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Basically it is just a morass of administration,
and local interpretation is going to really be the final line
MR. DONAHUE: We would like, if anybody has any
comments on the alternatives that we proposed or can think of
other alternatives, or can toss some out the window or think
of some new ones, we would really like to hear, because the
more comments we get, the more people get involved in the
§ thing, the more palatable recommendations will be. Before we
Q make any recommendations to Congress, we want to be able to
o
z hand with them, the transcripts of the meeting like this, plus;
X
VI
* whatever other kinds of public support we can show, to show
i
* a decision, was arrived at with lots of public input.
MR, PAI: Don, can I ask you a question? I hate to
put you on the spot. Look at Alternative 16. Is that going to
be a big administrative problem for you?
MR. PERRIN: Requires a letter of commitment?
MR. PAI: Yes.
MR. BROWN: That is a contractual letter of commit
ment as opposed to the way it is handled now.
u „ MR. PERRIN: I believe that was one of our recommendja
a.
H 1 tions that we made in June, during the hearing process on the
in II
regulations, that the letter of commitment be substituted for
the letter of intent, if we were going to continue with
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Industrial Cost Recovery.
MR. PAI: How about without ICR?
MR. PERRIN: Without ICR--
MR. PAI: Just the letter of commitment, for instanbt
requiring them to pay a fixed amount of User Charge.
8 MR. PERRIN: I don't see any problem with that.
MR.PAI: Administratively would you have any probleja
getting a letter of commitment from the industrial user?
o MR. PERRINr: In general, I would say no. There are
!
5 always going to be one or two industries that would probably
5
caise some hackles with that.
MR.VERLANDER: I would like to comment on Alternative
'S
16. I think in theory it is a very good idea in tonns of
treatment plant and sizing. I think it has also got its
problems in that yqu are now talking about a contract between
y
a municipality and an industry, whereby the municipality wouljd
* provide- a certain amount of treatment capacity. And with
tr
d that, of course, would have to be associated cost that the
industry would have to pay.
During the planning stages of the treatment works
where sizing is determined, it is very difficult to ascertain
the costs, what they are going to be to that particular industi
It would be very difficult to draw a contract which would
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stipulate cost.
MR. PAI: The contract may stipulate the portion of
the cost, not the exact amount.
MR. VERLANDER: I think unless industry saw what ho
was going to pay, he would be very reluctant to commit himsel
to a specific capacity.
MR. DONAHUE: I have seen charges just skyrocket
in two years, from the initial planning period, where things
look very reasonable, to a point where they are so large that
it would, if I put myself in industries' shoes, probably make
me rethink a few things, such as maybe I should put in more
water conservation type processing equipment, because now it
more economic for me to do it. But the original cost that
they told me, it wouldn't have been. So I want less capacity
but I have already committed for this large capacity.
MR. PAI: That is two sides of the coin. I guess
we talked about this before, Mike. If you want to go to water
conservation, you should do it earlier, before the plant was
constructed. That is one of the key things we are concerned
with, is industry can always go ahead and reduce their water
«O
useage by 20 percent, 30 percent, the municipality is holding
an empty V -T with excess capacity, and most ordinary people
have to pay for it.
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MR. VERLANDER: What I would like to see, and I
think it has worked fairly well here in California, at least
the way I view it, maybe EPA doesn't see it this way, but
anyway, California on their treatment plant design has a ten-
year growth design period and the growth limitations are fairly
a I stringent, I find. So you take your existing capacity and you
add whatever zero population would be, or whatever the growth
factor is that the state allows, and you come up with a design
capacity that the state and EPA will grant fund.
I think then it is a matter of the local community
* 1
1 to allocate its treatment capacity resources to whichever
user class it wishes to allocate them to, recognizing that if
they go beyond the design capacity, they are going to end up
with grant ineligible costs.
M
H More importantly, if they fill out their future
S> capacity or excess capacity immediately, that means they are
* going to have to enter an expansion phase which may not be
grant funded. In other words, they have a resource that they
have got to identify as such, and they-have to allocate.
z II
I think it is important that we don't just look at user class,
but we let the ...community look at its needs and allocate its
resources accordingly.
As I said, John, I do like the idea of a contract.
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I think it has got problems that night be very difficult to
resolve when you get right down to it, because industry or no
user is going to do anything to conserve water where hs has to
outlay money or more money than it would cost him not to conserve
water, unless it is legislated.
3 || MR. DONAHUE: One of our alternatives, Alternatives
2 and 3 say basically that EPA would fund present needs, ho-./-
ii
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ever; you design that. That would be present useage plus
some small amount of growth, and anything the community wanted
to build as far as sewage treatment capacity above and beyond
that, would not be grant eligible, and it would be up to the
community to come up with money to pay for it.
The idea behind that is a couple things. We don't
want.to build sewage treatment plants bigger than they have to
be. But the othar may be a philosophical one, and this came
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government. Congress enacted this law saying these are standarc
for water cleanliness that you will have to meet. We passed
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out of this. We won't interfere any more in your community
affairs. We are not going to give you any mpre money, either.
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You are on your o;m after that. That is the thinking behind
a couple alternatives.
MR. VERLANDER: Maybe I don't fully understand this
on Alternative 2, but it looks like at the point the cosanunit}
applies for a grant, current needs are established. Whatever
their discharge is, is probably what the plant would be
upgraded to, and ICR would be retained.
MR. DONAHUE: You could also build something with
present capacity and not have Industrial Cost Recovery. That
would be a variation on that alternative.
s
MR. VERLANDER: In this alternative it does say it
plant operating well and get the water quality standard up,
<
would be retained. What I would like to see is that No. 2 be
modified to allow a reasonable growth and not an extensive
design period, but something that would get the community ove
the hump and give them a couple years' breathing time to get
and then make the community responsible for an additional
treatment plant, expansions and upgrade as may be required.
0 I would like to see discontinuance of Industrial Cost Recover)/,
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again leaving it to the community to allocate its resources
among its users as it sees fit.
I think that industry now is kind of being discrimijna
against with Industrial Cost Recovery becasue ICR is not
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01
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01
32
meeting its intended purposes. So in fact, all it is, it is
an added charge to one group of users that has been isolated.
There is an interesting decision made by the Supreme i
Court of the State of New York of which you.may be aware, in
March, 1978. I could provide you with that decision. It had
to do with a power company, and the establishment of tiraa-of-
day rates, and their the Appellate Court of New York found th4t
the rate structure was discriminatory and would not allow the
5 rates to be instituted because these rates were only applied
to certain sizes of users. Of course that makes sense because
i
9 you have to be a certain size before it is economic to instal]
certain kinds of meters to institute time-of-day rates,
There it was, a clear case this was discrimination
in the isolation of certain users that were receiving identica(l
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5 services by the utility.
I 'don't know if it would have any application here,
_ but I think it is an interesting point.
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MR. BROWN: I am not a lawyer but ICR is written
z into the law. It is a law that you charge it. Now if it is
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discriminatory, well—
MR, VERLANDER: Laws can be inequitab-lex i don't
think that is the intent of Congress. It appears what was
intended to be equitable is now discriminatory, and I think
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it should be eliminated.
MR. PAI: I think some of the things we see in othex
parts of the country are not reflected in the State of Calif-
ornia, which is a credit to the State of California and the
State "fater Pollution Control Board. Generally you have a
very good process to size the plant properly and get your
revenue system down properly. Some of the alternatives or
some of the things we intend to correct are reflected in
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£ other areas of the country.
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MR. VERLANDER: I am well aware of that. That is
why I would like to use California as a model in terms of siz-
ing i-of treatment works. I think that is one of the critical
things here we are looking at. Of course it does tie into
water .conservation.
0 MR. PAI: California has everything going for it.
§
< It is not only the people, it has a whole environment, the
u social circumstances here, and it is just blended right.
MR. VERLANDER: It is interesting. I am doing a
job in the fixate of Oregon where a group of users has asked
0,
us to review the User Charge rate structure that is proposed,
and that treatment plant is now operating at a third of
capacity. It is a brand new treatment plant.
MR. PAI: Where is this?
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MR. VZHLAIIDSR: It is in a suburb outside of Portlar
and I find it Eicolutely incredible that a community would
design a treatment plant that is three times as large as
its current needs and won't be fully utilized possibly until
beyond the year 2000.
MR. PAI: This is our major concern at this point;
I can reasonably doubt that people will ever use that much
water throughout their planning period.
One thing particularly in this area is the water
conservation effort. Of course the population always grows,
but water usage does not always grow.
MR. DONAHUE: We got data from 241 wastewater
treatment facilities, and the average utilization was 68
percent of design capacity. That was average. The range was
from 4' percent to 120 percent, and that 68 percent is very
misleading. All the data is misleading, because it is average
and it is that kind of stuff; but the problem is you get a
big'-city like Chicago or New York, and you have an extra
hundred MGD capacity, only a small percentage maybe, and
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-x II you go to some small town with a 5 MGD plant that is only
6
I using 1 MGD and you have a problem. You are building a sew»
age treatment plant that somebody has to pay for.
The problem of excessive future capacity is really
something that has to be faced up to. You don't want to build
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35
a treatment plant that is too small. You don't want one
that is too big, either. It is a really difficult kind of
thing to determine what is the right size.
2 ' MR. PAI: Don, in your facility planning, do you
generally follow the cost effective guidelines or something
in addition to that?
o
° MR. PERRIN: We are now just following cost
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effectiveness guidelines, as far as grant eligibility for
future capacity.
MR. PAI: Sizing?
MR. PERRIN: Sizing, yes. We have had popu-
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lation projections we have been using for the last three or
four years.
« MR. PAI: So your major control point is popula-
u tion growth? How about industrial growth?
MR. PERRIN: We haven't been funding—the new
(B
ac
regulations now allow for an additional 25 percent increase.
Our state regulations have allowed for a 10 percent increase,
MR. PAI: Do you give anything in addition to that
<« 10 percent?
MR. PERRIN: Not for industry. We do give an
additional capacity depending on what the project is for
domestic/commercial, not for industrial.
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36
MR. PAI: Even if they send you a letter of
intent?
MR. PERRIN: In our state grant regulations we
have existing industrial capacity plus we do allow a letter
of commitment for future capacity.
If MR. PAI: Five and 10 percent?
MR. PERRIN: There is another additional 10 percent
above tihat:
£ | MR. PAI: In your case, you are allowed 10 percent
|
| of the design capacity for industrial growth, any kind of
*
industrial growth;in addition to that 10 percent, you require
a letter of commitment?
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MR. PERRIN: We require a letter of commitment for
any additional industrial growth, and then a combination of
that plus existing, we allow another 10 percent on top
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* I! MR.TAI: That is a good way to do it. That is what
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guidelines of course do not have that requirement of commit-
M ment for you to go beyond 25 percent of the industrial
fe ..
growth. That is..the letter of commitment we are talking
about here. In that regard we more or less try to bring the
national standard to that.
MR. PERRIN: I think that one of our other reasons
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37
for proposing a letter was because the additional industrial
capacity, and if all you had was a letter of intent, and at
some point in time that industry pulled out, it would really;
* be a heck of a burden on domestic/commercial users to have
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to pay for additional industrial plus the unforeseen that
is included.
1 MR. PAI: As I said, EPA at one tine tried to go
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a that route, and I guess the opportunity wasn't there at that
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te time. How long have you been doing this?
MR. PERRIN: Since 1977. About a year and a half
now. Those regulations went into effect in May of 1977.
MR. VERLANDER: Actually that is a relaxation of
your initial sizing criteria, because at the time 92-500
went in, growth was allowed for the noninduatrial sector, and
(A
5 the industrial sector was red lined. No growth was allowed.
u
I think the approach that the state is now using
really is a good, happy medium.
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I MR. PAI: Can you send me a copy?
CD
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there is talk going on of revising our guidelines or regula-
tions, and bringing them into conformance with the federal.
If that does occur, we will be funding for 20 years for
treatment plants according to cost effectiveness guidelines.
Appendix A, and of course that will bring into account the
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25 percent increase in industrial capacity.
MR. PAI: Still, in Appendix A, they don't require
a letter of commitment for above and beyond that 25 percent.
If you do have to go to 25 percent, it is not necessary that
? I you have to go with a letter of intent versus a letter of
5
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commitment difference. I am not arguing about 10 percent
or 25 percent, but it is an addition above 10 or 20 percent
that is what:really matters. You can argue about reasonable-
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ness of growth. Ten percent or 25 percent is reasonable.
S
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But anything above and beyond that, you should have certain
1
, control. That is our feeling at this time.
MR. VERLANOER: It has been our experience that the
industrial sector, existing industrial sector, once you do
institute User Charges, do reduce their loadings and discharge
to treatment works. So it seems to me that 10 percent number
S
<3 has a lot of latitude for the community.
I surely could concur with that. It seems like
25 is very broad.
MR. PAI: BAsically as we pointed out, there are
pretreatment costs involved and User Charges involved, and we
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may see a lot of industrial users decide to treat their own
waste, which again would give you a lot of latitude there for
what is planned for their growth.
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MR. PERRIN: I believe you are aware we have
dropped the E-0 projection that was effective in April.
We are now funding on the basis of E-150, which is the
Department of Finance baseline projection.
MR. PAI: The Department of Commerce has population
control.
§ MR. PERRIN: We are in the process of writing a
u
<= letter to the Administrator requesting the use of Department
of Finance E-150, as a basis for grant eligibility.
U)
i MR. PAI: Can you explain that a little bit?
i
*. What is the difference?
MR, PERRIN: Appendix A of the cost effectiveness
a
§ guidelines allows you to use state projections, if it is
within 5 percent of the BEA projection. The Department of
Finance E-150 is about 9 percent above, which keeps it out
« of that category. Therefore we are requesting a waiver of
*
that condition from the Administrator, and this letter will
be going out hopefully sometime next week.
m
_ MR. PAI: So instead of having a 5 percent variance
Q.
jjj you ask for a 9 percent variance?
MR. PERRIN: Right. We requested a 10 percent vari-
ance in the regulations. We didn't get it. So now we are
requesting individual variance for the Stata of California to
use E-150.
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MR. PAI: You don't have a lot of 208 planning
agencies here, do you?
MR. PERRIN: Five of them.
MR. PAI: la their plan finished?
MR. PERRIN: The State Board Thursday approved
208 plans for San Diego and AMBAG, without a population
1 factor, and Ventura, which means we still have SCAG and ABAC
left to do, which are the two big ones.
MR. PAI: Anything else?
* Again, October 31 is the cut off for written connnen1
and if you have any questlwis in. the meantime, we will be
back in D.C. next -week. Call me or call these other gentlemen
i
here for any other discussions.
5
MR. RANDOLPH: Thank you very much. The meeting is
J2 "
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"* " adjourned.
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< I) (Whereupon, the meeting was adjourned.)
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INDUSTRIAL COST RECOVERY PUBLIC MEETING
Federal Building
Seattle, Washington
Wednesday, October 25, 1978
The public meeting was convened at 10:05 a.m.,
Bob Kussman presiding.
STEPHEN B. MILLER a ASSOCIATES
T4S THIRD STRflT. >. W.
WASHINGTON. D.C. 20024
(202) 354-9148
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PERSONS PRESENT:
Bruce Brown, P-I
John J. Bonn, Nalley's Fine Foods, 3303 S. 35th St,
u Tacoma, Washington 98411
A
j Jerry Clarke, Safeway Milk Department
n
3 H.O. Davis, Safeway Stores, Inc.
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„ James M. Davia, John Fluke Mfg. Co., Inc.
o
jj William T. Dehn, CH2M Hill, 1500 - 114th St. S.E.,
a
o Bellevue, Washington 98004
o
Howard Donelson, Boeing
Jim Downing, Ch2M Hill, 1500-114th Ave. S.W.,
s- Bellevue, Washington 98004
S Howard Edde, Howard Edde, Inc., Bellevue, Washing-
2 ton
{3 Tony Harber, Brown & Caldwell
Douglas A. Hilderbrand, Municipality of Metro-
^ politan Seattle, 821 Second Avenue, Seattle, WAshington
a 98104
i
George Houck, Washington State Department of
Ecology,' Olympia, Washington 98504
Travis Keeler, Overall laundry Services
A. R., Van Kleeck, Sr. Environmental Engr.,
Design & Construction Department, Safeway Stores, Inc.,
425 Madison St,f Oakland, California 94660
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CO
Gary Krahmer, Unified Sewerage Agency, Hillsboro,
Oregon
Stanton LeSieur, Unified Sewerage Agency,
Hillsborof Oregon
Charles F. Liebert, Unified Sewerage Agency,
Hillsboro( Oregon
§ Robert McGuire, Agripac Inc., P,0. Box 5346, Salem,
Oregon 97304
5 Bob Meyers Olympia Brewing Co., Box 947,
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* | Olympia, ashington 98507
Elwood W. Ott, Seattle Engr. Dept., Room 910
Municipal Bldg., Seattle, Washington 98104 Tel. 206-625-2354
_ Larry L. Petersen, Metro, 410 W. Harrison,
5
Seattle, Washington 98119
Mike Price, City of Tacoma Sewer Utility
Judy piley, Metro
Bill Schow, Magic Valley Foods, Inc., P.O. Box
475, Rupert, Idaho 83350
z W. T, Sprake, Gordner Engineers, Inc., 3rd & Cherry,
x
£j Seattle, Washington 93103
John D. Thomas, Metro Wastewater Management Com-
mission, P.S,B., 125 Eighth Ave,, Eugene, Oregon 97401
Bill Whittom, Mayor, Rupert, Idaho 83350
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Gary C.Young, P.E., City Engineer, City of Twin
Falls,P.O. Box 1907, Twin Falls, Idaho 83301
M.R. KUSSMAN: Good morning. My name is Bob Kussman
On behalf of the Regional Administrator I would like to
welcome you for this meeting, which is a part of EPA's
Industrial Cost Recovery, a task mandated by Public Law
95-217 enacted last December.
It is our intention that the public be involved in
« the study and that the public's comments and concerns be
i
reflected in the final report to Congress.
«j In order to make certain that everyone has the
opportunity to be heard, we must have a simple, understandable
orderly meeting, To assure this, we will observe the followir
order of procedure.
First we will have an explanation of the purpose of
the ICR study and of this meeting by Christine Noah-Nichols,
our Regional Specialist for User Charge and Industrial Cost
88
Recovery.
y Secondly, there will be a briefing of the project
V)
scope and methodology by Alan Brown of Coopers & Lybrand, the
management consulting and accounting firm hired by EPA to
assist in the study.
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Thirdly( we will have a presentation by Ed Donahue
of Coopers & Lybrand,of the findings and conclusions of this
study, as well as some of the possible recommendations which
could be made as a result of the study.
Wh will then follow with prepared statements by
§ I those individuals who have scheduled a statement in advance,
followed by prepared statements by anybne else who has a
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o
\ and an open but orderly discussion.
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We intend for everyone to be heard who wishes to
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speak. I must insist that we follow the format just outlined
ICR is a topical issue and we want the Congress to
« be aware of the grass roots concern related to ICR. We will
r*
j3 stay as long as necessary to conclude the discussion.
We have a court reporter with us today, and a trans
cript of the meeting will be appended to the final report
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which goes to Congress
_ II
For that reason, I must ask you to speak clearly
0
S | and slowly and one at a time.
a.
55 I i would now like to present Christine Noah-Nichols,
our Regional ICR Specialist, who will explain the purpose of
the study and this meeting.
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MS, NOAH-NICHOLS: I am Christine Noah-Nichols from
the Wastewater Operations Branch. I coordinate User Charge •
and ICR reviews in Region X. I don't do all of them but I
have been involved in several of them.
I would like to tell you briefly why the study is
3 being conducted and why we are having the meeting today.
As we all know, with Public Law 92-500, Congress
intended that wastewater treatment facilities be operated as
well-supported nonprofit public utilities.
To achieve this, Section 204(b) of the 1972 Act
i required grantees to develop and maintain two kinds of rate
*
systems. One of these was User Charge systems and covers
operating, maintenance and minor replacement cost, all of
5 which are needed to keep the treatment plant operating up to
u standard. The requirements went one step further and also
specified that User Charges be proportional to the usage of
<
the system.
3 The other system is Industrial Cost Recovery, and
its intent is to recover from industrial users the portion of
the grant identified with construction of capacity for those
6
" industries.
Now, although some jurisdictions may disagree with
particular EPA regulations and guidelines related to User
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the impact of ICR on rural communities and on industries in
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Charges, most grantees agree in principle with the idea of
economic self-sufficiency, for the wastewater treatment systeijp
ICR on the other hand is a topic which has created
a great deal of debate over the last six years or so. As you
know, in December, Congress enacted the Clean WAter Act of
l"977"-f Public Law 95-217. This Act made several modifications
to the 1972 Act. One of these was Section 75 which specified
that EPA would study the efficiency of and the need for ICR.
The study was at least to include an analysis of
economically distressed areas or areas of high unemployment.
The report is to be delivered to Congress by
5
a December 31 of this year, and that isn't too far away. This
1
last May EPA contracted with Coopers & Lybrand to conduct the
ICR study for the agency.
Coopers &• Lybrand is a management consulting and
accounting firm, for those of you who are not familiar with
the name, one of the largest of the big 8 CPA firms. The
firm was- selected for several reasons,. I will just highlight
z
u
a couple of the key reasons,
For one thing,they had the necessary expertise
and familiarity with User Charge and ICR requirements, havinc
performed User Charge/ICR work for grantees and done some
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regulatory evaluating for EPA.
And also they had sufficient experienced personnel
available to perform the study within the very short time
period necessary.
5 Secondly, Coopers & Lybrand is highly regarded by
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§ industrial communities and local governments, both of which
N
have had previous exposure to CPA firms as objective and
b
° disinterested auditors and as management consultants.
o
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The purpose of the study was to carry out the
o
5
instructions of Congress. The basis for the scope of the
, work was a set of questions inserted in the Congressional
Record of December 15, 1977 by Congressman Roberts. Some of
8
you have received copies of those questions already.
He says, and I will quote the first paragraph:
"It has long been the intent of Congress to
encourage participation in Public Owned Treatment Works by
industry. The conferees are most concerned over the impact
with which the Industrial Cost Recovery provision of existing
law may have on industrial participation in these public
5 systems. Accordingly,the Industrial Cost Recovery, Section
75, has been.-incorporated in the Conference Report and EPA is
encouraged to submit ttie results of the study as soon as
possible so that Congress can take action on any recommendati
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10
that are forthcoming,
"It is expected that the Administrator will consult
with all interested groups in conducting this study and that
the study will address at least the following questions," and
I will paraphrase a few of these for you,
o $, Does ICR discriminate against particular
« industries or industrial plants in different locations?
i I
§
"! 2, What is the combined impact of User Charge and
6
§ ICR requirements? Do they cause some communities to charge
5 I!
much higher costs for waste treatment than other communities
in the same geographic area?
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„- 3 Does the ICR program drive industries out of
I
s municipal systems?
4. Do industries tying into municipal systems pay
more or less for pollution control than direct discharges?
5. Does the ICR program encourage conservation and
what is its economic and environmental impact?
6. Does the ICR program encourage cost effective
solutions to water pollution problems
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What are the costs and side benefits of monitoring industrial
effluent for ICR purposes?
What about tracking the number of industries?
What are the impacts of seasonal discharges or othei
changes in strength and quantity of effluents discharged by
individual industries?
And lastly, should small industries be exempted
from ICR? How small, and is there a reasonable cut-off
§ based on percentage flow?
jj Coopers & Lybrand has been busy for the past five
months speaking with and gathering data from a cross-section
«
of interests in order to address these very questions,
H
" As a final action, in their data collection phase,
3 ten.meetings are being held, one in each EPA region and this
u is one of those meetings.
There are four general purposes for inviting you
4 here today. One is to present a summary of the data gathered
a?
to date and some preliminary conclusions.
Another is to present some potential alternatives
- to the current .ICR system for your consideration.
The 'other two are to answer as many of your questicjr
as possible and to get statements and information from all
interested parties, especially those who have not yet had
direct input into the study,
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The last purpose is no doubt the main reason you
are here today, I know it is our primary purpose.
After our short presentation, the remainder of our
time today will be spent just listening to what you have to
say,
Now, here to give you an idea of. how the study is
being conducted is Alan Brown of Coopers & Lybrand and he will
S tell us-briefly what they have been doing for the past five
o
months. Thank you,
1 MR, BROWN: Good morning. My name is Alan Brown.
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I am with Coopers & Lybrand, and I was responsible fior the
data collection effort in the western half of the country.
s
When EPA first asked us to -.conduct an ICR study, th
first thing that we did when EPA asked us to conduct the stud
was to go back and look at the 1972 legislative history
related to Public Law 92-500 and the specific sections that
addressed the User Charge and Industrial Cost Recovery in
order for us to find out exactly what ICR was supposed to
accomplish.
Now, stated briefly, we found after reading the
legislative history that there are two major ideas contained
in there. One idea is an idea of equity or an attempt to
equalize the assumed economic advantage; namely, less
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sewage costs for those industries that have the
ability to use publicly owned sewage systems, as opposed to
those.'industries that have to great their own sewage,
The other idea that Congress was very concerned
about was that of capacity, or the appropriate sizing of
wastewater treatment facilities with adequate but not excess
future capacity.
The third idea that we found was not quite as centr.
to ICR as the first "two, was an attempt to encourage water
conservation.
