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PESSS COHFERBNCB
by;
Y^^LTtTf^iy Td fu ^ T?^ V ^? <^ ^rtT)
J©3aa Js0 ^ »KL»SS JKo
Deputy Aela ^istrator
U0 S0 Environments) Yotectloa
12; 10 p0at
esday.,, . July, 10 1
Enviroaaental Protect ion
Washington s D0C0
The above-entitled press
was coaveasd,, piarsuaat feo aotic®,, at 12; 10 P<,
"OCr
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MB, FFfiS?mi'KB: This noraing ?;e will have
a teioflng froza John E, ^aas'.lesj «7r.& Deputy Mmii^Ui
$B fc&e construction gyauts program,,
Mr. Qiiar&es.
£SR. QUARLSS: Ho*?? do you do* The purpose ©f
is simply Sox me to have an opportunity to meet T?ith you
and go over tJie psrog'sress which \vc have made in the
tiott gysats program,. wMch As cleas?J,y oiae o^ the major
a&d most importaat programs of t&e ageacj^0
We aye aanoimciag today that the Snvi^onmeatal
Protection Ageaey has awarded over 800 grants totaling
approjcisiately $1.2 billion for tfae COBStruction of municipal
wastewater treatmect facilities during the last xive
moaths of fiscal yeax1 1974. This bripgs the total amount of
grants awarded to $3, .4 billion in over 1S000 cities & ad
towns across the eouiitry du?iag tfee fiscal year.
This upsurge in the amount o£ coaot.s'y.ctioB graats
awarded du.?iog the last give months is indicative of ous1
total program efi'orto
We are ov©yc.ossing tlte complicated admisistxsi tive
aspects of this program,, It is foeginoiag to rim sraootalyo
The Desalts are evident aov/ la terms of projects actually
iQitiatedc,and giesnts awarded 0
The entire construction grants program
by the 1972 Federal Water Poiiutioa Control Act
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development oS a completely new set of basic adain;ls
«;r a t i ve r eg-a la t ieis»
A restructure Ing of the old grants program had
to be undertaken to encourage the use of separate grants
for planning, design, and construct Ion j, and to meet a
of other basic requirements spelled out la the Act.
ETe?/ requirements were iaposed for sucfe activities
as sewer system evaluation^ industrial capital cost re-
covery, industrial pretreatiaent of ei'fluents and user
charges0 Delays were experienced as ^e implemeated these
aev; requireffients0 This process included e&teaslve coBsulta-
tioD with iatex-ested organizations,, includiag particularly
officials of state ageccies acd municipalities.
la. the course of this process, literally dozens
of vital techaicalj legal9 aad administrative issues had to
be thrashed out0 Aad I am confident today that we have the
construction grants program on track; that we have passed
through the transition period necessitated toy the aew law;
aad that the program will continue to move ahead vigorously
in the months ahead,,
As the program-is-expanded, a large part of our
current effort is devoted to the planning and. design phases
of waste treatment plant projects before the final construc-
tion grants are awarded,,
This inevitably involves a large zmiaber of grants
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hai'ifig a relatively small dollar value, foist which w&ll lay
the boundstioa fa? major £uttir« projects. This GOT stepped
approach to funding was introduced on a large scale fr/x*
the first time during this past fiscal years
As a results tfce $1,4 billion awarded to mianici-
palities ia fiscal ¥ear 3.974 reps-es(5iitss in many cases,,
only the fajrst phases of activity on raaa^ jxrojeetSo We
estimate that the total of Federal gx-ants eventually awarded
to these, projects will exceed $3 billion as they eater tbe
cosistsfuctioa phase,
This projected .figure represents the highest
aaaual dollar level for projects initiated elace tfee program
was started ia 1S5S. As you may be aware „ uade?: the rules
that we followed prior to enactment of this new la's?,, the
initial graat cove?e^ tne entire project, including coastsruc
tioa, even thougfc the desiga work had aot been doaesaad the
planailcg worfe o£ten had aot been doae at that point, so it
is ia this sease aa understatement of. the progress by tfee
figures of obligations.
