H.B. 501 Water Modifications: transcript

Thank you Mr. Chair, Members of the committee. Um, I like to present a committee that I'm actually on part of, so thanks for having me. So, a little bit of background on this bill. Uh, last year, actually, two years ago, the legislature passed HB two 80. HB two 80 actually, uh, was the start of a, a study that was done by, uh, Zion Bank. And, and they came out with this study, and it was actually fairly alarming some of the information that we got back. The study found that Utah faces an estimated $1.2 billion in additional annual expenses for, for water infrastructure projects. Uh, this included $740 million for drinking water and secondary water systems, and another $420 million for sewer and storm water systems, and 40 million for off-farm agriculture irrigation. So right now, Utah residents currently spend around 2% of magi median adjusted gross income on water and sewer projects. And this is well below that EPAs average, which is 4.5%. And that's their affordability threshold and leaving room for local agencies to increase these rates at a time when they need water for, or excuse me, money for infrastructure funding. So the study gave us three steps, and we're gonna approach this just by one step at a time. And we're actually taking step number three and we're doing part of that right now. So this bill takes that step and it addresses a critical funding need by requiring water, public water systems who are seeking state funding to charge up to 3% of magi. If a public water system bills a customer for drinking water, even when the customer does not receive wastewater services from the same provider, a 1.5% minimum applies initially. So with me today, I have, uh, Candice, or tell me how you say your last, I'll let her introduce herself. I've never been able to say her last name very well, not as, as well as she can. So,

Good afternoon. My name is Candace Haeger. It means Rabbit Hunter in German.

Okay, I'll, I'll remember Rabbit Hunter. That helps. Um,

I'm the director at the Division of Water Quality as, as well as the Chair of the Water Development Coordinating Council. We have been in the throes of working on this, on developing a unified water infrastructure plan to really get a handle on one, how much water infrastructure need is out there, and then how do we fund it. And so one of the major pieces of this is the completion of the fee study that was finished up last November. And I had the opportunity to present to the interim committees as well as the Legislative Water Development Commission. And it's really, this does really take the first step of making sure that locals are charging the appropriate amount for their water and water infrastructure needs. And I would just say that any money that's collected through this stays with the locals. It doesn't go anywhere else, it doesn't go to the state. It just is there for them to address their own infrastructure needs. Happy to answer any questions.

Lemme just add to that a little bit too. So initially when this bill, uh, first came out, HB 5 0 1 without the first substitute, we had some cities and, and some concerns, um, they express were, you know, this is gonna go to the state and this money generated will be a, a state revenue source that stays with the locals for, for sewer and water projects. Um, the other piece of it that we took out was that this is mandated. And so we removed the mandate upon the cities. But one thing, just to be clear, when they come here asking for money with RFAs or whatever it may be, they will have had to have done what we propose here in this study. And I think that's fair. We have, uh, more needs in our state than we have dollars to use. And so we're really, uh, careful and good stewards of, uh, money that we appropriate. And so I think that this bill strikes a pretty good balance, um, in putting it back in the, in the local control and saying, you do what you need to do before we can appropriate money for water projects. So with that, we'd answer any questions. Thanks.

Uh, one question I have is, so if, uh, a community, uh, has, has a need for some infrastructure, uh, and they've been saving this money that's coming back to 'em, they've been good stewards and charging no fees, and if they need more money than they have available, is, what's their, what's their resource for that? Is that part of this?

Yeah, I think the state would be, you know, us as a legislature when we consider these RFAs, we would look at that for certain, right? Like, okay, this is a city take, uh, my little city of Grantsville for example, they've done what we've asked in this study, and so we would be more likely to, um, grant the request for additional funding.

If, if I might, Mr. Chair, um, there is currently state funding available through the Board of Water Resources, division of Drinking Water and the Water Quality Board as well. So there is already state money available. This would just be an additional thing they would have to meet to be eligible for that. And then we're also working with the unified water infrastructure plan to have a linked and pri a ranked and prioritized list, um, that would also be available. And any funding that is available that goes into the water infrastructure fund would then also be available for those ranked and prioritized projects.