Now, this background material from the legislative
history together with legislative history related to the 1977
Act and Congressman Roberts' questions which Chris read for
you and Congresswoman Heckler's statements on ICR served as
the frame of reference for us to plan the study, The initial
step we took in late May of this year was to sit down with
EPA representatives like John Pai, John Gall from Region I,
and Ted Horn from Region V and basically put together a
shopping list of every piece of data that we thought would
help us in answering the specific questions that have been
asked about ICR and some of the more general questions related
to User Charges.
Now, we took this shopping list of data elements an
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8 tion of Manufacturers, an
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ahead of time to the people we were going to meet with, so
they would know the kind of data we were lookin§ for and be
able to prepare a little before we showed up. We stressed
that participation in the survey was voluntary and in many
^ cases people mailed in completed questionnaires rather than
«
meeting with us personally,
The second category of people we were going to talk
o to were a list of 200 additional cities that we surveyed by
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8 telephone. The same questionnaires were used and these
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w questionnaires were mailed out in advance to the people that
we were surveying.
*
E Next we came up with a group of five which was later
i
S expanded to six industries for detailed study. Although we
were Interested in the impacts on industry in general, we wer<
particularly" interested in industries which met one or more
of the following criteria. We were looking at industries thai
* were particularly labor-intensive, that had low operating
5
d margins, were high water users, that were particularly
seasonal or were particularly impacted by the extent of
_ M pretreatment regulations
The industries that we eventually selected for
detailed study were the meat packing industry, dairy products
paper and allied products, secondary metal products,canned
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and frozen fruit and vegetalbes and the textile industry,
A list of selected establishments in those industri
that I just mentioned located in the cities which we planned
to visit in person and'in a telephone survey was prepared and
5 I survey forms mailed to those establishments.
Now, our entire data collection effort was
accomplished in six weeks, by using ten teams of c 6 L
consultants across the country.
The second step in the study, and we felt just as
important as the first, was to develop a mechanism for public
, I! participation in the study. Our primary concern was that we
* II
have grass roots involvement in the study and we wanted the
an
study to be/open one.
I I! We put together an ICR Advisory Group of approximate!
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reached some preliminary conclusions as to what the data means
We performed several computerized statistical
analyses and these are currently being refined.
We feel that we have looked at enough data to -be
j able to formulate some possible alternatives to ICR as it is
presently constituted, and the purpose of this meeting today
is to relate to you what we have found and to get your reactic
?
to it.
a
o After these ten regional meetings are held, we will
put together a draft final report which will be widely circu-
' lated. Our time schedule for this is to have the draft final
s
report completed by mid-November. Then in December we will
begin to write our final report which will be delivered to
Congress in late December. The final report will contain
u recommendations to Congress. We cannot, however, guarantee
that Congress will act on our recommendations.
K
Since you are all interested in our findings and
j conclusions, I will turn the meeting over to Ed Donahue, who
i
m will relate to you what we have found, what we think it means
z
and some possible alternatives to ICR.
E
MR. DONAHUE? Good morning, my name is Ed Donahue,
I am Project Manager for Coopers & Lybrand in the ICR study
I am here to tell you what we found in the course of our study
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what we think it means and present some possible alternative
The data and statistics that I will be using are
based on our study and are currently being studied, validate
and refined in our Washington office. Rather then hand out
$ raw data or computer printouts that are understandable to
m II
only a few people, we have summarized our data into a handou
entitled "ICR Study Data" dated October 10, 1978. You shoul
already have received copies of this handout.
The final version of the data analysis will be
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much more detailed, much more extensive/ to be appended to
and included in our final report.
There is also a one-page summary of findings and
conclusions which we just had reproduced and it will be
available for anybody who wants it.
m I Without further delay, let's examine the data.
RHmember, though, the data is national data and it is ayerag
therefore requires careful thought before using it, because
it can be very misleading. We eventually got data from 241
municipalities, sanitary districts, EPA grantees. The best
data came from places we actually visited. Data obtained
through telephone surveys was not as complete or precise but
was still useable.
We also obtained data from 397 industrial faciliti
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mostly through efforts of trade associations. The industrial
data is at plant level rather than at company level.
Looking at the major issues before looking at speci
data, the first thing we want to address is the issue of
equity or the assumed economic advantage; namely, less
expensive sewage treatment cost for industries UaingJthe
Publicly Owned Treatment Works, POTWs,- versus those treating
™ "
o
" and discharging their own waste. We used a computerized tax
model which we developed for industrial clients, and modified
o
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to reflect the User Charges and ICR situation.
Basically the model included a series of equations
which reflect the cost of doing business, and enable the
5 company to evaluate alternatives in a sense, a'i".mAke or buy"
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* decision. Should the company use a POTW or treat its own
sewage? What we found was for some medium or large industries
having compatible waste, it is cheaper in the long run to
self-treat, even without including ICR charges, just includin
u | User Charges. This is a very significant finding. What it
ii
means without ICR or pretreatment cost, large industries '
should, from an economic viewpoint, treat their own sewage.
£
Hi This is based- on several tax changes that were not really
known to bhe Public Works Committee when they wrote Public Law
92-500, Several have been enacted since 1972 when 92-500 was
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enacted. Basically these tax changes axe three.
The first is accelerated depreciation over a five-
year period for pollution control equipment.
The second is investment tax credits for capital
equipment.
And the third is the use of Industrial Development
Bonds, tax-free IDBs to finance self-treatment facilities.
The proposed tax law changes, some were just recentl
enacted and some which will be addressed when Congress
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3; reconvanves in January, will, if enacted, make it even more
attractive for industries to self-treat because of the increas
»-• tax credits which are proposed. What this finding says is
I
that for many industries it is cheaper to self-treat than to
use .POTW. If this is the case, why don't more industries
u self-treat? There can be several reasons. The first and most
obvious one is that they are not located on a river or stream j
o r other receiving body of water where they can discharge
directly, So therefore they must use a POTW
oa The second and probably fairly common.,is they just
don't want the hassle of self-treatment. They don't want a
NPDES permit, they don't want to operate and build a sewage
treatment facility.
The third reason and probably the greatest one at
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the momentf is that the User Charge and Industrial Cost
Recovery have just not been around long enough to see their
effects. The second thing to bear in mind, though, is if
^ ICR and pre'treatment costs are added on top of User Charges,
?
they could very well be the final straw that drives industry
o
out of POTWs, thus making it more expensive for the remaining
3 POTW dustomer§ to use the public sewer system,
In particular, EPA's application of pretreatment
standards is likely to make many industries give serious
consideration to self-treatment.
The second issue is that of POTW capacity. Based
on our survey of 241 wastewater treatment facilities, from
which we obtained data, the average POTW uses only 68 percent
of its design capacity. The useage ranges from a low of 4
H I percent to a high of 120 percent. It appears Industrial Cost
Recovery as presently formulated has not acted to put a cap
on construction of excess future capacity in POTWs.
The third issue is that of water conservation, and
the outcome is not as clear. Based on industries we surveyed,
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CL I water consumption has dropped an average of 29 percent, but
industries with whom we talked,attributed the water conservation
to higher water rates and to User Charges, not to Industrial
Cost Recovery, because Industrial Cost Recovery as a percentagfe
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of water costs and User Charges is not that significant at
this time.
The economic impact of Industrial Cost Recovery to
date is not significant in most locales, because ICR has not
S been in effect for more than a year or two, and most grantees
have suspended ICR billings, while the ICR moratorium is in
e effect. The exception to insignificance of Industrial Cost
p
d Recovery is those cases where there are seasonal users and/or
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Q advanced waste treatment. In those cases, the total sewage
< costs for industry have increased by a factor of several times
The incremental impact of ICR above User Charges is generally
ID
not great, with the exception of the two cases just mentioned
The combined impact of User Charge and Industrial Cost
Recovery can be YerY significant. We can find only a few
scattered instances of plant closings due to sewage cost, and
non attributable solely to Industrial Cost Recovery.
* The total jobs lost in the plants that did close
was less than a thousand. In every case there were other
factors such as plant age which affected the plant closing
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Q decision, also.
EJ
The impact of Industrial Cost Recovery appears to
be greatest in older cities, particularly in the Northeast,
and particularly in small' to medium size cities, and I think
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in agricultural communities. There does not appear to be
any impact of ICR on industrial growth patterns to date. We
were not able to differentiate the impact of ICR on small
versus large businesses, because very few industrial plants
S were willing to disclose production or sales data.
?
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8 The costs to industry of sewage treatment is much
greater by a factor of about 50 percent per gallon in AWT
plants as compared with secondary plants.
o The incremental cost to grantees to maintain and
operate Industrial Cost Recovery systems; that is, the
"eliminatable" cost above and beyond the cost of maintaining
the- User Charge systems is small when compared to the total
5
cost of sewage treatment, averaging about $15,000 per grantee
per year. The average ICR revenues per grantee per year are
w approximately $88,000, of which $8,000 is retained for
discretionary use' by the grantee
There is more data which might be of interest to
you that'is'included in the handout and we would be pleased
to discuss specific data during the question and answer perioc
at the end of our meeting.
N
To summarize our conclusions and our findings very
briefly, ICR is not doing what it was supposed to do.
Relatively few cities have implemented ICR, Those that have,
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have suspended billings during the moratorium.
ICR to date has had no significant impact on employ'
ment, on plant closings, on industrial growth, import/export
balances or in local tax bases.
* ICR is not proving cost effective in producing
in
§ revenues for local or federal governments, at least in most
I cities,
IM
§
N We must realize, however, that the Clean Water Act
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z had social as well as economic objectives. Among other things
5
I Congress was attempting to avoid the appearance of using publ:
i money to subsidize industries that discharge to grant-funded
*
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public sewer systems.
While our studies have shown that many of the
economic objectives have not been met, the social objectives
JJJ remain, and accordingly it .is appropriate to consider a series
of alternatives to Industrial Cost Recovery as it now exists.
At this time I will ask everyone to turn their
attention to a document entitled "Preliminary Compilation of
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^ Possible Study Alternatives," dated October 10, 1978, which
i you should already have a copy of. The document presents 16
a.
" alternatives to Industrial Cost Recovery, ranging from leaving
ICR as it is now to outright elimination of Industrial Cost
Recovery, These alternatives are not ranked in any order of
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preference. They are not necessarily mutually exclusive.
They could be combined. They could be refined. They could
be modified.
What I would like to do is adjourn the meeting for
3 15 or 20 minutes to allow people to look through those
alternatives and get some initial feelings about them. I
would like to reconvene the meeting and have Alan Brown go
through those alternatives, one at a time, explaining the
2 advantages of each, and the disadvantages. After that, we
will take prepared statements. Unless somebody at the table
has something to say right now, I would like to adjourn to
about 10:45, or ten of eleven,
MS, NOAH-NICHOLS? One point. I have several
questions on where to turn in written statements, and within
j*! what time period, if you don't have them today; and the word
is that they should be sent to Coopers & Lybrand by October
31 •
at
u
MR, BROWNi Anybody that is interested come by and
we can give you an address
MR. DONAHUE: Also you can send written comments to
g
Chris in the regional office,
MS, NOAH-NICHOLS; I will send them on.
MR, DONAHUE: Barring anything else, we will adjourr
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for 15 or 20 minutes.
(Brief recess)
MR. DONAHUE; If we could reconvene the meeting.
As I mentioned before we adjourned, we prepared a list of 16
possible alternatives to Industrial Cost Becovery. We
prepared some of them, we got some ideas from people in EPA
and some people from the trade associations, and as I said,
we don't' have any preference, We are not endorsing or
rejecting any of the recommendations at this point. They
are not in any order of preference and they are not necessari
mutually exclusive. You could combine some of them. They are
all subject to being modified or changed or whatever, What I
would like to do is ask Alan to go through the 16 alternative
M and discuss some of the advantages or disadvantages of each o
them. Alan.
MR, BROWN: What we have got here are 16 alternativ
Please keep in mind that the advantages and disadvantages are
not tremendously extensive. We tried to put down a few ideas
so that people would have something to discuss and what we
thought were the major considerations for each alternative.
We realize that these lists could be much longer.
If you will look under some of the disadvantages,
frequently it is mentioned that it is going to eliminate ICR
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revenues to the federal government and to local and state
governments. What we are talking about here, I think we
Shouid be familiar with itf based on our projections over a
30-year period, the total amount to be collected from ICR wii:
range from $1 billion to $2 billion. That is total ICR
revenue collected over 30 years. This varies significantly
from earlier projections of roughly $4-1/2 billion to $7
billion. When you consider that local communities or grantees
can keep ten percent of this money to do with as they want,
you divide everything by 30 years. You are really not talking
about huge amounts of money every year in most cases. So when
you see that listed as a disadvantage just keep that in mind,
that .is what we are talking about there.
Alternative No. 1 and probably the first one to com*!
to everyone's mind is to simply abolish ICR and replace it
with nothing.
The advantage here would be to eliminate complaints
that we hear frequently from grantees that ICR is not cost
effective, that it is difficult to monitor and difficult to
administer, it would eliminate complaints from industries
that ICR is double taxation and that ICR adds unfair economic
burdens to the industry, depending upon what part of the
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country they are inf and what kind of plant they discharge
to.
It would also eliminate the inconsistent ICR rates
that we see from region to region and from different parts
S of the country,
N
p Some of the major disadvantages here are keeping
in mind that ICR, one of the intentions of ICR was to help
j put a cap on the ffi-ze of treatment works. Without some contiJo
0
over the design parameters allocated to industry, abolishing
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5 ICR may encourage grantees to plan and construct treatment
*
1 wrks that are larger than necessary, the other disadvantage
_ being it would reduce revenues.
5
Alternative No. 2 is to attempt to base grant
£
S funding for elibible project costs, including the industrial
V>
components on a sliding scale, funding current needs at 75
percent and reducing the federal share of total project costs
as grantees plant the treatment works larger than current
j needs indicate, ICR would be based on the current regulations
Let me talk a little bit first of all about current
needs. This has been discussed in other meetings. Current
i
needs could be defined as the capacity and need today with a
reasonable period or a reasonable amount allocated to future
growth. Now,basing the grant funding on a sliding scale and
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reducing the total project costs as the plant becomes larger
than current needs indicate.- would do several things,
One would be to encourage more front end planning,
and reduce the amount of excess capacity that is being built
today,
Another advantage would be to encourage industry to
participate early in the planning process and become involved
in the sizing and designing of treatment plants early on.
o II
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x- The major disadvantage here is that it may not be
B
I cost effective to build a plant based strictly on current nee<
1
* when you are attempting to design a plant for an area that is
» large and rapidly growing.
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M
Another disadvantage is that it is going to increas
the total local share of cost for grantees if the grantee
« decides to build a plant with excess capacity.
S
y || Alternative No. 3 is a great deal similar to No. 2,
with one major difference, the difference being that there
u would be no grant funding for the industrial component in the
plant.
m
u Alternative No. 3 is to base grant funding for
eligible project costs on a sliding scale, funding current
domestic needs only at 75 percent and reducing the federal
share of total project costs as treatment works is designed.
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burden. It would eliminate costs associated with implementing
and raonitorin-j the ncft systems both at the grantee level and
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As I said before, this differs from No. 2 in that
there ig no federal grant funding for the industrial component
Since there would be no federal grant allocated to industry,
there would be no ICR, So ICR would be abolished in this
Alternative,
The advantage here would be to eliminate the grantees
complaints about ICR not being cost affective and difficult to
monitor and administer. It would eliminate complaints from
industry that there is double taxation and an unfair economic
the EPA level. And it would tend to encourage better facilit;
planning.
The disadvantage here is that it is going to increase
the local share of project costs, because there would be no
federal funding for industry, and the additional cost may be
passed through to industrial users and should exceed ICR costs
because of the fact that there is no federal funding for
industry.
Alternative No. 4 is to charge ICR strictly on the
treatment works and eliminating any ICR charges that have
been developed for interceptor sewers.
This has the advantage of reducing administrative
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work that grantees have to perform oftentimes in an attempt
to identify specific industries discharging to specific inter
ceptor sewers, The grantees have complained it is very, very
difficult when you have a large service area with many
3 segmented projects, it is awfully tough to figure out which
industry discharges where, and how much to charge them for
ICR on the interceptor.
The major disadvantage here would be to reduce
revenues.
Alternative No. 5 would be to base industry's share
of the federal grant on an incremental cost basis rather than
on proportional cost basis as is the case now.
IB
8 A hypothetical instance would be, say, you design a
10 MGD plant to meet needs of the total community, and two
M
H million gallons per day of that would be allocated to industr
What you try to do is determine what it would cost if you
built an 8 MGD plant and what it would cost if you built a
10 MGD plant, and the difference there, the incremental cost
between 8 and 10, would be the amount that would have to be
paid through ICR for industry. What this would do would be
I
to allow industry to receive benefits of economies of scale,
the
using/incremental cost basis. And I think most of you can se
the major disadvantage would be it is going to be extremely
ia
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difficult to determine just exactly what the incremental cos-
actual ly is.
Alternative 6 would be to allow cost of constructii
industry's portion of the treatment works to be grant eligib]
based on the grantee's option, If the grantee elects to have
3 the industrial component of the treatment facility be grant
eligible, industry would be required to pay ICR just as they
are today, based on current regulations. If the grantee uses
o alternative sources of funding for the industrial share, ther
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5 would be no ICR.
Now, grant eligibility here, once again, could be
either incremental or proportional. Some of the advantages
here would be to allow grantees to make ICR a local option,
depending upon availability of alternative sources of funding,
w and it would t-eird1 to encourage industrial participation in
planning early on.
The disadvantage, once again, if the grantee elects
j to have the federal conrponenit- grant funded, it is not going
to reduce any of the complaints you hear today about ICR,
because ICR would be just as it is now.
u
Alternative No. 7 is to attempt to establish some
sort of uniform ICR rate, and the things we have listed there
are different alternatives for a uniform rate. For instance,
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could develop a national rate. The people in Boston would
pay the same thing as the people in Seattle. You could attem; >t
to develop a regional 'rate. Maybe the people in the Northeas
would pay one rate, and people in the Southwest would pay
3 another, You could take it down almost as far as you wanted
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«| to go, state or city level.
These rates could be modified, based upon uniform
adjustments depending upon the treatment level, treatment typ
or level of discharge that the grantee is allowed to make.
What we are talking-about here, for instance, we
have already heard and seen that ICR tends to be more an
industry that discharges to a tertiary plant than it is to an
industry that discharges to a secondary plant.
So you could make it a uniform adjustment across
jjj the country so that everyone, no matter what kind of plant yo
discharge to, whether it is activated sludge, trickling filte
or what, everybody would pay basically the same kind of rate.
HJ 1 The major advantage would be to reduce the inconsis
m I tencies of ICR that you see from plant to plant and from regi
= to region.
H
OT The major difficulty here, once again, is it is
going to be difficult to develop and administer such a rate.
Alternative No. 8 is to attempt to establish what w<
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call a circuit breaker ICR exemption. Once a condition
reached a certain threshold, ICR would be collected and if yov
drop below that threshold, then ICR would not be collected.
Now, EPA's current 25,000 gallons per day exemption
is a circuit breaker exemption. Once industry's discharge
exceeds the equivalent of 25,000 gallons per day of sanitary
waste, industry is required to pay ICR. If industry's dlschai
o
a drops below 25,000 gallons per day, they are not required to
o
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pay ICR. So that is an example- of a circuit breaker.
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Some other possibilities for setting up circuit
* breakers would be based on local economic conditions, for
instance, if unemployment goes above a certain level, ICR is
no longer collected. If unemployment goes below a certain
level, then ICR once again is collected.
You could base it upon industry groups, geographic
areas. EPA currently has a level of pollutant discharge
exemption, and for instance, a dollar level of ICR payments
if the amount to be collected drops below a certain dollar
level, you don't collect it, if it goes above it, you do. The
advantages here would be to reduce the number of industries
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required to pay ICR, and that would reduce the grantee's
administrative costs associated with the program. It would
also allow flexibility based on special circumstances.
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The major disadvantages are to make it very, very
difficult to administer and monitor one of these kinds of
circuit breaker exemptions, and it will result in an incon-
sistent charge from area to area, because you are going to paj
your circuit breaker on special circumstances.
S Alternative No. 9 and Alternative No. 10 are very
similar. No. 9 is to allow a tax credit for ICR payments.
6
o
The tax credit would be in addition to normal business.write-
off that industry gets for ICR as a business expense. It
u
jjj would tend to eliminate industry's complaints that there is
*
1 double taxation involved.
The major disadvantage is it is going to be difficu!
to administer, it is going to reduce revenues, and also
requires administrative change
LJ Alternative No. 10 would be to allow a tax credit
for pretreatment cost, to include both capital investment and
operation and maintenance cost that an industry must pay to
at
pretreat,
The major advantage here is it is going to encourag
i industry to pretreat waste, and the disadvantages are, it
6
would be hard"to administer, it is going to reduce revenues
and require legislative change,
Alternative No. 11 would be to return to the
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requirements of Public Law 84-660, abolishing ICR as it is
today. One of the things that we have heard from industry am
from grantees is that charges are lower in plants that were
funded under Public Law 84-660, and that it is inequitable,
depending upon which type of funding was provided to expand
a I
S your treatment works.
i
* The advantage here would be you would return to the
I
j requirements of 84-660 which required that industry repay thei
d
o proportional share of the grantee's local capital costs.
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i This would eliminate the complaints of inequitability in
*
1 charges depending on the type of funding involved, and it
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5 should tend to reduce the administrative burden on grantees,
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g because 84-660 was less complex and easier to comply with.
I
5 The disavantages are to reduce revenues and lacking
|8 other kinds of controls it may encourage excess capacity to b
developed.
Alternative 12 is to abolish ICR as it is today,
j || get rid of it, and require the local: share of project cost
be covered through proportionate User Charge.
x | Currently EPA only looks at operation and maintenanc^e
H
10 " and replacement cost in their User Charge systems. What this
alternative would do would be to include local debt service
in the User Charge.
at
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The advantage would be to achieve equity in the
medthod of establishing rates if it is thoroughly and consis-
tently monitored.
There are several disadvantages here, however. It
would reduce the grantee's flexibility in designing rates. It
is going to increase the grantee's administrative cost, becaus
the User Charges now would be more complex, It is going to
increase cost to large users where the grantee currently uses
a sliding scale or discount block rate to fund debt service.
» And it may require major changes in bond covenants if the
5
* grantees use revenue or general obligation bonds to fund the
i
* I local share of the treatment works.
Alternative 13 is to add an interest component to
| | the current ICR requirements.
3 I!
The major advantage here is that it would eliminate
the perceived subsidy of industry by allowing an interest-free
loan component in ICR, and it would also tend to increase
industrial participation in facility planning, because you are
going to increase the ICR cost to be paid by industry.
The major disadvantage we can see is that it would
tend to encourage industry to seek other alternatives to
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discharging to a POTW because you are increasing the cost to
industry.
Alternative 14 is to extend the ICR moratorium. We
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feel the advantages and disadvantage of this are the same.
It just postpones the date for making hard and final decisions
on ICR.
Alternative 15 would be to maintain ICR in its
current form, doing nothing with it.
The advantage here is that it would require no
administrative or regulatory changes, and the disadvantage
would be that it would eliminate none of the problems that we
currently see associated with ICR.
And Alternative 16 is to require a letter of
w
* commitment in the form of a contract from industrial users of
5 POTWs when a POTW is sized, There is a typographical error
there—it is "sized," rather than "signed," This would tend
to encourage more precise planning early on, and the disadvan
co would be that it is going to commit industry for a longer ter^n
than most businesses are willing to sign up for. It would
be difficult to administer and difficult to get industry's
participation.
MR. DONAHUE: Thanks, Alan.
ob
5 These alternatives, as I said, are just a prelimina^
a.
v> list of possible alternatives. During the discussion period
after the statements, if anyone can come up with additional
alternatives or variations on these alternatives, we would li
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to hear them, because we really have no preconceived notion
of what the outcome, of what our final recommendation will be
I would like to turn the meeting over to John Pai
for a few seconds,
MR, PAI; Good morning. My name is John Pai, I
am frcmEPA, Washington, D,C. I am the Project Officer for
this study,
A few things I would like to go over with you.
o Number one, this public meeting is what we call or we attempt
o
i/i to try a group decision making process. We come here with
$
an open mind and a few suggestions to you, and hopefully that
you would help us or we could make a decision together to mak
a recommendation to the Congress.
As was pointed out, Chris pointed out, there are
J3 ten such public meetings held in this country. What you saic
V)
1
today or what you recommend from any individual in this regie
will be considered together with the remaining nine public
meetings rinpufcthat we have. EPA of course will make the
z
a final recommendation to Congress, and then the Congress will
i make the necessary legislative change.
u
What I am saying here is that the final recommendat i
you see may or may not respond to all your concerns. Howevei,
the recommendations are based on the general concern of all
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the concerned parties over the country.
As you go through these alternativesf I would like
to point out all these alternatives try to address one of the
following four major concerns we have on ICR.
2 Number one, all these alternatives are trying to
? attain some administrative simplicities for the grantees and
for the industrial users,
Number two, trying to encourage industrial users to
participate early in the planning stage for better planning
19
w of the facility.
*
1 Number three is trying to give the grantee more
s
discretion to fitting his local conditions.
And number four, and it certainly is not the least,
we try to address the cost problem to the existing users.
