first nine months of 1966, these
banks reduced their municipal securities holdings by another
$50 million. It is estimated that mutual savings bank
holdings of municipal securities will grow very slowly over
the next decade to reach $400 million at the end of 1975
($300 million in 1970).
At the end of 1965, assets of all U. S. life insurance
companies aggregated $158.9 billion, of which $3.5 billion,
or 2.2 per cent, were invested in municipal bonds. Analysis
of the growth trend of life insurance company assets indicates
*hat by 1975 total assets may reach $300 billion. It has been
estimated that, owing to the attractiveness of alternative
investments, the proportion of life insurance company assets
accounted for by municipal obligations will decline to about
1.3 per cent. Given the tight money situation for many in-
surance companies, there is reason to expect that by the end
of 1967 their holdings of municipal bonds will have dropped to
$2.9 billion. Because of alternative investment opportunities,
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128.
a further decline in holdings of municipal securities is
expected through 1969, but thereafter life insurance companies
are expected to increase their acquisitions of municipal
obligations because of comparatively more attractive yields.
Therefore, their holdings are expected to total $3.8 billion
at the end of 1975.
Stock fire and casualty insurance companies are expected
to increase their holdings of municipal securities at an annual
rate of about 6 per cent, or by amounts ranging from almost
$470 million in 1966 to $790 million in 1975. In the case
of the mutual companies, estimated purchases of municipal
securities were stated in terms of $10 million per year; i.e.,
5 per cent of admitted assets will go each year into municipal
bonds, or about 30 to 50 per cent of their portfolios will
be invested in municipal securities. It is estimated that
the net expansion in holdings of municipal securities by fire
and casualty insurance companies will rise progressively from
about $0.7 billion in 1966 to $1.3 billion in 1975.
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129.
GENERAL NOTE 3
Analysis of Public Borrowings
Despite the high cost of borrowing and the consequent
postponement of many new offerings, the supply of outstanding
tax-exempt bonds of State and local governments exceeded the
hundred billion dollar mark for the first time in 1966. The
volume of new issues sold by States and municipalities during
1967 reached an all-time high of $14,240,547,546, an increase
of $3,151,609,197, or 28.4 per cent, from the previous high
in 1966 of $11,088,938,349 (Table 20). The extremely large
volume of public borrowings is occurring at a time when
municipal bond yields are at their highest levels since the
1930's. There is no reason to believe that this upward trend
in bond sales will level off soon. Over the 20-year period
from 1947 to 1967, municipal bond sales increased from $2.4
billion to $14.2 billion. The December 1966 JEC study indi-
cated that State and local government borrowings each year
will continue at an accelerated rate, reaching $17.3 billion
in 1970. At this pace, the amount of municipal obligations
outstanding, now more than $100 billion, will double by 1975.
Financing Facilities; By Type of Issue
In considering practical methods for financing sewer and
waste treatment facilities, the "pay-as-you-go" principle is
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130,
Table 20. Municipal Financing Volume, 1947-66
(in millions of dollars)
Year
1947...
1948...
1949. . .
1950...
1951...
1952...
1953...
1954...
1955...
1956...
1957...
1958...
1959-.-
I960-..
1961...
1962...
1963...
1964-..
1965- ••
1966...
General
obligations
1,963.1
2,440.2
2,312.5
3,093.7
2,548.1
2,937.9
3,990.6
3,754.3
4,244.1
3,775.9
4,933.2
5,628.1
5,159.7
5,034.7
5,761.5
5,892.2
6,069.2
6,879.9
7,445.0
7,012.9
Revenue
bonds
385.7
549.5
683.0
599.9
730.1
1,463.5
1,567.3
3,214.4
1,732.4
1,670.5
2,024.9
1,772.3
2,521.4
2,194.8
2,598.0
2,666.0
4,037.5
3,650.8
3,639.2
4,076.0
Total
2,353.8
2,989.7
2,995.4
3,693.6
3,278.2
4,401.3
5,557.9
6,968.7
5,976.5
5,446.4
6,958.1
7,400.4
7,681.1
7,229.5
8,359.5
8,558.2
10,106.7
10,530.7
11,084.2
11,088.9
General
Obligations,
Percent of total
83.6
81.6
77.2
83.8
77.7
66.7
71.8
53.9
71.0
69.3
70.9
76.1
67.2
69.6
68.9
68.8
60.1
65.3
67.2
63.3
Source: The Bond Buyer's Municipal Finance Statistics,
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131.
not generally adaptable because of the need to create large
surpluses or reserves before undertaking construction. Es-
sentially what State and local governments must do is borrow.
Such borrowings are principally financed through the sale of
general obligation and revenue bonds.
General obligation bonds are secured by the full faith
and credit of the issuer and a pledge of its taxing power.
The amount borrowed becomes a general obligation of the
issuer and must be paid by the issuer without regard to the
earmarkings of any specific fund for that purpose. There
are variations within this category, such as limited tax
bonds where the taxing power is limited to a specified
maximum tax rate and special assessment bonds which are payable
only from assessments against those who benefit from the im-
provement provided. The majority of special assessment bonds
recently issued are additionally secured by full faith and
credit as well as a pledge of taxing power of the issuer, so
that they are, in effect, general obligation bonds.
The dollar volume of general obligation bond financing
for all purposes rose from $2.0 billion in 1947 to $7.0 billion
in 1966, but as a proportion of total bonds issued, it decreased
from 83.6 to 63.3 per cent in the period (Table 20). General
obligation bonds for sewer and waste treatment facilities,
however, represented 73.4 per cent of all obligations issued for
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132.
such purposes in 1966 (Table 21). This is consistent with
the average of 72.5 per cent for the period 1963-66.
Of the general obligation bonds issued in 1966 for sewer
and waste treatment purposes, 82.1 per cent were of the un-
limited tax variety and 8.9 per cent were additionally secured
by facility revenues or special assessment charges. Limited
tax general obligation bonds represented 8.9 per cent, and
1 per cent was payable from special assessments.
Substantially more financing of sewer and waste treatment
facilities is done through general obligation bonds than
revenue bonds because less complicated bonding procedures are
involved, there is no need to establish the economic feasibility
of the project in terms of revenues, usually lower interest
rates are obtained, the tax load is spread over the entire
community, and there is a greater investor demand.
Revenue bonds are payable from charges, tolls, or rents
by those who use the facilities constructed with the bond
proceeds. The project becomes self-liquidating by the use of
service charges. New issues of revenue bonds for all purposes
have grown from $386 million in 1947 (16.4 per cent of the total)
to $3.6 billion in 1966 (36.7 per cent). Revenue bonds issued
for the purpose of financing sewer and waste treatment facil-
ities represented 26.5 per cent of the bond market in 1966.
Over the last six years the percentage has not exceeded 29.5
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per cent, of the revenue bonds issued for sewer and waste
treatment facilities in 1966, 91.2 per cent were payable from
utility revenues and 6.8 per cent from rental revenues. This
is consistent with the ratio of the past several years.
The percentage of revenue bonds issued to finance sewer
and waste treatment facilities should increase in the future.
This is due to several factors, of primary significance is
the narrowing spread in interest costs between general obli-
gation and revenue bonds. In 1961, for example, the interest
cost differential could be expected to be at least 1/2 of 1
per cent higher on revenue bonds. In recent years the spread
has generally narrowed to a maximum of 1/4 of 1 per cent on
equivalently rated issued. The reduction in interest rate
spread is attributable to the issuer having incorporated
strong protective covenants in the bond contract, in providing
effective lien covenants, and in establishing in most cases
a history of adequate earnings and payment records—all of
which have induced a broader market acceptance of such issues.
Another reason why revenue bonds are attractive and their
use may tend to become more widespread is that revenue bonds
generally do not come under constitutional, statutory and/or
charter limitations on the amount of general obligation in-
debtedness which may be incurred by municipal entities empowered
to issue general obligation bonds. Also, it may be that no
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approval by the electorate is required for their issuance,
and no tax increase need be voted upon. In addition, facilities
built by the issuance of revenue bonds will not compete with
other projects for tax revenues, and the financing is more
equitable because the charge for services rendered falls upon
those who benefit from the use of the facilities.
Financing Facilities; By_ Issuing Authority
Over the past five years, municipalities have accounted
for an average of 52.2 per cent of the bond issues for sewer
and waste treatment facilities, special districts have accounted
for 22.4 per cent, authorities for 10.5 per cent, counties for
7.1 per cent, States for 5.2 per cent, and townships for 2.6
per cent (Table 22). While municipal governments will continue
to be the dominant issuer of bonds for such facilities, it is
estimated that States and authorities will begin to represent
a larger share of the market. This estimate is based upon the
trend of States increasingly to provide grants, the proceeds
of which are derived from State bond issues, to local govern-
ments to finance their sewer and waste treatment facilities.
Federal law frequently provides for larger Federal contributions
to such projegjts if this is done, which encourages States to
make such grants.
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As a result of the creation of new authorities to assist
local government to finance their sewer and waste treatment
facilities, such as were recently established in New York
and Nebraska,— this type of financing can be expected to
assume a larger share of the market in the future. Special
districts will also continue to represent a large percentage
of the market, due to the continuing trends of suburban
growth and the creation of legislation encouraging the for-
mation of joint sewer and waste treatment facilities among
communities.
Financing Facilities; By Size of Issue
In terms of the size of the bond market during the past
five years, for sewer and waste treatment facilities, the
highest dollar volume (26.7 per cent) was in the $2 million
to $5 million range (Table 23). The next highest dollar volume
(18.8 per cent) was in the $5 million to $10 million range,
closely followed by a range of $1 million to $2 million
(16.6 per cent). The balance (23 per cent) was among sales
of less than $1 million. This group represented 77.6 per cent
of the number of issues sold.
Financing Facilities; By Population of Issue
Due to incomplete reporting by the less populous communities,
I/ See General Note 4, Appendix II.
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the largest volume of sewer bond financing, $528 million
(23.8 per cent) remains unidentified as to the population size
of the issuing body. Disregarding this factor, population
categories below 25,000 now represent 21 per cent of the amount
of bond sales and 50.7 per cent of the number of issues sold
(Table 24). If, as some estimates state, 50 per cent of the
unidentifiable volume of bond sales belong in these categories,
it is conceivable that 52 per cent of the amount of bond sales
will be offered by population communities of less than 25,000
through the period ending in 1973. To some degree, however,
these figures could be lowered by annexations into surrounding
metropolitan areas.
