BUDGET REQUEST INCREASE

Senator ELLENDER. The amount available for this purpose in fiscal year 1969 was $2,406,000. The request for fiscal year 1970, based on an appropriation of $214 million for construction grants, was $3,050,000, which provided for a total of 267 positions.

Congress, in increasing the appropriation for construction grants from $214 million to $800 million, also increased the appropriation for construction grants administration. I note that you now indicate that for fiscal year 1970 the sum of $3,798,000 is available, and 358 positions.

Would you show the adjustments made between the budget estimate and your adjusted base for fiscal year 1970, showing how much was added by Congress and other adjustments to meet pay cost increases and other increases?

Mr. PILZYS. Senator, briefly, in this situation, if you recall, the Congress increased our appropriation from $214 million to $800 million. They also included a million dollars to support 156 new positions which were intended to take care of increased workload as we saw a three-fold increase in the grants program.

Late last January, when the President decided that he was going to give the $800 million, it was also decided that, instead of a million dollars for this fiscal year, we would be permitted to use $600,000 to support 90 positions. Some of the thinking in this area was that it was so late in the fiscal year, it would be difficult for us to plan for work that would not materialize. However, this budget before us does provide in fiscal year 1971 to utilize the extra $400,000 that is provided by this committee and Congress in 1970, in addition to the $2 million we are asking for in the 1971 budget.

Senator ELLENDER. Are you talking about the budget year?
Mr. PILZYS. For next fiscal year, 1971.

Senator ELLENDER. But I mean, the committee added funds for grant administration last year.

Mr. PILZYS. For the $800 million program, yes, sir.

Senator ELLENDER. How much more will you need actually?
Mr. PILZYS. For 1971?

Senator ELLENDER. $214 million as compared to $800 million?

Mr. PILZYS. That is an increase of $586 million for the construction grants program. Now, as I indicated, we are to provide the million to support 156 new positions, in support of 1970. However, because of the delay in commitments to use these funds we have only been permitted to use $600,000 and employ 90 positions. However, we do anticipate the full impact of the workload in 1971 at which time we will be permitted to use the $400,000 which is still available in 1971 in addition to additional staff that we are requesting here and additional funds to go with it.

Senator ELLENDER. A request for fiscal year 1971 is $5,883,000, which represents an increase of $2,085,000 over the adjusted base for fiscal year 1970, including 108 positions for a total number of positions of 466. Although there is no budget estimate for construction grants this year. I note that the administration's program is based on $4 billion over a period of 4 years, which would indicate an average level of $1 billion a year.

Would you discuss the necessity for an increase of about 67 percent in the funds requested to administer a program at a $1 billion level compared with an increase of $748,000 when the Congress increased the level for construction grants from $214 million to $800 million.

I guess you have answered part of that question already.

Mr. PILZYS. Yes, we have, sir. In this kind of program, I would like to point out that the big impact on the new appropriation such as $800 million appropriation really comes about in the following year when we have to make reviews of plans and specifications and subsequent inspection of these plans.

This is why the tremendous increase in 1971 and it is all not related but presumably is a billion-dollar program that is being prepared for 1971 under new legislation.

There will be some incremental increase, we think. However, we are still reviewing the situation.

Mr. JENSEN. We must also give more attention to the design of these plants than we have in the past. Again it was mentioned that we contemplate regulations which will call for some sort of minimum design standards. This we have not done in the past.

Mr. PILZYS. This was one of the criticisms from GAO, the operation and maintenance of these facilities. We haven't had adequate resources to look into this area which we do propose with this increase.

REIMBURSEMENT OF CONSTRUCTION GRANTS PROJECTS

Senator ELLENDER. Last year in explaining your need for an increase, you said that the 1966 amendments provided for reimbursement for the construction of any treatment works initiated after June 30, 1966. This year, there is no mention of the 1966 amendments relative to the reimbursement for treatment works initiated after June 30, 1966.

How many such reimbursements were made last year?

Mr. JENSEN. I believe there were no reimbursements last year.
Senator ELLENDER. Why was that?

Mr. JENSEN. The basic construction program exceeded the amounts of money that were available to us.

Mr. PILZYS. I think, primarily, when we are talking about last year, I assume the 1969 fiscal year, the level was so low that none of the States chose to take their allocations and apply them for reimbursement purposes. We do expect, though, in 1970 and subsequent years they will submit such requests.

Senator ELLENDER. What is the reason for omitting this reference in your justification sheets for fiscal 1971?