Let me explain a little bit on the last item. Basically you
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the situation in this region, but in many other regions or
areas, where the existing user feels the financial pinch of
the total cost to him, even"though"they have a well-planned
future growth projection, So ICR hopefully or it was intendee
to put some more cost considerations in there for people to
design their facilities, but in all these alternatives we all
n try to address the excess capacity not in avay of whether it
o
o
^ I! ia cost effective in the long run, but whether the cost can be
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p 1 bearable for existing users,
If any of you have a problem of a high cost for
existing users, be it to industrial users or be it to domestic
users, we would like to hear about them.
The point is that the-; cost effective solution for
the Long run may not be the best solution in the short run.
£
3
2 With that in mind, I would also like, as Chris
mentioned, because some of you received the material a little
latef to provide us with a written response, we have extended
the written response period to October 31, 1978. Any written
response can be forwarded to me, and my address is John Pai,
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- " CWH 5471 and the next line is U.S. EPA, address is 401 M Stree
Southwest, Washington, D.C., 20460.
My phone number is 202-4268945.
In case you have any further questions or answers
after you have had a chance to review this material in more
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detail, please feel free to call me on the phone and discuss
with me before you send your comments. It is very important
that you show your preference or your suggestions to us
because this is a time that you ca,n really impact the outcome
5 I of the study,
You can give them your address, too, Ed.
MR, DONAHUE:' We would like to get copies of
comments and suggestions, too. You can send them to either
„ Alan Brown or to me,,Ed Donahue. Our address is Coopers &
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2 I Lybrand, 1800 M Street, Northwest, Washington, D.C. Our zip
I code is 20036. Please feel free to call us, too.
If there is something we said that isn't really cle^r
1 || or something you would like us to expand upon or just some
H
questions or ideas you would like to bounce off us, our phone
11
5 | number is 202-223-1700.
I think John mentioned, if he didn't, whatever
written comments you have, even a handwritten half a sheet of
paper kind of thing is fine. We are not looking for people t<
a 1 draft laws, sit down and hire a lawyer or consulting engineer
y
to write a long and detailed and very technically correct and
precise kind of thing. We are just looking for ideas and
suggestions. So just off the top of your head kind of ideas
that you thought out are fine.
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I think we will turn the meeting back to Chris, ana
she will preside over any kind of prepared statements people
have.
MR. PAI: We have a list of people who, I guess,
telephoned in to reserve time for making a prepared statement
I will just go down in the order that we have here.
Mayor Whittom,! suppose you want to begin.
MR. WHITTOMr This is something new to me. I am
Mayor of Rupert, Idaho. My name is Bill Whittom.
The industrial portion of our sewage treatment
facility at our lagoon project which is about 97 percent
complete now is very important to us in the small agricultural
community where we live. Idaho, for example, produces 26
percent of the nation's potatoes. The majority of those
potatoes are produced and processed in areas such as Rupert,
Idaho, And for the city and the industrial users to grow
together is very important. It is asinine in my estimation
to have industry building a treatment facility and a mile away
have the city build a treatment facility.
So this has been helpful to us, but I can see
industry's side, too, I asked one of our major industrial
users to come and state some comments concerning his position
on it, too, I would like to call on him in a minute, but we
will have written testimony, and I talked to. Joim-«ar!Ldjer.
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He gave me his address, and we will be sending that testimony
to him.
The one thing that we are concerned about, as far
as a city operating this facility, is that some of our income
is derived from the payments that our users are making, and
a
that it could be/financial burden on us in some of the smalle :
communities where we have large industrial users participating
§
in this, if we lose that payment.
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I would hope you would consider that and figure out
some way to reimburse the local units of government for the
funds that we might lose in the future on projects such as
this.
Several alternatives that I have reviewed there, I
think a lot of them have merit. I can appreciate the work an{l
time and effort put into them, just in reviewing them briefly
I am sorry I am not better versed on this, because the first
I heard about it was the letter I got, I called over here anl
made arrangements to be here, because I think it is important
not only to our city but to many other municipalities and
industrial users of facilities such as this.
(L
We have the first treatment facility of its kind
in Idaho. We have just taken the effluent of a large Kraft
cheese, processing plant, one of the larger dehydrated potato
firms in Idaho, and all the city schools, schools outside of
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the city and so forth, it is being pumped out of the river
now, and into a lagoon system for land application later on.
I don't know how long that might be. It will be several yeai
I am sure. We have a pretreatment plant near our city where
the effluent is treated prior to going into the lagoons, and
| most of the systems just have a lagoon system. We are prettj
proud of it. If any of you ever get over that wayf you are
u welcome to stop in-.- We will show you how to build one and
d
get the users behind us, too
We have had real cooperative working relationships
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1 with our industrial users,
s
1 would like, John, if you would permit, because
for the time factor involved, and our plane was late and every-
thing else, we are very unprepared. We will have a written
u statement,
• •
o I would like to ask Bill Schow, who is the Comp'tro]
IA
for Magic Valley Foods, a large potato processing plant, shij
potatoes all over the world, by the way, and the latest is
B going to Japan—I don't know how many loads they ship over
there—but they are dehydrated potatoes made into something
£
w like Pringles potato . chips. Proctor and Gamble have dealt
through this firm. You have probably .sampled their products
somewhere along the line.
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MR. PAI: Thank you, Mayor.
Bill,
STATEMENT OF BILL SCHOW, MAGIC VALLEY
FOODS, INC,
j MR, SCHOW: 'Bill is quite right about being prepare^
S I got a call from our President yesterday and he said to be
on the plane this morning. We are currently, as Bill stated,
about 97 percent finished with the project, and it has been
o funded under the Federal Water Pollution Control Act, 92-500.
19
U)
One of the problems that we are facing at this poin
in time concerns double taxation, I think industry in general
is probably not in favor of their being doubly taxed, but whe
the problem arises is in additional funding for nonfederally
granted monies to start with. It is kind of like renting a
jjj house and paying for it at the same time. We have $100,000
initial construction cost down payment which at this point
« in time we are financially unable to make it out of working
£
capital. So we have tried to get financing for it,but since
od the system isn't ours, it is not viable collateral, as
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collateral as such.
Anyway, a specific item. If industry isn't going to
use it, who are they going to foreclose on to get payment?
Federal monies, I thinkr need to be funded for these costs
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0 system is not ours, and it cannot be capitalized, and there
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o are no investment tax credits available. It is being rented
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to us.
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if industry is going to go along with municipalities.
If the system was ours, under 92-500 we would be
funded, but since it is not our system, it is tbe City of
Rupert's, they are the sole owner, so we are ineligible for
this extra funding.
I am in agreement with Alternative No, 9 which we
just went over, about tax credits along the same lines. This
I would like to see Alternative 9 be implemented.
I think as far as industrial users are concerned, the breaker
as it was called, 25f000 gallons a day, I think there was a
fallacy in some instances that industry has the ability to
repay. Sometimes industry does mot have the ability to
repay. Twenty-five thousand gallons a day does not give an
exact parameter of the type of discharging into the system.
For example, a car wash could use 5fOOO gallons of water a
day easily, dischargining lots of grease and oil, which is
definitely harder to treat than our potato waste which is
very much biogradable, and we settle a lot of stuff out of i :.
So I do not feel that that parameter is exact. Also going
industry's ability to _, -
back to/repay, the 25f000 gallons is not really very much
water. I think the average home owners in our area are
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using 8,000 gallons a month, and it is not—
MR, PAXi What do you feel , trying to see that
number increased or refined?
MR. SCHOW: I am sliding off here, losing my train
of thought, I think you are right. The definition,you know
S the actual building and use of the system is being repaid th
^ way, It is not per se the number of gallons being discharge
I
it is the type of effluent being discharged. There should b<
o some balance there with that type,
And we are not saying that industry should not pay
its fair share, but I think industry in general feels they an
B double taxed, because not only are they paying it through
o first time, why should the industry that uses 25,000 gallons
§
3 or mote have to pay! for the guy who uses 20,000 gallons that
13 is still making a buck off the system, -too,
MR. DONAHUEt You had to come up or have to come
up with $100,000 as your contribution for construction cost.
Is that towards the local cost of construction or is that
Industrial Cost Recovery or is it both? Or are you sure?
x I MR, SCHOWs I am not sure, I think it's the initi
stages of the project incurred, our share was $100f000 down
payment, in three payments in three stages of construction,
The final payment was supposedly to be paid upon approval of
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the system. But what has happened is we were trying to get
under this Act, 92-500, one of the eligible requirements whicl
i.£your number 2; if your business discharges into a publicly
owned works and the city and county required treatments of our
and so on --
wifcte diachaegck'y' when we initially went into the project we
felt we would have long-term low-interest money available to
u s.
But through a quirk or however it is written up,
we were ineligible, because the system is not ours. We were
1
cited. The city was cited,
, I] We are going to pay probably 50 percent of the cost
" of the lagoon over a period of it, The SBA was willing to loa
H I
• 11 •»
5 us money through jconventioEial: resources with raising a bank
9 percent guaranteed loan, That is where collateral comes.
It is not ours. How do you use collateral that is not yours?
We are stuck between the rock and the hard place,
MR, DONAHUE; I can't imagine too many people would
want to have a sewer system as collateralf anyway,
x 1
M MR, WHITTOM; Excuse me for interrupting. I think
this is important, we are a classic example again of one of
the problems that has been created here. They are put on the
spot because they don't have the bucks to initially invest in
it, especially a small business, They are not HtJ, Heinze or
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the Hunt Corporation or something else, it is a small
family-owned corporation or operation and it puts us in a
bind because we have to to to the home owner then and say
they can't pay their $ioOfOOO, We are going to borrow from
you to p?y their bill to the contractors that have already
done the work. The home owner says, Hold it, why are we
paying their bill? If I don't pay my water bill or my light
bill--in this case we own our electricity system, too, in our
z city—you turn my lights or water off. Why don't you turn
o
I them off? I am in the middle of the damn thing. It is reall
I
, II a puzzling situation to be in, because they employ 100 people
k
" " in our community, 'a payroll of—it is sizeable—one of those
things you can't win at, They are either mad at me or the
" " people are mad at met
v> MR, DONAHUE: You are put into the middle of abiding
by the environmental kind of things and at the same time
worried by the economic impact.
MR. WHITTOM: The only good thing is I have three
years before I have to run again.
CD
CLaughteri
MR; 'DONAHUE; If you all, when you have the time,
before the end of the month, if you-could reduce something
to writing about what it is doing to you, we are not looking
for proprietary or confidential information, anything you cou
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give to us as part of the public record if somebody wants to
see it if they canf but if you could put something in writing
just a couple»page letters saying what this is doing to you,
and what kind of alternative you would suggest, it would be
helpful. For the -more things like that we can show to
§ Congress, the more likely they are to do something.
1 MR. SCHOW; That is our basic purpose.
n
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° I MR. DONAHUEi When you have some time to reduce it
to writing, we would appreciate it,
MR. SCHOW: We feel we do use the system, but why
Bl
is someone who has his limits set up for repayment, why is th(
industry always stuck with the bill? Bill talked about the
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8
economic impact? industry does carry the majority of the load
for everything. Every time something comes along, they hit
industry up for a little more,
I think it is well known that industry profits are
lower than private—if industry makes 3 percent on the buck
5 after taxes, they are doing quite well. If a small business
had to do that, they would be out of business.
Thank you for your time.
^
ti I MR, WHITTOM: He is not only representing Magic
valley Foods, but another affiliate! they have is Magic West,
located in Glens Ferry, and they have treatment problems there
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or have had in the past, I don't know whether they are solv
or not,
MR, SCHOWj EPA didn't close us down totally.
MR, WHITTOMs The things he and I point out, not
only affect Rupert and Magic Valley Foods, but I think we arle
| representative of many small ihduatdAs-; and small communities
and without them we wouldn't have as big a .system as we have
Without' us they wouldn't have a system to go to, it is
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o doubtful that they could come up with the bucks to treat it
5
5 way EPA is indicating they tfaVc? to.
*
1 I thank all of you for your time. I am sorry we
are so disorganized. We are from Idaho, you have to excuse
o us. we walk around here and look at these buildings and thejy
3 are bigger than our haystacks,
j2 MRiv DONAHUE.' Thank you,
MR. PAI> The next gentleman is Mr. Mike Price,
STATEMENT OF MIKE PRICE, SEWER UTILITY
DIVISION, DEPARTMENT OF PUBLIC WORKSf
TACOMA, WASHINGTON.
MR. PRICE: I am Mike Price, Chief of the Sewer
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Utility Division, Department of Public Works, Tacoma,
Washington. I have a letter here addressed to the Regional
Administrator of Region X, and signed by R,D. Sparling,
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Utility Services Superintendent of the City of Tacoma:
"Dear Mr, Duboisj
"This statement represents the position of the City
of Tacoma regarding the Federal Industrial Cost Recovery
Program mandated by the Federal Water Pollution Control Act.
8 it is our understanding that this public meeting is being held
to obtain public comments which will be the basis for a
decision'on implementation or non-implementation of the
Industrial Cost Recovery portion of the Federal Water Pollutidn
z Control Act,
"As a member agency in the Association of Metropolitja
Sewerage Agencies, we participated in the drafting of a
resolution regarding Industrial Cost Recovery at the annual
I
5 AMSA conference in Anaheim, California earlier this month.
u Tacoma fully supports that resolution by the Association of
Metropolitan Sewerage Agencies. The resolution reads as
follows:
'The Association of Metropolitan Sewerage Agencies
i
0 supports the elimination of ICR provisions from the Federal
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Water Pollution Control Act (Pi 92-500) and the Clean Water
£
w Act of 1977 (PL' 95-217). Until the ICR requirements of the
law are eliminated, AMSA urges EPA to develop regulations for
the program that are consistent with the spirit and intent of
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Congress' recent amendments to GPL 92-500),
"We have enclosed for jour use the complete AMSA
position paper from which this resolution was developed.
"Tacoma has currently suspended all further work on
an Industrial Cost Recovery study and program development and
S will hold further such work in abeyance until this issue is
resolved by EPA during the Congressionally mandated moratorium
period provided in PL 95-217. This action is in conformance
p with Condition 4, Moratorium Reviews and Approvals, which is
_ contained in your February 3r 1978, Region X Interim Policy
on User Charges and Industrial Cost Recovery. This particular
paragraph provides that grantees will not be required to
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develop nor submit ICR systems during the moratorium.
• f! We thank you for the opportunity to submit this
53 statement into the record, and we trust that the testimony
presented today will be utilized in developing a reasonable
f and rational approach to the question of Industrial Cost
ot
Recovery."
^ I might add, if I understand your schedule for today
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i there will be later a question and answer and general comment
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" period, because after reading your alternatives, I have some
other comments I would like to make.
MR. PAIs Thank you.
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The next gentleman is Mr,^ Bonn,
STATEMENT OF JOHN J, BONN,
TECHNICAL SERVICES P,E,
MANAGER, NALLEY'S FINE FOODS,
DIVISION OF CURTICE-BURNS, INC,,
TACOMA, WASHINGTON
MR. BONN: Since I am not going to read the whole
report,'you may want to follow me. My name is John Bonn,
I am Technical Services Manager of Nalley's Fine Foods in
x Tacoma, Washington,
*
i What I handed out there was an impact statement
*
that this has on Nalley's Fine Foods, In the form of an
" introduction, basically we discharge approximately 800,000
3 gallons of water to 1,000,000 a day. The cost of this servi<
is $163,000. That is in addition to $64,000 for the water
itself.
^ The City of Tacoma has an ordinance that is being
at
drafted and will be presented in January that will increase
this cost to $726,000 annually. This is all in the name of
I
i the Clean Water Act.
a.
Our"recommendations are fairly simple. We believe
industries should not be assessed for repayment of EPA grant
In addition, we encourage EPA not to burden treatment plants
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with nonproductive administrative cost and regulations that
detract f,rom the intent of the Clean Water Act.
fcet me give you a little background, The gist of
it here, I guess, is we would like to continue negotiating
working with treatment plants. Nalley's is sort of locked in
and we have no choice. We think that the conditions in the
local leyel could best be handled by people at the local leve
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that understand each procurement situation. Now, Nalley's
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~ been down there recently you have seen how we have grown,
was started down in Nalley Valley in 1940. If you have ever
On Figure 1 there—the original has a glossy—it is
pretty hard to Xerox—is an aerial photograph of Nalley's and
Nalley Valley showing we are locked in an area and have no
room to expand. So if we are to install our own treatment
plant, we would have to disassemble or do away with some of
our existing facilities.
The next layout, shows the trunk lines and our
discharge points at Nalley Valley, and we have seven of them.
So it is almost cost prohibitive to funnel this water or pump
this water to a central location.
What''we have been doing with the treatment plant,
though, is providing that type of treatment that would help
the municipal facility,
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For example, of concern was the high acidity of our
pickle brine, We installed neutralization plants, neutrali-
zing plants, to bring pH's to an acceptable level.
In addition, it was mentioned earlierf the high cos
of removing grease, we. have installed grease recovery in
grease traps in order to alleviate this problem at the treat-
ment plant. We have solid screens removal for larger particlos
to assist them down there. We have installed sampling stations
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MR, BONN; All right, That $434,000 in the report
is from $ consultant report to the city, but they did not
take into consideration our recent strength. So the $712,000
there is our calculation of our recent strength and that has
been unofficially confirmed,
MR, DONAHUE; Why is the increase so great? All
that increase isn't due to Industrial Cost Recovery,
MR. BONN; None is due to Industrial Cost Recovery
MR, DONAHUE; You are saying you are going to have
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< these costs whether or not there is Industrial Cost Recovery?
MR. BONN; This hasn't been approved by the Council
MR, DONAHUE; What has happened to the rate structu
| the way they're charging, to make it go up that way? Have
you'had a declining block rate or something?
£ MR. BONN: No, we were charged a surcharge based on
the highest strength. Now they are charging it on all
suspended solids grease.
§
^ MR. DONAHUE: Do you have any idea how much
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gj MR, BONN: No, I don't. We had an estimate in
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19--I don't know the portion of industrial cost, but the
total estimated in 1975, we predicted would be about $350,00(
MR. DONAHUE: Per year?
M
Industrial Cost Recovery would cost you on top of this?
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MR, BONNi Per year. Not industrial, that was
total, including the user cost. What portion of that, I don't
recall,
MR, DONAHUE: In the plant modifications that you
have made, have you been able to reduce significantly your
water consumption, BOD, or—
MR. BONN: My gut feeling says yes, but we haven't
been able to monitor or come up with a quantitative measure.
MR, DONAHUE: That is a pretty significant increase
in sewage cost,
I don't have any other questions.
Thank you very much. Appreciate it.
MS. NOAH-NICHOLS: The next person to speak will be
5
Robert Maguire, from Agripac,
STATEMENT OF ROBERT MAGUIRE,
TECHNICAL DIRECTOR FOR AGRIPAC, INC.f
SALEM, OREGON,
at
MR, MAGUIRE: My name is Robert Maguire, technical
Director for Agripac, Inc?, Salem, Oregon, Agripac is a food
processor operating three C3J vegetable canning and freezing
plants in the Willamette Valley in Oregon, All three of these
plants are currently discharging to POTW's.
Of particular concern to us is the situation that
now exists in Eugene, Oregon, Over the years our'Eugene plant
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has discharged to the Eugene City treatment plant which has
been operating under a NPDES permit allowing 60/34 BOD/SS
during the low water period. Under a new DEQ permit, the
cities of Eugene and Springfield have formed a Metropolitan
waste water district which will be required to maintain a
10/10 discharge during the low water period. In addition,
Agripac as the only major seasonal industrial discharger
I will not be permitted during the low water period to discharge
either through the POTW or direct to the Willamette River.
As a result of these restrictions, Agripac will
* have to make a decision whether CD close this plant, (2) movje
* to another location, which will involve both cost of moving
plus additional construction cost, (.3) construct the lowest
cost waste disposal system at the present location. If the
m latter course is followed, it-will involve a nine (9) mile
< pipeline with the necessary acreage for spray irrigation or
land flow. The original CH2M Hill estimate for spray irriga-
tion based on January It75 construction and adjusted for
inflation is $6.3 MM for mid 1980 construction costs. A
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5 second estimate made by Brown and Caldwell came in at $7,8 fojr
{•; spray irrigation. They also estimated an alternative system
of lagoon storage with land flow at $6.3 MM.
Using the above $6.3 MM Figure as the lowest cost
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alternative and with a 1977 flow rate the replacement costs
is $92.55 per M gallon of effluent. The annualized cost is
obtained using 30 years ICR funds for 75 percent of the cost
and the remaining 25 percent payable to the Metro district at
5-1/4 percent for 20 years, This cost is $340,075 per year
8 compared with $75,000 for 1977 treatment costs. The cost per
M gallon of effluent is $1.09 under the old system and using
the 1977'flow rate the estimated cost under the new system is
o %5.00. For comparison, our Salem plant with roughly the same
product line and volume had a 1977 cost per thousand gallon
effluent of $1,25. Our best estimate is that other vegetable
canners discharging to the Salem POTW will have the same cost
5
o per thousand gallon.
I
This case history is submitted to illustrate how
u extraordinary circumstances and level of pollutant discharge
will result in excessive ICR payments. It illustrates the
high cost of obtaining extremely low level BOD/SS effluent as
J prescribed by the Oregon DEQ. It also points out the inequit;
arising when one seasonal industrial user is required to spem
i $6.3 MM for a waste water treatment system that will only be
UJ
used for 140 days per year.
In conclusion, our first chioce with respect to ICR
payments would be to eliminate them as "double taxation'1 and
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unfair economic burden, In the event ICR payments are not
suspended, the "circuit breaker1" exemption should be
established to give relief to thosecdischargers coraing-under
the "extraordinary circumstances" category as illustrated
in this case history.
Thank you,
MR, DONAHUE: It sounds like your problem isn't just
ICR,. It is a problem of total cost of sewage, and ICR just
makes it that much worse, You are being faced with the proble
of not being able to discharge into the POTW or direct dischar
ICR, that is just so much more of a problem. Your basic
problem is where you are going to discharge.
MR. MAGUIRE; Correct, coupled with severe Oregon
DEQ requirements,
MR, DONAHUE-, Water quality standards where POTW
will discharge or you will discharge?
MR, MAGUIRE: No, I am not saying ICR payments are
totally the charge of these high future—
z ||
to 1 MR. DONAHUE: But 1hey contribute?
MR, MAGUIREt Very definitely. Out of a $340,000
estimated 1988 cost per year effluent, only $51,000was O&M
cost, so , correct, on this $340,000 that was Brown and Calde
I assume that their estimate is somewhere in the ball park,
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SO $290,000 out of $340,000 ICR—
MR. DONAHUE; Either capital repayment or ICR kind
of cost. That is really significant.
Thank you,
5 MS, NOAH-NICHOLS, Thank you very much.
The next person to speak will be Howard Donelson
from the Boeing Company.
Mr. Donelson,
2 He is not here.
Okay, then. George Houck, from the Department of
Ecology, State of Washington,
STATEMENT OF GEORGE HOUCK, WATER QUALITY
g MANAGEMENT SECTION, STATE DEPARTMENT OF
ECOLOGY
IA
H MR. HOUCK: I am with the Washington State Departme
of Ecology in the WAter Quality Management Section.
* The following comments represent the position of th
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J Washington State Department of Ecology, We are the pollution
control agency which administers much of the municipal con-
struction grant program in Washington. We hope our comments
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will be considered in the light of our intimate involvement
in this program. The 1977 Clean Water Act set up the machine
by which qualified states could be delegated the entire
it
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program is warranted. In particular, the regulations should
attempt to free the cities of any nonproductive, cumbersome
requirements, The 1977 Clean Water Act, in changing the
„ definition of industrial user from the former 2,500 gallons
per day to 25,000 gallons per day, was a step in the right
direction,
N To do away with Industrial Cost Recovery without
§
CM
payback by industry of its fair share of the capital costs
would result in some serious inequities. Two examples that
b
w come to mind arei
$
1. The incentive for an industry, faced with the
capital costs of upgrading its treatment facilities, to conne<
to a municipal plant could be overwhelming and not really
cost effective when total cost to the consuming public is
£ considered. In effect, the industry would be served by a new
facility whose cost was borne by the American taxpayer in
« contrast to constructing its own plant,
ee
2. Competing industries which must provide their
own treatment plant are at a disadvantage as compared to an
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industry connected to a municipal plant where the capital
costs of treatmet of the capacity are provided free of charge
Our department provides a 15 percent EPA grant, for
a total 90 percent grant. Under the provisions of a recently
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adopted state regulation, Chapter 173-255 Washington Administ:
tive Code, we discontinued providing the 15 percent grant for
the industrial portion. We did not want to upset projects
. which were well on their way, so cities which had already
received a state grant award'"> to do the design phase, prior t<
September 23 of this year, were "grandfathered in" by the
regulation. Our definition of industrial user in the regula-
tion was made compatible with the EPA definition. Thus,
a
o d iscontinuing or making substantial changes to the ICR progran
on
will impose a hardship/administration of the municipal
1 construction grant program in Washington Statef to a degree,
The reason for our recent regulation was that in
o a few years the state bond money will run out,and we wish to
5
5 provide the supplementary state grant to as many worthwhile
municipal projects as possible. We did not initiate and
industrial cost recovery program of our own because we
« believed the administrative costs of the smaller state progran
15 percent as compared to the 75 percent federal grant, would
be too cumbersome.