Financing Facilities; By Net Interest Cost Ranges
The difference in interest costs between general obligation
bonds and revenue bonds for sewer and waste treatment facilities
has ranged from 1/2 to 3/4 of 1 per cent although the spread
has been narrowing in recent years (Table 25). During the
period 1961-65, 36.7 per cent of the revenue bond issues (47.0
per cent of the dollar amount) had net interest costs ranging
from 3.50 per cent to 3.75 per cent. For the same period,
36.3 per cent of the number of general obligation bonds (44.4
per cent of the dollar amount) had net interest costs ranging
from 3 to 3.25 per cent.
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GENERAL NOTE 4
New York State Pure Waters Authority
Existing financial and legal constraints on local govern-
ments require the States to reexamine the status of the legal
entities authorized to undertake the construction and finan-
cing of sewer and waste treatment facilities. Consideration
of these matters by a limited number of States has resulted
in the determination to create a public entity with requisite
powers to operate on a statewide basis. Representative of
such entities is the New York State Pure Waters Authority.—
The New York State Pure Waters Authority was created to
assist local governments in the planning, financing, con-
struction, maintenance, and operation of waste treatment
works, sewage collecting systems, and solid waste disposal
facilities. The authorized powers of the Authority include
the following:
(1) Pursuant to contract with any municipality empowered
to construct sewage treatment works, sewage collecting systems
or solid waste disposal facilities, to construct such facilities
for such municipality.
(2) Pursuant to contract with any municipality empowered
to operate and maintain sewage treatment works or solid waste
I/ Title 12 of Article 5 of the New York Public Authorities Law.
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143.
disposal facilities, to operate and maintain such works or
facilities for such municipality.
(3) To make loans to any municipality for the construction
of sewage treatment works, sewage collecting systems and solid
waste disposal facilities.
(4) Pursuant to contract with any municipality empowered
to construct, operate and maintain sewage treatment works or
solid waste disposal facilities, to provide sewage treatment
or solid waste disposal services for such municipality in
sewage treatment works owned and operated by the Authority,
and, when desired by any such municipality, to transfer the
facilities for such services to such municipality at the close
of the service contract.
(5) To provide technical advisory services to any munici-
pality in connection with the planning, construction, operation
and maintenance of sewage treatment works, sewage collecting
systems and solid waste disposal facilities.
In furtherance of such functions, the Authority is author-
ized to purchase municipal bonds and notes issued by a munici-
pality for the purpose of financing construction of sewage
treatment works, sewage collecting systems, or solid waste
disposal facilities. The Authority is also authorized to issue
its own bonds and notes, to be secured by operating revenues
and interest, and amortization payments on any municipal bonds
and notes owned by it and obtained from the foregoing loans.
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Any municipality contracting with the Authority for the
construction, operation, and maintenance of municipally owned
sewage treatment works would remain eligible for State aid
under the State Public Health Law to the same extent as the
municipality would if it were to perform those functions itself.
Where the Authority provides sewage treatment works owned and
operated by the Authority, the Authority is eligible to
receive State assistance for the construction, operation, and
maintenance of those works pursuant to the provisions of the
State Public Health Law.
The stated powers of the Authority are related to the
magnitude of the programs required to be undertaken by the
local governments within the State and the understanding that
each locality or group of localities in a region have their
particular resources and also their special problems—physical,
financial and technical—in carrying out the accelerated action
contemplated in such program. Such powers are designed to
provide assistance in mobilizing local or regional resources
and in meeting such special problems. The Authority, under its
powers, can ease the financial and administrative burdens on
local governments in carrying out their responsibilities by
(1) accumulating and providing technical expertise and experi-
ence not otherwise available to a single community; (2) distri-
buting the costs of services over a broader base; (3) providing
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145.
impartial assistance in the development and execution of
multi-community projects; and (4) providing financing assis-
tance not otherwise available or at lower debt service costs.
Under the powers of the Authority to construct waste
treatment works on behalf of a local government, the Authority
can apply its available superior technical knowledge and
resources at lower cost to provide a better facility. Simi-
larly, under the powers of the Authority to operate and
maintain sewage treatment works on behalf of a local govern-
ment, the expertise of the Authority provides more efficient
operation and maintenance at lower costs.
In the exercise of the powers of the Authority to construct,
operate, and maintain sewage treatment works to provide under
contract with a local government for the treatment and disposal
of its sewage, the Authority is enabled to handle both local
and regional problems more directly and simply. In addition,
the ability of the Authority to construct, operate, and maintain
sewage treatment works to provide the requisite service under
contract with a local government removes the concern with the
ability of such local governments to finance the cost of the
required treatment facility, and the undertaking of the financing
by the Authority provides such financing, in most instances, at
considerably reduced costs.
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146.
The power of the Authority to make loans to local govern-
ments also reduces the cost of financing to such governments
since, in most instances, the credit rating of the obligations
of the Authority will exceed the ratings of the obligations of
the individual local governments. In addition to a preference
in credit rating, the obligations of the Authority is more
readily marketable than those of a single local government,
as the Authority, by combining the financing of projects for
a number of local governments, can provide a larger issue and
a wider credit base.
The purposes for which the New York Pure Waters Authority
was created, and the accomplishment of such purposes by this
Authority, will undoubtedly demonstrate to many other juris-
dictions the desirability of creating governmental agencies
with requisite powers to operate on a statewide or regional
basis.
One State, Nebraska, has already enacted a modified form
of the New York legislation. The 1967 Session of the Legis-
latrue created the Nebraska Clean Waters Commission.— The
essential difference between it and the New York State Pure
Waters Authority is that the Nebraska legislation confines
the powers of the Commission solely to the financing of sewage
collection and treatment facilities for municipalities. The
I/ L.B. 884, Session Laws, 1967, p. 1327.
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Commission is not authorized to construct, operate and main-
tain such facilities for a municipality as, was indicated
above, may be done by the New York State Pure Waters Authority.
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148.
APPENDIX III - State-By-State Analysis of Bond Issues
For Sewer and Waste Treatment Facilities
The material contained in Apendix III has been extracted
from Moody's Municipal and Governmental Manual and pertains
to bond issues for local governments for sewer and waste
treatment facilities in the 50 States and the Commonwealth
of Puerto Rico. It cannot be considered a complete catalogue
of all bond issues of local governments for,sewage and waste
treatment facilities purposes since Moody's Manual does not
attempt to rate all bond issues, particularly smaller issues,
and some issues are given designations not identifiable as
for sewage and waste treatment facilities. In the interest
of brevity, the matters covered herein have been summarized
to provide basic and general information. The contents
should not be relied upon as technically accurate.
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149,
STATE OF ALABAMA
1. Nature of body issuing sewer bonds
(a) Cities
Twelve cities issued general obligation bonds.
Fifteen cities issued sewer and utility combination
bonds.
(b) Utility Boards
Five municipally created utility boards issued sewer
and utility combination sewer bonds.
(c) Waterworks and Sewer Boards
Five legislatively created waterworks and sewer
boards issued water and sewer revenue bonds.
(d) Boards of Water and Sewer Commissioners
Four public corporations organized by cities to
provide water and sewer systems issued sewer revenue
bonds.
2. Security pledged
(a) General obligation bonds - taxing power of municipal-
ity and, additionally, in some cases, by first pledge
of all public improvement assessments levied against
properties benefited or pledge of license and privilege
taxes.
(b) Revenue bonds - revenues of designated utility systems.
3. Purpose of bonds
Most issues are combination utility bonds. The others made
no distinction between sewage collection and sewage treatment.
4. Debt limitation
5% of assessed valuation for municipalities of less than
6000 population. If bonds for sewer purposes then 8% of
assessed valuation. 7% of assessed valuation for munici-
palities of more than 6000 population.
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STATE OF ALASKA
1. Nature of body issuing sewer bonds
(a) Cities
Three cities issued general obligation bonds.
One city issued sewer revenue bonds.
(b) The Greater Anchorage Area Borough which encompasses
an area of 1260 square miles issued general obliga-
tion bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
None.
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STATE OF ARIZONA
1. Nature of body issuing sewer bonds
(a) Cities
Nine cities issued sewer general obligation bonds.
Five cities issued water and sewer general obliga-
tion bonds.
Six cities issued water and sewer revenue bonds.
(b) County Sanitary District
One county sanitary district issued general obli-
gation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of the water and sewer
systems.
3. Purpose of bonds
One issue was for sewage collection and another for sew-
age treatment. The rest made no distinction between
sewage collection and sewage treatment.
4. Debt limitation
4% of value of assessed property without election.
10% of value of assessed property with election.
15% of value of assessed property with election if for
sewer system owned by municipality.
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STATE OF ARKANSAS
1. Nature of body issuing sewer bonds
(a) Cities
Nine cities issued sewer revenue bonds.
Five cities issued water and sewer revenue bonds.
(b) Sewer District
One sewer district issued assessment general obli-
gation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer or water system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
Arkansas limits local government debt through a tax rate
limit which is $5 for $1,000 of assessed property value.
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STATE OF CALIFORNIA
1- Nature of body issuing sewer bonds
(a) Cities
Fifty-four cities issued general obligation bonds.
Fourteen cities issued sewer revenue bonds.
(b) Districts
1. County Water Districts
Seven county water districts issued general
obligation bonds.
One county water district issued sewer revenue
bonds.
2. County Sanitation Districts
Fifty-one county sanitation districts issued
general obligation bonds.
One county sanitation district issued sewer
revenue bonds.
3. Municipal Utility Districts
Two municipal utility districts issued sewer
general obligation bonds.
4. Community Service Districts
Two community service districts issued sewer
general obligation bonds.
One community service district issued sewer
revenue bonds.
5. Municipal Improvement District
One municipal improvement district issued sewer
general obligation bonds.
6. Municipal Sewer Districts
Two municipal sewer districts issued sewer
general obligation bonds.
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2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
Six issues were for sewage treatment. The remaining
issues make no distinction between sewage treatment and
sewage collection.
4. Debt limitation
No municipality shall incur any indebtedness which exceeds
the income and revenues provided for such year without
the assent of 2/3 of the qualified electors thereof.
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STATE OF COLORADO
1- Nature of body issuing sewer bonds
(a) Cities
Five cities issued general obligation bonds.
Thirteen cities issued sewer revenue bonds.
(b) Districts
Two sanitation districts issued general obligation
bonds.
The Denver Sewage Disposal District issued general
obligation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - secured by pledge of net revenues
of the system or district.