Thank you, Mr. Chairman. May I ask a few questions? Yes. Um, we have talked about this, uh, uh, I'll find you and Candace, you just answered my question because, um, some of my cities and towns have gone through the, uh, drinking water board to get some, so, um, the thing that I'm concerned about is, um, we, we we're going to impose a higher tax, uh, for water, but in my area, I have some really small towns, literally one town that has like 38 residents. I, I don't know that raising taxes by a coup by a couple of percentage is ever going to put them in a position to do it, to do anything hardly with water. But if they impose this, then they can, because right now you're saying if they don't, they cannot come to the state for any money. Correct?

Correct. I,

I struggle, I, I get the concept. I truly get that. 'cause some of my little towns are, are, have had to redo all those. In fact, I, couple of 'em are just finishing up. But we just have such small populations, I just dunno how they can, and, and a lot of 'em, we have old communities. We don't have lots of young people moving in. So I, I do have some concerns, even though we've really talked about, and, and I, I, I do get the vision and why you're doing this. I just have some concerns. Thank you. I

I will say to that though, so if you go to, in part of the bill, it talks about, um, the Water Council and DEQ and Magi, and it lists every city in the state and what the medium adjusted gross income is for every single city. And so it that's part of setting your rate. Right? And so, uh, my city was, uh, 73,000 was, was that we have like Provost City and some, uh, university towns like that, that is actually very low Right. Because of the student population and things like that. So that's part of, uh, setting that, that fee And, uh, it accounts for, for the area in which you live.

And that's in the bill? Yes. I mean, I've just got a couple of pages of it, yes. Okay. Thank you.

Yeah, thank you, chair. Um, I like that you, I like that you have, uh, come up with a sub that says the money will stay with the locals and you've eliminated the mandate. Um, I do have some concerns though about the, the small towns as the good representative from Carbon County mentioned. But you, you've explained that pretty well. I, anything else you want to tell me that would satisfy me on small towns? This is a good bill and, um, my district, as you know, is very rural, right? I mean, I have, I actually have 32 small cities in my district, and, uh, that's a lot of small cities. And I've talked to many of my mayors and, and explained this to them and, and, uh, given them the ability to, to have a little comfort and wrap their head around this, this idea. And so, uh, Fillmore City was one of those, I spoke with the mayor two weeks ago about this very thing and, and, uh, addressed a lot of his concerns. But, um, I understand the concern and, and why that would be the case, especially with a city with, with 38 residents. And so all those of us in town Yeah. And, uh, those of us that represent rural areas is something that we need to be, uh, very sensitive, uh, for sure. I, I get the principle that, you know, we're trying to, to build a fund to help these folks and, and they're helping us help them. Because the other day in natural resources appropriations, we had like 38 requests for appropriations, and a good share of those were for water projects. And some of 'em brought a little skin in the game and some brought zero. Yeah. So I think this would help with that in a, a great deal.

Let me just add this too, if I can, Mr. Chair. So, you know, since I've been in the legislature, when people come to, um, the state for money and they go through the appropriations process, we see it with roads oftentimes, right? They come, they come here and they want money for whether it be a county or a city. They want money for roads, they want some help. The question that we often ask is like, okay, are they doing everything in their power? And, and if the, if the answer's yes, then is what we appropriate money we're thinking, okay, this is, they're doing everything they can. They need our help. And, and recognizing that there are towns and, you know, small cities, I'll call it a city, um, with 38 people, you can't raise a fee to even really be able to scratch the surface. But that's what we're saying is, okay, if you've done everything you can do, then you come to the legislature and request appropriation, then we're gonna be more apt to say, okay, this is, this is a, a partnership. And they've, they've done everything that they can do. They've given them, uh, or they've, they've used the tools that we've given them. And

Thank you chair.

