WASHINGTON -- The funding earmarked for wastewater and drinking water treatment over the next decade is sufficient to meet the needs of most local communities, an Environmental Protection Agency official told Congress yesterday.

But state and local officials later argued that far more federal funding is needed.

The $10 billion a year that is currently being spent by federal, state, and local governments on sewage treatment projects is meeting most local needs, Robert Perciasepe, EPA assistant administrator for water, told the House Public Works and Transportation subcommittee on investigation and oversight.

But, he said, in a perfect world, $137 billion would need to be spent over a period of time to meet the nation's sewage treatment needs, including combined sewer overflows and non-point pollution.

The gap in funding between what is currently being spent and total needs should be filled by the municipalities, Perciasepe said.

"Because wastewater infrastructure is fundamentally a local responsibility, we believe that this difference will have to be filled primarily through local and state resources," he said. "Additional capitalization of the [clean water state revolving loan fund] program, along with funds from other federal sources, will substantially finance the additional costs associated with regulation under the [Clean Water Act]."

The Association of Metropolitan Sewerage Agencies, which represents the nation's largest wastewater treatment agencies, surveyed its membership and found that federal funds will pay for only 7.9% of projects from 1993 to 1998, while local governments will carry 84% of the burden, said Edward O. Wagner, chairman of the group's legislative policy committee and deputy commissioner of the New York City department of environmental protection.

The association has proposed an amendment to the Clean Water Act reauthorization bill, which is currently making its way through Congress, that would help pay for unfunded federal mandates by authorizing up to $1.5 billion annually to capitalize the state revolving loan program, Wagner said.

Over a 10-year period, $15 billion would be available to the program for the federal requirements included in the bill, he said. Any federal funds the states received totaling more than $1.5 billion would be used for grants to address priority water quality problems.

The Clinton Administration has proposed $1.6 billion in fiscal 1995 funding for the wastewater treatment state revolving loan funds. The revolving funds would receive $2 billion a year in federal funds from fiscal 1996 to 1998. Federal contributions would then begin to trail off, with the loan funds totaling $11.25 billion by the end of the fiscal 2004. The fiscal year begins October 1.

The federal funding levels were designed to "allow states to continue to make loans of more than $2 billion annually for the foreseeable future through a combination of federal contributions, leveraging, and repayment," Perciasepe said.

Still, local wastewater treatment managers say more federal funding is needed.

"Clean Water Act requirements ... are increasing at a time when the availability of federal financial assistance is decreasing," said Carmen F. Guarino, who represents the Water Environment Federation, a nonprofit technical and education organization.

Although Guarino asked for higher funding levels, he said, at any rate, the Clean Water Act must be passed this session of Congress. Passage cannot be delayed "without seriously imperiling our ability to fund clean water infrastructure," Guarino said.

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