•jj Now that we have seen the preliminary findings of
u
the consultant's study of Industrial Cost Recovery this
morning, we do have some additional comments to provide in
writing,in a day or so. We hope they will receive the same
consideration as these presented this morning.
Thank you.
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MR,, DONAHUE t Mr, Houck, if it were shown that the
cost of self-treatment were lower than the cost of using
Publicly Owned Treatment Works—I am making an assumption you
want to encourage industry to use the public sewer system
« rather than create their own sewage, because of economies of
sealer- If it were shown it was cheaper to treat your own
sewage than to use the public sewer system, would the state
feel the same way about Industrial Cost Recovery? In other
2 words, if, assuming what appears to be an economic advantage
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w from using a 75 or 90 percent funded facility versus building
your own, if that were shown—if tax law changes made that
economic advantage disappear, would the state still feel that
ICR was a good thing to have? There are other reasons for
having ICR as well.
y>
MR, HOUCK: I am not really prepared to answer that
this morning. That is something I am not familiar with. You
brought out these changes in the tax laws that some are
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proposed and some are in place,
°> MR, DONAHUE; When we discussed that with some
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people on the House Public Works Committee staff and they
tn
were sort of flabbergasted when we told them what we had done
and the reason they were assuming, and it just makes common
sense, using a facility that is three-quarters paid by
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somebody else it is going to be cheaper than what you pay
for by^yo»|paelf-*-^/ it looks that way on the surface, We
went through the tax law kind of things and discussed .this W|LX
leople on the House Public Work staff,
3 I They were amazed. They were in the Public:
Works Committee writing environmental law, and the Finance
3 |1 Committee is writing tax law, And their objectives don't
S
u J| always mesh. The Public Works people weren't aware of what
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« || the Finance Committee was doing or how extensive were the
ii
tax law changes which had been made. They were pretty
surprised when we went to them with this computer model and
c showed them what was happening. Our final report will
*•
8 include all kinds of cost curving on different size industri4s
5
f
5 MR, HOUCK; You don't have tax laws here today.
SO
discussion of tax laws. We took a couple of our tax partners
and locked them up with some of our economists, and our peopl
from Camp Dresser McKee who did cost curves for us. It
surprised me, too,
_ n Thank you,
MS. NOAH-NICHOLS: Now we will be taking statements
from anybody else who is ..here this morning to make a statemen-
Those who haven't called in in advance,
MR. DONAHUE: Our report will have a detailed
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STATEMENT OF GARY YOUNG, CITY ENGINEER,
TWIN FALLS, IDAHO
MR, YOUNG; It seems small Idaho municipalities are
rather well represented here, I am Gary Young, City Engineer
City of Twin Falls, Idaho, We are an agriculture/light
industry based city of about 25,000 not too far from Rupert.
We have the same general types of problems with food processoi
It was interesting to me, the categories of industries that
were studied in detail. Twin Falls has five of the six
categories with the exception of the metal industry, we had
to
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every other category of light industry in our ICR program.
We do have a going ICR program. It has been in
g operation since 1976. We have had quite a few dealings with
s II
EPA and the Idaho State Health and Welfare over not specifica
I would like to po£nt up a couple items specificall
ICRr but wastewater treatment in general.
where the City of Twin Falls has made good use of the ICR
program., rftattiwr than worrying about its bad paurtia^. wet*? feel
it does have some very good points.
? Number one. I think most of the HtefiSrt X people are
g
familiar with the Rock Creek Pump Station. Everyone I talked
to, when I say I am from Twin Falls, they say, oh, yes, Rock
Creek Pump Station. We have some sort of pending lawsuit tha
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is out 0f my hands at this point, concerning illegal dischar
from that area. We did use ICR funds to abate that discharge
Without that source of funding, we would still be maintaining
the alleged illegal discharge.
This specific case Shows that the 50 percent retain
funds from the ICR payback is an extremely valuable tool for
cities. We didn't have the money to fix that thing. It was
an emergency situation, not emergency enough to get state or
§ I federal funding on a quick response basis, and I think in
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ui I practically all emergency cases state and federal "emergency
»
money" is not available on a timely basis.
(.- These ICR funds that are in the city's hands but
I
" under direct control of the EPA are a quick source of funds
for .emergency<.-caij>ifeal .improvements. To me that is one of the
u nsa§tfrbenefits of this program. I think I can speak for the
taxpayers in the Twin Falls area that they are not keen,
they would not be keen on funding 85 to 90 percent of the
J total cost of the treatment plant expansion that we recently
£
BJ |[ underwent out of the general taxpayer fund.
x I! One of your alternatives I believe alluded to the
public picking up the industrial cost. In our cases, and
I think possibly in Rupert's, the industrial portion
of the plant, this incremental cost funding thfct you are
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talking about gets the cart before the horse, in the
case where industries are discharging 85 percent to 90 percent
of the total discharge, and we are operating under those
conditions.
There are several averages involved, and I would
have to say in some of those average costs, cases we must have
been on the other side as far as'average conditions on your
study.
But that was one point.
Contingency money, I don't think you will see
a local government entity, i.e., city council or whatever type
of form you have, that is willing to put money in the pot,
that when the pump station breaks, that the money is there
Ito fix it. They are not oriented in that way. Emergency
jcapital expenditures are a real nightmare to local agencies.
This is one area where we are well served by this program.
I can vouch for the fact that our program, ICR program has
given the industries a new awareness of water use and discharge
Now that is certainly a dollar-related situation,
but I have had our industry people come and tell me we -real-ly
|cut down on our water use, and we are making attempts to
decrease their discharge. Certainly the dollar is a terrific
incentive to cut down on your discharge. I feel that we
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benefit of the whole community, particularly in reference
to discharge because at least two major industries were
discharging their industrial waste directly into Rock
Creek. Those wastes are now picked up by an interceptor
sewer and go into the famous Rock Creek pumping Station
g and are treated.
So I think with some minor revisions this is
basically a good program. I feel I can represent Twin Falls,
I can speak for Twin Falls on that subject,
Thank you.
i MR, BROWNj Mr^ Young, how much do you collect
K in ICR every year total?
c
a
* MR. YOUNG: About $100,000, That is a rough'-
number.
w MR. BROWN: Of which 10 percent is kept by the
city?
MR. YOUNG: Yes.
§ I! MS. NOAH-NICHOLS: Fifty percent.
MR. YOUNG: Forty percent money is money I am
| referring to on this Rock Creek situation. Certainly 10
a.
» I percent would1 not have done the job.
Another point is that the monitoring, both in flow
and strength is a good tool for the operation of the plant,
and if you knocked out ICR today, we would still make an
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The capital cost recovery should actually reflect
the fact that industry is only using a percentage of the
total amount, but the operation and maintenance coat in
Particular of a 10 MGD facility, for example, doesn't
reflect the fact that the plant is only receiving 4-1/2
to 5 MGD. The operating costs tend to approach more to the
coat of operating the full facility. This is not taken
account of.
Any attempt by the municipality to recover costs
from some other method than ICR—I have seen in several
places through here—you mention removing some or all of
the ICR system and actually putting the responsibility for
capital cost recovery back on the community. There again the
tendency is they pay for a 10 million gallon facility, of
which only 5 is being presently used, but they are having
to make repayments on 10, Therefore they look to industry,
[whoever, to actually provide the repayments to cover their
[repayments for that.
I think this is something you should consider in
((anything that is involved with abolishing ICR or modifying
|it in some form to make sure that industry—industry tends,
ay and large, to know how much waste it is going to produce,
roughly what strength. That is not completely true. It is
are true than trying to anticipate population growth. They
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generally know how much capacity they want and how much
capacity they may want to have in addition, if they wanted
to expand, It is generally fairly predictable, so they, I
think, feel they should be able to go to the municipality,
saying, we need this much, we would like to know how much it
is going to cost us in terms of capital recovery.
Once they get committed into the program, then
they find that if costs get out of hand, it is very hard to
make a certain decision, I think their involvement in
facility planning would be valuable.
MR, DONAHUE; Since you work with Brown & Caldwell,
what kind of pressures to you get when you are talking
with a community and trying to design a wastewater treatment
plant facility, trying to size it? What kind of pressures
do you get? What do you do to try to build for them one
that will be big enough to handle their needs, but not
to run at 45 percent capacity? What are good ways to get
industry involved, since industry frequently bears a fair
z share of the local capital cost? What are ways to get
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industry involved?
MR. HARBER: I think the growth question has been
addressed by EPA now to the point at which it is fairly
well controlled. The problem with the treatment plant
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design aspect is there is an economical expansion size, so
you must build increments of a certain size and therefore
some surplus capacity gets built in, in service. It is
generally based on a fairly' sound engineering decision.
I don't believe plants are now getting built—they
8
|| shouldn't be any longer, anyway—that have this 40, 50 percent
capacity. That should be corrected now, anyway.
8 MR. DONAHUE: If you are building a plant, you
are talking about one with a 10 MGD plan, and only getting
± II 4 MGD flow, and operating costs are fairly fixed. What
would be some way, if you don't put it on a proportional
basis, what ways will you use to recover operating cost?
H
•
Who would pay for it?
* MR, HARBER; Capital costs I would feel should be
r% II
vt 1 brought in, in the way of front end costs, As many munici-
palities have a connection charge as well as a yearly charge,
I think that can be related to industry as well as general
u domestic connections. The operation and maintenance cost,
I don't honestly have an answer for, unless you back them
3 I off financially so that people coming into the system later
pay a larger share of O&M to represent what has already been
spent. It is difficult for me to put the idea over.
MR. DONAHUE: This is a feeling, but administratively
I think it would be difficult.
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MR. HARBER: That's the only way 1 can see doing it
I assume we, as a compnyf will be putting in information,
MR. DONAHUE: We would be glad to get one from your
local office.
MR, PAI; Can I ask you, just from your knowledge
in this area, how common is this plant operating around 50
percent of capacity? How common? Is it an isolated case
or what?
o || MR, HARBER; It is not uncommon. It tends to be
(9
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more the smaller plants than larger ones,
MR, DONAHUE: The figure we have on average utili-
*
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jj zation, 68 percent, is very misleading, because if you take
I
o a big city like Chicago, if they throw in an extra 50 MGD,
it's.only a small percentage excess,
u MR. HARBER: Is your 68 percent figure based
on flow?
MR, DONAHUE: Flow.
j MR, HARBER; It is really biased to a larger
area.
x MR. DONAHUE; It is frightening when you get to
a.
u
a small town.
5
.-'Eai; Is there any other lady or gentleman
who wishes to make a comment' here?
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STATEMENT OF W, T. SPRAKE,
GARDNER ENGINEERS, SEATTLE, WASHINGTON
MR, SPRAKE: My name is W. T. Sprake. I am
with Gardner Engineers in Seattle, civil and structural
engineers, and we are involved in water and sewer system
design.
Wfe prepare rate studies when we can't avoid it,
for clients, of course, that need the service.
My guess is that they would favor Alternative
No. 12, which pays their obligations to the federal govern-
ment for the grant, but allows them to determine for
themselves the way in which they would like to do it.
When I make a presentation on rates, I say that
the characteristics are of course adequacy, equity, simplicity
and durabiliy; and you can't possibly achieve all of them.
It is a matter of trying to get a balance, and that means
you must understand the local situation in order to achieve
the best you can in simplicity and equity, and of course by
state law they must be adequate,
So without being authorized to speak for them, but
understanding what they have told me in the past, my sugges-
tion would be, I would like to tell you that I think No. 12
would be fayored,
MR. DONAHUE Thank you very much.
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If anybody has any questions or comments—I can't
believe we have done so good a job that everybody is satis-
fied with what we have said. If somebody has a question
3 or a comment, we would like to hear it,
«
4
in MR, PRICE; I can make a few more comments on
your alternatives.
I MR. DONAHUE; Sure,
CM
0 MR. PRICE: I would like to point out some of the
particular concerns that a company would have. I believe
< earlier in the presentation someone mentioned that the average
administrative cost would run in the neighborhood of $15,000
to $20,000 per year for a typical ICR program, and I believe
1 it was also stated that the average discretionary 10 percent
funding would be approximately $8,800 a year. That
says that the discretionary funds that the typical munici-
pality receives are approximately half or less of what it
will cost that municipality to run that program to get
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those funds. That says that the difference is coming out
of the municipality's own pocket, because they can't use
LU
£3 the other 40 percent that they get for specific capital
projects.
From that standpoint I think the program is,
contrary to some of the statements I have heard, your own
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study has pointed out that the cost of administration
exceeds the benefits that the municipality is going to
receive.
MR. DONAHUE; There have been a couple recent
changes in EPA regulations which allow taking the administra-
tive cost/ incremental administrative cost off the top of
§ I the ICR collections. But that doesn't change very signifi-
cantly the cost effectiveness situation. It still costs
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^ " you a fair amount of money to collect a not much greater
IA
"* " amount of money.
i
* II MR. PRICE: As an example, Tacoma Central Treat-
ment Plant is a 27 MGD plant. It is primary. We have,
including the industrial representative that was here today,
we have approximately 3 million gallons of that which is
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" industrial that would qualify for ICR. When regulations
were changed from a 2,500 to a 25,000 gallon cut-off point,
~ we decreased from about 60 industries to approximately 50
3
that would fall under the ICR provisions. We have about
five or six large ones that account for approximately 2
w million gallons a day of that 3 million. That means that
there are some 40 to 45 additional small dischargers that
would still fall under those provisions, but only represent
approximately one twenty-seventh of the total capacity
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the last moment eliminate someone's bill, but you have gone
through all the administrative procedures, and you will
have to continue to watch that industry, because the
next six months or a year or whatever your billing period
3 is, they may again fall above the line and have to be
included,
MR. BROWN; One question that we have had for
grantees oftentimes is f assuming you have to monitor
| for your User Charge system and you have to charge for
excess strength, you have to know what flow is, what addi-
tional monitoring do you have to do for ICR that you don't
have to do to maintain a User Charge system?
MR, PRICE? First you have to calculate that
industry's share of the plant, and you have got to separate
out each billing period, whether or not he is really using
that part of the plant, In other words, Nalley's represen-
* 1 tative has stated that their wastewater flow comes in at
S
j || several locations. It varies by some 25 percent annually.
It may vary considerably more than that in a one-month
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industrial billing period.
We are keeping records of how much we should charge
them, but I assume we would have to compare each month how
much of their fair share of the treatment plant they actually
used and bill them accordingly, or are we going to bill them
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once a year on the basis of their maximum potential use of
the plant?
I would assume if Nalley's cut their flow in half
permanently, we would have to reduce their ICR charge.
So then you can carry that down to an every'month basis.
3 We bill every month, Do we figure their ICR payment
on the basis of water use each month, strength each month?
So we see the potential for some pretty significant
administrative costs.
I I too am drawn to Alternative 12, but I think
i that so far we are missing the same point we missed
*
on the User Charge studies, and that is that local municipali-
ties ought to have the right to decide based on their load
3
conditions how they are going to recover those charges.
V)
Hi
at
As an example, the major increase in Nalley's
bill that you have been told about came about partially
from the fact that in 1971 when the last rate package was
3 developed for Tacoma, the city fathers elected at that
time that industry would be in essence subsidized by the
local residents? that is to say, they would not pay their
full cost of"treatment, That was their prerogative at
that time, It no longer is, and consequently we have had
to place more of the burden for industrial treatment
on industry. We have had to place all of it on industry,
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which means that the residential rate is going up very little
and the industrial rate is going up astronomically, We
don't have a choice,
Those figures that Mr. Bonn gave you were for
User Charge changes based upon the federal requirements and
they do not include going to secondary treatment. That is
just a primary treatment plant.
I see no reason why the local government should
be precluded from determining that lower capital cost charges
to industry is not a viable option. Why shouldn't they be
able to decide that they would rather encourage industry
to come in, encourage jobs, and make that decision on a
local basis? Right now I think that our city council
S
will probably, even if they were given that option, would
very likely say they wouldn't want to pay the full share.
But under Option 12, just as under the User Charge program
currently, they don't have that choice.
I don't think it is necessary to take away from
the local municipality.
MR, DONAHUE: I think the idea in that alternative
was if recommendations coming from the study were just to
abolish Industrial Cost REcovery, that recommendation may
or may not get favorable reception on Capitol Hill.
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^ federal regulatory authorities is such that we are not
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If that were your recommendation, that Industrial
Coat Recovery isn't doing what it is supposed to do, but
there are other things that can do the same things ICR is
supposed to do, abolishing ICR and recovering a portion
of the local share would be a definite incentive for cities
to build appropriate sized treatment works without a whole
lot of excess capacity, and would also encourage them
to conserve water,
MRF PRICE: Our experience with the state and
particularly concerned about the opportunity to gold plate
our treatment plants. We have been very Closely monitoredf
and we feel we have developed a sewage plant that gives
us what we need without a lot of surplus capacity, That
decision was a very hard fought one, but we are satisfied
with it as I believe the state and federal organizations
are, also,
MR. DONAHUE: I think in the case of AMSA meetings,
the 43 cities that belong to AMSA, by definition being
metropolitan sewage agencies, the problem of excess capacity
isn't as severe as it is in small cities,
MR, PRICE; We are in AMSA by the skin of our
teeth, We fall below the minimum definition.of a
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metropolitan sewage agency, tfe are on the lower end of the
scale. A 5 MGD surplus capacity is still a pretty sizeable
chunk for us.
I would like to point out one other avenue that
perhaps could be explored, Tacoma operates as a public
utility in their sewage facilities. Many of the smaller
communities do not, We don't have the problem of contin-
gency funding, because we are required to make enough to
z
9 recover our costs, and set aside funds, We cannot
«•
< borrow from general government nor can we loan to general
government. If you go to a self-sustaining private
business approach to the operation of a sewage utility,
you eliminate a lot of that. But we still have, under
N
e
N
I
CM
o
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* public utilities laws, we could still adjust our rates to
H place the burden on one or another group a little more
selectively than we are allowed to under federal regulation.
MR, DONAHUE; Do you have to go to the state
K
"
for approval of your rates, go to the state PUC or something
like that for approval of rates?
UJ
MR. PRICE: No,
MR, DONAHUE: Do you have a city veto over rates?
MR. PRICE; Yes. The city council will have to
approve or disapprove, If they disapprove of our rates,
-------
87
all we can do is cut our budgets and reduce our operating
e xpenses. We cannot operate in the red.
I think that is probably the critical item
that if you are operating as a utility, you are going to
2 have to get all of your revenue and that includes local
m
8 capital cost recovery. It has to come from sewer rates.
MR, DONAHUE: Do you have provisions in bond
covenants to set aside—
§ MR, PRICE: We have to have a minimum set aside.
a
As I say, the state PUC law requires us to be self-
*
i supporting, which means that we are going to recover what-
•
^ ever our local costs are, both for operation and maintenance
and capital recovery, They will have to be recovered from
I
5 the sewer user, not from the general taxpayer.
MR. PAI: Mike, if the city vetoed your rate
increase request, and you have to cut your budget, would
your plant still be operated properly and maintained ade-
pt
quately?
MR, PRICE: Something would have to go, and since
*.
x the vast majority of our budget is for operation and mainten-
6
" ance, we can believe that we are operating fairly austerely
now, and if we cut back any further, something is going to
suffer. They are going to have sludge piling up on us or
something- that will eventually get us into regulatory
-------
88
difficulty with the state.
MR. PAI; It may happen, though,
MR, PRICE: I think it definitely will happen.
MR, PAI: What you are saying, the system you have,
= II
55 there is no guarantee that you will always generate sufficient
in
§
H
n
o
o
O
O
S
3
!
u
£
revenue?
MR, PRICE: Yes, we will always generate sufficient
revenue. We have to, by law,
MR, PAI» I mean sufficient revenue is for propel
operation and maintenance of the plant, not sufficient revenue
to cover your expense.
MR. PRICE; The state PUC law doesn't speak to that
That is a matter of judgment on the part of the regulatory
agencies. It is a matter of local government having to decidi
for themselves whether they are willing to possibly breach
state ofc federal law, and in the area of pollution control, in
an effort to keep the rates to local residents now.
MR. PAI: Just a question, how much of a percentage
of your plant is being utilized now? Just flow?
MR. PRICE: We have dry weather flow in the neighborj-
hood of 20 million to 22 million gallons a day, and we have
plant capacity of 27 million gallons a day, For wet weather
flow, we utilize the entire plant easily.
-------
S
at
m
n
a
S
o
10
*
i
*
*
89
MR t PAI» I have no more, Thank you.
For the record, ICR paybacks, you can retain actual
50 percent, of which only 10 percent of that 50 percent is
for discretionary use. Forty extra percent can be helpful to
many communities. It is not what I call highly profitable.
MR. PRICE: Within our budget we have to set aside
those contingency monies when we are operating a public
utility. So the extra money, since it can only go for capita
construction, has pretty limited benefit for us.
MR. PAIj I just wanted to say on record you did
actually keep 50 percent.
I think we will just continue to solicit comments
Because of the fact that we adjourn for lunch, we may lose
continuity of the discussion. It is subject to your preferen
If you feel we should take a lunch break, we will. But any-
body who would like to make a commentf I would feel this is
a better time, rather than after lunch. I am sure some of
K
Ul
^ the people will have other engagements in the afternoon. We
may just use this lunch break and get every comment in and
Ul
I! have a larger audience,
10
I will entertain comments from the floor. Does
anybody wish to make one?
MR, MAGUIRB; I would like to ask a question, not
-------
*
m
m
«
o
N
-------
91
MR, HOUCKs The report gets turned into EPA in mid-
December?
MR. PAI: Mid-November. They will send it to me in
mid-November.
MR, HOUCX: The report that goes to Congress, has
S the report been edited by EPA?
MR. PAI: EPA is responsible for the final product.
MR. DONAHUE': EPA is going to edit the report, I
think what you are implying is EPA going to censor the report
<9
I No, EPA is very open.
MR, HOUCK: I didn't mean censor. I was wondering
if EPA was going to put their judgment on the report?
MR, DONAHUE: Absolutely, EPA has l«gal responsi-
5
bility to conduct the study and make the decision.
y MR, PAI; What I am trying to point out to you,
EPA will not have prejudiced the judgment. The EPA judgment
to
w
was more or less in line with what this meeting reflected,
41
qe
and as far as in other-parts of the country, EPA has a very
open mind at this point. That is one of the things that
Congress instructed us, and that is why we instructed the
a.
<* contractor to keep an open mind on the final recommendations
We came out here with an open mind. Whatever your
preference may be at this point, be sure to let us know, I
-------
92
think that is the only way to make' a "decision1-by' the majority
or by consensus.
MR. WHITTOM; Just for clarification, on the commen
from the gentleman fronv the State of Washington, it doesn't
set too well with me. I am not criticizing you personally.
When someone, the attitude, like in this case referring to
industries as not being'a taxpayer, In our community they
S are a taxpayer. Not only that, that cost that we are
o
incurring on thenrls being passed on to you and me as consume
CM
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i
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a
CD
and those of us who criticize the system such as this, are th
first men to say it's the middle man that causes a price
increase, in the grocery store, in this case potatoes or beans
•
or whatever it might be,
passing on incre
MR. DONAHUE: You are talking about/" to consumers,
that is true, That is certainly what industry would like to
do if they are hit with increased price. One of our concerns
with industry, particularly the textile industry, where we ha
«
* a big problem with foreign competition, what we have been
hearing from industries, some industries, is their prices are
5 not really set by the cost of production, but really what.
x
0.
fc the market will bear to pay for it, They are not able to
pass along the cost, which is why some of them are concerned
in closing down.
-------
93
MR, WHITTOM: When that happens, you end up with
more monopolies, a particular type of processing firms,
In other words, they can dictate the price more to us than if
you have a whole bunch of them, We will end up with a. food
•o
* chain like we have with oil cartels now,
S MR, PAI: Let me make a comment on that. I think
we all understand, once total cost is committed, somebody is
§
going to pay it. And this indirectly or directly is paid
u
o
o
z
by taxpayers at large. One of the major concerns we have,
as I pointed out, is trying to see if the total cost committe
*
is palatable for us, either for the industrial users or
consumers. Because eventually it is coming down to all of
z
them, What we are most concerned with is total cost committe
Can we hack it? That is our key question because once you
w> have that cost there, somebody is going to pay for i-t, and
it wouldn't be fair for anybody to take an extra burden of
8
^ that chunk of the cost.
4j
BE
What we are trying to do, and this is the way we
try to solicit your comment, if you think there are better
™ ways that we can have a more reasonable commitment of the •
total cost, capital cost, O&M cost, that is what we have to
look at. I am saying in line of reasonable growth. I am
not saying that we will cut down growth of industry or
-------
HI
m
§
IM
-------
95
the law.
MR. WHITTOM: Sometimes regulatory agencies—we are
getting off the subject—they expand beyond what the
Congressional intent wa'sf
MR, OTTi I am Elwood Ott from Seattle Engineering
§ If Department, Could regulations be written so that if administ
tive costs actually exceed the cost that you recover that you
could abandon the program or cut it off at some point?
o
Q
Because in -our particular case the grants we got were just a
o »
o
small increase to our—we had all the sewers and everything,
in
* and just had a apiall increase, so that we will be lucky to
M
V,
break even with 50 percent, If I put like today's meeting,
which should be part of this cost into it, we lose another
couple hundred dollars,
MR. PAI; There is a possibility that administrativ
cost exceeded the total cost to be recovered,
MR, OTT: If that could be made flexible-, ,then we
could cut it off.