Yeah. Thank you, Mr. Chair. Um, if I got this right, that would put somebody in Midway a water bill of somewhere around $235 a month. Is that what

Intended? Yeah. Maybe Canice could speak to that a little bit. I dunno,

Mr. Chair. Um, yeah. So I don't have Midway Magi right in front of me. Casey did. Okay. Casey did, They had a magi of 95,000.

95,000. So that means we're all rich and we can afford it now. It doesn't, that's the problem. That is too high in my opinion. I think there's a way to get some money and maybe inspire them to do a little bit more, but not, not that much. I mean, right now they're probably paying in the vicinity of 40, be more than that, about $90 a quarter. And they're covering their costs plus reserves. I mean, they're doing what the law says now before this comes out. Yes, they've come. And, and so if the irrigation other things and sewer and others come to the Water Resource board for help, I realize this puts the gate on that. But there's gotta be something more reasonable in my opinion. I apologize for just two bills. My goodness. Go with that.

Thank you Chair. I, I think I share many of the similar con many similar concerns to those that have been articulated, um, even within one of these areas, right? You'll, you know, when you're calculating the median, just gross income, you'll have an outsized impact on folks who are below that median as, as far as I'm understanding this compared to those that are above. Um, could you speak to that and, um, any consideration that was given to, to how that impact would be felt depending on your income level within that, that calculation? Yeah,

May, may, Mr. Chair. Yeah, it's, it's a great question. Setting rates is complicated, right? Because you have to consider all those things, not only the, the different income levels, but also different tiers for water rates. And so being able to address that on the individual. So we don't, this bill doesn't tell an individual water company on how to charge it. So they can set rates accordingly to meet their own needs. It's just generally on average that they would have to meet that.

Okay. Thank you. Hey,

Thank you, Mr. Chair. I forgot to ask a question. Explain to me, and, and I know this will take you a little bit, the secondary water issue that that's huge in my area. So I'm curious, would you explain that? Sure.

So as, as we've gone through a, a lot of d different, well, well, the legislature's gone through a lot of different iterations on how to handle secondary metering and how to charge for secondary metering. One of the issues that was brought up was for those, you know, either it's a water conservancy district or those irrigation companies that provide secondary water, they don't have the capacity to go back and change contracts. So right now they're based on just a, for a certain volume of water, there's a certain amount that it's charged. That's how those contracts mm-hmm. Were originally written. And so now we're the legislature through a bill last year to charge in 2030, if I'm remembering correctly, on how secondary metering is actually delivered to the user versus block rates versus on actual usage. There was the need for these irrigation companies, water conservancy districts to have the flexibility to go back and change those contracts. It's my understanding of, of, So that's what this does. That, that's my understanding.

Okay. Now, I, I have, uh, at least one little tiny, I'm gonna call it a canal company for better, you know what I'm talking about. And, uh, they just don't even hardly make enough to, for everybody to put their own meters in. And so they do a big chunk thing. And, and my meter broke this a year Yeah. This last year. And I had to put a new meter in, and that was not inexpensive. And, and that, and that falls on me. In fact, when I called the company to come out and put it in, they said, don't put it in. You don't have to do this. And I said, I said, yeah, I do. I mean, I've had it ever since we had secondary water, and this is the second one that I've had to replace. And they were like, oh, no, you shouldn't have to do that. Obviously they didn't know our laws and, um, which I did. But, um, but our canal, our, my canal company requires it. We have to send in all that stuff. But there's a couple that are so small. I, I am, I'm real concerned

If, if I might, Mr. Chair. Yeah, go ahead. Um, I, I would add that if there is a sys, so through this whole secondary metering process, there's been a number of exemptions that have been put in place depending on what county class they're in, and there's a number of different ones. Uh, and so if there is a system that is exempt, they're not required to do that part of it. They're not required to put in meters.

So they have to ask to be exempt.