Mr. PILZYS. It was not intentional, sir. We do have the reimbursable program and it was, as of December 31, a total of about $814 million as far as what has been accruing in terms of possible awards.

Senator ELLENDER. Will you put in the record a statement concerning these reimbursables?

Mr. PILZYS. Yes, we can. The Commissioner just pointed out to me that as of December 31 there was actually $322 million that was earned by the States and local communities, which means that if we had the cash available, we could pay $322 million, although there are $814 million somewhere in the future.

Mr. JENSEN. The difference between these two numbers again is a construction lag. It takes a long time to build a big sewage treatment plant and although the plants that are now being constructed will cost us $814 million when eventually completed, thus far only the $322 million has been spent on them.

Mr. PILZYs. I think it is important to point out, Senator, that we do not make a payment to a community or State until a certain amount of the facilities are in place. Our regulations call for 25 percent before we make the first payment. Twenty-five percent of the facilities has to be in place. Certainly it can be 25 or 75 or 100 percent. We pay after the fact rather than before. This is why the lag in payments.

Senator ELLENDER. To show that the State is doing its part.

Mr. JENSEN. We also like to look at it to make certain it is really there.

CONSTRUCTION GRANTS FOR WASTE TREATMENT WORKS, TOTAL REIMBURSABLES AS OF DEC. 31, 1969 [In millions of dollars]

MULTIMUNICIPAL OR REGIONAL TREATMENT SYSTEMS CONCEPT

Senator ELLENDER. In the paragraph on "Need for Increase," you state that you avoid a proliferation of small inefficient systems that increase costs and achieve less than optimum water quality, communities are being encouraged to join together to build multimunicipal or regional treatment systems where feasible.

What success have you had in this direction?

Mr. JENSEN. It is very very hard for me to answer precisely how many areas we have been successful in. What we have done is, through the regional offices, continually try to encourage communities to look at this concept of regionalization and if it comes to our attention that there are two plants being right next door to each other, we would go back to one or the other community and say, look, this isn't in the public interest. You ought to try to get together and I really don't have a way of measuring how many times we have been successful through this device.

Senator ELLENDER. You certainly ought to be. You hold the purse strings, more or less. You might be able to give them an idea of what they ought to do and should do if they are to get the money.

Mr. JENSEN. Yes, sir. It helps.

Senator ELLENDER. It is a good lever.

Mr. JENSEN. Yes, sir. We are using it.

Senator ELLENDER. I know. I am used to all of that.

As I recall, a regional system was developed for the Cleveland area, and shortly thereafter several communities that had indicated a desire to participate in the regional system withdrew their support.

How many regional systems have actually progressed to the point where the local communities have approved bond issues for participation in such a regional treatment facility?

Mr. JENSEN. Again, I don't think that we really have a good answer on that.

Mr. PILZYS. I think one of the problems where we may not have all the answers in this area is that in the past the large communities have funded their projects alone because of the limited amount of Federal funds that have been available. However, I do think now and in the future we would play, we have to play, a great part.

Senator ELLENDER. Yes.

Mr. JENSEN. Sir, it also takes two to cooperate and the big community and the little community both have to want to do this and if one or the other is reluctant, particularly out around the fringe of it, it is very hard to tell whether you really have succeeded or have failed in this regionalization concept.

Senator ELLENDER. It is hard to get municipalities to cooperate. Usually they are jealous of each other and, of course, that is true in Fort Worth and Dallas area, I guess you know the trouble they have had there, and yet their corporate limits are 10 miles apart.

Mr. JENSEN. We do want to point out that we again are proposing new regulations which will encourage the communities to join in regional systems if they are to receive Federal grants.

Senator ELLENDER. You certainly have the power to do it and where feasible it ought to be done irrespective of pride and jealousy. It ought to be developed.

TRAINING

Senator ELLENDER. The justification for "Training" will be placed in the record.

(The justification follows:)

An adequate supply of trained manpower is an essential ingredient of a successful water pollution control effort. Manpower needs exist at all levels of government--Federal, State and local-- and private industry. Those needs must be assessed, and action plans must be formulated to meet the needs. Close coordination and cooperation among government, industry and educational institutions is required.

FWPCA has a multifaceted manpower development and training program which is described below.

1. Grants

(a) Training: Fiscal year 1970, $4,020,000; fiscal year 1971, $4,650,000; increase, $630,000.

An additional $630,000 is required to support the renewal of professional training grants made in prior years which have reached the end of the initial project period. This will permit the continuation and expansion of proven programs which are producing needed new professional personnel.