MR. PAIj That is one of the circuit breakers we
are talking about.
Again the difficult problem is how do you adjust
administrative cost, and whether it would be reasonable to
estimate that portion. That is one of the alternatives here.
-------
96
If you look at Alternative 8—
MR, DONAHUE: It wasn't clearly said,.but;in
Alternative 8, that is one of the things that falls under tha
kind of alternative. It wasn't specifically mentioned.
MR, PAI: Or the last one is very related, the
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o
I
o
s
oi
dollar level of ICR payments.
MR, OTT: We had that in our ordinance, got thrown
out by EPA.
MR, PAIi The law does not allow us to approve
systems that cut out after this time, That is one of the
i
viable alternatives,
». MR. SPRAKE: What do you do in a situation where 40
§
percent or so of the sewage in the community is produced by
federal facilities?
u MR. PAI: The federal facility basically is under
another separate requirement, in the way that a federal
facility has to put out front money,
MR, SPRAKE: We are in the situation in several
communities where that is the case. The size of the sewage
z
~ treatment plant—is enormous compared to the requirement of
the citizens. It is r federal agencies'who are there, not
only producing large quantities of sewage, but the kind of
sewage which requires expensive treatment.
-------
97
Can we get money back from them under ICR?
MR, BROWN: YOu charge them up front for what it
cost to build their portion of the treatment plant.
MR. SPRAKE: How about operation and maintenance?
S
5 MR, PAI: They pay through the User Charge system.
«
10
(5
o
N
MR, SPRAKE| You are saying we can get from them
their 40 percent?
MR. DONAHUE: Yes, sir,
u
MR, PAI: Their 40 percent was not paid by you.
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UNIFIED SEWERAGE AGENCY
OF
WASHINGTON COUNTY
ADMINISTRATION BUILDING— 150 N. FIRST AVENUE
HILLSBORO, OREGON 97123
(503) 648-8621
BOARD OF COMMISSIONERS Joe| Wesselman
MILLER M DURIS. Chairman General Manager
BILL BLOOM Room 302
VIRGINIA DAGG
RICHAHDC HEISLER October 18, 1978
RAY MILLER
Environmental Protection Agency
Region X
1200 Sixth Avenue-
Seattle, WA 98101
Attention: Ms. Chris Noah-Nichols
SUBJECT: Industrial Cost Recovery (ICR)
The Unified Sewerage Agency of Washington County, a re-
cipient of substantial federal grants in terms of the State
of Oregon, takes the position of favoring the abolition of
the ICR program provided for under the Clean Water Act of 1977.
We have determined preliminarily that we serve 17 industries
chat fall into the "industrial user" category. Further, we
have determined that our recovery will be less than $50,000
annually and,•therefore, question the economic feasibility of
such a program. Assuming we can use 20 percent of our share
of the recovered funds for administrative costs, there is no
possibility of offsetting our actual administrative costs. If
the program is implemented, it is possible that some industries
will construct pretreatment facilities, thereby causing signi-
ficant adverse effects on the regional sewerage plan.
EPA's contractor, Coopers & Lybrand, have identified two
disadvantages in the event the program is abolished, they are
as follows:
1. Without some control over the design parameters allocated
to industry, abolishing ICR may encourage grantees to plan
and construct treatment works that are larger than necessary;
and
2. Abolishing ICR would eliminate ICR revenues retruned to
the federal government.
We suggest that the control suggested in number 1 above can be
imposed at the time facility planning is being accomplished and
during construction plan review. Regarding number 2, if EPA
-------
Environmental Protection -2- October 18, 1978
Agency
grants $45 billion, the best estimate suggests a return of $0.5
to $1.0 billion to the federal government over a 30-year period.
We feel this $33.3 million annual return is insignificant in
terms of the federal budget.
Finally, the local funding for this Agency is provided
through ad valorem taxes paid by all properties whose tax rate
is based on property value. Industries also pay taxes to the
federal government. If one assumes these taxing formulas to be
equitable, then industry has already paid its share toward the
sewerage facilities.
In summary, we believe the costs to implement and administer
the ICR program will be as great or greater than the actual dollars
recovered and, further, believe industry has already, and will
continue, to pay its share of the clean water program.
Very truly yours,
Jary ». Kranmer
General Manager
GFKrby
-------
Electro Scientific Industries. Inc.
13900 N.W SCIENCE PAIR DRIVE
PORTLAND. OREGON 97229
(wao cod* Sta) 441-4141
TE1EX No MOOT
October 16, 1978
OCT23I37J
Mr. Gary F. Krahmer, General Manager
USA Of Washington County
Administration Building
150 N. First Avenue
Hillsboro, Oregon" 97123
SUBJECT: ICR regulations regarding industrial users of
USA System.
Dear Mr. Krahmer:
We are strongly against EPA recovering their costs for services
rendered. Tax money was used to primarily take care of indus-
trial users and some 75% of that tax money came from industrial
users. The bill has been paid. For EPA to ask us to pay it twice is
beyond our comprehension. Please express our views in Seattle with
your meeting with EPA.
Yours very truly,
ELECTRO-SetENTFIC INDUSTRIES, INC.
Don Dennis
Facilities and Maintenance
Manager
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HALEY'S FOODS
DIVISION OF C-H-B
P.O. BOX 200 - HILLSBORO, OREGON 97123 • phone (503) 648-1181
October 19, 1978
Mr. Gary F. Krahmer
Unified Sewerage Agency
150 N. First Avenue
Hillsboro, OR 97123
Dear Mr. Krahmer:
Thank you very much for your letter and notice of the public
meeting to discuss industrial cost recovery payments.
As I mentioned to you in our phone conversation, I, as general
manager of HALEY'S FOODS a food processing facility located in
Washington County, Hillsboro, Oregon, am very concerned with
the potential cost to not only our company but other industries
of the county and the nation. In the 2% years that I have
been general manager of HALEY'S FOODS, I have seen our sewer
costs nearly double without an increase in production but
actually a reduction in cases produced.
We employ approximately 100 people on a year round basis in this
manufacturing facility. I am sure you are aware that the food
business is a very competitive industry. We are a relatively
small concern and are finding it more and more difficult to
maintain our competitive position against many of the larger
corporations. Any further charges with the impact that is
mentioned in the rules and regulations of the Federal Register
of September 27, 1978 would have a tremendous economic impact
upon our company.
I would please ask you, Mr. Krahmer, if you could represent our
company namely, HALEY'S FOODS, and pass our message on at the
public hearing in Seattle, October 25, 1978. I would further
compliment your agency on your ability to handle the enormous
amount of growth that our area is currently experiencing.
-------
Mr. Gary F. Krahmer
Page 2
October 19, 1978
Again, I would like to thank you for Informing me of this
important public meeting; and I feel quite pleased we have a
professional representing our company's views. I would appre-
ciate hearing your comments pertaining to this meeting, so I
will call sometime after the meeting.
cX
R. Gern Nagler
HALEY'S FOODS
Division of C.H.B. Foods, Inc.
RGN/sed
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WASHINGTON
PUBLIC WORKS - UTILITY SERVICES
SEWER UTILITY DIVISION
October 24, 1978
Mr. Donald P. Dubois
Regional Administrator
U.S. Environmental Protection Agency
Region X
1200 Sixth Avenue
Seattle, Washington 98101
Subject: Industrial Cost Recovery - Position Statement
Dear Mr. Dubois:
'This statement represents the position of the City of Tacoma regarding
the Federal Industrial Cost Recovery Program mandated by the Federal
Water Pollution Control Act. It is our understanding that this public
meeting is being held to obtain public comments which will be the basis
for t\ decision on implementation or non-implementation of the Industrial
Cose Recovery portion of the Federal Water Pollution Control Act.
As a member agency in the Association of Metropolitan Sewerage Agencies,
we participated in the drafting of a resolution regarding Industrial
Cost Recovery at the annual AMSA conference in Anaheim, California
earlier this month. Tacoma fully supports that resolution by the Asso-
ciation of Metropolitan Sewerage Agencies. The resolution reads as
follows:
i
•"The Association of Metropolitan Sewerage Agencies supports the
elimination of ICR provisions from the Federal Water Pollution
Control Act (PL 92-500) and the Clean Water Act of 1977 (PL 95-217).
Until the ICR refluirements of the law are eliminated, AMSA urges
EPA to develop regulations for the program that are consistent
with the spirit and "intent of Congress' recent amendments to
PL 92-500.~ ' C
' We have enclosed for your use the-'complete AMSA position paper from which
this resolution was developed.
''Tacoma has currently suspended all further work on an Industrial Cost
Recovery study and program development and will hold further such work
in abeyance until this issue is resolved by EPA during the Congression-
ally mandated moratorium period provided in PL 95-217. This action is
818 YAKIMA AVENUE SOUTH, SUITE 202, TACOMA, WASHINGTON 98405, AREA CODE (206) 593-4803
-------
Mr. Donald P. Dubois
October 24, 1978
Page 2
in conformance with Condition 4, Moratorium Reviews and Approvals, which
is contained in your February 3, 1978, Region X Interim Policy on User
Charges and Industrial Cost Recovery. This particular paragraph provides
that grantees will not be required-to develop nor submit ICR systems
during the moratorium.
We thank you for the opportunity to submit this statement into the record,
and we trust that the testimony presented today will be utilized in
developing a reasonable and rational approach to the question of Industrial
Cost Recovery.
Sincerely,
R.^D.'Spar
Utility Services
RDS:MPP:mi
Enclosure: AMSA Position Paper
-------
AMSA RESOLUTION OH INDUS!RIAL COST RECOVERY
Resolution:
"The Association of Metropolitan Sewerage Agencies supports the elimination
of ICR provisions from the Federal Water Pollution Control Act (PL 92-500) and
the Clean Water Act of 1977 (PL 95-217). Until the ICR requirements of the law
are eliminated, AMSA urges EPA to develop regulations for the program that are con-
sistent with the spirit and intent of Congress1 recent amendments to PL 92-500."
Rationale:
1. No practical benefits will be gained from making the program more
complex, or from expanding the definition of ICR-eligible dis-
chargers to include sewerage customers that are not normally con-
sidered "industrial."
2. Major changes in the present regulations -- outside of those man-
dated by Congress -- could be invalidated by the findings of the
ICR study and subsequent actions of Congress and would, in the
meantime, only delay fulfillment of final requirements as treatment
agencies struggle with yet another series of regulatory revisions.
3. ICR requirements will work against the general objective of revita-
lizing America's center cities, since the ICR program makes joining
or staying in municipal systems more expensive than would otherwise
be true. As all industries are federal taxpayers, it is unfair to
require them -- and only them -- to reimburse the federal government
for 201 grant money spent on their behalf if other users are not
asked to do the same.
Background:
The Clean Water Act of 1977 revised ICR provisions in PL 92-500 to exempt
small dischargers from ICR payment and to allow calculation of ICR charges on
a system-wide, rather than a project-by-project basis. In the law, Congress
also ordered the Agency to undertake a study- of the feasibility of ICR systems
and the economic impact of ICR charges. AMSA urges EPA to use these opportuni-
ties to revise existing ICR regulations so the program requirements that treat-
ment agencies must comply with are simpler, clearer, and more likely to foster
the smooth administration of the programs developed.
1978
'''/».-„ _
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Chapter 173-255 WAC
LIMITATIONS ON USE OF REFERENDUM 26 GRANT
FUNDS FOR WATER POLLUTION ABATEMENT
WAC
173-255-010 Purpose and scope.
173-255-020 Effective date
173-255-030 Definitions
173-255-040 Limitation of programs eligible for funding under
Referendum Bill No 26
173-255-050 Limitation on grant awards within the municioal
grants program
173-255-060 Provision of guidelines
WAC 173-255-010 Purpose and scope. The purpose
of this chapter is lu set forth ihc limitations on uses of
money* administered by the department or ecology pur-
suant to chapter 43 83A RCW (Referendum Bill No.
26) The limitations arc necessary to insure that these
funds will be used to their optimum extent to protect the
resources and environment of the state of Washington
and the health and safety of its people by providing ade-
quate publicly owned facilities and systems Tor the col-
lection, treatment and disposal of solid and liquid waste
materials [Statutory Authority RCW 43.2IA.080. 78-
09-066 (Order DE 78-12), § 173-255-010. filed
8/24/78 ]
WAC 173-255-020 Effective date. All projects, or
phases of projects, which have not received a federal or
state grant award for design, before the effective dale of
this chapter will be subject to provisions contained here-
in [Statulory Authority RCW 43 21A 080. 78-09-066
(Order DE 78-12). § 173-255-020. filed 8/24/78.]
WAC 173-255-030 Definitions. For the purpose of
this chapter.
(I) "Department'' means the Washington slate de-
partment ol ecology
(2) "Agricultural pollution grants program" means
the program of grants administered by the department
for the planning, design and construction of publicly
owned or operated agricultural pollution abatement
facilities
(3) "Lake restoration grants prograinVmeans the
program of state grants administered by thq department
for the planning, design and implementation of lake res-
toration projects.
(4) "Marina pumpout grants program" means the
program of state grants administered by the department
for the design and construction of sewage pumpout fa-
cilities and dump stations at publicly owned or operated
mannas
(5) "Municipal waslcwatcr treatment works construc-
tion grants program" (hereinafter referred, to as the
construction grants program) means the federal/state
matching program of grants under Tille I! of Public
Law 95-217 to municipal entities for the purpose of up-
grading their treatment works to meet the effluent re-
quirements of stale and federal law.
(6) "Water supply residual waste treatment works
grants program" means the program of state grants ad-
ministered by the department for the design and con-
struction of pollution abatement facilities for publicly
owned or operated water supply plants in existence on
February 3. 1976. that discharge residual wastes to the
waters of the state
(7) "Individual systems" means privately owned
treatment works serving one or more principal residences
or small commercial establishments constructed prior to
and inhabited on or before December 27, 1977, to abate
an existing water pollution or public health problem.
(8) "Industrial cost recovery program" means the
program established under Title II section 204(b) of the
Federal Water Pollution Control Act Amendments
(Public Law 92-217) to recover the cost of municipal
treatment systems attributed to industrial users, when a
municipal treatment system has been funded with feder-
al funds under Title II
(9) Industrial user*
(a) Any nongovernmental user of publicly owned
treatment works which discharges more than twenty-
five thousand gallons per day of sanitary waste, or a
volume of process waste or combined process and sani-
tary waste, equivalent to twenty-five thousand gallons
per day of sanitary waste.
(b) Any nongovernmental user of a publicly owned
treatment works which discharges wastcwatcr to the
treatment works which contains toxic pollutants or poi-
sonous solids, liquids, or gases in sufficient quantity ci-
ther singly or by interaction with other wastes, to injure
or interfere with any sewage treatment process, consti-
tute a hazard to humans or animals, create a public nui-
sance, or create any hazard in or have an adverse effect
on the waters receiving any discharge from the treat-
ment works.
(c) All commercial users of an individual system con-
structed with grant assistance under section 201 (h) of
the Clean Water Act of 1977 (P.L. 95-217).
(10) "Innovative and alternative technology projects"
means those projects employing innovative and alterna-
tive wastcwaler treatment processes and techniques as
defined by EPA guidelines in 40 CFR 35. Appendix E.
and which arc eligible for federal grants under 40 CFR
35.908 promulgated on April 25, 1978. or hereafter
modified (Statutory Authority RCW 43.21A 080. 78-
09-066 (Order DE 78-12), § 173-255-030. filed
8/24/78.]
(8/24/78)
[Ch. 173-255 WAC—p I)
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I7j-*,j;j'-0mi Limimlions un use 01 neicrcnaum 26 tunas
WAC 173-255-040 Limitation of programs eligible
for funding under Referendum Bill No. 26. (I) The fol-
lowing programs shall be eligible Tor slate matching
grants in an amount not to exceed fifty percent of the
otal eligible cost of a project as determined by the de-
partment' The marina pumpout grants program, the wa-
ter supply plant residual waste treatment works grants
program, the lake restoration grants program, and the
agricultural pollution grants program. The department
may authorize a matching grant less than fifty percent
of the total eligible COM of u project in I hose cases where
it would be in the public interest, or where .federal
matching funds are available and it would be in the
public interest to secure a local matching portion.
(1) The construction grants program shall be eligible
for slate matching grants in an amount not to exceed
fifteen percent of the total eligible cost of a project as
determined by the department except us provided in
WAC 173-255-050(1) [Statutory Authority: RCW 43-
21A 080. 78-09-066 (Order DE 78-12). § 173-255-
040. filed 8/24/78.)
WAC 173-255-050 Limitation on grant awards
within the municipal grants program. (I) The state
matching grants for innovative and alternative technolo-
gy projects shall be limited to nine percent which is the
same portion of the nonfcderal share as other types of
projects funded under the construction grants program.
(2) Expenditure of funds under the provisions of
chapter 43 83A RCW is limited to public bodies which
arc defined in the statute to mean any agency, political
ubdmsion. uxing district, or municipal corporation
thereof, and those Indian tribes now or hereafter recog-
nized as such by the federal government for participa-
tion in the federal land and water conservation program
and which may constitutionally receive grants or loans
from the state of Washington. This provision and defini-
tion prohibits the expenditure of state funds for match-
ing grants for. among others:
(a) Individual systems; and
(b) That portion of the construction of a municipal
treatment works attributable to industrial users. Such
portion is to be determined through (he Environmental
Protection Agency's industrial cost recovery program.
[Statutory Authority RCW 43 2IA.080. 78-09-066
(Order DE 78 12), § 173-255-050. filed 8/24/78.J
WAC 173-255-060 Provision of guidelines. The dcr
partmcnt will publish guidelines which establish proce-
dures, under each of the Referendum 26 grant
programs, for the grant application :md award process.
[Statutory Authority RCW 432IA.080. 78^09-066
(Order DE 78 12). § 173-255-060. filed 8/24/78.)
|Ch. 173-255 WAC—p 2) (8/24/78)
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STEPHEN W BUCKLEY
Supervising Sanitary Engineer
SEWER COMMISSION
ONE GOVERNMENT CENTER TEL
FALL RIVER. MASSACHUSETTS 617-675*011
INDUSTRIAL COST RECOVERY MEETING
FALL RIVER GOVERNMENT CENTER
MONDAY, AUGUST 21, 1978
LflfflTT RMTINC SfflVICt INC.
26 BROAD STREET c ^ AREA CODE 6.7
WEYMOUTH. MASS. O2I88 Ottnoltfpe ±KepO\ttng 333-6791
CONVENTIONS - HEARINOS - CONFERENCES - LEGAL PROCEEDINOS
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INDUSTRIAL COST RECOVERY MEETING
FALL RIVER GOVERNMENT CENTER
MONDAY, AUGUST 21, 1978
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MR. GEORGE DARMODYs If I can have
your attention, ray name is George Darmody. Z
have the honor this afternoon of introducing
Congresswoman Heckler to this group who are
all interested in the elimination of the cost
recovery clause in the Clean Water Act. Z
might say that Z represent the Zndustrial
Commission, and within our office Congress-
woman Heckler is indeed an asset for not only.
her District, but the country in economic
development.
Our purpose here today is to allow
the Fall River Industrialists the opportunity
to present their cases to EPA officials and
how the cost recovery portion of the Clean
Hater Act will affect them. Cost recovery
payments in this city amount to approximately
$134,000 annually to be shared by many busi-
nesses, w.lth the major portion being paid by
eight manufacturing firms, most of whom are
represented here. These eight companies
employ 1,810 people which breaks down to a
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coat of approximately $75 per parson. I point
this out to show that we not only are talking
EPA, but economics. It would simply cost the
Federal Government far leas dollars to eliminate
the cost recovery clause of the legislation than
to suffer tax loss and subsidized unemployment
which potentially could result by the imposing
of the cost recovery clause upon industry.
Therefore, the Industrial Commission respectively
requests that the cost recovery portion of the
c-r> Clean Water Act of 1977 be eliminated.
Prior to turning the program over to
Congresswoman Heckler, I might point out that
the Congresswoman has led the fight for Pall
River manufacturers and manufacturers within
her district to get a moratorium for a study of
this cost recovery clause, has been instrumental
in contacting the proper people to give our
industry an opportunity to present their case
to the proper federal officials. I think she
deserves a round of applause for the work she
has done.
The Honorable Congresswoman Margaret M.
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Heckler.
[Applause.]
CONGRESSWOMAN HECKLER: Thank you
very muchr, George, and for your help on behalf
of industrial development in Fall River. It's
been invaluable.
I would like to say this is a business
session. I am not going to take the time to
make a speech. However, there are a few remarks
that I think are in order. First of all, I would
like to thank all of the-Industrialists and the
Chamber of Commerce and their leadership here.
Z an very sorry the Mayor is detained elsewhere
in a very beautiful place, but he is well
represented by his staff and by his assistant,
Mr. Zenni. At the same time I am grateful that
the EPA is here, and the consulting firm engaged
in this important work is present.
One of the recurring problems we have
in the Congress is the fact that we are often
asked to enunciate policy, and we find that
the regulatory agencies contradict the intent
of Congress. When we return to our constituencies.
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we learn that the policies aa we have devised
them have boon interpreted with a little
different flavor and, in fact, an unacceptable
twist on the local level. It has occurred so
often that today Z felt it was very important
to be present so that this particular study
which was originated as a result of an amend-
ment' that Z proposed to the Congress and
struggled hard to achieve and which was passed
in the Congress will not be misunderstood by
C_r3 the regulatory agency involved.
Z do know that there is a sense of
cooperation here among the Zndustrialists, and
for all present Z would like to recite very
briefly the chronology of what brought us to
this point and why we see this as a major problem
in the city.
Let me just say that in terms of the
issue, the issue came to me on December 16,
1976, when Z met with many of the people in
this room*; former Zndustrialists, to discuss
the implementation of the cost recovery imposed
by PL 94-500. The Federal Water Amendment of
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1972, Section 204B1, states that the EPA
Administrator shall not approve any grants or
treatment works unless payment is provided to
applicant, by the industrial user for that
portion of the federal construction. Seventy-
five percent would be allocable to treatment
of such industrial waste.
On March 24, 1977, after the meeting
with the local Industrialists who explained to
me the dire straits that they would face in
this City which has faced economic distress for
some time and is fighting its way around the
corner to a renaissance economically, the
prospect of having heavy charges imposed on
local Industrialists which would force them to
leave the City would raise such a serious
problem in my mind and for the people of the
City and for the City itself that I then asked
for this special study.
This was proposed in the Congress,
and on March 24, 1977 the House Public Works
Committee reported out the bill containing my
amendment which imposed an 18 month delay on
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collection of payment by industrial users for
their portion of the 75 percent share of costs
of construction of waste water treatment
facilities. Now, it's this mandated study that
we are embarking upon at this moment.
On April 5, 1977, the House passed
the Water Pollution Control Act Amendments of
1977'with the Heckler Amendments intact.
August 4, 1977, the Senate passed the bill
exempting from cost recovery industrial dis-
charges with flow rates not exceeding 2500
gallons per day. The Senate version of the
bill which was considered a compromise has no
effect on Fall River, since we are here talking
about dyeing and finishing industries using
heavy amounts of water. So, the Senate's
answer was not an answer for this City.
Zn the fall of 1977 the Extended
Conference Committee deliberated on the Z.C.R.
approach. This amendment became one of the
chief controversies in the bill, and after
extensive lobbying the House Proposal did pass,
and the House Proposal mandated that the
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8
assessment of the economic impact in these
older cities particularly where the level of
distress could be exceedingly high would have
to be made, and this would include industry
such as the textile industry.
December 27, 1977, the President
signed into law the Clean Water Act Amendment
of 1977 with the Heckler Amendment intact.
Now we are here today implementing
the laws, and we're now starting the study.
I would say if the textile industry and the
dyeing and finishing industry were to be
excluded from serious consideration, Z would
not have embarked on this long struggle to have
some economic impact study. So that I would
feel that it's a Congressional intent, as Z
fought for it in the Congress as the chief
sponsorer of this legislation, to have this
industry taken into account with its particular
problems in the northeastern section of the
United States. And, this is what has brought
us here today, and tomorrow we will be in
Taunton and, gentlemen, Z will be with you again,
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How, so that we start out on the right
track, this is our track and we will be follow-
ing this study and we want the emphasis, the
kind of evidence that you're going to get from
the Industrialists here today, to be taken very
seriously by EPA because that is what this
amendment is all about. We ask for your serious
consideration of the economic and human problems
of this City and the problems of the business.
survival in the City, a City that has seen many
c~° businesses go southward and find brighter
horizons, leaving unemployment that the City
can hardly absorb. These businessmen want to
stay. They need some help. We have to find a
way to find a compromise between ecology and
the economy, and I support both.
That is the end of my remarks. What
I would like to do is to proceed with having
each person around the table introduce them-
selves.
Ralph, would you like to say something?
MR. RALPH GUERRIEROs Thank you very
much, CongresBwoman Heckler.
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10
Thank you everyone for attending
today.
My name is Ralph Guerriero, and Z am
Co-chairman of the Fall River Textile Processors
Waste Water Treatment Committee. Our group
came together in a common causes survival. We
are truly an endangered species, the textile
finishers, while we do not represent everyone
in this room, Lou D'Araico and Z co-chaired this
committee, there are other people here, labor
leaders and government people and other indus-
tries in the City that this industrial cost
recovery will affect.