Yes. Either through the law current laws or through mechanisms that are available through division of water rights. They would have to go through that and apply to be exempt.

Thank you, Mr. Vice Chair. Um, I'm wondering if I can ask a question, Mrs. Segger there the stand. Um, sure. Candace, you've been involved in this process as of many of us for the last three or four years coming to this point. And, um, I'm wondering if you can give us an overview of how we got here so that it is less of just a, this session problem and maybe speak to some of what the, the data showed based on some of the studies in terms of overall need and the options that were available and sort of the winnowing. It was mentioned briefly by the sponsor in his process, in his testimony, but I'm wondering if you just give us an overview for the committee so they understand kind of all the dynamics

Here. Yes. Happy to do that, if that's okay with you, Mr. Chair. You bet. Uh, so since 2024 with the passage of HB two 80, we have been marching down this path. And really the goal is to develop a unified water infrastructure plan. So we have large water infrastructure needs, and we wanted to get a better handle on what those are actual on the ground projects. And so this is once again, trying to develop that ranked and prioritized list and able, in order to do that. Part of the question is how do you fund the water infrastructure? So the division of water resources went through two different studies over the last couple years. One is an integration of existing funds. How do our current funds, the one 16th sales tax that goes into water infrastructure, how does that fit into the equation? And the second one is a fee study that was completed last October. And so, uh, in that fee study, um, it really came out that there's about a $1.2 billion need for water infrastructure projects in the state. Uh, that includes drinking water, secondary systems, sewer, storm water, and even off-farm agriculture. So that's a really comprehensive number. So part of that fee study went into a, a deep dive of how do we fund this very significant water infrastructure need? And what we found is there's about 700, um, sorry, let me just find my notes here. Approximately 852 million of it annually can be raised through the local comp, the co local drinking water systems, water suppliers and um, sewer providers to fill that gap to fill part of that need. And so that left about $346 million per year of kind of a funding gap between that 1.2 billion, um, and what can be done at the local level. And so there was a lot of discussion of do we charge some sort of fee that then gets remitted to the state and then is divvied back out? Um, that idea was, there was a lot of concerns around that idea. So this is the first step in understanding and getting locals to kind of pay what they can. Uh, so currently what the study found is Utah residents currently spend on average about 2.1% of magi on water and sewer services. The EPA has an estimated affordability threshold of 4.5. And so this bill was the goal of trying to raise it up to three, so an additional percentage point to help cover that water infrastructure need. Once again, this money stays with the locals. It's for their use to develop their capital asset plans and to develop their long-term plan and needs. This will not cover all the small systems that were mentioned. There will still be a funding need for those, and that's why the, it's still important to have the state be a player in how we fund water infrastructure.

Thank you. And, and thank you Mr. Chair and vice chair for entertaining that question. It's, Uh, This has been a complicated problem to solve. I appreciate the good sponsor who has broad shoulders bringing this forward in this legislative session, but, um, the reality is we have a significant deficit, and if the locals can help and, and ensure before they come to the state for money, they are up to magi. And not even to the recommended maj, but just even halfway, uh, it, it will cover $800 million of that 1.1, $1.2 billion deficit. And that's what this bill is really asking about. I appreciate the good questions from the, from the sponsors from rural Utah. This, this is not mandatory, but it is saying, help us help you, um, before we can move forward. So I appreciate that context and, and this bill. Thank you,

Thank you, Mr. Chair. Two short questions, if I may bet. Um, one of the questions I hear from, or the concerns I hear from Provost City and some of the districts in my area are that some are, they feel like they're managing things. They're able to anticipate and save money for the future, for future projects. And so they are maybe being penalized for planning ahead and they're saving, whereas other cities, other municipalities or water districts may not. And they compared it similar to like the student debt for the person that's paying off their student debt over time. And then, uh, the government, the federal government offered to just pay off the other student debt for, uh, individuals that may had it and we're not paying off their student debt overtime. So they compare it to student debt. Is that a fair analogy or is there a, a valid concern there that they would have? And how would you answer that?