3. Purpose of bonds
Three issues were for sewage treatment. The rest made no
distinction between sewage collection and sewage treatment
4. Debt limitation
Cities or towns - 3% of assessed valuation, with election.
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STATE OF CONNECTICUT
1. Nature of body issuing sewer bonds
(a) Municipalities (cities or towns)
Forty-nine municipalities issued general obligation
bonds.
One municipality issued sewer revenue bonds.
(b) Hartford County Metropolitan District issued general
obligation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose bonds
Nine issues designated for sewage treatment. The rest
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
2 1/4 times annual receipts from taxation averaged for
last three preceding years.
3 3/4 times annual receipts from taxation averaged for
last three preceding years if indebtedness is for sewer
purposes and if approved by state tax commissioner.
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STATE OF DELAWARE
1. Nature of body issuing sewer bonds
(a) Cities
Three cities issued general obligation bonds.
One city issued sewer and water general obliga-
tion bonds.
(b) Counties
One county issued general obligation bonds.
2. Security pledged
General obligation bonds - taxing power of issuing body.
3. Purpose of bonds
One issue was for sewage treatment. The others made no
distinction between sewage treatment and sewage collec-
tion.
4. Debt limitation
None.
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STATE OF FLORIDA
1. Nature of body issuing sewer bonds
(a) Cities
Fourteen cities issued general obligation bonds.
Twenty-three cities issued sewer revenue bonds.
Thirty-eight cities issued water and sewer revenue
bonds.
(b) Counties
Two counties issued water and sewer revenue bonds.
(c) Sanitary Districts
Four sanitary districts issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body and additionally, in some cases, by cigarette
taxes.
(b) Revenue bonds - revenues of various systems and
additionally, in some cases, by cigarette and utili-
ty taxes.
3. Purpose of bonds
Two issues were for sewage treatment. The rest make no
distinction between sewage treatment and sewage collection,
4. Debt limitation
(a) Non-chartered cities and towns - 10% of assessed
valuation.
(b) Chartered cities - debt may not exceed levy assessed
against property to be improved.
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STATE OF GEORGIA
1. Nature of body issuing sewer bonds
(a) Cities
Thirteen cities issued sewer general obligation
bonds.
Three cities issued water and sewer general obliga-
tion bonds.
Thirty-one cities issued water and sewer revenue
bonds.
(b) Counties
Three counties issued general obligation bonds.
Three counties issued water and sewer revenue bonds.
(c) County Water Authority
One county water authority issued sewer revenue
bonds.
2 . Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of various systems.
3. Purpose of bonds
Three issues designated for sewage treatment. The others
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
Municipalities and counties - 7% of assessed value of
taxable property.
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STATE OF HAWAII
1. Nature of body issuing sewer bonds
One city issued general obligation bonds.
2. Security pledged
Taxing power of the city.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
10% of assessed valuation of property.
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STATE OF IDAHO
1. Nature of body issuing sewer bonds
(a) Cities
Two cities issued general obligation bonds.
One city issued sewer revenue bonds.
Three cities water and sewer revenue bonds.
(b) Sewer District
One sewer district issued general obligation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of various systems.
3. Purpose of bonds
One issue was for sewage treatment. The other issues made
no distinction between sewage treatment and sewage collec-
tion.
4. Debt limitation
Cities - 10% of value of assessed property therein.
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STATE OF ILLINOIS
1- Nature of body issuing sewer bonds
(a) Cities
Twenty-one cities issued general obligation bonds.
Twenty-one cities issued sewer revenue bonds.
Thirty-six cities issued water and sewer revenue
bonds.
(b) Sanitary Districts
Fifteen sanitary districts issued general obliga-
tion bonds.
Two sanitary districts issued sewer revenue bonds.
2. S e c u r i ty pledge6.
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of various systems.
3. Purpose of bonds
Four issues for sewage treatment. The other issues made
no distinction between sewage collection and sewage treat-
ment.
4. Debt limitation
Municipalities and counties - 5% of value of taxable pro-
perty therein.
2 1/2% of value of taxable property therein if munici-
pality has less than 300,000 population, but not applicable
if indebtedness is for sewer system.
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STATE OF INDIANA
1. Nature of body issuing sewer bonds
(a) Cities
Five cities issued general obligation bonds.
Forty-six cities issued sewer revenue bonds.
(b) Sanitary Districts
Five sanitary districts issued general obligation
bonds .
2 . Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of
Two issues were for sewage treatment . The other issues
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
Municipalities - 2% of value of taxable property.
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STATE OF IOWA
1- Nature of body issuing sewer bonds
Twenty-five cities issued general obligation bonds.
Seventeen cities issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
One issue was for sewage treatment. The other issues
made no distinction between sewage collection and sew-
age treatment.
4. Debt limitation
5% of actual property value within municipalities and
counties.
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STATE OF KANSAS
1. Nature of body issuing sewer bonds
(a) Cities
Twenty-four cities issued general obligation bonds.
Nine cities issued sewer revenue bonds.
Two cities issued water and sewer revenue bonds.
(b) Sewer Districts
Three sewer districts issued general obligation
bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system and in some
cases revenues of both water and sewer system.
3. Purpose of bonds
Thirteen issues were for sewage treatment. The other
issues made no distinction between sewage collection and
sewage treatment.
4. Debt limitation
(a) Counties - 1% of property assessed for taxation.
(b) Cities - less than 60,000 population - 15% of
property assessed for taxation; 25% of
property assessed for taxation if indebted-
ness is for sewers
60,000 to 120,000 population - 2% of pro-
perty assessed for taxation; 15% of pro-
perty assessed for taxation if indebtedness
is for utilities.
over 120,000 population - 8% of property
assessed for taxation; 17% of property
assessed for taxation if indebtedness is
for utilities.
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STATE OF KENTUCKY
1. Nature of body issuing sewer bonds
(a) Cities
Five cities issued general obligation bonds.
Eleven cities issued sewer revenue bonds.
Twenty-five cities issued water and sewer revenue
bonds.
(b) Sanitation Districts
Three sanitation districts issued sewer revenue
bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of designated systems.
3. Purpose of bonds
Two issues were for sewage treatment. The other issues
made no distinction between sewage treatment and sewage
collection.
4. Debt limitation
(a) Cities
1st class, 2nd class and 3rd class with more than
15,000 population - 10% of value of assessed proper-
ty therein.
3rd class with less than 15,000 population and 4th
class - 5% of value of assessed property therein.
5th class and 6th class - 3% of value of assessed
property therein.
(b) Counties
2% of value of assessed property therein.
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STATE OF LOUISIANA
1. Nature of body issuing sewer bonds
(a) Cities
Twenty-seven cities issued general obligation bonds.
Seven cities issued water and sewer revenue bonds.
One city issued gas and sewer revenue bonds.
(b) Sewage Districts
Thirteen sewage districts issued general obligation
bonds.
Three sewage districts issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of appropriate utility
systems.
3. Purpose of bonds
Two issues were for sewage treatment. The other issues
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
Municipalities - 10% of assessed valuation of taxable
property.
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STATE OF MAINE
1. Nature of body issuing sewer bonds
(a) Cities
Four cities issued general obligation bonds.
(b) Sewer Districts
Three sewer districts issued general obligation bonds,
2. Security pledged
Taxing power of issuing body.
3 . Purpose of bonds
No distinction made between sewage treatment and sewage
collection.
4. Debt limitation
7.5% of assessed valuation.
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STATE OF MARYLAND
1. Nature of body issuing sewer bonds
(a) Cities
Ten cities issued general obligation bonds.
(b) Sanitary District
Seven sanitary districts issued general obligation
bonds.
2. Security pledged
(a) Municipal general obligation bonds - taxing power of
issuing body.
(b) Sanitary district general obligation bonds - bonds
are guaranteed as to both principal and interest
by the county commissioners wherein the districts
lie. They are payable from charges against the
property in the districts benefited and by taxes on
assessable property in the district, if necessary.
3. Purpose of bonds
Three issues designated for sewage disposal. All the rest
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
None.
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COMMONWEALTH OF MASSACHUSETTS
1. Nature of body issuing sewer bonds
(a) Cities
Forty-three cities issued general obligation bonds.
(b) Sewer Districts
Two sewer districts issued general obligation bonds.
2. Security pledged
Taxing power of issuing body.
3. Purpose of bonds
Five issues designated for sewage disposal. The other
issues made no distinction between sewage collection and
sewage treatment.
4. Debt limitation
(a) Cities
2 1/2% of the average of assessed valuation of taxa-
ble property for the three preceding years. 5% with
approval of emergency finance board.
(b) Towns.
5% of the average of assessed valuation of taxable
property for the three preceding years. 10% with
approval of emergency finance board.
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STATE OF MICHIGAN
1. Nature of body issuing sewer bonds
Sixty-nine cities and counties issued general obligation
bonds.
Twenty-five cities and counties issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
Fifty-one issues designated for sewage treatment. The other
issues made no distinction between sewage treatment and
sewage collection.
4. Debt limitation
Cities and counties - 10% of value of assessed property
therein.
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STATE OF MINNESOTA
1- Nature of body issuing sewer bonds
(a) Cities
Fifty-one cities issued general obligation bonds.
Five cities issued sewer revenue bonds.
(b) Sanitary District
One sanitary district issued general obligation
bonds.
2 . Security pledged
(a) General obligation bonds of municipalities - taxing
power of municipality issuing the bonds.
(b) General obligation bonds of the sanitary district -
net revenues of sanitary sewer system and, in case
of insufficient revenues, the full faith, credit and
taxing powers of district without limitation as to
rate or amount.
3. Purpose of bonds
Nineteen issues designated for sewage disposal. The
remaining issues make no distinction between sewage treat-
ment and sewage collection.
4. Debt limitation
10% of assessed property valuation within municipality
if allowed by municipal charter, 5% otherwise.
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STATE OF MISSISSIPPI
1. Nature of body issuing sewer bonds
Six cities issued general obligation bonds.
Seventeen cities issued water and sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of munici-
pality.
(b) Revenue bonds - revenues of the water and sewer
system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
15% of assessed valuation.
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174.
STATE OF MISSOURI
1. Nat.ure of body issuing sewer bonds
(a) Cities
Twenty-one cities issued general obligation bonds.
Seventeen cities issued revenue bonds.
(b) The Metropolitan St. Louis Sewer District issued
general obligation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system and in
some cases revenues of both water and sewer system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
5% of value of taxable property in municipality.