Political leaders today need more
help than ever before. Some of them know it,
as Congreaswoman Heckler said a minute ago, and
others need to be persuaded. Most of them are
faced with enormously complicated problems way
beyond anything for which they were prepared by
prior experience. Our group has pledged to
help them.
The reason we are here today is to do
away with industrial cost recovery, if possible.
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11
It ia important. Everyone in this room ia in
favor of clean water. We join with other
citizena in Fall River in the need to preserve
our natural resources for future generations.
Our group was instrumental in this
City creating a Sewer Commission which made it
more comfortable for the City Council to approve
the original bond issue which got the project
started in the first place. The textile
processors will be faced with 57 percent of the
total annual charge for the waste water treat-
ment facility. For an industry that works on
low margins and is faced with competition in
the south and our new competition from imports,
we are disadvantage*, to be sure.
Hill Z.C.R. be the last straw to break
our backs? If the existing industries are
burdened with the cost of constructing waste
water treatment facilities, some of us will
literally go down the drain.
We are in favor of a user charger
according to the amount and relative harmfulness
of. the discharges. This will be our incentive
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12
to reduce pollutions recycling, changes in our
processes, shifting to less polluting materials
as well as development of more efficient pollu-
tion removal technology. We are asking that
I.C.R.'s portion of the law be eliminated, that
ad valorem taxes be used to cover the industrial
users' share of the cost of the treatment plant.
Zf the law cannot be changed, we do
not intend to stop here. We intend to go to
Washington, if necessary, to ask that Fall River
CL-i"5 be exempted from the law. EPA has made such
exemptions. We will not stop here.
I will be back later to speak about my
£= cdmpany. Swan Finishing Company. Z will turn
«=c:
±1^ the meeting over now to Mr. Pat Harrington who
represents United Merchants, then I will be back
to speak about Swan.
CONGRESSWOMAN HECKLERs May Z suggest
that we go around the table and have each one
introduce themselves so we will all know who is
talking and then proceed with Pat Harrington?
Mr. Brian James, Massachusetts
Dlvison of Water Pollution Control.
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13
Martin Zenni, the Special Assistant
to the Mayor.
Dan Began, City Council Chairman and
Acting Mayor.
Bill Torpey, President of Pall River
Area Chamber of Commerce.
Richard Levesque, Assistant Manager
of United Merchants and Manufacturera.
Pat Harrington, Counsel for United
Merchants.
Paul Horvitz, Counsel to Sterling Pile
Corporation.
Leonard Ansin, President of Sterling
Pile Fabrics.
Jim Lenehan, National Representative
of United Textile Workers.
Tony Cabral, President of the Local.
Fred Canuel, Plant Manager.
Frank Stetkiewic2, representing Bristol
Finishing Company*
Irwin Shaw, General Counsel of
Providence Pile Fabrics.
Lionel Corriveau, Providence Pile
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14
Corporation, Engineering Department.
Leonard Ansin, Sterling Pile Fabrics.
Louis D'Amico, Duro Finishing.
Ralph Guerriero, Swan Finishing
Company.
John Friar, Sewer Commission, Fall
River.
CONGRESSWOMAN HECKLER« And Private
Consultant to Margaret Heckler. John advised
me on many stages of our legislation.
Ed Donahue, Coopers & Lybrand.
r rp
^ Paul Flax, Coopers* Lybrand.
Steve Buckley, Supervising Sanitary
Engineer, Pall River Sewer Commission.
John Noel, Cost Recovery Specialist
for EPA Region Onej Technical Advisory Committee
on National Stady.
Dennis Orvis, Chamber of Commerce.
Ken Dufault, Amalgamated Clothing and
Textile Workers, Textile Division General
Manager.
John Sullivan, Providence Journal.
Bob Luttman, Plant Manager, Frito-Lay.
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Russell Borden, Frito-Lay.
Jack Robertshaw, President of United
Labor Council and Massachusetts State Building
Trades, Vice President of Fall River Building
Trades.
Edward Hyles, Jackson Company,
Incorporated.
Roland Mercier, Engineering Manager,
Aluminum Processing.
Edward Schultz, Plant Engineer,
Aluminum Processing Corp.
Edward Capuano, President of Capri
Textiles.
Bob Capuano, Capri Textiles.
CONGRESSWOMAN HECKLERI Pat, we can
get started.
MR. PAT HARRINGTONt I think it
should be primarily an industrial type input.
MR. RALPH GOERRIEROt We are here
today to give input to the Coopers & Lybrand
study on how it affects our industry. Well, X
can speak for Swan Finishing Company. I have
a statement I will read. I will give you a
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c_o
copy of my statement on how it affects Swan
Finishing Conpany.
The title of ny little talk is
Endangered Species.
Swan Finishing Company was formed in
1958 by Mr. Ralph Guerriero, Sr., who cane fron
New York. Re La still a major stockholder.
The company's primary purpose was to serve the
textile industry by performing dyeing and
finishing on various fabrics, Halloween costumes,
drapes and home furnishings. Swan was originally
located in Swansea, Massachusetts, a suburb of
Fall River, until 1973.
Prior to 1973 Swan was discharging
its affluent into the Lees River which empties
into the Taunton River Basin. Under mandate
by EPA to stop polluting the Lees River, the
company decided to relocate to Fall River,
where after neutralization its affluent would
be handled by the City's sewerage treatment
plant.
The company was without debt in 1972
and employed approximately 180 persons. There
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17
were no fedoral programs to help us relocate,
so we financed our new building at a high
intereot rate fron a local bank. Our debt
exceeded $2.5 Million by the end of 1973. The
stockholders had pledged everything to help
the company stay alive. It would be necessary
to increase production 40 percent in order to
meet the company's obligations in a new
facility. We see our whole building as a
pollution device.
Then came the Arab Oil Embargo and
economic recession which we are all familiar
with. We sustained large losses in the follow-
ing two years, and it was necessary to again
refinance. We also had to make investments in
other processes such as textile printing to
diversify ourselves to be able to survive.
Our debt increased to $4 Million. Our interest
expenses were staggering.
Has Swan paid its share to help
clean water? You bet it has. Today, the waters
in the Lees River run clear and clean. Shell-
fish are bountiful, and the species of fish
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18
that has not been seen for nany yeara has
returned. Wo have paid our ohare, but it did
not coat Fall River the joba that Swan provided.
We could have gone south like other companies
have done* but we felt an obligation to the
area and to our employees who had been with us
for many years. Today we employ 250 people,
mostly male, in a City that provides mostly
jobs for females. They are low skilled and
hard working. Some cannot even speak English.
Where will these people find jobs? Ours are
,— not low paying jobs either.
C=(±
Fj-. Our average wage is over $5.00 an
;— hour and going up. Many of our employees drive
i -~
late model cars and own homes and pay taxes in
the City. Our annual payroll is over $3 Million,
We also spend $2 Million for supplies and
services in the Fall River area. This amount,
I believe, turns over at least five times in
this area and adds $25 Million to the economy
of Fall River.
You may ask at this point what is the
problem, why are you complaining. Swan has
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overcome all its problens so far, why not one
more? For Swan the cost of I.C.R. is approxi-
mately $40,000. This is not a lot of money
until yovrconsider what our profit was, about
80,000. Our financial statements have been
made available to Coopers & Lybrand, and they
speak for themselves. The $40,000 does not
include the tax rate effects of the City's
share of the proposed waste water treatment
facility or the operations and maintenance
costs associated with industrial employees'
domestic waste water generated while at work.
I am sure the Union will be happy to hear Z
will not allow my employees to go to the bath-
room. What will all that cost? No one knows.
The textile dyeing and finishing in-
dustry is in trouble. If you don't believe me,
then ask the 350 employees who lost their jobs
when Newport Finishing closed in 1977 or the
150 employees who lost their jobs when Midland
Print closed, or maybe teven ask the employees
of Swan Finishing Company who didn't get a wage
increase last year in last year's union negotia-
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20
tions. If you're still not convinced, then
call Mr. Robert Donovan from the Department of
Environmental Quality Engineering in Lakeville.
Ask him why he has had to be so patient with
Swan in regard to their air pollution problems.
Through the efforts of Congresswoman
Heckler and Kenney Dufault Swan was able to
secure a direct loan from S&A for approximately
$100,000 at low interest to purchase air
pollution equipment. This equipment is being
c-° installed and will be operational soon.
We are trying to be a good neighbor
and live with other people and citizens in the
City. Will the Z.C.R. be the last straw to
break our backs? We believe we cannot afford
to pay I.C.R., and it should be eliminated.
We are also in favor of Senate Bill
2710 that would change the present law to allow
the use of ad valorem taxes for industry's
share.
Even if Z.C.R. is eliminated, there
is no guarantee that we will survive. There
are many new storms on the horizon. We are
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21
fighting imports. What will the effect of
deregulation of gas mean to us? Will the taxes
in this City go up or down? Z leave you with
that question. Thank you.
CONGRESSWOMAN HECKLERt You know Z
can give an answer to that question, Ralph.
Very good statement.
What would you like? Would you like
to ask questions as you go along? Z think, to
get the right information, you would like to
hear front all these witnesses because each has
c_o
his own specifics.
MR. PAT HARRZNGTONt May Z say,
"~*~ Congresswoman, that we have spent some time and
^= effort trying to prepare for the record the
basic background data which hopefully you will
find useful later on in Washington. Z think
maybe we should get the people on the record,
maybe not as extensively as Ralph, but at least
let's find out what it is we are dealing with
so that later on when we have that record we
can point to it. Zt may be 2 inches thick, but
at- least we can point to it.
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CONGRESSWOMAN HECKLZRi All right.
MR. GOERRIEROi Let's proceed with
the formal presentation, and we will make the
whole transcript available to you.
MR. NOEL: Could I quickly say some-
thing? As you know, previously C & L was in
Fall River at an introductory meeting to this
follow-up meeting, I guess, as it turns out.
In addition to the field work that was done at
that time I understand they have made available
c-° to Mr. Buckley copies of industrial user survey
forms which are nost constructive for our pur-
poses in terms of gathering hard, factual data
to plug into our study. So, certainly, today
we are glad to hear your presentation. I would
like to alert you to the form. The form will
probably be made available to you to provide
some additional data that is useful to C & L
for the specific approach that they're taking.
I just wanted to alert you that the form was
available or was going to be made available,
so hopefully we could get some more information,
MR. riARRIHGTO!7: I think maybe, for
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23
the record, it might be worthwhile to point out
that one of our problems with the prior meeting
was the fact that the copies of the contract
between Coopers & Lybrand and the Environmental
Agency were not available, nor were the 24
questions that had been raised, and X think
very legitimately raised, by Congress available
at the time. So we had to sort of put those
things together, so that the prior meetingcould
hardly be called a meeting where we had some
sort of informed understanding of what we were
talking about. So that I think that we now have
disseminated this information and copies sub-
sequently. I think all of the industries are
in a better position to present their cases.
We still would like to reserve the right to
present in depth the economic impact because
filling out the answers to the questions that
raised — It was your contract, your contract
with Coopers & Lybrand, right?
MR. NOBLs I am with EPA.
MR. HARRINGTONi In any event, the
EPA and Coopers & Lybrand have indicated in a
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24
five-page or six-page study here — nine-page
study what they want, you know, to discuss,
what they want to develop. That was not avail-
able to uff until two weeks ago. Whatever it
was we mimeographed here in Ralph's office
because we didn't have that nor did we have the
questions which the Congress had raised in
connection with this whole bill that apparently
brought the Coopers 6 Lybrand effort with EPA
into effect. So that Z think that we would
c~° like to reserve at this point, if it is permis-
sible, the right to submit detailed factual
data based upon your contract in answer to the
contract between EPA and Coopers & Lybrand.
Is that acceptable to you?
MR. NOELs Most certainly. The intent
of the survey forms of which I spoke is to try
to codify the scope of the contract in a kind
of form that C & L can use to try to make a
national assessment, but certainly anything
that you can submit to us that is going to
further our understanding of your situation is
going to be most constructive to us.
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MR. HARRINGTON: I think that Ralph
has really, you know, keyed this thing off
very well, but Z would submit that the first
question raised by Congress and whoever did this,
and Z assume somebody on the staff does it for
the most part, but it's really very, very
germane.
First, whether the industrial cost
recovery program discriminates against parti-
cular industries or industrial plants in
c-° different locations; and, do small town busi-
nesses pay more than their urban counterparts?
What is the combined impact on such industries
of a usage charge and Z.C.R. requirements?
Whoever wrote that first question went to the
heart, it seems to me, of the whole problem.
Z think that basically what we have
asked, we have disseminated this to all of the
people here in the room, and Z think that what
we ought to really do now is to have them
briefly discuss how the answer to that question
affects their own industry, having in mind
where they're located, what their charges are
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here and how they relate to national organiza-
tions and all the rest.
COIIGRSSSWOMAN HECKLER I Pat, have
you seen a^ copy of their survey?
MR. BUCKLEYi Re couldn't have. I
received this questionnaire last week. I was
on vacation, and I didn't know about it until
this morning. So by tomorrow or Wednesday all
industry representatives should have a copy of
this.
CONGRESSWOMAN HECKLER: And it can
be amended, if they have further information.
MR. HARRINGTON: I think with that,
if it's all right with you, I think we should
run through that scenario. I wanted this to be
primarily an industry type approach. They have
spent a lot of time and effort. I don't want
this to be a legalese type operation.
CONGRESSWOMAN HECKLER: The Whole
point of this is to have the industry speak,
and that is what we need, that data and that
information.
MR. HARRINGTON: Ultimately the
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27
request Z would like to make with respect to
information we need coming from this conference,
which X think would be provided either through
your office or through the Freedom of Informa-
tion Act, but, in any event, Z think we need
some follow-up things from Coopers & Lybrand
and the EPA. Z think Z can sum that up when we
get all through.
CONGRESSWOMAN HECKLERI All right.
Lou, do you have a statement.
MR. LOO D'AMICOt Z would like to
address myself to that first question because
Z think that is the most important question
asked.
Zf we can go back to the 1950*s, the
south in their efforts to attract the textile
industry, which they did very successfully,
in most of the small towns and many of the
large cities in the south adequate sewerage
plants were built. Some of these were built,
Z would say, if they were built in the late
sixties and early seventies, probably were
financed somewhat with government money. The
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south has a user charge, but there is no
industrial cost recovery.
We now cone to the Fall River area,
an old urban area that certainly was behind
the times. They had a diminishing tax base
and a host of problems, did not bother with
updating their sewerage plants. It's now been
mandated that they do upgrade their sewerage
plants. You're now going to add, as the
previous speaker said, 57 percent of this
industrial cost recovery which would be assessed
to the textile industry.
The major question that management
is going to ask, why should we stay here when
transportation charges are higher in the north,
energy charges are higher, workman's compensa-
tion, taxes, payroll taxes, property taxes.
So now it becomes another cost that really
cannot be absorbed.
The thing that worries me with Z.C.R.
is that if any of these major plants, textile
plants should leave, number one, you have now
a facility larger than it should be. That means
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29
user costs, maintenance costs are going to have
to increase. Secondly, you erode the tax base.
Then you have a problem how do you attract
industry to cone in when you tell then, if
you're a water user, hey, buddy, we've got an
industrial cost recovery clause that you're
going to have to absorb.
Our plants employ — our group of
plants are made up of three plants in Fall Rivers
Duro Finishing, Duro Textile Printers and Pyro
Finishing — over 700 people. Our payroll is
about $9 Million. Big number. We pay out
group insurance of approximately $700,000 a year,
over a quarter of a million dollars in pensions,
plus at least a hundred thousand in health and
welfare. Zf you knock out those 700 people,
what in heaven's name are you going to do with
them? Then it seems that Z.C.R. is counter-
productive. Then the United States Government
will probably step in and say why are these
people out of jobs, was it foreign import, and
they will now receive some money per year. But
that isn't adequate.
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30
What do you do at the end of the
year? What do you do with the hospitals that
will have to absorb these people when they come
in for services? What do you do with some of
these workers that are depending on a
supplementary pension in addition to Social
Security? No nore money will be going into the
pension fund. This is the main concern.
We are really at our wit's end in
New England. If you're going to survive as a
textile plant in Mew England, you must work
twice as hard as the other guy because not only
do you have domestic competition from the south
where everything is lower, but you have foreign
imports. Our government has a free trade
policy or a policy that is based on voluntary
quotas. If you continue along this line, to
add costs, you're going to cause the death of
textiles in New England. I think that is going
to be tragic.
That is basically my statement on one.
I reserve the right at a later time to give you
more information.
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31
!7c<.r will this affect our suppliers?
Uo looked at our costs the other day. There
is over $4 Million a year paid out to local
people, people who supply us with paper tubes,
electrical contractors, people v/ho supply us
with all sorts of supplies that we need to run
our plant. That will cause a secondary problem
of layoffs in other parts of the City, something
that this City cannot afford. It seems to- me
that somewhere there should be some wisdom by
c-r3 the government that there should be a circuit-
breaker for urban cities that do have problems,
that Z.C.R. should be waived. It just does not
make sense that you would have the same formula
apply to all areas.
We have led the nation in unemploy-
ment. We have led it in industry moving out.
We have got every problem imaginable. Just
look out the window and see. You can see the
problems. And to cause a further flight of
people who want to stay here, sincerely want
to stay in this area, just doesn't make sense.
CONGRESSV7OMAN RKCKLERi Mr. D'Amico
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J f.
was so pcrouaoive, he nada this same speech to
me. That I think was more of a reason that Z
continued all of this. You really summarised
the problem.
Zs there another Industrialist who
would like to speak?
MR. RICHARD LEVESQUEt (United
Merchants and Manufacturers) As a little bit of
background. United Merchants as of June 30th
pulled out of Chapter XZ bankruptcy. That
leaves us running our own company again, but
in a good need of a lot of cash and capital.
United Merchants at the moment has been cut in
half in terms of its total size. It's a multi-
national company, and cash requirements are in
the six figures plus. Any drain of cash on a
nonproductive basis at the moment would threaten
the existence of the Fall River complex to the
point where United Merchants would not hesitate
to pull out of Fall River.
Up until a year ago just prior to the
bankruptcy United Merchants employed a thousand
people in this area. We closed down one operation
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33
in the last I?, conths. Midland Print, and our
current cnpioyncnt is 836 people. That con-
tributes over $8 Million in terras of wages
and salaries earned by people in this area.
Profitability in the textile indus-
try as everyone knows is in the one and two
percent area. How, you tack on an estimated
$60,000 for us based on the 73 proposal, and
considering we have increased productivity
about a third since then, you've got to consider
80,000 in expenses between I.C.R. and O ft M
charges. Take that off of profitability and
you don't have a good reason to stay here.
The effect on Fall River is interest-
ing. You know, there is a considerable amount
of money which our company puts into this City.
In terms of property taxes we put in $150,000
alone, just property taxes. Like Z said,
wages earned are $8 Million. That generates
in terms of state and federal taxes well over
a million dollars. And, on an average basis
in terms of Fall River property tax, well over
70 percent of our people live in the area.
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34
we're talking about another, let me see,
$800 to $900,000 in terns of City taxes. City
property taxes, which are collected. You know,
that is not even to mention the other effects
of the waste treatment, not that we*re opposed
to waste treatment, but this is all adding to
the burden of expenses.
We will probably have to install
pre-treatment. Pre-treatment for us may go
anywhere from a quarter of a million dollars
up to two-and-a-half million dollars. There is
no way at the moment that the company would
spend two-and-a-half million dollars on waste
treatment in this City. It*s not that we want
to leave, but we can't afford to stay under
those conditions. And, as Mr. Harrington said,
we do feel that this I.C.R. charge is discriraina-
tory.
We reserve the right to submit addi-
tional information.
CONGRESSWOMAN RECKLERt Any other
Industrialists who would like to speak?
MR. LEONARD ANSHit (Sterling Pile
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Fabrics) Uo have a statement that we put in.
We have a statement front Sterling Pile that we
would file with the record.
I prepared a few brief remarks in
here. I don't want to be redundant on what
has already been said. Z think the case has
been very, very well established already.
Let me just go through this letter
and, if Z read too quickly, slow me down.
Sterling Pile Fabrics Corporation is
a Pall River based textile dyeing and finishing
company involved primarily with the manufacture
of dyed finished corduroy fabrics. Within the
confines of our wet processing operation we
employ the use of water combined with various
dye stuffs and chemicals. These mixture solu-
tions are controlled by our staff of employees
in such a manner that the resulting effect on
a processed corduroy fabric is a desirable one
in the eyes of our customer. Once we have
completed our use of a particular wet solution
of dye stuffs and chemicals the remaining
solution is discharged. For 30 years — Z say
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3G
again 30 years -- we have been operating in
such a nanner here in Fall River with a reason-
able degree of continuing success.
Zn recent years we all have had to
react to forces somewhat beyond our immediate
control, and these forces have had a significant
undesirable impact on our daily lives. Rising
inflation and skyrocketing energy costs,
unaffordable nodical expenses and insurance
coverage premiums that lend a new dimension to
the stretching of the imagination are a few
such forces that are zapping our morale ^and
resources, be they physical, financial or other-
wise.
Our 30-year-old company employing
200 Fall River area residents is having to
fight the war aqainst all of these undesirable
forces, and at the same time it's necessary
for us to cultivate the marketplace, encourage
growth and expand at home. As a result of our
involvement to date with the Z.C.R. program
development based on our present volume of
affluent and its nature we interpret the
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37
financial impact on our company to be approxi-
mately $18,000 par year with a user charge
ranging anywhere from 35,000 per year to
$50,000 par year. This means our company can
potentially expect to spend somewhere in the
vicinity of $60,000 per year to help make our
area water clean, and this is providing we do
nothing to increase our present volume of
affluent or alter its nature in such a way
that it would have a negative financial impact.
Our market distribution is worldwide,
and in the same respect so is our competition.
We are certain that if our product manufacturing
cost is increased as adversely as these potential
I.C.R. and user charge figures suggest, the
results to a company such as ours will be a
lesser competitive selling price, lower sales
volume, fewer jobs and eventually an overall
undesirable economic scene for our area citizens.
We feel that it is absolutely necessary
that our area citizens be totally knowledgeable
of what can happen, if the burden on clean water
here in Fall River and the surrounding areas is
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38
not distributed on a fair and equitable basis,
each one shouldering its fair share.
MR. HARRINGTONS Will you submit that
as part of the record?
MR. ANSIK: Yes.
CONGRESSWOMAN HECKLERi Are there fur-
ther statements for the record?
MR. GUERRZERO* Your Union representa-
tive is here.
Is Eddio Cabot still here?
c~° Eddie Cabot, would you like to say
something here because we seem to be taking
the textile people first and then there are
others. Would you like to say something?
MR. EDWARD CABOTz (Textile Processors)
We are a new company that sprang out of the
ashes left from the fire at Newport Finishing.
Z was involved with Newport Finishing. I know
first-hand the effect of having non-productive
costs laid upon a company. The I.C.R., as Z
see it, is a very unfair system of extracting
payment from the people in this area and older
areas particularly. Zn my business especially
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39
today we see our costs rise almost by the
month, but this is a cost that won't go away
and that we can't pass on because our competi-
tion doesn't have this cost, people outside of
this area, people who have relocated in the
south or people who live in an area that had
the foresight or the affluence to build this
type of facility before 1972.
There is only so far you can go as a
straw in the wind. Someday even the straws
stop bending, and they break. I think Congress-
c^>
woman Heckler and you, sir, from the Environmental
Protection Agency and anyone who has something
to say should speak out for the people here who
are being discriminated againat. We are new and
we are struggling. We certainly don't have some
of the problems that are built into some of the
older businesses, but with this cost and any
other costs that come along, if we are in a
position that — I will speak for my own company.
I knov; it's true for the most part of Duro and
true of Swan and most of the other textile
processors. Our competition doesn't come from
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40
a guy in Taunton who might be faced with the
same problems. It cones from imports. It
comes from people who are in a more advantageous
location who don't have the costs and don't
have to worry about passing it on. If we have
an erosion of profits, obviously we won't be
able to run a business.
CONGRESSWOMAN HECKLERi It is a fact
of geography that our region of the country was
settled earlier. That is part of our colonial
heritage. Because of the age of the City we
are dealing with older plants, older systems,
and we have not been able to build from scratch,
PROM THE FLOORi May I say something?
Everybody is talking about the companies, but
we've got to keep in mind the people, too,
because they will be out of a job and where are
they going to go? I mean, I don't think it's
fair. I don't think it's fair at all. That
is all I have to say.
CONGRESSWOMAN HECKLERi You are with
the Textile Workers Union?
PROM THE FLOOR: Yes.
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41
CONGRESSWOMAN HECKLERi If you have a
written statement that you would like to have
put into the record, you may submit it.
-FROM THE FLOOR* No.
MR. HARRINGTON: May we reserve the
right to submit one later on?
MR. EDWARD MYLES: (Jackson Company)
May Z say something? I am one of those companies
that is supported by these other companies like
Ralph and Lou D'Amico have been talking about*
i manufacture paper tubes* and I believe that
most all of the factories that are here I
represent as their supplier. If they go, my
business goes with it. Though we are a small
company, there could be 30 to 50 jobs that will
leave this area, if these businesses go down
the drain, as Ralph says. I am sure that all
the supporting industries will feel this amount
of impact and that the total loss of jobs will
be double what the industries themselves use.
Thank you.