As you may know, t?e have allotted $9 b:illioa to
the States in Fn9738 -74, and -75 funds for obligation to
sew jpx-ojectQ. To date, we foave comwitted a total of almost
$3 billioa of these fuads. We expect that much of the s?e~
maining $6 billion will be committed in the neat twelve
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Therefore, its the immediate futureP v?e do 2O"i cee
sigailicaat limitations being placed oo this program toy ea
insufficiency of Federal funds„ But trtiile the total Federal
construction grants program is not money-1 Ami ted $ we are co>n-=
ceraed about local plaaaiag and
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0
$1,2 Mllioa gor olde? projects o.« v/hich construction was
initiated duriag the 1066-73 period, and wfcicJi are eligible
Total gz'ant awards during Fiscal 1974,
exceeded $206 billion, including ou.? reaabursable pr
£ fisa also happy to report that cash outlaws to
t jfecipients exceeded $1.5 billion du.?iag the pest fiscal
yeasr » Of this amount, approximately $?00 jaiiliou was paid
to reimbm-ssbie projects, Tbe $!«,5'_bi3Llioa cash outlay
figure is more tSian double the amount ever paid to our
gsfaatees ia a siagle yeaff.
Sa closing^ let me tvum to one special ares of
the construction greats ps'ogram: cleaning up the Great
Lakes, Tije Great Lakes agreement between the United States
aa<3 Caaadas signed OR April 15 „ 1S72S called for several
joiat actions to clean up water pollution la the Lakes,
After our recest progreas meeting with Canadian
officials in May, we were able to report that all of the
municipal waste treatment construction called for 10 tae
Great La&es Agreement •will toe underway or completed foy
Beeesabes* 33Le 1975.
By 1978, the systems In the Great Lakes ases w.l!
be providing adequate sewage treatment :?or fifteen aillioo
people 9 oy ninety-five per cent of the populatioa served fey
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7
that region's municipal sewer systems*
As of June 308 1974, $720 Billion in the Federal
funds had been granted to 189 projects in the Great Lakes
States0 I might add that tbe single largest plant to be
constructed, in Detroit, is scheduled for completion in
1976.
In summary, total activity in our construction
grants program has picked up considerably during recent
months and we expect this trend to continue in the months
ahead„
We have established a solid basis to carry forward
a program that can deserve the respect and support of the
publics a program that will give the taxpayers their Honey's
worth, and a program that will mafee our water clean,
Before-, turning-to. questions, ,X -would like $Q
add one or two reiaarks8
First of allj, this problem has been a difficult
one to implement and carry out0 As I indicated ia the formal
opening statement, we have faced a great many administrative!,
legal9 technical problems. They have been controversial,
aad they have.been difficult.
S don't mean to suggest that we are satisfied
with the level of construction activity occurring in this
country. In our judgment it needs to be a great deal higher;
and in our expectation it will become higher*
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8
The point that S aia iyyiog- to raa&e, however. is •
tfeat ausGh of the essential auts-and-bolts development worfe
that has to go into tbe development of a p^ogyara aw faas been
accomplished j and we believe that the program is on a basis
where it caa go forward.
•I would iik© to coiameat ©a the tv/o charts that,
2 bc3ieve9 aar« in yorn- package,, and also are her© oa either
The .vightfeaud c&a>t over &e.?e shows a. total out-
lay which la effect wbtiM Imve occarffed oa the basis of th©
eoostruction that was beieg costploted during- the. fiscal
years covered.
If there had beea a full ftuuUng, so that we
\?ould act have had this carryover o.f reisibursab3.es. In
othes* words, if the fuadij^ tod been there to cover the
bursafoles as they carae due, this :ls ou«r estisaate on a a
approximate basis of tfee levels of outlays that would have
bsea made.