-------
175
STATE OF MONTANA
1. Nature of body issuing sewer bonds
Three cities issued general obligation bonds.
Three cities issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
Two issues designated for sewage disposal. Two issues
designated for sewage treatment. The otherissues did
not distinguish between sewage treatment and sewage
collection.
4. Debt limitation
According to Constitution the municipal debt limitation
is 5% of the value of taxable property in the municipality,
However, this limit may be extended by the Legislature by
authorizing municipal corporations to submit the question
to the taxpayers affected when such increase is necessary
to construct a sewage system.
-------
176.
STATE OF NEBRASKA
1. Nature of body issuing sewer bonds
One city issued general obligation bonds.
Nine cities issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
(a) Counties - 10% of value of assessed property therein.
(b) Cities over 200,000 population - 5% of value of
assessed property therein.
-------
177.
STATE OF NEVADA
1. Nature of body issuing sewer bonds
(a) Cities
Six cities issued general obligation bonds.
(b) Sanitary Districts
Two sanitary districts issued general obligation
bonds.
2 . Security pledged
Taxing power of issuing body.
3. Purpose of bonds
Sewer bonds - no distinction made between sewage collec-
tion and sewage treatment.
4. Debt limitation
City bond debt may not exceed 30% of assessed valuation,
-------
178.
STATE OF NEW HAMPSHIRE
1. Nature of body issuing sewer bonds
Three cities issued general obligation bonds.
Twelve cities issued state guaranteed sewer bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) State guaranteed sewer bonds - unconditionally
guaranteed as to principal and interest by the state,
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
(a) Cities - 1.75% of last assessed valuation. Indebted-
ness for sewage systems not limited.
(b) Counties - 2% of last assessed valuation. Indebted-
ness for sewage systems not limited.
-------
179.
STATE OF NEW JERSEY
1. Nature of body issuing sewer bonds
(a) Cities
Sixty-four cities issued general obligation bonds.
One city issued sewer revenue bonds.
(b) Sewer District Authorities
Twenty-nine sewer district authorities issued
sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - payable from and secured by sewer
system revenues. In some cases revenue bonds are
additionally secured by guarantees of municipalities
served.
3. Purpose of bonds
Twenty-two issues were for sewage treatment. The other
issues do not distinguish between sewage treatment and
sewage collection.
4. Debt limitation
(a) Counties
2% of average valuation of taxable real estate for
last three preceding years.
(b) Municipalities
3 1/2% of average valuation of taxable real estate
for last three preceding years.
-------
180,
STATE OF NEW MEXICO
1. Nature of body issuing sewer bonds
Eleven cities issued general obligation sewer bonds.
Twelve cities issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of the sewer system.
3. Purpose of bonds
Sewer bonds - no distinction made between sewage collec-
tion and sewage treatment.
4. Debt limitation
4% of assessed valuation, but no limitation if sewer
bonds.
-------
181.
STATE OF OHIO
1. Nature of body issuing sewer bonds
(a) Cities
Eighty-six cities issued general obligation bonds.
Thirty-five cities issued sewer revenue bonds.
(b) Counties
Sixteen counties issued general obligation bonds.
Five counties issued revenue bonds.
(c) Sanitary Districts
One county sanitary sewer district issued sewer
revenue bonds.
One county sanitary sewer district issued general
obligation bonds.
(d) Sewer Authority
One sewer authority issued revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - payable solely from and secured by
a first lien on and pledge of the net revenues of
the sewer system and, in some issues, by a first
mortgage on sewer system.
3. Purpose of bonds
Twelve issues designated for sewer treatment plants.
Three issues designated for sewer collection. The remaining
issues made no distinction between sewage treatment and
sewage collection.
4. Debt limitation
(a) Cities
1 1/2% of property in city listed and assessed for
taxation if no election.
-------
182.
STATE OF OHIO
(continued)
7% of property in city listed and assessed for
taxation if approved by electors.
(b) Counties
3% of first $100,000,000 assessed valuation; 1 1/2%
of valuation in excess of $100,000,000 but not
in excess of $300,000,000; 2 1/2% of the tax list
valuation in excess of $300,000,000.
-------
183.
STATE OF OKLAHOMA
1. Nature of body issuing sewer bonds
Twenty-nine cities issued general obligation bonds.
2. Security pledged
Taxing power of issuing body.
3. Purpose of bonds
Eight issues designated for sewage disposal plants.
All the rest made no distinction between sewage treat-
ment and sewage collection.
4. Debt limitation
5% of municipal assessed valuation, with election.
-------
184.
STATE OF NORTH DAKOTA
1. Nature of body issuing sewer bonds
Three cities issued general obligation bonds.
Six cities issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - payable solely from and secured by
a first lien on and pledge of the net revenues of
the waterworks and sewer system.
3. Purpose of bonds
No distinction made between sewage treatment and sewage
collection.
4. Debt limitation
5% of assessed property valuation in cities without
election.
8% of assessed property valuation in cities with
election.
-------
185.
STATE OF NORTH CAROLINA
1. Nature of body issuing sewer bonds
(a) Cities
Fifty cities issued general obligation bonds.
(b) Sanitary Districts
Four sanitary districts have been created by reso-
lution and they issued general obligation bonds.
2. Security pledged
General obligation bonds - taxing power of issuing body.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
10% of assessed valuation of municipality, but this does
not apply to sewer bond debt.
-------
186.
STATE OF NEW YORK
1. Nature of body issuing sewer bonds
(a) Cities and counties
Eighty cities and counties issued general obli-
gation bonds.
(b) Bronx Valley Sanitary Sewer District issued general
obligation bonds.
(c) Buffalo Sewer Authority issued general obligation
bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Bronx Valley Sanitary Sewer District bonds are
direct obligations of Westchester County. The
bonds are obligations of the county payable solely
out of special taxes levied against property within
Bronx Valley Sanitary Sewer District.
/
(c) Buffalo Sewer Authority general obligation bonds
are secured by sewer and water taxes levied by the
City of Buffalo.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
(a) Counties
Nassau County - 10% of average full valuation.
Any other county - 7% of average full valuation.
(b) Municipalities
City of New York - 10% of average full valuation.
Other cities having more than 125,000 inhabitants -
9% of average full valuation.
Towns or villages - 7% of average full valuation.
-------
187,
STATE OF OREGON
1. Nature of body issuing sewer bonds
(a) Cities
Seventeen cities issued general obligation bonds.
One city issued sewer revenue bonds.
Two cities issued combination general obligation
and revenue bonds.
(b) Sanitary Districts
Five sanitary districts have been organized as
municipal corporations and they issued general
obligation bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
(c) General obligation and revenue bonds - payable from
net revenues of sewer system and then from ad
valorem taxes as necessary.
3. Purpose of bonds
Two issues for sewage treatment, five issues for sewage
disposal. All the remaining issues make no distinction
between sewage treatment and sewage collection.
4. Debt limitation
The amount of. any sewer self-liquidating bonds shall not
be within any limitation of indebtedness fixed by law
or charter, but shall be in addition thereto. However,
the aggregate thereof shall not exceed 15% of the latest
assessed valuation of the issuing city.
-------
188.
COMMONWEALTH OF PENNSYLVANIA
1. Nature of body issuing sewer bonds
(a) Cities
Sixteen cities issued general obligation bonds.
(b) Sanitary Authorities
One hundred thirty-five sanitary authorities have
been created by municipalities. These authorities
issue both revenue and assessment bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - payable solely from rentals derived
from the lease of the sewer system to the munici-
pality. Some issues are secured directly by the
revenues of the sewer system.
3. Purpose of bonds
Sewage treatment is the purpose of eleven issues. All
the remaining issues make no distinction between sewage
treatment and sewage collection.
4. Debt limitation
1% of assessed value of property in city with voter approval
or 2% without voter approval.
-------
189.
COMMONWEALTH OF PUERTO RICO
The Puerto Rico Aqueduct and Sewer Authority, an instru-
mentality of the Government of Puerto Rico, owns, operates
and is further developing a complete sewer system for Puerto
Rico. It has issued revenue bonds secured by water and sewer
revenues.
-------
190.
STATE OF RHODE ISLAND
1. Nature of body issuing sewer bonds
(a) Cities
Fourteen cities issued general obligation bonds.
(b) Sanitary District
One sanitary district has been created by a muni-
cipality and it issues general obligation bonds.
2. Security pledged
Taxing power of issuing body.
3. Purpose of bonds
One issue for sewage disposal, one for sewer and
pollution abatement. The rest of the issues make no
distinction between sewage collection and sewage treat-
ment.
4. Debt limitation
3% of taxable property in city or town.
-------
191.
STATE OF SOUTH CAROLINA
1. Nature of body issuing sewer bonds
(a) Cities
Six cities issued general obligation bonds.
Three cities issued sewer revenue bonds.
Eight cities issued water and sewer revenue bonds.
Six cities issued combined public utility revenue
bonds.
(b) Sewer Districts
Six sewer districts issued general obligation bonds.
2. Security pledged
(a) General obligation bonds of the sewer districts -
taxing power of the counties in which the districts
lie.
(b) General obligation bonds of the cities - taxing power
of the cities.
3. Purpose of bonds
Two issues designated for sewage disposal. All the rest
made no distinction between sewage treatment and sewage
collection.
4. Debt limitation
6% of assessed valuation of taxable property in the cities,
-------
192.
STATE OF SOUTH DAKOTA
1. Nature of body issuing sewer bonds
Two cities issued sewer general obligation bonds.
Pour cities issued water and sewer general obligation
bonds.
One city issued water and sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing body.
(b) Revenue bonds - revenues of utility systems.
3. Purpose of bonds
Two issues were for sewage treatment. The other issues make
no distinction between sewage treatment and sewage collection.
4. Debt limitation
Counties, cities and towns - 5% of assessed value of taxable
property therein.
-------
193.
STATE OF TENNESSEE
1. Nature of body issuing sewer bonds
(a) Cities and towns
Fourteen cities and towns issued sewer general obli-
gation bonds.
Three cities and towns issued water and sewer general
obligation bonds.
Seven cities and towns issued sewer revenue bonds.
Nine cities and towns issued water and sewer revenue
bonds.
Twenty-four cities and towns issued sewer revenue
and tax bonds.
(b) The Metropolitan Government of Nashville and Davidson
County issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing body.
(b) Revenue bonds - revenues of various systems.
(c) Revenue and tax bonds - revenues of sewer system
and unlimited tax, if necessary.