MR. ROLAND MERCIERi (Aluminum
Processing Corp.) We are not textile labor at
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42
all. We are a (3 i via ion of Lite-o-lear,
New Jersey. We have to eonpote with satellite
divisions in Mew Jersey, Illinois, California.
This area- has already been pointed out as
having the highest utility rate. We feel we
would have qualified under the secondary metal
products group which was one of the groups to
be considered. However, the decision has been
made to cancel out on a complete electroplating
line which had been established in this area
because of the water waste, what have you.
CONGRESSWOMAN HECKLER* You cancelled
out a whole expanse in the area?
MR. MERCIERt Yes. There would have
been at least ten jobs to start and probably
tripling very rapidly. The other problem is
our expertise is in the fact that we are con-
sidered the best in what we do in Lite-o-lear.
This is why we employ roughly 550 people. We
do it better than our other divisions. We do
it better because we hire technical people.
Technical people cost money. If the decision
were made to have X.C.R. the cutbacks more than
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43
likely would have to come from these technical
people. Cutbacks in the technical people would
result in us not possibly being as competitive
as our other divisions, and as a result of that
X am sure Fall River could lose jobs in that
area also. Z do have a statement which I will
submit later.
MR. NOELi Could Z ask a question?
You indicated that you deferred expanding your
operating line because of these proposed charges?
MR. MERCZERs Yes. Zt makes us non-
competitive with some of our other divisions.
CONGRESSUOMAN HECKLER: Are there
further statements? Mr. Stetkiewicz.
MR. FRANK STETKIEWICZr (Bristol
Finishing Co.) Z operate a little plant called
Bristol Finishing Company. We are a small
business. There was a time when a fellow who
had a little knowledge and not too much money
could go into the textile business, he could
run a plant. Zf he wanted water, he took it
out of the river. This is dead. As time went
on he grew, but was still small. We only
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employed 40 people, but this is a payroll of
$550,000. When Z say 40 people, it's really
40 families. Many of the advantages that they
have at the other plants we haven't been able
to afford.
As time went on, we were hit with
the oil, practically went down. We had to go
to the bank, mortgage all our property, and we
managed to survive. We paid off most of our
problems. We're starting to give the employees
some advantages, and now we're faced with maybe
$10,000. Our profit at the end of the year
may be this $10,000. We are not in good shape.
We can't very well afford this. So, small busi-
nesses should be considered.
That is all I have to say. I have no
statement.
CONGRESSWOMAN HECKLER: Mr. Shaw had
something to say.
MR. IRWIN SHAW i (Providence Pile
Fabrics Corp.) We are a major textile manufac-
turer in Pall River. Although we do not do any
dyeing and finishing in this area, we do it in
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Woonsocket, Rhode Island with another company.
All of the comments which have been mentioned
here today apply to that operation, and we are
extremely., concerned and are looking at this
thing on a day-by-day basis. However, to get
back to the Fall River area, since we do not
have this type of activity here, I will say
that our presence in this City has been very
nice and we have grown. This is our world head-
quarters.
I can't say that at this moment Z have
some of the problems here that you other gentle-
men have. However, Z would like to mention why
maybe we are here from another point of view.
As Z mentioned, the company has grown and we
hope to continue to grow. In some of our growth
areas it does use water processing and finishing
techniques. Zn view of what is happening here
and our observations of what is going on in
Woonsocket, it would not be in our best interest
to make any commitment of any type until this
matter were resolved.
We currently are considering other
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46
locations in tho south. By the way, for those
of you who haven't been exposed to this — Z
have mentioned this before, and Z will say it
again — bur company continues to get courted
by various utilities and local governments in
the south who come up here, and they're offer-
ing us a lot of good dice including much lower
utility rates, and we certainly would not have
the effect of this industrial cost recovery.
Zt's extremely tempting, and Z think it cer-
c-° tainly is in everybody's best interest, not
just from a where we are now point of view, to
look forward to try and get a good handle on
^ this and realize that, if this type of legiala-
!z!zi tion does get implemented, what the effect is
going to be on this area from this time forward.
MR. NOELi Could Z answer the question
not only of you, Mr. Shaw, but of several other
people who mentioned a regional inequity, if
you would, between the north and south?
Z would like some information because
there is a general concensus in the agency that
everybody has to meet water quality standards
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47
and that we did appropriate — not we. Congress
appropriated $18 Billion in 1972 to build waste
water treatment facilities, and most recently
has extended that to 24.5. The original 18
billion was spent, and I know a lot of it was
spent in the northeast. Any money that was
expended under that Z.C.R. program is subject
to industrial cost recovery. What I am inter-
ested in, is there a particular locality in
the south that you think is where the textile •
industry will go?
MR. LOU D'AMZCOs Winston-Salem and
Sampson, North Carolina do not have Z.C.R.
FROM THE FLOOR: Raleigh, North
Carolina.
MR. LOU D'AMXCOs They have modern
plants, no user charges. That is only two that
Z know of, but there are many. Z think
Charlotte is another area that does not have
it. Also, Z find the EPA uses a much softer
sponge in the south than they do in the north.
They're not as aggressive, and things do not
happen the way they do here. Z think enforcement
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48
of EPA in all areas is much nore rigid in
New England than it is in the south, and it
may be because we are so- concentrated it's
easy for your?A people to be out in the field.
It doesn't take four hours to drive to another
city or two hours to drive to another city.
But you have a different approach. The
approach here, it seems to me, is a penalizing
approach to industry. It's not as cooperative.
The south did not grow because it has
a better work force or better land. In fact,
the first site I saw in the south I told the
Town Manager that we had better land that we
let cows graze on than they wanted to give us
for an industrial area. Their key point is
that they welcome industry. They're there
every day. It's not a one time -- It's not a
fast honeymoon. The honeymoon lasts a long,
long time in most of these southern communities.
They are aggressive. I think if you look at
the record, a great deal of money, federal
money, went into the south in the fifties and
sixties. It was poured into that area. It
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49
just didn't happen. It was poured into that
area. Now wo*re being made to pay. This
City has had every imaginable problem tossed
at it and-has now been thrown a new curve.
You're saying now, fellows, come up with the
money for Z.C.R. I don't think it's going to
work. I think you're going to build a mon-
strosity of a plant that is going to be much
larger than you can use. That is why I say
it's counterproductive. We're not thinking
ahead. What is going to be the end result?
We have people who will have to live
not only in '78, but in 1990 who must have jobs
to support themselves and their children. You
just can't put everyone on the state, city and
federal payroll. Industry is your best vehicle
for keeping people happy, keeping them employed.
It's not government. The government can help,
but the government cannot provide the jobs.
You're talking about a small amount.
You know, when I look at themoney that
is going to be thrown out, if these people
become unemployed, it's going to be ridiculous.
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50
There is no bottom lino.
MR. NOEL: I think clearly that ia
the concern that has been stated in the mandate
of the legislation. That is why we are here.
CONGRESSWOMAN HECKLER: Exactly,
because the record is pretty clear.
There must be other statements. The
Union people that are here wish to speak, but
I would like the companies to at least present
themselves.
Mr. Began, if you would like to speak
next.
MR. DAN BOGAHs I'm wearing three
hatsi the Acting Mayor, the President of the
City Council and also involved In the business community.
It's unusual in Fall River for a businessman to
be avowed in politics because it seems to be
the evil word, but what you're witnessing really
is a commitment from the business community to
get themselves involved in government until a
solution can be arrived at.
Business has been criticized. There
was a statement which said Fall River was behind
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51
the tiroes. That is true, but we all bear a
part of that responsibility because we, all
the business people, neglected the political
arena.
You mention the south. The south
got involved in politics and said that is how
it's going to be done. They're no smarter, no
more aggressive. We have a plant in the south.
The same thing is involved there. They're after
you. They cone after you. They put on a good
PR approach. They become involved in the
community. What has happened here is we're
paying for it now because we didn't become
involved. This sewerage treatment plant would
have gone through unless people did become
involved. This involvement, Z believe, is a
new dimension in towns like Pall River, Lowell,
this part of the area. But I think the main
thing is the fact that the business community
realizes they have to work with the political
community and work together for a common goal
or common cause and by treating all equal.
The way it stands now it would seem
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52
that the government is saying that the textile
related industry ia being discriminated against,
That is what it is. He are being discriminated
against here. Z think we have admitted to our-
selves that the business community — Z am
speaking now as part of the business community •
has neglected the political community. Now we
are going to pay for it, now wo are going to
change it, we are going to be more involved.
Z think the City of Fall River as far
as on a political basis has had problems from
1920 on. That is when it first started. We
are trying to survive and let it grow. Our
industry is growing. The more growth we put
into it down there, in a few short years this
could hamper us.
That is a three-way speech.
COHGRESSWOMAN HECKLERs Are there
other Industrialists? The Chamber of Commerce.
MR. WILLIAM TORPBTt (Chamber of
Commerce) Z really feel and Z appreciate what
Dan Bogan has just stated here. Zn fact, he
probably stole exactly what Z wanted to say.
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53
but I might be able to emphasize it.
The business and professional groups
or individuals and/or organizations we now have
in the Chamber of Commerce is almost 1000. We
have reached a pinnacle of success, in spite of
the tremendous problems of business today, all
the way from energy costs, payroll costs, all
that you have heard here today. The support of
the business community here in this City is
unbelievable. It's tremendous and it's still-
ed growing.
What Dan has just said is there has
been a major or there has not been an input by
the business community into the political
arena. This is where the decision-making powers
come. But to see this kind of a meeting and
this kind of force which has not previously
occurred, to my knowledge, to have the kind of
one industry, textile industry group, represented
as you are today and the satellite industries
such as Ed. Myles represents hero at a table to
tell the political arena in the name of Congress-
woman Margaret Heckler and the regulatory
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54
agencies, the EPA, and study group, the
consulting group. Coopers & Lybrand, the
message has got to get across of the tremendous
damage" that all of these people had added up
together. In my own sheets I have added up
two figures. That is the number of jobs and
the amount of annual payroll. Unbelievable.
If it occurs, I think we might as well close
shop. That is not going to happen. We are not
going to let that happen.
c-° As far as speaking for the Chamber of
Commerce, the Chamber only reflects what we
have here, what the business people think. If
you don't support your Chamber, you don't
support your City. That is my personal belief.
By numbers, by grouping ourselves
together, it's just what others have said: that
it's the north versus the south. In the south
there is a unanimity of thought and action.
They get together. They do things together.
We are going to change that. We have changed
that. That is why we are sitting here today.
We hope you qot the message.
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55
CONGRESSWOMAN HECKLER: Ralph, do you
have other speakers?
MR. GUERRIEROs We would like to hear
from Kenny Dufault.
MR. KENNETH DUFAOLT: (General Manager,
Amalgamated Clothing and Textile Workers,
Textile Division) I am in a very unique position
today as a person from labor. I am in total
agreement with everything that has been said by
management. I know first-hand how we got here
more than most people in the room. I was
formerly employed on the staff of Congress-
woman Heckler when the first team came in from
Georgia which wasn't even considering the
economic impact. Through her personal effort
we have arrived at where we are today.
Z won't go over all the problems that
you gentlemen have brought up. Z totally agree
with all of them. Z would just like to add,
if we lose, oh, one major or a couple of our
medium-sized plants, all the rest will go because
of the fact they're all sharing costs. There
are all various kinds of commodities that they're
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56
buying from the local area. X view as the
biggest problem a complete, total insensitive
approach fron EPA, from state and federal.
Outside of this meeting, which Z am very happy
to be at, I haven't seen any evidence that
they're trying to understand the problem.
They finally came to the source, and Z am very
grateful that they have now. Maybe now we can
get down to the base of the problem.
Z only view this as step one. Zf
you're able to knock out Z.C.R., it's still
only going to leave you status quo on many of
the companies here. The Union has done their
part. We forewent raises at Swan Finishing.
Labor is playing its part which it has to.
The old phase of the two sides of the table is
gone, if we have any intelligence. Zf we
don't get any help beyond the Z.C.R. from the
EPA, c-ean air is important, but eating is
more important. Zf you don't eat, what is the
difference if the water is clean or not. You
could close off Fall River and make it a
national monument. You're never going to fill
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the jobs again. You're never going to re-employ
the people, you Know, so it's time to really
sit down and knock it out because you're right
on the verge.
Z know personally three or four
different plants here. I won't mention their
names. One in particular was contemplating a
very large expansion, and right now this is
not only the reason, but- it's a major reason —
it's not one that has been mentioned, so I won't
reveal the confidence. They simply don't want
to. Z know of also a couple of others of the
associates that I deal with that are looking in
the states right now that are being relocated.
I don't blame them. They're not getting any
concentrated effort or any show of sensitivity
to their problems from EPA. So, Z am very glad
that today is a definite step in the right
direction, but they have got to go even far
beyond what we are trying to accomplish here
today.
That is all Z have to say.
MR, GUHRRZEROs Mr. Robertshaw..
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58
MR. JACK RODCRTSHAWi (United Labor
Council, Mass. State Building Trades and
Fall River Building Trades) Z want to say first
of all that we in the Labor Union here in
Fall River — I am in a very unique position,
Z can speak for the building trades and Building
Labor Council and also the State Labor Council —
wish to express our support for these Indus-
trialists, and we will go all the way with you
and support you all the way.
We think the industrial cost recovery
is a burden that these people cannot tolerate
and cannot survive with. We think it's unfair
to this area where we are forced to import
80 percent of our oil, where we are forced to
pay very high energy costs, where we are getting
killed by foreign imports. These people have
got all they can do to stay in business.
By staying in business they*re pro-
viding jobs for the people in this community.
They're keeping this community alive. This
community was the largest textile producer in
the United States, in fact in the world.
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several years ago. What are we now? Look out
the window, as someone oaid, and look at the
empty mills. We need help in this community.
We don't need further burdens placed upon these
fair people who negotiate with their unions,
pay them a fair wage, who are competing with
the Japanese, the Indonesians, the Philippines,
Thailandera. It will surely be the Belgian
Congo before we're through with low wages
coming up here knocking their pants off. We
don't need the federal government here knocking
their pants off.
We hear out of Washington and we hear
from President Carter that he wants to help the
older cities. This is not helping them by plac-
ing this additional cost on these people who
are trying to survive. You have heard every
one of them speak. I didn't hear one of them
here saying they're rolling in dough. I heard
every one of them say they are trying to survive
here. They're a part of this community. They
want to remain a part of this community.
I would direct a question to EPA.
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It concerns the environnent. If you look in
Webster's dictionary you will aee that
environment means the surroundings in which we
live. The surroundings in which we live is not
only ecological, it's not only clean air, it's
not only clean water. There is a social
environment. People employed making money,
people not having to go to Parkersburg,
West Virginia, or Marguette, Michigan, like
my members have to do because there is no
c-° growth here. There is a social environment.
When you lay people off and put them on the
streets, you're crime rate goes up. That is a
proven fact. These are statistics. We can
have clean water, but we'll also have crime
because of the unemployment rising in our City.
Then what is the advantage of clean water?
Row about the economic environment?
How about people doing a simple thing like
eating? Making a living? Being able to send
their kids through college? I come from a
union with 50 percent unemployment. We're told
the unemployment rate in the City is dropping.
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61
Try to tell that to some of my members. Try
to tell it to the people in the building trade.
We don't neod any bureaucratic hogwash.
This cost recovery system is going
to be harmful to these people in the City. We
in the labor realize what is harmful to them is
harmful to this City and is harmful to us. So
I would like to respectively go on record as
saying that we, and X can speak for 90 percent
of the labor movement in this City, we are
unalterably opposed to the industrial cost
recovery. We shall stand with these Indus-
trialists. We shall be of every assistance we
can here in this City, in Boston and in Washing*
ton.
We ask to reserve the right to sub-
mit a written statement. Thank you.
CONGRESSMAN HECKLERt Well, we have
heard from both sides of the aisle, labor and
management. Do you have other Industrialists?
MR. JAMES LENNOMt (United Textile
Workers of America) I concur with what my
brother from the labor movement just said here.
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62
It's interacting to note that in our society
today we seen to concentrate on cures of every-
thing. There is always a euro, but there
doesn't seen to be too much along the lines of
preventive action in terras of whatever, so they
make their evaluations of situations such as
this and the necessity for clean water and what-
ever else the environment proves necessary here
and throughout the country, but we don't very
often hear of any cold statistics or rather
projections as to what will happen, you know,
in terms of unemployment as we are all aware of
it.
It reminds me somewhat of a parallel
situation where up in Maine, Bruster Forest,
which Z understand was donated somewhere along
the road to the State of Maine and wasto be
preserved in perpetuity so we would have some-
thing of the wildlife and so forth, and for
some reason or another we had a storm a couple
of years ago and it devastated the forest at
least to the point where many trees had been
falling, and it created a fire hazard in terms
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63
of, if anything should happen there, how do you
get into sort of fight this fire, and so forth.
So the environmentalists went to court. They
were upheld by the court. The fire occurred.
You know what happened to Bruster Forest.
The point I an bringing out here, we
are not opposed to our environment being managed
in a way that will be beneficial to us all, but
I think that we are overlooking many times
concentrating on our objective, you know, and .
ignoring and making some real hard evaluations
of what the results might be. Basically when
we're talking Pall River — incidentally, I
come from Rhode Island. It's very serious there,
the unemployment. That is nothing to be looking
forward to. I am talking about unemployment
benefits of supplementary unemployment or this
training program and that training program. X
am not opposed to these things, understand.
What I am saying, the key to our economy and our
society is people — without people we need
nothing because none of us need to be here and
nothing needs to exist without people. People
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64
are tho key to our wholo society, the whole
civilization. It would seem to me that probably
these people are pushing some of these things
here, and^it's been ray observation to some
degree that there is no logic in terms of —
again, I am not saying I am opposed to the
progress that we should endeavor to accomplish
for our environment, but if you look at it, you
don't see anybody coming up and saying what
happens.
Out in the vest there was a steel mill
that was closed up because of the environment.
Now they're trying to get it going again. It's
the same way here on the East Coast and all of
these things that we are involved in. I think,
yes, we can do these things, but we have to be
practical. We cannot go along and say this must
be done, let's try to prevent what the results
might be and give an evaluation and give
priorities to where they should be, particularly
here in New England, as we all agree here. This
is very serious in many areas.
In regard to my brother here from the
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Chamber of Commerce and others commenting about
the textile group being here, everybody in this
City here and in the State of Massachusetts and
wherever is part of this thing here because
it's a domino effect. You know what happens
when people get unemployed. It just goes down
the line. So I think that we should back up and
support the people here in the City of Fall River,
all of them, no matter what business they're in
because we're all in the same boat.
MR. JACK ROBBRTSHAWs Can I just make
f '->
an additional remark?
We are in favor of building that
sewerage treatment because we are in favor of
clean water. What we are opposed to is asking
these gentlemen to pick up the cost which they
can't afford to pick up. They can't afford
that extra 40,000, this gentlemen with 10,000
and that gentleman with 8. We don't think
there is any need for it. We think there is
plenty of money there without ruining the
economy of this City to accomplish it. We
believe it can be done in other ways.
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66
COIIGRESSWOMAN HECKLER I Further
comments? John Friar. Re was one of the
original experts, and I think is a most eligible
person speaking for both the industry and govern*
ment here.
HR. JOHN FRIARi (Sewer Commission
Chairman) As has been indicated, we have had
comments from what might be termed both sides of
the table, that is labor and management.
Perhaps, we should also consider government on
the local level as being, perhaps, in the middle
of the whole thing. The Sewer Commission is
Q- squarely in the middle of that. There are a
couple of specific points that I would like to
have taken care of at this time, if Z could.
One of the problems that bothered me
at the last meeting was the apparent fact that
neither the textile industry as an industry nor
the City of Pall River as a city would be
formally included in the statistical work that
was done on this project. That was an impres-
sion that I had as a result of that meeting.
I would like to find out once and for all if
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67
that, in fact, continues to be the case.
MR. NOELi Two issues. First of all,
the reason we had the meeting previously was
because Fall River was one of the cities that
was being statistically studied. Zf we were
not going to study you statistically, we wouldn't
even have been here.
MR. FRZARs Well, I thought there was,
as a matter of fact, supposed to be sort of
narrative type of input.
MR. PAUL FLAXi (Coopers « Lybrand)
Z spent the morning with Steve. We spent three
or four hours completing a survey form that we
are doing for a number of cities across the
country.
CONGRESSWOMAN HECKLERI Fall River was
one of them?
MR. FLAXl Yes.
CONGRESSWOMAN HECKLERI Z would
certainly hope so. As the author of the amend-
ment that wanted the study, Z would be terribly
unhappy with EPA if this City were not number
one on the list and fully analyzed.
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MR. HARRINGTONi If she*a unhappy,
you're going to be unhappy.
COHGRESSWOMAN HECKLER: You're going
to be very unhappy. Heckler in Congress is not
to be minimized.
MR. NOEL: Which was why Fall River
was on the list.
MR. DONAHUEi He are gathering informa-
tion about industries in all of the three
hundred cities that we are visiting. We were.
paying particular attention and doing a little
bit additional research in five industries
because our scope of work said that we would
pick out several industries that were particularly
impacted by industrial cost recovery. The
criteria that we used to select these industries
was the total number of employees, the number of
establishments in the country, those kinds of
things, criteria that EPA approved. When wo
took the industries that were considered as
potential, candidates, the textile industry was
not one of them. However, because of the
interest that was shown by Congresswoman Heckler
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69
and Congressman Studda and Senator Chaffey, we
went back and got EPA*a approval to expand that
from five industries for a specific kind of
study to six, and the sixth one was textiles.
CONGRESSWOMAN HECKLERi Let me just
say this shows you how far the agency strayed
from what the Congress intended because on the
House side I fought hard for this amendment,
and Senator Chaffey was extremely active in
fighting for the amendment. This was the origin
of the whole idea, and Congressman Studds
supported this. Now to have the FPA overlook
that central fact is just amazing to me. It's
really almost shocking, but I am glad we recti-
fied it and I am glad we had the preliminary
meeting so we knew a secondary meeting was in
order. We are glad you revised your setting of
priorities because I hope again this, too, will
go to the head of the list.
MR. JOHN PRIARj (Sewer Commission
Chairman) I think it is important that it
be understood here that it has taken place.
The second point that I would make would be a
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70
suggestion as to the execution of that study.
Z am not sure that this situation of two
clearly separate geographical areas being in
competition with each other for a particular
industry is the same for almost any other type
of industry that you would look at. You might
say that Boston and California would compete
to some extent for the electronics trade, but
I am not sure that that is really one of the
industries that is going really to be nailed.
CL-° I don't know. Maybe the geographic separation
is enough there so there is not that much in the
way of competition any more. But I consider
the textile industry in my mind as being some-
what unique in that regard. So I would suggest
that the study show the relative impact within
the textile business. In other words, what
would happen not just to the industry as a
whole — maybe the industry as a whole will
still have 200-or 300,000 jobs, but will those
jobs suffer displacement as a result of this
cost situation.
The final point that Z would make
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71
has to do with sort of a coat benefit ratio
consideration of what is happening here. Z
have read some of the deliberations that the
committee, undertook or at least a summary of
the rationale they used in developing Public
Law 92500 and particularly the method of
addressing charges. I can understand that
rationale. I think anybody who reads it would
say that their thinking was reasonably clear.
The problem is that it was not in any way all
c_n encompassing for all situations. It was
necessarily general and limited to the extent
of detail, I think. So there is some justifica-
tion to ask for this to be considered and with
the specific problems of either the textile
industry or, perhaps, even some cities in the
northeast or even the problems of Fall River
rather than the general questions raised during
their deliberations, particularly with an idea
what is the cost to benefit ratio. If the
federal government succeeds in recovering some
of its capital by way of the I.C.R., will it on
the other hand end up expending much larger sums
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72
of money because of the displacement or losses
or what have you and will it also have done it
or what should it do to protect its investment
in a $45 Million project. It doesn't make a
lot of sense to have a 32 or 31 million gallon
a day plant that is only going to be serving
an effective 23 or 24 million gallons a day
because the other eight or nine million gallons
a day have moved south or someplace else. So
it doesn't make a lot of "sense to build a big
c~° plant and not have a flow to make it work
properly which might occur as a result of an
industrial slowdown.
MR. NOEL: I think Ed would like to
address a few things.
MR. DONAHUE» The degree of geographic
competition we are addressing not only for
textiles, but also for pulp, paper. You have
New England versus the midwest. So there are
two industries. The cost benefit side, we have
hired Camp, Dresser & McKee as subcontractors
to help develop some cost equations and to
look at what is the most cost effective way to
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73
treat sewerage. Will I.C.R. with pretreatment
regulations load industry to go to a elf treat-
ment?
MR. FRIARi We worried about that
balance.
MR. DONAHUEi We are coning to that
problem, too, if you have got a plant with
excess capacity, then everything is going to
suffer because those people who are left are
going to pay higher sewer rates. Yes. We are
worried about that and, yes, those are things
we are looking at.
MR. FRIARi Is there some way the
City could, at least the governmental aspect of
it, be kept abreast of what is going on?
MR. DONAHUE: We have periodic public
meetings which include industrial people and
manufacturers, several trade associations,
environmental groups, league of cities, whatever.
Those meetings are public. There are transcripts
available, and we will be glad to give transcripts
to anyone as to what is going on. We are also
going to have a series of ten regional meetings
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74
in late September or October in Boston relating
to what we've found in this geographic part of
the country, offering those cities we did not
visit the.opportunity to see what we have and
to put additional statements in the record. We
will have transcripts for all those meetings.