I do eapaasijae it is ou? estiaaate oa a a approxi
mate basis 3 because there io aa inevitable assouat of j^'.dg
aad uacertaiaty made in recpastructaag reteat might have foeeaa
But I think that tfee goaeyal effect a ad the general levels
that are indicated a.?e accurately x-epyesentative of what they
are intended to showj sad v/tot that does bear upas is that
it probably is as good aa iadicatioo as oae could get of t
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levels ©£ actual constructIOQ tfeat have beea occur2"ia*
<8uriBg the jjeriod of time covered0
This reflects the Federal frauds that wov&iti havie been
granted on those projects,; and 10 some respects,, the
increase is accounted for by the Increasing share of Federal
funding for individual projectss foxvfc most of the projects
on which saoney has beenpaid out ©re projects pfuaded at the
SO os* 55 pes- ceat ieveI0
That has beesa taken into account as an element
of the reimbursement, and so that facet of the thing is
really quite sssall atad virtually negligible,. What the chart
shows is a very definite9 very encouraging increase in the
level of consruction o.f municipal plants viewed in abso-
lute terms. Viewed, in relation to the scope of the job thst •
has to be dosSj, it As immediately apparent to us all that
this has only been nibbling away at the total Jobv aad it
is a tremendous amount of the remaining job that aeeds to
be addressed, and hopefully will be in the future0
Turning to this chart on your left, this simply
shows the actual outlays that have been paid out by the
Federal Government of £unds during the various fiscal years,,
and again it shows a significantly more steeply risiag carve
attributable to the fact that a large portion of the fund-
iagj, IB fact, was not paid oat but was collected in the form
of reimbursables until this last fiscal year when substantial
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10
levels ©3 re ijsb-ur sables have toeen paid out0
Oae other item that we will go into presumably
during the questioaingj and I will simply flag it and corns
back to it if it is not raised in the questioning concerns
the user charges„
As you may be awares -s?e learned ±a the last
couple days that the Geaeral Accountlag Office has rendered
an opinion stating that the basis on which v/e had planned
to administer the user charge requirement in their judgment
did not fully comply with the legal requirements, sad that
we therefore would be in their vie?; required to re-evaluate
that, and either change it or seek new legislation,,
How let me paiase at this point and throw it opera
to yoiar questions <,
QUESTIONi Mr, Queriesr specifically oa that
Detroit plant that you say is so large, are there aay problems
with its and have you begun coast.vuetion, aad is it goiag
to bs significantly different^ is there anything imlqwe
about it?
MEa QUAEl^S; The project in Detroit is the
largest single project in the entire great lakes effort,,
The full scope of that project encompasses Biany different
smaller projects ©r components ia the total plan.
That plan was developed following the 180 day
notice that was issued to Detroit immediately after EPA
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11
\vas formed in 10?QS and construction oa much of tas v/oyfe
tosen proceeding right along during the last several yea;?s»
5 am not peysoaaily fas-alias1 witfc the details os
»5 and X do not kaow of any problems foe lag ea~
•?„« tfeat, but tiy iafarisation is thafe it is goiag
ahead encouragingly, aa
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12
that show up suggestAag that water ia various areas xvaiiefct
have been particularly polluted nov? is gettiag cleaner and
better able to support fish life and be used for various pur-
poses of society,
Oa the other hand, in regard to the goal that is
set forth by the 1972 Water Act of installing secondary
treatment facilities for all municipal plaatss that goal9 I
think we aeed to recogniae nows is sjany years offc and the
broader objective of installing all of the facilities, ia-
eluding secondary facilities, and also including facilities
to deal with more stringent requirements where water quality
conditions dietateg and to deal with the combined se^er rua-
off problems,, all of. that will entail a program that doubtless
is goiag to continue for the aest 15 or 20 years9 and you ask
•R'hen SPA will be satisfied.
We will not be satisfied until that total prograEa
IB completedo I think it is reasonable to ®sspect teat
within the next three or four or five years,, the public
will begin to eajoy a very noticeable improvement in the
water quality of waer bodies that are most used by the
public,, and located whdre the higher population denisities
exist, partly because those are the water bodies on ^hich
major attention focused first, pre-»datiag the 1©72 act,
QUESTIONS': Mr0 QuarleSj on the user charge question,, are
you going to ask Congress to permit ad valorem taxes? Are
you going to require municipalities to install meters ami
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13
apply a meter charge?
MRe QEARLSS: I Relieve very strongly that At is.
totally unrealistic to eizpect meters to be installed in
individual households^, and 2 do not necessarily read the
GAP'opinion to call £o& that or to think that others ia
Congress expect that; so the metering issue is iis some
inspects a red herring*
But the question that is very botherso&e, and
is a much more realistic practical problem to the city and
municipal officials involved, is the question of what changes
T&ould foe required in their current stsuctu^es i'oy raisiiig
revenues»
If they are required to abandon the current
structure for raising funds aad establish a totally new and
separate administrative procedure, thea that will be a
process which I espect r?ould require several years for
jaany of your cities to carry out.