3. Purpose of bonds
Two issues designated for sewage treatment. The other issues
made no distinction between sewage collection and sewage
treatment.
4. Debt limitation
(a) Cities and towns - 10% of value of assessed property.
(b) Cities of less than 290,000 population - 15% of value
of assessed property.
-------
194.
STATE OF TEXAS
1. Nature of body issuing sewer bonds
Thirty-five cities issued sewer general obligation bonds.
Thirty-three cities issued water and sewer general obli-
gation bonds.
Twelve cities issued sewer revenue bonds.
Eighty-two cities issued water and sewer revenue bonds.
Four cities issued electric, water and sewer revenue bonds.
Two cities issued gas and sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing body.
(b) Revenue bonds - revenues of the various systems.
3. Purpose of bonds
Five issues were for sewage treatment. The other issues
made no distinction between sewage treatment and sewage
collection.
4. Debt limitation
Texas uses a tax rate limitation to limit local debt.
(a) Cities over 5,000 population - no tax for any year
shall exceed 2 1/2% of the taxable property therein.
(b) Cities under 5,000 population - no tax for any year
shall exceed 1 1/2% of the taxable property therein.
-------
195.
STATE OF UTAH
1. Nature of body issuing sewer bonds
(a) Cities
Two cities issued sewer general obligation bonds.
One city issued water and sewer general obligation
bonds.
Two cities issued sewer revenue bonds.
Two cities issued water and sewer revenue bonds.
(b) Sewer Improvement Districts
Two improvement districts issued sewer general
obligation bonds.
One improvement district issued water and sewer
general obligation bonds.
(c) Sanitary Districts
Three sanitary districts issued general obligation
bonds.
Four sanitary districts issued sewer revenue bonds.
2. Security_ pj._edqed
(a) General obligation bonds - taxing power of issuing body
(b) Revenue bonds - revenues of respective systems.
3. Purpose of bonds
One issue for sewage treatment. The other issues made no
distinction between sewage treatment and sewage collection.
4. Debt limitation
(a) Municipalities - 4% of taxable property.
(b) Counties - 2% of taxable property.
-------
196.
STATE OF VERMONT
1. Nature of body issuing sewer bonds
Four cities issued general obligation bonds.
2. Security pledged
General obligation bonds - taxing power of issuing body.
3. Purpose of bonds
Four issues were for sewage treatment purposes.
4. Debt limitation
A municipal corporation may not incur any indebtedness
which, with its previously contracted indebtedness,
shall exceed ten times the amount of the last grand list
of such municipal corporation.
-------
197.
STATE OF VIRGINIA
1. Nature of body issuing sewer bonds
(a) Cities
Nineteen cities issued sewer general obligation bonds
Eleven cities issued water and sewer general obli-
gation bonds.
Five cities issued sewer revenue bonds.
Two cities issued water and sewer revenue bonds.
(b) Counties
Three counties issued sewer general obligation bonds.
Two counties issued water and sewer general obli-
gation bonds.
(c) Sanitary Districts
Five sanitary districts issued sewer general obli-
gation bonds.
Two sanitary districts issued water and sewer general
obligation bonds.
(d) Sanitation Authority
One sanitation authority issued sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of various systems.
3. Purpose of bonds
Ten issues were for sewage treatment. The other issues
made no distinction between sewage treatment and sewage
collection.
4. Debt limitation
Cities and counties - 18% of value of assesses property.
-------
198.
STATE OF WASHINGTON
1. Nature of body issuing sewer bonds
(a) Cities
Five cities issued general obligation bonds.
Four cities issued sewer revenue bonds.
Nineteen cities issued water and sewer revenue
bonds.
(b) Sewer Districts
Seven sewer districts issued sewer revenue bonds.
(c) Seattle Sewage System issued revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of utility systems.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
Counties and municipalities - 1 1/2% of taxable property
without election. 5% of taxable property with election.
-------
199.
STATE OF WEST VIRGINIA
1. Nature of body issuing sewer bonds
Two cities issued general obligation bonds.
Nine cities issued sewer revenue bonds.
Eight cities issued water and sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system and in some
cases revenues of both water and sewer system.
3. Purpose of bonds
Designated only as sewer bonds, no distinction made
between sewage collection and sewage treatment.
4. Debt limit.ati.Qn
Counties and cities - 5% of value of taxable property.
-------
200.
STATE OP WISCONSIN
1. Nature of body issuing sewer bonds
(a) Cities
Nineteen cities issued general obligation bonds.
Seven cities issued revenue bonds.
(b) Sewerage Districts
Three sewerage districts issued general obligation
bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of sewer system.
3. Purpose of bonds
Three issues were for sewage treatment. The others made
no distinction between sewage treatment and sewage
collection.
4. Debt limitation
5% of full property valuation.
-------
201.
STATE OF WYOMING
1. Nature of body issuing sewer bonds
Three cities issued general obligation bonds.
One city issued sewer revenue bonds.
One city issued water and sewer revenue bonds.
2. Security pledged
(a) General obligation bonds - taxing power of issuing
body.
(b) Revenue bonds - revenues of utility system.
3. Purpose of bonds
No distinction made between sewage collection and sewage
treatment.
4. Debt limitation
Municipalities and counties -
2% of assessed value of property.
6% of assessed value of property if indebtedness for
sewer purposes.
-------
APPENDIX IV—TABLES
202.
-------
PAGE NOT
AVAILABLE
DIGITALLY
-------
Table ^'. Required Capital Outlays^/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
State and
Function
Size of community
Less than
5,000
5,000-
9,999
10,000-
24,999
25,000-
99,999
100,000
and over
Unknown
Total
Alabama
Upgrading^/ 7.4
Unmet needs—/.... 16.8
Pop. increase£/.. 4.1
Total 28.3
Alaska
Upgrading
Unmet needs 0.9
Pop. increase.
Total 0.9
Arizona
Upgrading 4.0
Unmet needs.
Pop. increase.... 0.4
Total 4.4
Arkansas
Upg rad ing 8.7
Unmet needs..,
Pop. increase.
Total 8.7
1.6
5.2
0.0
6.8
2.7
0.3
3.0
0.7
0.7
1.9
0.1
2.0
6.9
6.9
1.1
0.3
0.1
1.5
4.1
4.1
0.6
3.2
3.8
2.6
11.8
10.2
24.6
4.1
1.8
5.9
4.9
4.5
9.4
17.1
8.0
3.3
28.4
0.2
0.2
28.3
14.8
43.1
2.3
0.2
2.5
0.8
0.8
1.2
1.2
35.6
41.8
18.4
95.8
1.3
8.0
2.2
11.5
4.7
28.3
19.3
52.3
13.5
4.9
9.2
27.6
NO
o
CO
Continued—
-------
Table 27. Required Capital Outlays^/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(2)
State and
Function
Size of community
Less than
5,000
5,000-
9,999
10,000-
24,999
25,000-
99,999
100,00
and over
Unknown
Total
California
Upgrading 22.1
Unmet needs 269.0
Pop. increase.••• 10.1
Total 301.2
Colorado
Upgrading 4.0
Unmet needs 17.5
Pop. increase.... 0.1
Total 21.6
Connecticut
Upgrading 9.0
Unmet needs 23.5
Pop. increase.... 1.3
Total 33.8
Delaware
Upgrading 2.8
Unmet needs
Pop. increase.... 0.3
Total 3.1
District of Columbia
Upgrading
Unmet needs
Pop. increase ....
Total
1.9
9.5
11.4
0.8
1.2
2.0
4.7
1.0
5.7
1.0
0.5
1.5
45.1
3.0
23.8
81.9
0.6
2.9
3.5
20.4
8.8
29.2
0.5
0.4
0.2
1.1
36.9
203.9
89.4
330.2
1.8
6.8
8.6
9.0
32.0
5.6
46.6
3.8
1.3
5.1
385.0
51.3
436.3
22.4
1.9
24.3
34.1
34.1
10.0
10.0
14.3
14.3
4.6
4.6
3.2
3.2
491.0
475.9
198.4
1,165.3
27.8
19.3
17.5
64.6
77.2
55.5
16.7
149.4
14.3
4.7
5.0
24.0
ISJ
O
VD
3.0
3.0
3.0
3.0
-------
Table 27. Required Capital Outlays—' for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(3)
State and
Function
Size of community
Less than
5,000
5,000
9,999
10,000-
24,999
25,000-
99,999
100,000
and over
Unknown
Total
Florida
Upgrading 8.5
Unmet needs 169.2
Pop. increase.... 8.6
Total 186.3
Georgia
Upgrading 17.9
Unmet needs 46.5
Pop. increase.... 1.0
Total 65.4
Hawaii
Upgrading 1.8
Unmet needs...... 15.6
Pop. increase....
Total 17.4
Idaho
Upgrading 3.1
Unmet needs
Pop. increase...
Total 3.1
Illinois
Upgrading 20.6
Unmet needs 63.7
Pop. increase.... 4.5
Total 88.8
1.8
8.4
10.2
2.2
6.5
3.2
11.9
0.6
0.6
2.1
1.1
3.2
7.5
24.0
2.2
33.7
18.0
8.2
26.2
7.3
6.6
13.9
0.8
1.3
1.7
3.8
6.6
0.4
7.0
14.2
24.8
18.3
57.3
2.3
38.0
10.1
50.4
12.7
1.7
14.4
0.8
0.8
3.0
1.0
4.0
5.5
15.1
20.6
21.5
14.4
8.0
43.9
30.4
9.0
39.4
1.4
15.8
1.0
18.2
4.9
1.0
5.9
35.1
35.1
9.1
9.1
3.0
3.0
17.1
17.1
Continued--
52.1
221.6
78.4
352.1
57.8
65.7
30.6
154.1
4.6
32.7
6.5
43.8
11.8
3.0
2.5
17.3
52.7
112.5
58.2
223.4
-------
Table 27. Required Capital Outlays—/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(4)
State and
Function
Size of community
Less than
5,000
5,000-
9,999
10,000-
24,999
25,000-
99,999
100,000
and over
Unknown
Total
Indiana
Upgrading 10.3
Unmet needs 45.6
Pop. increase.... 2.6
Total 58.5
Iowa
Upgrading 3.6
Unmet needs
Pop. increase.... 0.7
Total 4.3
Kansas
Upgrading 6.4
Unmet needs
Pop. increase.... 1.1
Total 7.5
Kentucky
Upgrading 4.4
Unmet needs 26.9
Pop. increase.... 5.4
Total 36.7
Louisiana
Upgrading 1.2
Unmet needs. 51.0
Pop. increase.... 3.3
Total 55.5
3.2
1.0
4.2
0.5
1.3
1.8
0.4
1.7
2.1
1.1
1.1
4.6
1.0
5.6
22.0
4.0
26.0
5.0
0.5
5.5
8.5
1.4
9.9
10.6
3.3
13.9
2.7
10.7
8.2
21.6
6.2
2.6
8.8
7.5
2.9
10.4
1.7
1.7
2.4
1.9
4.3
3.6
3.6
1.7
1.9
5.3
8.9
7.5
0.5
8.0
0.2
0.4
3.2
3.8
24.2
0.5
24.7
20.3
26.6
3.3
50.2
6.5
6.5
0.6
0.6
7.0
7.0
9.9
9.9
Continued--
43.4
50.1
19.4
112.9
24.1
5.9
30.0
15.5
0.4
9.7
25.6
42.7
26.9
18.1
87.7
24.2
92.9
29.3
146.4
-------
Table 27. Required Capital Outlays3./ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(5)
State and
Function
Size of community
Less than 5,000- 10,000- 25,000- 100,000
5,000 9,999 24,999 99,999 and over Unknown
Total
Maine
Upgrading 3.5
Unmet needs 9.9
Pop. increase....