I would just say that there are many cities that have already been planning that don't need the state for money. Right. And so, um, I mean, I think it's a good question. I, I think, you know, we only have so much state money to appropriate for water projects. And so those that really need it, I mean, that haven't maybe planned or haven't had, don't have the population is, is Representative Watkins brought up. Um, that's what, that's what this is really for. There, there are lots of cities that I can think of, even in my district, little cities that have never come to the state for, for any money. So, um, I mean, it's a, it's a good question. Candace, maybe you can check in on that.

Yes. Oh, there it goes. Um, so yes, there, I mean, there are cities and towns and water systems and sewer that have been planning and saving money. Um, and then there are those that, that haven't, and once again, any money raised through this stays with the locals so it's not remitted to the state. So it's still there for them to, to use for their water infrastructure needs.

I appreciate that. That's a good answer. The other question I would have is, uh, for those that maybe have not planned into the future, and whether it's 'cause they're a small city or a town or whatever reason, if they continue to kick the can down the road, it's one of those things like, it's gonna be significantly more expensive down the road if you don't address it now, it seemed. So helping everybody come to the table to address these issues now is, yeah, it might, there's gonna be some pain there, but it's gonna be significantly less painful than down the road. Is that a fair, fair question?

Yeah, I think so. Thank you.

I have one other question. Uh, so this fee that is assessed that they pay, so does that go to the state and they hold it in a restricted account for that city? Or do they hold it in their own bank account? Wherever they bank the city or or town?

They hold the money themselves. They hold the money.

Thank you, Mr. Chair. Derek Kitchen. I represent myself, Mr. Chair, members of the committee. Utah is facing a structural water challenge. I think we all know that metering secondary water and implementing tiered conservation rates are necessary steps. We cannot conserve what we don't measure, and we can't reduce demand without sending appropriate price signals. I support the direction of this bill, but as Representative Watkins and many of you have already expressed, it's highly likely that municipalities will rapidly raise rates to qualify for state funds. I'm concerned about rate shocks for families. Um, conservation policy must be paired with affordability safeguards. So there are a couple recommendations I'll buzz through these just really quick. I know I only have a, a a minute. I first recommend adding a lifeline rate, which would be, uh, tied to the area, uh, median gross income. So for example, households that are 60 or 80% could be held harmless at a protected rate with a baseline block of essential water. I have a few more recommendations, I'll put them in an email and send them out to you all. But I, I like the direction of this email, or excuse me, this legislation. And, um, I'd love to see some adjustments. Okay,

Go ahead, sir. Mr. Chair. After my testimony, I have these for you guys. Um, this bill has the potential to be great, but I believe it is not yet there. The biggest issues that I see is within lines 48 to 80. Hey, could we get somebody else to move up in that seat? Excuse me. Go ahead. Within lines, 48 to 80, it gives the municipal, did You state your name, sir? Jeremy Gills. I'm from Farmington, Utah. Okay, thank you. Sorry. Uh, 48 to 80 allow the municipalities to choose the classifications when councils like the Water Development Coordinating Council or the DWR could use standardized classifications to better track efficiency standards across the state. So that's one suggested change right there on line 476, a portion is left undefined. Does a portion mean a small patch of grass used for growing food, or could somebody growing a farm use that on line 665? The terminology used says under. Does that mean pulling from using or under, i I don't know if I said that right, but,

My name is Leland Meyers. I represent the Wasatch Front Water Quality Council, which is a coalition of wastewater utilities across the Wasatch Front. Um, we believe this bill has potential. We've met with the sponsor who's agreed to help us perhaps, uh, modify the definition for regional wastewater treatment service provider to better meet the needs of our industry. And we'd like to see that done. Um, right now, the average bill across the Wasatch Fund for sewer is about $50 a month, which is 0.8% of the median adjusted gross income. Over the last five years we've spent in this industry between two and a half and $3 billion on upgrades to all of our facilities. And, and within our sewer rates across the municipal area, across the Wasatch front, we can withstand gra, uh, major changes unless they're really major. And so we encourage you to always be vigilant to make sure that environmental changes that are proposed are actually needed.