This could hold back very seaiously coastructioa
projects, depending on how the requirements '-are applied.
We are going to revie\? this issue a great deal
more than we have had a chance to yet* We are going to try
to work out requirements on which the laser charge require-
ments caa be met with as little disruption as possible, tout'
still consistent with the legal requirements. And that may
well mean that ^e will seek new'legislation.
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14
1 I thiak we probably are goiag to need aew
2 legislation,
3 QUESTION: ^ caa you give us sore explanation of
tfeis user charge issue^ the background,' a ad ^kat was the law?
S MR. QUARLESs I will be very glad to trys but
6 it Is a very complex issue„
But the statute s^ulres that esch grant for a
municipal waste treatment plant may., after June 30P 1913.,
9 had to contain eoaditioas requiring tfaat the muaicipality
establish a user eliarge system uadei* which each recipient
13 of the ^aste trsatmest services would psy "its proportionate
S2 share" of the costs of running that system.
13 The issue presented is wteat esactly does t&at
14 mean to & Emaleipal system. And it aad bcea^ I think, clear-
ly understood and clearly agreed by all coijceroedj, and I
16 was iavol^ed ia tfeis as far bacis as I960 ia developing pro-
17 posals for ssmeadmeat of the la^9 but there should b© some
systeia under wSsicfa municipal sewage district • commissions or
19 the other bodies rmmisg a siuaicipal waste treataeat plant
would have a fiaa£jcial independence and streiagtJa obtained
21 from collect ing user charges for the services that they fiwalsfe
22 ed aad also a system that ^ould place oa the polluters th®
2S Ijiardea-of payment for those services as aa iaeeative to
24 easourage them to reduce tae total flow of tfesir pollution.
2S The particular focus ia most of this earlier thought
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15
the industrial, dischargers because they have got the
;t ©ppcKPttaaities to Fediaee the pollution i'low a ad because
they aceotsst .toy a sign if leant part o# many mnicipal
systems, a part that in the gasfc lias been subsidises fey
the geaeyal tax authorities., and this is or has held
£
back the building and operation OA treatment plants aaci in
' ' or<3er to provide mm1® of a fais? equality c£ financial
betweea the industrial dischargers that discharge
into the aavigatole waters and have to treat tJleir
effluent by t&amseives aad t&ose t>iat are discbargiag in
16 the Biuaieipal
•so
We adopted an ag»p?oac& several months ago jarovitS«
that t&s user charge ?e^uis*emeats cowld be satisfied
ia our vie?; if a nnmieipality v/ould specify that
categories
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16
ae eseeasive aome wiaicii «>©rkans
«• «^ J*{
2 might have oaly &&e same effinest as a much less
3 home a ad one that wuld have a smaller ac? valorem
4 It is our feeling that the administrative six
5 city of this appyoacli recommeaded very highly its usep anfi
6 that ia terras of total fairness this was eot feelag unfair
7 asd tltat ia tesras of carry lag out the basic latent a ad p
3 pose of tlie statute^ It PJQS wit&ia that latent sod
I believe tliat is a reasonable -interp
10 the statute„ It was aw effort oa owr part to take one of these
relatively rigid requirements o.f the statute aad try to
12 apply it in a practical sisjsaer so that the program coi^Ic
13 move ahead of build log these waste tjreatsieats and act be
lag held back iby a lot of red tape and other esteraa! s
15 meats0
16 I believe that makes sease. I believe that
57 aad ^hea we aaaoiaaced that this \?as an approach -we wss
t© take A ad pSaaiaed to takes «»e received fyom inaay
of tfe public work® committees their eadossesaeat aad support,
20 However, we did sot sreseive iiaaaifiiows
21 aadS stapport. The issue was refesred to GAO, sad tkey
k this legal ^evi©^;, resultiag in their coizslsasio® that
23 it is not & proper appr®aeh0
fs M^o Q«arless isart that GAO report
23 aimed at aa ad vaiorera tax on. tiae iaolustrial users ia the
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17
Chicago area rat&ea* t&aa residential users?
MS. QMELSS: I thiak the GAO report does not
3
specify whether or aot it is aimed at industrial or x
4
a&<3 the report does eoataia l&agusig® saying, I
believe,, tkat is the SPA wishes to use tee a<2 valorem fcas
at alls, hich prohibited Step 29 Step
3 contractiag ia a lump?