Total 13.4
Maryland
Upgrading 4.4
Unmet needs 20.1
Pop. increase.... 1.7
Total 26.2
Massachusetts
Upgrading 61.2
Unmet needs
Pop. increase.... 0.3
Total 61.5
Michigan
Upgrading 27.3
Unmet needs 159.0
Pop. increase.... 4.2
Total 190.5
Minnesota
Upgrading 9.9
Unmet needs 22.4
Pop. increase.... 3.3
Total 35.6
0.4
8.3
0.2
8.9
0.3
3.9
2.4
6.6
4.2
0.3
4.5
8.2
1.1
9.3
2.6
13.5
2.4
18.5
2.5
5.9
8.4
2.1
25.0
9.2
36.3
11.7
2.4
14.1
43.1
0.1
43.2
5.4
7.8
13.2
10.1
0.7
10.8
5.1
10.4
15.5
92.4
9.0
101.4
10.4
15.5
25.9
7.1
7.1
0.2
0.2
0.1
0.1
59.5
59.5
157.1
1.4
158.5
53.3
53.3
0.0
21.9
21.9
0.4
0.4
6.6
34.2
0.9
41.7
12.0
49.0
23.7
84.7
136.6
92.4
12.0
241.0
246.1
159.0
44.2
449.3
71.2
35.9
21.0
128.1
Continued--
-------
Table 27. Required Capital Outlays—/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
6-Year Period, 1969-73
(in million current dollars)
--Continued
(6)
state and
Function
Mississippi
Unmet neeas ......
Pop. increase,...
Total
Missouri
Upgrading ........
Unmet needs
Pop. increase
Total
Montana
Upgrading ........
Unmet needs ......
Pop. increase. . . .
Total
Nebraska
Pop. increase. . . .
Total
Nevada
Unmet needs
Pop. increase ....
Total
Less than
5,000
3.2
0.9
4.1
2.5
20.2
2.5
25.2
1.9
0.8
2.7
4.2
4.2
0.9
0.9
5,000-
9,999
0.3
7 6
2.4
10.3
1.0
15.4
5.6
22.0
1.5
1.5
1.6
0.8
2.4
—
Size of
10,000-
24,999
1 8
1.6
3.4
8 4
14 3
4.1
26.8
8 9
0.1
9 0
4 8
0.1
4.9
0.3
1.4
1.7
community
25,000-
99,999
10 2
2.2
12 4
2 5
76 6
4.4
83 .6
3 0
0 1
1.6
4 7
0.4
0 4
4.7
4.7
100,000
and over
7 7
3.4
11 1
—
2 T
2 3
9 0
4 6
2.5
16 1
—
Unknown
0.0
5.1
5 1
0.3
0 3
0.8
0 8
0.9
0 9
Total
3 5
97 '*
10.5
41 3
1 A A
1 2fi fi
21.7
162 7
i 7 £
0 i
2.8
20 £>
19 6
4 6
4.6
28 R
0 9
0 ^
7.0
n 2
NJ
M
Ul
-------
Table 27. Required Capital Outlays^/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(7)
State and
Function
New Hampshire
Unmet needs
Pop. increase. . . .
Total
New Jersey
Upgrading
Pop. increase....
Tota 1
New Mexico
Upgrading
Unmet needs
Pop increase. . . .
Total
New York
Upgrading
Unmet needs
Pop. increase....
Total
North Carolina
Upgrading.
Unmet needs
Pop. increase. . . .
Total
Less than
5,000
2. 8
0. 3
3. 1
9. 7
59. 5
69. 2
0.9
2. 9
0.1
3. 9
79. 9
218. 0
4.4
302. 3
15. 3
2. 5
17. 8
5,000-
9,999
0. 3
5. 0
1.3
6. 6
5. 4
47. 0
5.1
57. 5
—
23.1
37. 2
9.2
69. 5
1. 6
1.2
2. 8
Size of
10,000-
24,999
2. 8
2. 5
5. 3
18. 6
57. 2
22.2
98. 0
2.1
2.1
58. 9
50. 2
31.0
140. 1
0. 3
0. 5
0 8
community
25,000-
99,999
2. 2
9. 7
1.4
13. 3
26. 4
14. 6
25.2
66. 2
2. 0
0.1
2 1
44. 5
87. 2
24.0
155. 7
7. 3
3.8
11. 1
100.000
and over Unknown
0.0
124. 6
124. 6 —
1. 2
4.5 2.6
5.7 2.6
89.2
41. 3
23.6
130 5 23 6
17.0
7. 5 1-0
24 5 10
Total
8. 1
17. 5
2.7
28. 3
184. 7
178. 3
52.5
415. 5
0.9
6. 1
9.4
16. 4
295. 6
433.9
92.2
821. 7
17. 2
24. 3
16. 5
58 0
tv
i-
Continued—
-------
Table 27. Required Capital Outlays-^/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(8)
State and
Function
North Dakota
Unmet needs
Pop. increase....
Total.
Ohio
Upgrading.
Pop. increase. . . .
Oklahoma
Pop. increase....
Total
Oregon
Upgrading. .......
Unmet needs
Pop. increase. . , .
Total
Pennsylvania
Upgrading.
Unmet needs
Pop increase. . . . .
Total
Less than
5,000
2. 8
2. 8
22. 0
107. 2
4.9
134. 1
3. 2
0.1
3 3
6.4
46. 3
1.0
53. 7
14. 9
30. 0
1. 7
46. 6
5,000-
9,999
—
13.0
19. 3
5.5
37. 8
1.3
1 3
4. 1
1.9
6. 0
16. 7
1. 6
18. 3
Size of
10 , 000-
24,999
—
38. 0
6. 7
14.2
58. 9
1. 6
1.5
3 1
2. 9
4.0
6. 9
41. 7
6. 9
48. 6
community
25,000-
99,999
4. 5
0.9
5. 4
13 2
14 1
9.2
36. 5
1 7
3. 3
5 0
1.7
1 7
10 8
10 8
100,000
and over Unknown
—
47. i —
1.9 19.1
49.0 19.1
46
6. 2
4.4 0.6
i s 2 n fi
19. 5
12.0
19 "i 12 0
89 8
89. 8
Total
2. 8
4. 5
0.9
8 2
133 3
147 3
54.8
3354
ni
6 2
11.2
00 C
12 g
46 3
20. 6
QQ Q
1 6"? 1
If) 0
21 n
214 1
r>
h
Continued--
-------
Table 27. Required Capital Outlays-3/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(9)
State and
Function
Rhode Island
Upgrading
Unmet needs
Pop. increase. . . .
Total
South Carolina
Upgrading
Unmet needs
Pop. increase-.--
Total
South Dakota
Upgrading
Unmet needs
Pop. increase....
Total
Tennessee
Upgrading
Unmet needs
Pop. increase....
Total
Texas
Upgrading
Unmet needs ....
Pop. increase. . . .
Total
Less than
5,000
0 2
12. 3
12. 5
14. 0
26.2
0.1
40 3
3. 6
0.3
3 9
6 5
27.6
2.9
37 o
17. 3
6. 7
24. 0
5,000-
9,999
0 8
0. 8
1. 6
0.2
1 R
1 0
1 0
2 6
1 ?
T Q
0 9
0. 7
1 6
Size of
10,000-
24,999
1 4
1.2
2 6
5 0
0.2
c. o
0 ft
0.6
1 4
67
i 7 i
10.0
•3-3 Q
5.0
S 0
community
25,000-
99,999
•} A
c. 7
1.1
1 1 ?
10 -3
2.6
1 A Q
0.9
n Q
Q 1
0.5
9f.
fin i
16.8
If. Q
100,000
and over Unknown
AC, _
4C _
9.0
— — Q n
y . u
0. 0
c o
10 -3
2.4 3.3
9 c q o •a
n i —
") & T — —
39.1
£ C C
Total
in T
-LU . j
i Q n
-L 17. U
2. 3
9 n A
12.1
5 A
1.8
7O
o i n
£. J. • U
*7 *3 "3
/ J. J
19.1
1 1 t A
J.-L J . *i
1 Q T
J.O- J
Ob. 4
68- 3
1-70 n
NJ
Continued—
-------
Table 27. Required Capital Outlays^/ for Municipal Waste Treatment Plants,
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(10)
State and
Function
Size of community
Less than
5,000
5,000-
9,999
10,000-
24,999
25,000-
99,999
100,000
and over
Unknown
Total
Utah
Upgrading 2.6
Unmet needs 22.4
Pop. increase..,
Total 25.0
Vermont
Upgrading 3.6
Unmet needs
Pop. increase....
Total 3.6
Virginia
Upgrading 9.2
Unmet needs 50.8
Pop. increase....
Total 60.0
Washington
Upgrading 12.3
Unmet needs 67.9
Pop. increase.... 2.2
Total 82.4
West Virginia
Upgrading 8.6
Unmet needs 5.1
Pop. increase.... 0.2
Total 13.9
6.4
1.6
8.0
0.4
3.0
1.0
4.4
4.2
4.2
3.8
2.7
6.5
4.6
4.6
2.6
2.6
6.8
6.8
11.2
3.8
15.0
18.2
2.9
21.1
5.9
0.6
6.5
63.9
1.8
65.7
0.1
0.1
0.2
3.1
2.8
5.9
0.1
0.1
8.3
9.7
0.6
18.6
2.0
0.1
2.1
42.6
1,
12,
56.
