Assembly Committee Conducts Hearing on NJ’s Crumbling Water Infrastructure

Almost 10 years ago, back in 2005 testimony to the Clean Water Council, I emphasized the need for a public investment strategy and outlined a specific 23 point regulatory agenda and financial solutions.

• Bottom line: It remains to be seen whether today’s hearing was part of a process of building consensus and political will, or just another sham Dog & Pony.

Last week, a package of water infrastructure bills authorizing some $359 million were approved by the Senate Environment Committee with no testimony from DEP and virtually no debate, something I complained about in this post:

• Environmental Infrastructure Funding Bills Continue to Ignore Climate Risks and Adaptation

So I was pleased that yesterday, the Assembly Environment Committee conducted a special hearing on NJ’s crumbling water infrastructure and a huge deficit in financing some $40 billion in necessary upgrades.

DEP was invited and kicked off the testimony by touting their various efforts during and after Sandy, including a new permit program to control urban “combined sewer overflows” (CSO’s), their bridge loan program known as SAIL,  and new “Asset Management Guidance”.

NJ Spotlight covered the hearing, but their story left out context and many important issues, see:

NJ’S ARCHAIC WATER SYSTEM: THE $40B PROBLEM IN SEARCH OF A SOLUTION

Since good testimony was ignored in the Spotlight piece, I figured I’d cover it here.

• DEP comes out from hiding – spin is over the top

DEP and the NJ EIT testified. Let’ just say they were not in any way defensive about criticisms of their policy and performance.

Instead DEP went on offense and took credit for a suite of major new programs, including CSO controls, asset management, “resilience” (what ever that means), SAIL (bridge loan program), and Sandy rebuild.

But no one mentioned the inconvenient fact that only a lawsuit by NY/NJ Baykeeper forced them to take action on CSO’s after many years of foot dragging.

Amazingly, as the DEP panel gained momentum in their testimony, it all got so over the top that at one point, citing Camden County as a model, NJEIT Director Zimmer  suggested that infrastructure investments would LOWER user rates – he implied that lower interest payments on NJEIT loans, more efficient equipment (e.g. energy costs savings) and budget CUTS essentially would pay the debt service.

For a $40 billion deficit? Are you kidding me?

I wonder if that’s the kind of “financial” approach that Zimmer pursued in his private sector days as an investment banker working in “structured finance”.

Aside from the ludicrous nature of Zimmer’s claim (i.e. free lunch, something for nothing, just borrow your way out of the problem with no real cost), in Zimmer’s mention of CUTS, I sensed a bit of what the international lending agencies like the World Bank and IMF call “Structural Adjustment” – Neoliberal austerity where debt is used as an instrument of policy to force damaging concessions, like CUTS to social safety net programs.

This made me wonder if Zimmer’s NJEIT is doing quiet damage by imposing cost cutting conditions in NJEIT loans. We already know that DEP failed to comply with federal Buy American and prevailing wage requirements and that the Christie Administration is ant-union and anti-labor, so NJEIT imposed anti-labor cost cutting measures is not unthinkable.

In response to DEP’s self congratulatory testimony, they were unable to answer some very basic questions from Legislators to back up the rhetoric with facts.

I won’t go into all the details, but mention Assemblyman Benson’s question:

Q: How many of the over 500 wastewater and water facilities permitted by DEP have submitted asset management plans?

A: DEP reply: we don’t track that information, but none have. Actually, we are exploring what new legal authorities we may need to require asset management plans and have chosen to post Guidance on the website instead of enacting regulations.

So, the entire asset management initiative that DEP bragged about is non-existent: it is not being implemented and it is voluntary. The DEP doesn’t even track the information!

There were other embarrassing examples, my favorite was the pump station at Lake Como as 1 of just 2 minor SAIL post Sandy projects that have been accomplished – all this is too detailed to go into hear. Suggest you listen to the entire hearing (hit this link).

• Regulatory context ignored

The Association of Environmental Authorities and private water companies testified – much or their testimony praised DEP as a “partner”.

Absent from the Committee discussion was the reality that AEA’s members and private water companies are regulated by DEP, that there should be some tension if not an adversarial relationship between regulator (DEP) and the regulated; and that AEA members, for decades, have fought DEP efforts to enact tougher regulations on AEA members.

• Solutions Offered

Contrary to the impression created by the NJ Spotlight story, many specific and economically feasible solutions were presented to the Committee in testimony.

NY/NJ Baykeeper urged the Committee to restore and move prior bills on storm water utilities, green infrastructure, public disclosure of CSO discharges, and funding of natural oyster resilience projects.

I testified about DEP failure to use regulatory and planning powers under the Water Supply Management Act and the Clean Water Act as a means of driving investment and planning for climate change adaptation and asset management.

The DEP has abandoned and abdicated ints planning powers. The Water Supply master Plan is 25 years out of date and the Water Quality planning program has delegated DEP responsibilities to Counties and authorities. This is key failure, because DEP water permits must be consistent with these plans.

I also specifically recommended that DEP’s “asset management Guidance document” be incorporated in the the NJ EIT FY’15 legislative package released from the Senate Cmte last week – that package of bills has not yet been heard in the Assembly.

I testified about DEP’s failure to use inspection and enforcement powers to provide incentives (what Dan Van Abs referred to as “price signals”) to facilities to comply with current permit requirements regarding emergency planning, backup power, climate adaptation, etc.

I also cited specific economic methodologies that the legislature and DEP could include in asset management requirements, including lifecycle cost (and of course, external costs).

There is other recent legislation that has been killed by development interests, including:

1) expanded impact fees so that redevelopment becomes an opportunity to upgrade decrepit infrastructure;

2) Senator Smith’s water tax bill;

3) “flush” taxes on wastewater – (not yet introduced in NJ, but I think Maryland has enacted a fee on wastewater to fund Chesapeake Bay restoration work). and

4) stormwater or impervious surface fees (could be part of regional storm water utility legislation or statewide).

5) Almost 10 years ago, back in 2005 testimony to the Clean Water Council, I emphasized the need for a public investment strategy and outlined a specific 23 point regulatory agenda and financial solutions.

Unfortunately, despite all these good suggestions, at the close of the hearing, Committee Chairwoman Spencer made no summary statement that would suggest a going forward plan and no commitments for next steps or action items.

Bottom line: It remains to be seen whether today’s hearing was part of a process of building consensus and political will, or just another sham Dog & Pony.

But we will be back on this issues soon, when the FY 15 NJ Environmnetal Infrastructure package of bills is up before this committee. We’ll keep you posted