16 "X QUISLES; Ho,, altliougb tte t Is another sig-
-J-0i—'• issue that arose. Winat 1 was yeferyiag to ia
is simply tfee fact that there s?er® a great aiaay
ia the way we had beesa running the programs
20
a© a result of specific statutory sfecjtti^eifjefits contoiaed ia
the
Tlsese iacltide, fear example, reQuiremeats that is
filtMtlos iaficsw aoalysis bs siadej. 2'eqyiremeats that th©
s
24
grants fee carried oat oa a step basis9--aad that ao^oastraction
25
'tee awar<3e
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18
a ad apgHravedj, ffe
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19
graats made of FY75 njc>aey? but it is a siiaute ;?raetioa of
ttee total0
3 As yow know 3 ,wh©a we mafee act allottmeat of total
4 filed® to the various States,, they tfeei* develop a prior It,?
5 list of how to use that moEcy for specified projects within
their States,, mad they can do it ia aa order through those
lists., ^?J&ieh aaturslly uses up the 73 jaoaey before the 74
ffioaey before the 75 moaeya
There can fee eseeptioa® to that, but generally they
move aSaeacU Za a few states tfeere have teeea some limitations
©E a total a&ouat oi' fwjads available. la those statesB
12 they faave p?asteed forward tb® tase oij 75 money aore or
iadivMual projects saight feave jusaped afreads but ia a
gareat csaay states,, there was sal doubt as to whettoes1 tbey
15 would fee able t© complete the WB.S et/ea of 73 money before
tfeat expired; aati ia states gsaearally through the couatry
17 they are sow ijartwap- tMrougii their 74 Ea^ney,
YOM caa get a general perspective ©a that if you
realize tfeat, the iaitial allottmeat vas $5 billion; that
20 «a© $2 billioa 73s aad $3 billion of 74 ssoasy. That initial
allotts&ent of $5 billioa/ we have aoi7 obligated $3 billioo9
22 so we ©re ia a sease oveysiaiplifiyiag It all the u«y tferoisgfo
23 ^j^e 73 moaey a ad & third of the *?ay throagh the 74 iaoaeyp
aad ee have BOW got $4 billioa oS '15 a»Bey that lies aheadu
25 QUESTION II the adaiaietaratiofii teda't ir&pouaded
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3
5
e
8
to
1?
12
13
14
15
ie
17
2©
22
23
1 your Esoasys laow «lif Cerent wo«ld the. fcijae table feefi aac! i
l wrtioH £«B»«-h<&Ef« aj.0og would you
i. QOAIUL&S: It is difficult to aasraep tfee
I $tb 1 rfi v'f^Xr'^Mli^G*
JTJlt?B T.O*£- <•»- p t*M ^*yi5 iiiiV> A CijAiSi -"i *^-^*^* lni'ir**a 0
The lesei of f^nds tfcat Iiave beea available
©bligatioa teaveB geaerally epeafeingj, beea safficieat to
| off of obligate all acceptable applications... All
I
tfcat have toeea submitted to iss ia. proper
feeea a
There a**e two €j«aiifieati©S2S that are si
is9 as 2 indicated^ tfeere a^e apeeifie projects
&e eo^ats'y wliere tiae total fuacis available to the State
are so limited tiaat they have lield back ciertaia projects,
pe^teaps t&e classic esasnpls of taatfl ©tovimjsly* ,1s tfee Blue
Plaias plant here ia Washingtea.