Thank you, Mr. Chairman, uh, committee members. My name is Steve Erickson. I represent Great Basin Water Network. I also represent, um, crossroads Urban Center, which is, uh, one of the oldest anti-poverty groups in the state. Um, not unsympathetic to the difficulty of the challenge here. Um, we've, uh, followed the process through the development of the unified infrastructure plan, um, that said, uh, a fee based on culinary water use, uh, uh, utility, a necessary, uh, utility and need, um, in both indoors and outdoors, but also indoors with, uh, use of wastewater, of course, um, is it's a regressive way to go about creating this pool of funding availability. It hits lower income household hardest and disproportionately, it takes a higher percentage of their income. As you know, that's definition of regressivity. And, uh, it's, this will not ob, uh, offset substantially, um, be, be offset by the, uh, putting it, the factor in for the magi flat fee is not going to provide significant incentive for much conservation. Um, and massing matching assets. Can you wrap it up? Assets are available with a lot of these water suppliers and districts, and they should be, um, able to,

Rather than have it pre prescribed. Prescribed. Thank you.

Thank you chair and members of the committee. My name is Cecily Ross, and I'm speaking on behalf of the Utah Sierra Club. As the legislative intern, I urge you to vote no on HB 5 0 1 because it levies a new water tax that would unfairly impact low income households and low water users to raise money that would be used on unspecified water projects that may or may not benefit those taxpayers. Utah Utahns already pay a considerable amount in taxes through property taxes, vehicle taxes, business taxes, and two sales taxes. During a time when everyone is feeling pinched by rising costs, adding another tax on top of what we already pay for our water seems ill intended. The way this tax is set up to be tied to medium income makes this disproportionately burdensome to lower income residents who reside in the same water supplier service areas as high income residents, farmers and secondary water users who are the biggest users of water in the state will not be required to pay the tax. Setting this burden solely on the shoulders of households now is not the time to be funding water projects that would divert much needed water from the Great Salt Lake. Thank you. Please vote no on this Bill.

I've got a question, Question for you. Hang on. Yeah. You mentioned unspecified water projects. What are those?

I know that the new sub has changed it so that the water remains in the hands of, um, the locals, and we appreciate that, but I think the, the actual water projects are not specific enough.

Well, you mentioned two unspecified projects. What are they?

They're unspecified. I'm not sure that would be

A question. Well, then you ought to get your facts straight before you mention that. I think that's disingenuous, at least. Thank you. Okay. Thank you. Okay, go ahead.

Spencer Gibbons from the Utah Farm Bureau. We, uh, we appreciate the, uh, the sponsor. Um, we, we understand the vision. Um, I think the conversation for the last three or four years at least, maybe even more, has been how do we, how are we responsible with our water? Um, uh, a lot of, a lot of focus has been on our ag users, um, and, and we keep hearing, you know, this is a Utah problem. You know, we need to come up with a Utah solution. Um, so we appreciate the sponsor, uh, and being collaborative. Uh, we're certainly in, you know, willing to, uh, continue dialogue on this. Uh, but we do think that this, this certainly has potential and we're, uh, we feel like this is an onus that all of Utah should share, so we support it.

Okay. Thank you. Thank you, Mr. Chair Court. Ashton from the Utah Land Title Association. Uh, we, we are here to comment on, uh, lines beginning at line five 50. And it, this is the report that's due from title companies and, uh, in the middle of a closing trying to, uh, trying to help this. So we've met with the sponsor and he's agreed to help us try to make that language workable for the closing and for the title, uh, industry in general. And, uh, and we're hopeful to get some changes to that section of this bill. Thank you.