6.6
31.3
2.6
40.5
0.1
0.1
5.3
5.3
7.5
7.5
10.5
10.5
0.9
0.9
2.6
94.7
11.4
108.7
10.8
3.1
1.1
15.0
70.3
52.6
26.4
149.3
40.9
99.2
21.0
161.1
27.5
14.8
2.3
44.6
Continued--
-------
Table 27. Required Capital Outlays^/ for Municipal Waste Treatment Plants.
by Function and Size of Community for Individual States,
5-Year Period, 1969-73
(in million current dollars)
—Continued
(11)
State and
Function
Wisconsin
Upgrading
Unmet needs
Pop. increase. . .
Total
Wyoming
Upgrading
Unmet needs
Pop. increase. . .
Total
United States
Upgrading
Unmet needs
Pop. increase. . .
Total
Less than
5,000
16.9
0.8
17.7
0.5
0.5
508.0
1,654.3
85.1
2, 247 .4'
5,000-
9,999
1.3
4.1
5.4
0.8
0.8
138.3
211.3
84.6
434. 2
Size
10,000
24,999
11.9
3.8
15.7
3.4
0.5
3.9
493 9
221.5
236.1
951.5
of community
25,000
99,999
12.3
3 7
4.1
20. 1
0.6
0.9
1.5
208 5
813 7
327.1
1 349 3
100,000
and over
9 2
4.7
13 9
—
1 307 8
253 1
193.1
1 754 0
Unkn own To t a 1
516
37
17.5
72 8
47
06
1.4
— 67
— 2 656 5
— 3 153 9
237.2 1,163.2
237 2 6 973 6
a/ Excluding depreciation allowances.
—' Upgrading less than adequate -facilities.
£/ Elimination of current unmet needs.
—' Provision for population and industrial increases.
Source: U. S. Department of Interior, Federal Water Pollution Control Administration unpublished
data, adjusted to current dollars.
oo
-------
219.
Table 28, Sanitary Sewers and Municipal Waste Treatment Facilities,
Required Capital Outlays, Net Cost to State and Local Govern-
ments , Assuming 55 Percent Federal Grants for Treatment
Facilities, 1969-73
(in millions of current dollars)
State
Alabama :
Tr
Sw
Total . . .
Alaska:
Tr
Sw ......
Total. . .
Arizona:
Tr
Sw
Total. . .
Arkansas :
Tr
Sw
Total - - -
California:
Tr
Sw
Total
Colorado:
Tr
Sw
Tota 1 ...
Connecticut:
Tr
Sw
Total . . .
Delaware:
Tr
Sw
Total. . .
1969
9.3
13.3
22.6
0.9
1.6
2.5
5.0
27 .5
32.5
3.0
5.0
8.0
105.3
242.4
347.7
6.3
10.7
17.0
13.5
25.8
39.3
2.2
4.0
6.2
1970
9.6
13.6
23.2
0.9
1.7
2.6
5.4
28.3
33.7
3.1
5.2
8.3
111.3
250.4
361.7
6.7
11.1
17.8
14.2
26.7
40.9
2.3
4.1
6.4
1971
10.0
13.9
23.9
1.0
1.7
2.7
5.7
29.1
34.8
3.3
5.4
8.7
117.8
258.6
376.4
6.9
11.5
18.4
15.0
27.5
42.5
2.4
4.2
6.6
1972
10.4
14.2
24.6
1.1
1.8
2.9
6.0
29.9
35.9
3.5
5.5
9.0
125.0
267.1
392.1
7.2
11.9
19.1
15.9
28.5
44.4
2.5
4.3
6.8
1973
10.9
14.5
25.4
1.3
1.9
3.2
6.4
30.8
37.2
3.7
5.7
9.4
132.7
275.8
408.5
7.6
12.3
19.9
16.7
29.4
46.1
2.6
4.4
7.0
Total
1969-73
50.2
69.5
119.7
5.2
8.7
13.9
28.5
145.6
174.1
16.6
26.8
43.4
592.1
1,294.3
1,886.4
34.7
57.5
92.2
75.3
137.9
213.2
12.0
21.0
33.0
Tr = Municipal water waste facilities
Sw - Sanitary sewers
-------
Table 28. continued
220.
State
District of
Columbia: !
Tr
Sw
Total
Florida:
Tr
Sw
Total. . .
Georgia:
Tr
Sw
Total. . .
Hawaii:
Tr
Sw
Total. . .
Idaho:
Tr
Sw
Total . . .
Illinois:
Tr
Sw
Total . . .
Indiana:
Tr
Sw
Total . . .
Iowa:
Tr ......
Sw
Total. . .
1969
1.0
11.0
12.0
32.1
75.5
107.6
14.7
21.3
36.0
3.7
15.1
18.8
1.7
1.8
3.5
25.0
43.2
68.2
11.7
13.8
25.5
4.1
2.6
6.7
1970
1.1
11.8
12.5
33.5
77.5
111.1
15.3
21.9
37.2
4.0
15.7
19.7
1.7
1.9
3.6
26.2
44.4
70.6
12.3
14.2
26.5
4.3
2.6
6.9
1971
1.1
11.8
12.9
35.3
79.4
114.7
16.0
22.4
38.4
4.3
16.2
20.5
1.8
1.9
3.7
27.6
45.6
73.2
13.0
14.6
27.6
4.5
2.7
7.2
1972
1.1
12.1
13.2
37.4
81.5
118.9
16.7
23.0
39.7
4.5
16.8
21.3
1.9
2.0
3.9
29.1
46.8
75.9
13.6
15.0
28.6
4.6
2.8
7.4
1973
1.2
12.5
13.7
39.6
83.6
123.2
17.4
23.5
40.9
4.9
17.4
22.3
2.0
2.1
4.1
30.7
48.0
78.7
14.4
15.4
29.8
4.9
2.8
7.7
Total
1969-73
5.5
58.8
64.3
178.0
397.5
>575.5
80.1
112.1
192.2
21.4
81.2
102.6
9.1
9.7
18.8
138.6
228.0
366.6
65.0
73.0
138.0
22.4
13.5
35.9
Tr = Municipal waste treatment facilities.
Sw = Sanitary sewers .
-------
Table 28- continued
221.
State 1969
Kansas :
Tr
Sw
Total. ..
Kentuckys
Tr
Sw
Total . . .
Louisiana:
Tr
Sw
Total. . .
Maine:
Tr
Sw
Total. . .
Maryland:
Tr
Sw
Total . . .
Massachusetts :
Tr
Sw
Total. . .
Michigan:
Tr
Sw
Total . . .
Minnesota :
Tr
Sw
Total. ...
3.2
4.2
7.4
8.4
10.0
18.4
13.4
29.5
42.9
3.6
0.8
4.4
8.3
23.8
32.1
22.7
41.2
63.9
41.4
39.4
80.8
12.5
15.4
27.9
1970
3.2
4.3
7.5
8.8
10.3
19.1
14.0
30.5
44.5
3.8
0.8
4.6
8.8
24.6
33.4
23.5
42.3
65.8
43.4
40.5
83.9
13.1
15.9
29.0
1971
3.4
4.4
7.8
9.2
10.6
19.8
14.8
31.4
46.2
4.1
0.9
5.0
9.5
25.4
34.9
24.5
43.4
67.9
45.5
41.5
87.0
13.7
16.3
30.0
1972
3.5
4.5
8.0
9.7
10.9
20.6
15.6
32.4
48.0
4.3
0.9
5.2
10.1
26.2
36.3
25.6
44.6
70.2
47.9
42.7
90.6
14.4
16.8
31.2
1973
3.6
4.6
8.2
10.2
11.3
21.5
16.4
33.5
49.9
4.5
0.9
5.4
10.8
27.0
37.8
26.6
45.8
72.4
50.5
43.8
94.3
15.1
17.2
32.3
Total
1969-73
16.9
22.0
38.9
46.3
53.1
99.4
74.2
157.3
231.5
20.3
4.3
24.6
47.5
127.0
174.5
122.9
217.3
340.2
228.7
207.9
436.6
68.8
81.6
150.4
Tr SB Municipal waste treatment facilities .
Sw - Sanitary sewers
-------
Table 28. continued
222.
State
Mississippi:
Tr
Sw
Total . . .
Missouri:
Tr
Sw
Total. . .
Montana :
Tr
Sw
Total. . .
Nebraska:
Tr
Sw
Total . . .
Nevada:
Tr
Sw
Total. . .
New Hampshire:
Tr
Sw
Total. . .
New Jersey:
Tr
Sw
Total . . .
New Mexico:
Tr
Sw
Total . . .
1969
3-7
8.5
12.2
14.5
60.3
74.8
1.9
1.1
3.0
3.0
3.6
6.6
1.0
3.3
4.3
2.5
3.9
6.4
38.5
79.6
118.1
2.0
6.8
8.8
1970
3.9
8.8
12.7
15.3
62.1
77.4
2.0
1.2
3.2
3.2
3.7
6.9
1.0
3.4
4.4
2.7
4.0
6.7
40.5
82.1
122.6
2.1
7.0
9.1
1971
4.1
9.1
13.2
16.2
63-6
79.8
2.1
1.2
3.3
3.3
3.7
7.0
1.1
3.5
4.6
2.8
4.1
6.9
42.6
84.8
127.4
2.2
7.2
9.4
1972
4.4
9.3
13.7
17.2
66.4
83.6
2.3
1.3
3.6
3.4
3.8
7.2
1.2
3.7
4.9
2.9
4.2
7.1
44.9
87-2
132.1
2.3
7.5
9.8
1973
4.6
9.9
14.5
18.3
68.8
87.1
2.3
1.3
3.6
3.6
3.9
7.5
1.3
3.8
5.1
3.0
4.3
7.3
47.5
90.1
137.6
2.4
7.7
10.1
Total
1969-72
20.7
45.6
66.3
81.5
321.2
402.7
10.6
6.1
16.7
16.5
18.7
35.2
5.6
17.7
23.3
13.9
20.5
34.4
214.0
423.8
637.8
11.0
36.2
47.2
Tr = Municipal waste treatment facilities
Sw = Sanitary sewers
-------
223.
Table 28. continued
State
New York:
Tr
Sw
Total . . .