Another .project aloag tfee earn© lice is a laajoir
iastti€&gal ^aste treatment facilities to serve Las Vegas „-
asw! tbes-e tfee total fuads allotted to Heva^a. are
i :ia total asatd fuaciiiag fo? that project is aot great
beea soiae iafekibitiogs ia. Delaware p
ia Me^ Ifos'kj a ad im some of the other States, wfeic^ ia t&e
past fead de?elo{9@d mose aggressive progjcaias aacl
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21
? (j Swliy reacty tcs submit plans a ad specs aa$ obtain construct ioa
2
10
M
13
14
ts
8
,;. s© in some instances the fact that we had a surplus
of saoaey ©a a national basis did aat pa?eveat the result that
aa individual project was fesld back £«M* lack of adequate
raoaey „
The seeoad aspect„ aad a very important oaeff but
oae that is subtle and really is sot showing up yets aa<3
nevey will Ise able to be measured,, i3 the extent to which
it is iiecessafy to have the fuadiag out these, available,,
so that the gsaRicipalitie© &QOTO that it will fee there whea
it is seeded ia ordox- to eaeowage municipalities to go ahead
a ad do the planning worJs that is required at'fefee ^irat stagei
in order to ©Main a construction graat two years Iater0
£@r taialy it has feeea tr«es aad it still is true
that t&e amount of sioaey tiiat has bsea definitely committedfl
committed to this program Iseyoad aaj sort of
are aot moving abead at jsasiaisBi speed syea ^/hea tia©
i
holding has aot beea auffieieat to provide a wide apea iacea«
tive to everjfe«tdy to go aliead at iaajsimism speeds»
We .find in a g?eai jaaay eases tiiat
20 |
I
is available, aad oae of the ^eal ps-obleas t&at we are
grainpliag with a0v? is Jjow csa we get the muaicipalities £©
move shead witis tfeei? plaanlag work so that they eaa stay
as close to sskeehile as possiblee
There are ssaay difficulties that they have
-------
^itft, aael S asa not blaming thejas out that i
tlie &®ttleaee& Is
3
5
of that al&o is that they havart had
4
of what the Fe4$?a2, j?«qui5?emeats would Is®
t&eis State r ^uis-eia&nts won Id bs, so it asa w
system ttsiag, but t&afc is EJliers1 we are tryiss^ to put the
emphasis scar,, anel to ©osa® degree that ferns beee adversely
fey the 2u2w21ng &£&&&»
But it is a corjpectp real stateaieat, t&at ©1»
so
the iffljssoiaQdBiOQt iesae feao lia
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t&at f?lll a«ed to 'be completed at some jpo&iat in t
2 f utu^e, aad,, obviously as S&©B as possible,, before the
3 total job is done sad ££©se projects are cses 2o^ <5?ftlefo we
4 do not no® liave money available.
5 I feel a personal 'CosaSMeaea that the public
6 aad t&e Congress is goiag to &eep this program go lag and
7 that there •will toe fu&ding voted year sties' year-r ©a aa
8 iag feasis 4P 5S 6j, 7 billion donahs — I dca't Itaow what
it will fee »«• but tiaere will fee aoaey available eaefct yeas-
10 the future, 1 feel eertaisu
s I tMnic that the ireogirasi is geifig to
12 sjove a&eads aad municipalities eemld fegia t^e plaaaing
is acti«ipatiofl of tliato
Wfeat t&ey doa't feave aow is simply tfee
15 unequivocal assii^aaee t&at tlaat moaej ^ill bs
: .. So fou really expect thats to saove
1E0 QU&R1LSIS: 2 tMak what is s? eas«ssa&Ie fco aspect
19 is tfeat through t&e State plaaaiiag processs priorities
20 fee develttjpecl „ desigaating ttee mss1© mportaat projects
a wates? quality vie%7p«iat as fesiag at the top of tk© list;
22 aae* it. is reas^imble to ©specs; that progress will sovo a
23 la yegsra t© iiioae projects ^ecttijse tliey iiave got a very ?:«
espectatioa of obtaining fua4sj aud? ©f courses a
•25 sigttificaat part of tfce currcat fuads are beiag «sei3 to
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34
grants £y Saass fesallt
12
23 to iaafee theas
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3
4
12
«3
22
23
24
25
issras-s foseeme settled ©ace £0(8.
Q'OS&TION; ¥ms said you feel confident to j
this a live 0 Would you li&e to add the Mmiaistratioa?
1E0 QB&BLSS: Yes. Tfae Admiaistratioa will
£u&ds fe this prcigraao Zt iaas doae this la the
thoiigh^ as yena are all £ai» av;ares not to the level
of the espeetst,i@a vithia the Ccagrcsa.
The Adi&li&istratioa locks at tlaese gissjtl&ag isfsssss
v;ithin a cleares- perspective .of tfee limits tioas ©i1 the
total Federal budget tha®9 1 tlssiakp some eomiuittees in ike
s doj feat the A
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