My name is Macy Tilk. Uh, I'm a Salt Lake City resident, just here to urge you to vote against HB 5 0 1. This bill is problematic for every fiscally conservative Utah having to pay yet another tax increasing taxpayer debt and wasteful government spending. Worse yet, the Wasatch front's biggest water wasters, secondary water users will not pay this tax. Thank you.

Thank you, Mr. Chair. Justin Lee, deputy Director of Utah League of Cities and Towns. First want to just, uh, express appreciation of the sponsor for meeting with us. Um, when we first presented this bill to our legislative policy committee, it was one of the highest concern levels we've seen out of our members, um, when the mandate was in there, uh, with the removal of the mandate that everyone has to impose these fees in 2031 and the clarification around the fees staying with the locals, um, I would say we're position pending 'cause we're waiting to see what some of the substitutes say, but our concern level has dropped from very high, uh, to perhaps medium and seeing where that's at. But just wanna thank the sponsor for working with us and look forward to ongoing, uh, clarifications that may come in future subs.

Okay, thank you. Good afternoon, members of the committee. My name is Zachary Frankel. I'm the Executive director of the Utah Rivers Council. And I ask to consider your constituents carefully and vote no for this bill. You know, there's 18,000 cities across the United States, and virtually all of them are struggling with replacing an old water infrastructure without, of course, the federal government able to fund those things. Water rates, impact fees, and of course, borrowing money from the bonding market are continually used to replace our water infrastructure. Water infrastructure is essential. I drink water, I have water sewage, and I buy hay. So I'm not anti farming. However, the figures that we've been presented today about $1.2 billion a year don't include revenues. They exclude. There are, they are gross costs and do not include net revenues. So revenues from water rate collections, revenues from bonding, revenues from property taxes for water, are not included in these figures. We need a net revenue need or a net expense need before we're able to really assign how much the infrastructure burden is for Utahans. And with that, I thank you for your time today. Thank you.

I've got a question for Mr. Frank. For you Mr. Frank? Yes, sir. Were you responsible for the handout on the floor of the house?

Um, could you be more specific representative? Yes. I believe that's ours.

That's despicable was to put one of my favorite presidents on there and say that we're not being conservative. That was a terrible handout and it's basically a bunch of bs. So thank you.

Thank you. I'm gonna respond to that. Thank you. If I could, because Thomas Jefferson said, your

No government should be without critics

I am Mickey Wright. I'm the mayor of Torrey, one of those small towns that has to come up with the money to pay for this.

Uh, let me figure out what's going wrong with the camera.

Yeah. So I'm the mayor of Tori and I did a quick calculation using the formula. And the number I come up with is $360,000 per year is what Tori would be required to pay, which represents $750 per connection. Our general budget this year is 332,000. So that 360 exceeds our general budget. Our water budget is $500,000. Torrey needs to increase its water supply. We are the gateway town of Capitol Reef and we have many, many visitors coming through. And we really love that we want to keep Tori to be a, a wonderful place to come visit and live. I can't do it with these prices, and if the only way I can get state help is to participate, that's gonna be a real problem. Thank you.

Hi, thanks. My name is Carrie Doen from Salt Lake City. Speaking for myself. Um, I agree, um, that, uh, with the regressive tax, um, portion of this bill as well as, and in speaking to the mayor of Torrey, um, not charging secondary and agricultural water users any fees, keeping them exempt seems to be a loss of opportunity for or funding, uh, projects. And then lastly, with respect to the commenter from Sierra Club, I think you misheard, she said two meaning to maybe not TWO because I also do not see any guardrails on the types of projects, uh, that would be eligible for this, for these funds. I think if the state is serious about saving the great Salt Lake, there should be some projects that are not on, uh, the state planning infrastructure list. Thank you.