No. Carolina:
Sw
Total . . .
No . Dakota :
Tr
Sw
Total. . .
Ohio:
Tr
Sw
Total . . .
Oklahoma :
Tr
Sw
Total. ..
Oregon:
Tr
Sw
Total. . .
Pennsylvania:
Tr
Sw
Total . . .
1969
73.9
131.5
205.4
6.5
15.6
22.1
0.9
1.0
1.9
33.3
50.8
84.1
3.7
8.7
12.4
9.2
13.8
23.0
24.4
9.5
33.9
1970
77.9
135.8
213.7
6.8
16.0
22.8
0.9
1.1
2.0
34.8
52.3
87.1
3.8
8.9
12.7
9.7
14.2
23.9
25.2
9.7
34.9
1971
82.3
140.1
222.4
7.1
16.4
23.5
0.9
1.1
2.0
36.6
53.8
90.4
4.0
9.1
13.1
10.3
14.6
24.9
26.2
10.0
36.2
1972
87.2
144.7
231.9
7.5
16.8
24.3
1.0
1.1
2.1
38.5
55.3
93.8
4.2
9.4
13.6
10.9
15.1
26.0
27.2
10.3
37.5
1973
92.4
149.4
241.8
7.8
17.2
25.0
1.1
1.1
2.2
40.5
60.0
100.5
4.4
9.6
14.0
11.6
15.5
27.1
28.4
10.6
39.0
Total
1969-7
413.7
701.5
1,115.2
35.7
82.0
117.7
4.8
5.4
10.2
183.7
272.2
455.9
20.1
45.7
65.8
51.7
73.2
124.9
131.4
50.1
181.5
Puerto Rico:
Tr
Sw
Total...
Tr = Municipal waste treatment facilities
Sw = Sanitary sewers.
-------
Table 28. continued
224.
State
Rhode Island:
Tr
Sw
Total...
So. Carolina:
Tr
Sw
Total. . .
So. Dakota:
Tr
Sw
Total . . .
Tennessee:
Tr
Sw
Total
Texas :
Tr
Sw
Total. . .
Utah:
Tr
Sw
Total.. .
Vermont:
Tr
Sw
Total . . .
Virginia :
Tr
Sw
Total . . .
1969
3 1
6 ft
9.9
6 ft
7 I
13.9
0.9
0 ft
1.7
10 5
13 6
24.1
20. 2
77 6
97.8
9.7
10 5
20.2
1.4
0.4
1.8
13.9
22.7
36.6
1970
30
. t.
6Q
. y
10.1
7 1
/ . J-
1 "\
14.4
OQ
00
. O
1.7
11 n
14 O
25.0
21 0
79 5
100.5
10 1
10 9
21.0
1 5
0 4
1.9
14.4
23.4
37.8
1971
3/1
.4
71
. 1
10.5
7 A
.4
7/\
.4
14.8
OQ
.7
OQ
. y
1.8
np.
id •?
j.4* . j
25.9
Ol Q
01 A
103.3
1O fi
11 ^
21.9
1 5
0 4
1.9
15 .0
24.2
39.2
1972
.5
. 3
10.8
.7
.6
15.3
In
.U
Ort
.y
1.9
10 i
£ * £
•t A -]
J.4 . /
26.9
29 Q
o-i A
106.3
no
nc.
22.8
1 5
0 4
1.9
15 7
24.9
40.6
1973
3.7
7.5
11.2
.1
.8
15.9
IT
. 1
. 9
2.0
10 o
\.i . O
IK 1
J.D . -L
27.9
^A n
£•1 - U
QC C
OD . _>
109.5
11 7
1 5 n
23.7
1 7
Oc
2.2
16 4
25 8
42.2
Total
1969-73
16.9
35.6
52.5
37.1
37.2
74.3
.8
.3
9.1
DO .1
nT
. 7
129.8
110 n
J.XU . U
A m >i
4U / .4
517.4
c-i -i
D J . J
RA 1
DO . J
109.6
T ft
99 1
9.7
75 4
mn
196.4
Tr = Municipal waste treatment facilities
Sw = Sanitary sewers.
-------
Table 28. continued
225.
State
Washington:
Tr
Sw
Total . . .
West Virginia:
Tr
Sw
Total . . .
Wisconsin:
Tr
Sw
Total . . .
Wyoming :
Tr
Sw
Total . . .
TOTAL U.S.
Tr
Sw
Total . . .
1969
14.4
38.4
52.8
4.1
2.8
6.9
8.5
9.2
17.7
0.7
0.9
1.6
666.2
1,267.7
1,933.9
1970
15.3
39.6
54.9
4.3
2.9
7.2
8.9
9.5
18.4
0.8
1.0
1.8
698.9
1,306.4
2,005.3
1971
16.2
40 .8
57.0
4 .5
3.0
W • w
7.5
9.2
9.7
18.9
0.8
1.0
1.8
735.2
1 , 344 . 2
2,079.4
1972
17 1
^ f • A
42 0
^f *• • \J
59.1
4.6
3.1
w » *
7.7
9.7
9.9
19.6
0.9
1.0
1.9
774.7
1,385.1
2,159.8
1973
18 3
A W • W
43 2
^f >J • *i
61.5
4.9
3.2
8.1
10.1
10.2
20.3
0.9
1.1
2.0
817.6
1,430.2
2,247.8
Total
1969-73
81 3
W^ • -J
204.0
285.3
22.4
15.0
37.4
46.4
48.5
94.9
4.1
5.0
9.1
3,692.6
6,733.6
10,426.2
Tr = Municipal waste treatment facilities.
Sw = Sanitary sewers.
Source: Calculated from U.S. Dept. of Interior, Federal Water
Pollution Control Administration, unpublished data in
constant dollars, adjusted to current dollars on the
basis of projected construction cost increases.
-------
226.
Table 29. Municipal Waste Treatment Facilities, Average Annual
Construction Contract Awards, 1962-66, and Average Annual
Required Capital Outlays, Net Cost to Local Govern-
ments, Assuming Varying Levels of State and
Federal Grants, 1969-73
(in millions of current dollars)
State
Average
Annual
Contract
Awards ,
1962-66
Average Annual Required Capital Outlays
1969-73
Total
Net Cost to Local Governments ,
Assumed Combined Levels of
State and Federal Grants of
30% of
Totals/
70% of
Totalb/
80% of
To tal£/
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of
Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
6.9
0.7
5.2
7.2
37.6
8.1
8.7
2.2
7.0
14.0
9.5
5.6
1.1
33.3
17.1
7.5
5.5
8.7
13.0
3.4
12.7
13.5
23.3
13.4
5.2
22.1
1.4
5.1
3.6
22.3
2.4
12.7
7.4
263.1
15.4
33.5
5.3
2.5
79.1
35.6
9.5
4.1
61.6
28.9
10.0
7.5
20.6
33.0
9.0
21.1
54.6
101.7
30.5
9.2
36.2
4.7
7.3
2.5
15.6
1.7
8.9
5.2
184.2
10.8
23.5
3.7
1.7
55.4
24.9
6.7
2.9
43.1
20.2
7.0
5.3
14.4
23.1
6.3
14.8
38.2
71.2
21.4
6.4
25.3
3.3
5.1
1.7
6.7
.7
3.8
2.2
78.9
4.6
10.0
1.6
.8
23.7
10.7
2.8
1.2
18.5
8.7
3.0
2.3
6.2
9.9
2.7
6.3
16.4
30.5
9.1
2.8
10.9
1.4
2.2
0.3
4.5
.5
2.5
1.5
52.6
3.1
6.7
1.1
0.5
15.8
7.1
1.9
0.8
12.3
5.8
2.0
1.5
4.1
6.6
1.8
4.2
10.9
20.4
6.1
1.8
7.2
0.9
1.5
0.5
continued —
-------
Table 29. Municipal Waste Treatment Facilities, Average Annual
Construction Contract Awards, 1962-66, and Average Annual
Required Capital Outlays, Net Cost to Local Govern-
ments, Assuming Varying Levels of State and
Federal Grants, 1969-73
continued —
(in millions of current dollars)
227.
State
Average
Annual
Contract
Awards ,
1962-66
Average Annual Required Capital Outlays
1969-73
Total
Net Cost to Local Governments,
Assumed Combined Levels of
State and Federal Grants of
30% of
Totals/
70% of
Total b/
80% of
Total £/
New Hampshire 3.2 6.2 4.3 1.9 1.2
New Jersey 18.8 95.1 66.6 28.5 19.0
New Mexico 4.4 4.9 3.4 1.5 1.0
New York 42.3 183.9 128.7 55.2 36.8
North Carolina 16.6 15.9 11.1 4.8 3.2
North Dakota 1.1 2.2 1.5 0.7 0.4
Ohio 25.3 81.7 57.2 24.5 16.4
Oklahoma 4.7 8.9 6.2 2.7 1.8
Oregon 5.8 22.9 16.0 6.9 4.6
Pennsylvania 27.4 58.5 40.9 17.5 11.7
Puerto Rico 2.2
Rhode Island 2.8 7.5 5.3 2.2 1.5
South Carolina 5.5 16.5 11.6 4.9 3.3
South Dakota 1.5 2.1 1.5 0.6 0.4
Tennessee 10.9 25.8 18.1 7.7 5.2
Texas 22.0 48.9 34.2 14.7 9.8
Utah 2.9 23.7 16.6 7.1 4.7
Vermont 3.5 3.1 2.2 0.9 0.6
Virginia 11.7 33.6 23.5 10.1 6.7
Washington 21.0 36.1 25.3 10.8 7.2
West Virginia 6.4 9.9 6.9 3.0 2.0
Wisconsin 20.1 20.6 14.4 6.2 4.1
Wyoming 0.3 1.8 1.3 0.5 0.4
Total U. S. 563.0 1,641.1 1,148.8 492.3 328.2
a/ 30% Federal grants, no State grants,
b/ 40% Federal grants, 30% State grants.
c/ 55% Federal grants, 25% State grants.
Sources: Average annual contract awards, 1962-66 calculated from
U. S. Department of Interior, Federal Water Pollution
Control Administration, WP-15 Series Publication, Table 4.
Average annual required capital outlays, 1969-73 calcu-
lated from U. S. Department of Interior, FWPCA, unpub-
lished data in constant dollars, adjusted to current
dollars on the basis of projected construction cost
increases.
* U.S. GOVERNMENT ntlHTIHG OFFICE : IMS O—289-749
------- |