Those transcripts are going to be appendixed
to the report to Congress. Then there will be
the draft reports which will be ready in aid-
November.
MR. FRIAR: Can we put that on an
active basis rather than passive? Could we
request this be forwarded to us actively rather
than have us —
CONGRESSWOMAN HECKLER: You mean the
draft reports?
MR. PRIAR: Yes. With a draft there
is usually a period of review where comments
can be made.
MR. DONAHUEi We can certainly give
you copies. There are deadlines set by Congress
which are very short.
MR. FRIARt We don't want to wait for
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75
it.
MR. DONAHUES You * re going to have
to respond very quickly.
MR. GUERRIEROj When is your draft
report due?
MR. DONAHUE: It is due out mid-
November. We are supposed to have it done by
early December. We are supposed to have meet-
ings on a regional level in October without any
recommendation. Based on those regional meet-
ings plus the data we have gathered from the
300 cities, we will have a month to put together
a draft report, and then December is the dead-
line for the final report to Congress.
MR. NOELi Which brings me to a point
Z would like to make.
CONGRESSWOMAN HECKLERt Could we take
a brief recess for the stenographer first.
(Brief recess.]
CONGRESSWOMAN HECKLERt Are we ready
to resume?
MR. FRIAR: There was one point I
would like to make I mentioned it to a couple
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76
of people that I had talked to. That is, if
there is anyone who doesn't want to make a
formal presentation now either because they're
uncomfortable doing so or because of financial
disclosure or what have you/ I had guaranteed
to such people that you would be available
afterwards to hear whatever they might have to
say. So, if you would stay around for a few
minutes afterwards to give someone an opportunity
to come up, if they want to.
FROM TEE FLOORs We will be advised
of the public hearing that will follow, so state-
ments can be added at that time?
MR. BUCKLEY: There will be a public
notice in the paper.
MR. NOEL: Just before we broke Ed
brought up the problem of time constraints that
both he and the agency are under by Congres-
sional Mandate. That is, we have to report to
them by December of this year. So that any
information that you can provide us either by
way of this survey form or supplemental types
of- correspondence is most important* We have a
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77
very short time frame in order to integrate it
into the whole flow of the project.
MR. GUERRIERO: Are they to send
this information in? Does everyone know?
MR. BUCKLEYs Once I give them the
form, if they will return it to me, I will
make sure that Coopers & Lybrand receive
completed forms.
MR. GUERRIEROt Are you going to pass
those out?
MR. BUCKLEYs I will have copies
drawn up and make sure they're distributed.
MR. GUERRIEROs We have made our
presentation, and we would like to have
Mr. Pat Harrington sum up most of what we had.
MR. BUCKLEYs Would you like to say
something?
MR. DONAHUES Z don't care when. I
have a few feelings I would like to express
also when he is done.
MR. PAT HARRINGTONS (Attorney,
United Merchants) I am an attorney. I have a
law office in Fall River. I represent United
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78
Merchant a, but I think trhat I am going to say
that I represent nost of the people around tho
table hero who got together the other day to
sort of go through and try to prepare for tho
meeting here with the Congresswoman. Z would
like to say at the outset that having had some
little knowledge about government, I think that
CongresBworaan Heckler should bo thanked profusely
for being on top of this particular issue, and
I personally know what it takes to know all of
c-° the facts about a particular thing where you have
got 100 things in your office and the like. I
think you have done a great job here today. Z
think without her we would not be here today in
this particular delicate political natter.
One of the things that was of some
interest since it was first introduced to us at
a meeting with Coopers & Lybrand the other day
was this scope of the work on this Industrial
Cost Recovery Study that Coopers 6 Lybrand is
doing. At that time we obtained from them a
copy of this thing, and thanks to Ralph we got
a mizneographer, so we have had a chance to
-------
exanine it to some degree. It's a nine page
contract, and it's a very interesting contract.
I think the first paragraph or the first sentence
is worth quoting. "Primary objective of the
study is to examine with full public participa-
tion the efficiency of and need for the
industrial cost recovery provisions of the
Federal Waste Water Pollution Control Act."
Without going through the other nine pages of
things that you are supposed to change, Messrs.
Coopers & Lybrand, if you study those things in
the way they're set out here, we are convinced
that you're going to cone out with the conclusions
which have been expressed around this table today
because v/e think that the Congress and
particularly Congresswonan Heckler who raised
these various questions, which incidentally were
not available at the tine Coopers & Lybrand
originally cane in to talk to us, but wore sub-
sequently made available, if you address those
questions and you answer then fairly and honestly
with reference to the Fall River situation as has
been enumerated here today by people better
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80
qualified to speak about this than I am, I
think you're going to cone out with a report
that indicates that obviously this particular
I.C.R. does discriminate against us, does
discriminate against Fall River, and I think
all of the subjective, all of the statistical
data that you need should be there and available,
In that connection, however, we have some
reservations. We, at least I personally, have
had some experience with consulting firns, and
I realize they're doing a. big job and naybe
sor.etimes a broad brush treatment of a
particular subject which requires some inten-
sive on-the-scene examination. Therefore, I
would like to request and get a public commit-
ment, if I can, that before this report gets
put into concrete forn that a draft report of
this thing will be made available to this group,
a draft report of what Coopers & Lybrand is
going to submit, so that we can make some
intelligent comments upon that ^raft report.
We will make available to you the
record of this meeting, so that you will have.
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since you haven't taken it down yourselves,
all of the input that has cone through this
meeting. T7c would like to have a chance to
sit down with you and with the EPA before this
report gets sot in concrete because Z realize,
you know, the effect of these type reports on
the future action on this, and I don't want
the kind of report that says, well, we ran
through Fall River, you know, one Monday after-
noon, we listened to a lot of people, everything
was fine, and basically we give EPA what they
originally commissioned us to do. We don't want
that.
We want to have what we have said to
you here today in the record, and we want to
have a chance to comment on that record before
it becomes a Coopers & Lybrand report to
Congress.
Can we get that sort of commitnent
out of you?
MR. DONAHUE: First of all, I would
like to take the transcript of this meeting and
include that as part of our final report to the
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82
Congress because I think, if any significant
number of communities have spoken out as
forcibly as you all have about this issue,
it wouldn't be an issue.
MR. HARRINGTONS No problem with
that.
MR. DONAHUE: Secondly, the drafts
of all our final reports will be available to
you, and we will be glad to meet with you. I
cannot guarantee that the recommendations we
put in will bo to your liking. I am not trying
to prejudice this, but we call shots as we see
them. We will be certainly glad to sit down
with you with our draft report which should be
available by November 15th.
MR. HARRINGTONS That is fine. We
have no problem with that.
Who are you going to contact so we
will not have any problems with that?
MR. DONAHUE: Whoever you would like,
MR. BUCKLEYS I will.
MR. DONAHUES Fine. We will contact
Steve Buckley.
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83
MR. BUCKLEY: I will make those
copies of the report available to all of you.
MR. HARRINGTONi I would like to
offer this thought, too. That granted that
you're going to have a transcript of this record,
but if there are other matters or questions that
are raised that we haven't been able to go into
in detail, given the limitations of time and the
rest of it, I would hope that Coopers & Lybrand
would feel obligated somewhat to corae back and
c-° ask some other questions on the basis of the
*_ *"»
transcript that has been presented here today
of the various industries that are represented
and also the other industries which were going
to file briefs with you who maybe are support
industries of the industry which we are now
talking about, but I would hope that you would,
instead of leaving something up in the air,
come back to us and ask us for our thoughts and
opinions on that thing before you put this
thing in concrete and it goes back to EPA and
to the Congress.
MR. DONAHUEt Yes, sir.
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84
MR. HARRINGTON: We would also like
to have available to us any meetings that you
are going to have anyplace in connection with
this matter. We would like to know when they're
going to be hold and what the subject is going
to be. We would like to be on your mailing
list on all of those particular matters.
MR. DONAHUE: All of those are in
public. We have court reporters for all of
them and transcripts available for anyone who
wants them.
MR. HARRINGTON: So they may be
available. If somebody doesn't tell us, we
don't know.
MR. DONAHUE: Our next public meeting
is on the 31st of August in Washington, D.C. at
EPA headquarters at 1:30 in the afternoon.
That is a progress report by Coopers & Lybrand
to the Advisory Committee made up of the
trade associations, the civic groups, the
industrial groups and EPA.
MR. HARRINGTONi What will that
progress report be comprised of?
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85
Mil. DONAHUE: To tell them what we
have done, what we have found, and we also
would like to give a discussion of the engineer-
ing and economic approach in looking at some of
the cluster industries.
MR. HARRINGTON! Will there be a
written report for that group at that tine?
MR. DONARUEs There will be documents
distributed, yes.
MR. HARRINGTONi Can we get a copy of
those documents prior to that time?
MR. DONAHUEs I am not sure how far
prior to the meeting it will be finished. It's
not going to be finished until a couple of days
before.
MR. HARRINGTONS We have some interest
in attending some of these meetings. I don't
think you're going to get rid of us. (Laughter.)
MR. DONAHUES We're certainly not.
We are encouraging public participation.
MR. HARRINGTON: Do you have a list
now of the various meetings?
MR. DONAHUES The dates for the ten
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86
regional meetings will be in late September
and early October.
MR. HARRINGTONS You're going to go
back to your advisory committee in Washington --
MR. GUERRIERO: When is the one in
Boston?
MR. DONAHUES We don't have a date
yet.
MR. HARRIWGTONs Let me say one thing.
We have a very strong feeling that what input.
we give to you and what comes out of your shop
f '"«
;= is going to raake a great deal of difference to
this City and to the industries represented here
today, and so consequently, if ever there was a
report or a consultant type thing which requires
some real expertise, this is it. X think that
we would like to be part of that process all
along the way because we think, if we are part
of that process, we are going to coma out of
this with positive conclusions.
MR. DONAHUEs We would like you to be
part of that process. That is why we are here.
One thing 1 would like to point out
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87
as a caution is that as enthusiastic as
Congressworaan Heckler is about the issue,
industrial cost recovery, we are going to raako
a report to Congress through EPA --
CONGRESSWOMAN HECKLERt I am
enthusiastic about removing industrial
recovery cost.
MR. DONAHUEt I'm sorry. I nean.
Congress as a whole may or may not act on any
of our recommendations. She can speak very
vocally as far as removing industrial cost,
but it will be up to Congress to decide.
MR. HARRI>TG7Ol«: One other thing we
xrould like to address ourselves to is this.
There are two major issues. Can we get rid
of the Industrial Cost Recovery? Maybe that
la beyond the state of the political art. If
we can't get rid of it overall, can we get
a formula which takes into account all of the
factors which have been plugged in around this
table so that those older, urban areas where
they have a significant problem because of
everything you have heard here, because of
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88
imports, because of taxes, because of energy,
because of transportion problems, because of
energy problems, you name it, whatever it is
vre've got it, can there be a formula cranked
through in terras of a recommendation that says,
look, it nay be great, it's probably not going
to impact some communities in the Midwest that
is going to build a $10 Million sewerage treat-
ment plant ten years from now, it's not going to
be a problem, but for us right now you have a
$50 Million plant. As John Friar very eloquently
C-3
P= addressed himself to that problem, we might wind
up with two different things. We might wind up,
j— you know, nunber one, with a totally unacceptable
*-!-; thing as far as local industry is concerned and,
secondly, not any industry there to support the
plant. So you have those two things going.
Can we ask your agency to specifically
address yourselves to alternatives or* exceptions,
whatever words you want to use, and that is
spelled out in your contract right here.
MR. DONAHUE: The recommendation that
we are going to make can range anywhere from
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89
doing nothing, leaving the law as it is presently
written, to outright abolition or, you know,
somewhere in between.
MR. HARRINGTON: My guess, speaking
contrary to some of the other people around this
table, knowing something about how the federal
government works, all-out abolition does not
happen on any sort of thing you're doing. So
the question comes down to the final analysis
can we make through what we are doing here a
persuasive case for being — As President Carter
has said, you know, he is in favor of helping
urban areas and so on — can we make a persua-
sive case for exempting places like Pall River
from the impact of that I.C.R.
MR. DONAHUEt That could be one of
the recommendations we make. To use a formula
that says unemployment is over a certain level.
MR. HARRINGTONi Well, will you commit
yourselves to your oxen deliberations going
through that thinking?
MR. DONAHUE: Yes, sir. We have to.
We wouldn't be doing a good job if we didn't.
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90.
MR. HARRINGTON: I just wanted to have
it on the record that you are going to do that,
whether it's an affirmative or negative state-
ment in this report as to whether or not we
should be exempted or one way or the other. I
would like to see that in the draft report. If
we haven't made a case and we have lost, okay.
I want that said, but I want somewhere in that
record a statement that you people have reviewed
comments that we are making today. I an speaking
c~° on behalf of everybody, I think, in this group,
that you reviewed those statements and that you
have either agreed with them or don't agree
with them, but we should have affirmative state-
ments so when we go back to Mrs. Heckler back
there in Congress we can say, okay, we either
did or didn't make the case. Then, at least,
we know there won't be a question whether you
did or did not address the issue.
CONGRESSWOMAN HECKLER: That issue
seems to be settled.
MR. DONAHUE: There would be no doubt
we would address the issue in the report.
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91
l!n. GOERRIF1RO: You said there was
public hearings. Was there a notice in any of
the Pall Hivor papers? If there are public
hearings, who is directed in your office to
notify people?
MR. BUCKLEY! It wasn't a public
meeting.
MR. NOELt I think it needs explana-
tion. We have two levels of study that we are
operating on here. One at the local level where
we come out to Pall River or Woonsocket or
Taunton, Fitrhburg, r'emnleton, Massachusetts or
Portland, Maine. I presume, although I am not
too sure, Steve, you have a public notice to
inform interested parties prior to the meeting.
The meetings we are having in Washington, we
have an advisory group of people that are at
the Washington level, the American Frozen Food
Institute, the American Canned Food Association,
a whole list, if you would, of lobbyists at that
level including the environmentalists such as
the Sierra Club and Clean Water Action Project
and such things as the Association of
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Metropolitan Sewer Works Agencies, some national
and county officials, associations, and that is
the public hearing that Ed is alluding to that
is going to take place on August 31st and that
have taken place in the past.
CONGRESSWOMAN HFCKLER: So how can you
hope to get the true story from the people?
MR. 110EL: By coming here as we have
done?
COTIGRESSWOMAN HECKLER: Have you had
any other meetings like this?
MR. DONAHUE: Yes.
CONGRESSWOMAN HECKLER: Where?
MR. DONAHUE: All over. There is
another meeting going on out in Stockton,
California. Wherever there has been any inter-
est on the part of industry to sit down and
talk, we have net.
MR. NOEL: The other point, the
operation that is going on now ostensibly is
a data gathering one. Clearly, we are going to
listen to you as you speak to us, but the real
point to discuss the issue is going to be at the
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regional meetings.
CONGRBSSWOMAN HECKLERs The law was
passed a year ago. A year has gone by. When
did you cone up with this survey? Two weeks
ago?
MR. NOEL I No.
MR. OONAHUEt EPA gave a contract to
us in mid-May. It took us six weeks to try to
gather information which was the basis for the
scope of work for the contract. The beginning
c-° of July we went out to collect data, visiting
cities.
CONGRESSWOMAN HECKLERI You can do it
in six months?
MR. DONAHUE: What?
CONGRESSWOMAN HECKLERs Your job.
MR. DONAHUEz Well, we're a big
company. We think we can do it in six months.
MR. NOELi We have no choice. By law
it has to be in Congress in December.
CONGRESSWOMAN HECKLERI Like
Mr. Harrington said, we are not going away.
(Laughter.)
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MR.. DONAHUEi You know, we have an
interest. This isn't a conflict of interest.
We have an interest in Fall River. We are the
auditors-of the City of Fall River. We have
an interest in seeing that the City survives
financially. We would like to bo paid.
COHGRESSWOMAN HECKLER: Then you know
our facts are accurate.
MR. DONAHUE: We are heavily involved
in the private sector. All of our business is
with the private sector, very little with
government. It was an uphill battle to persuade
the EPA we weren't biased in favor of industry
as opposed to the environmentalists. So we
are trying to be objective about it. So we do
understand the business world because we are in
the business world.
MR. HARRINGTON: But you stand the
chance the EPA could submit a report which is
different from yours on the basis that it is
difforent'fron what the agency hires you to do.
MR. DONAHUE: We do not intend to let
EPA sanitize our recommendations. We wouldn't
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sit otill for that.
MR. NOELs If we did try to do it,
I know what would happen. The report ia being
done for Congress, not for EPA.
COMGRESSWOMAN HECKLER: I will say
I have not heard of this advisory group, and
I want to know what is the membership on this
advisory group, was there anyone from this
sector of the economy included, can it be
expanded, because I am quite surprised to know
that that group exists.
MR. DONAHUE: It is a group of 35
organizations.
COHGRESSWOMATJ HECKLER: I am just
worried about what the relative weight of
various individual interests would be on a
competitive basis. I am going to look at that
list very carefully. I would just like to say
I think we are all about finished.
MR. KEN DDFAULTi I take exception
to the faet that I had to be notified by my
Congressman, which I appreciate very much, but
1 don't think it's your responsibility, and I
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got a call from one of the industries. I
figure it's important enough for my people,
if you're doing a study, that you should at
least communicate with the people by whatever
method to let us know what is going on, so I
think we're starting off on the wrong foot,
number one.
number two, does your study include
looking into the requirements of EPA itself?
I mean, we're talking everything after the
c-r3 fact. One of their requirements is take dye
out of water which is scientifically impossible.
It can't be done. It's not a question of want-
ing to be done. It can't be done. Someone
front EPA in their wisdom, whether it was a
consultant firm, did an in-depth study, I
assume in a phone book, and cited Duro as one
of our more serious polluters. They're monitor-
ing on their property, and they haven't violated
anything yet, which leads to insurmountable
problems,"'and they're not polluting. I took
part with Mr. D'Amico from Duro with EPA, so
we're assuming the gods have spoken. You can't
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take dye out of water. How can this study be
effective If you're not even checking what
they're doing?
MR. DOMAHUEs We're not environmental-
ists. We're businessmen. The study asked us
to address the cost to industry and to local
governments to administer because of the cost
recovery. We are asking people what they're
paying for pro-treatment and what you're liable
to pay for pre-treatraent. We're making the
assumption that is one of the costs that has to
be factored in determining whether the cost
recovery is there. We can't change pre-treatment
standards.
CONGRESSWOMAN HECKLER: That is not
within the purview of the study, unfortunately.
MR. DUFADLT: Well, it should be.
MR. DONAHUEt We're accountants, not
engineers.
MR. DENNIS ORVIS: (Chamber-of
Commerce) Three quick comments to back up what
Pat has said about the modifier because that
is probably where this Z.C.R. might end up.
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One is that the majority of our larger companies
in Fall River are owned someplace else, and the
decisions on those companies will not be made
in Pall River. We have many splendid plant
managers fighting very hard to keep the companies
going in Pall River, but the decisions aren't
being made here. Industry makes its decisions
down the road four or five years. This new
plant won't be on line for three or four years
or whatever the time is, so the decisions being
made today affect the companies that are in town
now, and we hope they will be here five years
from now.
The second point is that I have been
in Pall River 19 years. The lowest unemployment
rate Z have seen was 5.9 percent. It's been as
high as 14. We haven't been the highest in
Massachusetts, but we have been in that
distressed area for as long as my memory will
serve in Pall River. At the same time, CETA
is spending over $7 Million a year in Pall River
training and finding jobs for people, so it's
been said before and it probably ought to be
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repeated here that we're walking on thin ice
here in Pall River. It nakos no sense for the
government to spend $15 Million finding people
jobs when we're talking about a small item to
keep the jobs here in the first place. I think
these are all important to what we are trying
to do.
MR. DONAHUEi Someone mentioned plants
that were considering expansion or having
second thoughts about it because of this and
other factors. That is particularly on this
industrial survey form one of the things we are
looking for. If you read the legislative
history that goes with the act, unemployment
particularly in older cities with distressed
economies is something we are really looking
for, so somebody, please, come up with informa-
tion showing v/here somebody has decided not to
expand production or cut back on production.
We really would like to get it. We cannot say
it's going to be confidential because one of
the disclaimers we have to put up front in
order to make this a convincing report, the
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information supporting it has to be public.
We can't say to them this is the way it is and
then we can't give them any of the financial
data to back it up. Z realize people may be
disclosing information they don't like to dis-
close. They have to make that tradeoff. Any
information we get we don't Intend to identify
specific companies in our report, not without
their approval anyway, but the general counsel
office from EPA has Informed us under the
Freedom of Information Act anything we collect
in this study, if sonebody asks for it, we can
give it to them the same way you're asking for
transcripts. Anybody can ask for it. So if
you have got the data and you don't want it
disclosed, then, please, don't give it to us.
CONGRESSWOMAN HECKLERS Hell, I think
we have covered —
MR. BRIAN JAMES: (Mass. Divison of
Water Pollution Control) I have worked with
Mr. Swan... be fore. I don't know if you remember
me when I used to be out taking samples in the
Lees River area.
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Industries are going to have to be
burdened with coots which have been, you know,
intimated here, not just on the I.C.R. system,
but enforcement of the sewer use ordinances.
These are very basic. We have to protect the
collection system. We have to protect the
treatment plant, the pumping stations. Next in
line is going to be possibly even more stringent
pro-treatment standards. There are a lot of
costs that these industries are going to have
to be bearing.
As far as the Division is concerned,
the I.C.R. system is a cost which we consider
probably at this point in time very excessive
because a lot of the industries are going to be
hit in a relatively short period of time with
major expenditures. We are more concerned with
getting the treatment plant on line, getting the
various industries to have compatible waste*
so that a $45 Million project down there is
going to do what it is supposed to do. Other-
wise, we are just going to be blowing away that
$45 Million.
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I feel that the Division has attempted
over the past 10 years to assist industry at
least to a certain degree. We tried several
years ago to have low interest loans for
industries, and apparently it was ruled
unconstitutional. Chapter 700 and 701, these
are where incentives are given as far as defray-
ing taxation and write-offs of equipment
associated with pre-treatnent facilities.
The Commonwealth is very much concerned with
industry. We are also very much concerned with
the large urban centers. We are developing our
priority list.
Right now we are basically taking the
federal money which has been assigned to the
Commonwealth of Massachusetts and allocating
it throughout the Commonwealth. A very large
amount of this money has gone to the major
cities. Fall River is one of two major
projects for relocation work as well as for
waste water treatment facilities. . I can
sympathize with you. We have our job to do.
We are mainly concerned with getting the plant
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built, trying to protect the environment and
something we can all live with.
I feel that as far as where we are
going at this point in time, Z think Z would
take a hard look to see what the ramifications
are going to be. We have had several major
treatment plants in Massachusetts where they
were designed for such loadings from industry,
and then all of a sudden the industry folded and
moved out of state. Zt creates a lot of problems,
Z think Z would also like to submit —
we will be submitting a formal statement for the
transcript.
CONGRESSWOMAN HECKLERs Z do appreci-
ate that. Z would like to say really for myself
we are going to have to take a very hard look
to see where we are going to place our priorities,
We do need a pure environment, as pure as it can
be compatibly with a growing economy. Frankly
speaking, as one who has served, Z voted for
environmental bills in Congress and with great
interest and firm support. I feel very strongly
that we squandered some of our best assets, but
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I really have to say that ultimately on this
issue and on other issues at this point the
survival of the economy is my first priority.
This has to be made compatible with the
environment. But, if people don't have jobs,
pure air and pure water are simply a luxury
they can't afford. Frankly, I think that this
is going to be the priority that many members of
Congress feel, but certainly any of us from
Massachusetts will have to take a hard look at
where our people will be employed, what job
opportunities are open for them and how we can
preserve that while seeking environmental goals,
and we do have to seek the environmental goals.
I am personally delighted the Indus-
trialists came today and the members of labor
and the labor representatives who spoke. I am
grateful to the representatives from the state
EPA and our regional office. He hasn't given
me his full title.
Mr. Donahue, I am delighted that you
are involved with the auditing of the City of
Pall River because you can verify the accuracy
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of the comments made.
I feel very strongly the purpose of
the amendment thai; I introduced was to force
EPA to take a hard look at the environmental
consequence of the X.C.R. I have received an
education from the people at this conference
table. As the figures emerged and as my
enlightenment proceeded, I could see there was
a tremendous struggle for survival in the City,
and this was a major factor. I am not inter-
ested in having a hearing for the Cityi I am
interested in finding a process of problem
solving. I am a bottom lines person. I want
to know how we are going to get from here to
there and how we are going to find an answer.
So, I guess we're going to look for certainly,
barring all-out success, the elimination of the
I.C.R. Barring that, we will look for alterna-
tives and options. The problems of the City and
the accuracy of the statements here we don't
need to enumerate on. I do feel that there is
going to be a sincere effort on the part of
both EPA and the consultants and all of us to
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work together to resolve the problem. As I
see it, the crux of the matter is the data
gathering and the suggestions, solutions, the
options because this is a critical natter that
is critical for the future of the City, and
without it we are not going to have a tax base.
Massachusetts will not have tax revenues. We
will not have the money which we would need to
do the good things that need to be done in
society including improving the quality of the
c-° air. So, I will continue to work with you, and
I thank all of you for your time today.
[Applause.]
[Whereupon, the meeting was
adjourned.]
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