Chair, chair. Um, in, um, respect of trying to avoid some redundancies, I'll just say,

Yeah, my name's Dakota Worth. I'm a Clearfield City Council member. Um, you've heard a lot of points in opposition to this bill. And I wanna say what concerns me the most is, as families are struggling to absorb the costs of Rise Rising costs and infrastructure, um, I, I do share the concern that this will force municipalities to raise rates in order to qualify for state funding. And in listening to your discussion, I'm worried that that is in the hopes that the legislature will appropriate those funds and projects. Um, that is my, my biggest, um, concern here with this bill. And I hope we can find a way to address this solution, this, um, this problem. 'cause it is a solution that we already need a dire action on something.

Vice chair, I, uh, I move that we recommend HB 5 0 1 first substitute, uh, favorably.

I would. Um, water vs are hard to run and I think we all recognize it. And I, I know this one is probably harder than most given the history and, and, and, uh, some of the dynamics here at play. But we have taken the time to have this discussion. Um, I appreciate the sponsor. I know were multiple years, uh, thousands of men and women hours on studies, multiple committee hearings, um, and still trying to come up to some sort of figure that works. We, in this state, if we do not get ahead of our water infrastructure needs in a fair way, we will be in a deficit more than the drought and more risky than the drought that we are currently facing. And I, I commend the sponsor. Now, this, these are hard conversations, but I I, I wish to remind the committee and the public that where this started and where this ended are different places. And all we are asking in this bill is that before we contribute already scarce state resources, that those who can help themselves. And we've tried to make it as fair as possible based on medium adjusted gross income. And we've, we've tried to make it non-mandatory. And I know the sponsor will continue to navigate this, but this is a good bill and there's been a lot of falsehoods spread. The, the good chair referenced those, uh, falsehoods and lies. And that just comes with the territory on some of these unfortunately. But, um, this is, this is a good step in the right direction 20 years from now when, when we have infrastructure enough to accommodate growth and we have a rate structure in place that allows for conservation. And we have a lake, uh, in the Great Salt Lake that is full though, we're, we're going to look back and, and see the wisdom in what is being proposed here today. So with that, I'd encourage my colleagues to support the bill.

Thank you, Mr. Chair. And just a couple of comments, um, in looking at my area there, and I, I kind of think we're like a lot of others in, in Utah now, where people look at Midway, especially where I live there, Hebrew Valley generally, but Midway, everybody's up there is rich. I would say about 60% of 'em are still gonna get hammered really hard by this fee. The rest of 'em don't care. They're new or they've come into some wealth, whatever. But I don't think our town's different than others. The system that is in place now, at least the ones I participate in, has the water resource board. You can go get loans there, you can, you have to pay 'em back, which we have. And that's a system that's worked really well. Uh, with, with reservations. I'm gonna vote to support this out. Um, 'cause I respect the sponsor and I'd like to have some conversation conversations about maybe some staged fees here where based on some infrastructure projects that are already done, I know at least in Midway and he and Wasatch County, we've been actively involved in replacing infrastructure uh, without waiting for it to fade where it's a, a catastrophic event. Um, we don't have, I, at least I'm, I'm pretty comfortable saying we don't have the, the need that some others will in the short term. It doesn't mean it won't be longer, but if we could stage these fees so it's a little more reasonable. Uh, I think there's might be some way to work this in, but, so I'll support the bill to get it out, but I want to have some more discussion about it before it gets to the floor and passes. Thank you.

Thank you, vice chair. Um, I, I want to echo a lot of the sentiments that were just voiced by the good representative. I, I applaud the, the hard work that's been put into this effort over years. Um, the, the thing that I am struggling with most is the idea that I, within my area, would pay the same fee despite the fact that I might in my household use more water. And not because of my public school income, but because my wife makes more money than I do be able to endure the fee better than folks in another part of my town. And that just doesn't, it just, it feels like whether it's staged fees or, or further work. And I know that you're committed to doing more work on this as we go forward, but within that work, recognizing that as we all put skin into this game, that, that some people have less skin available. And, and I would love to see that acknowledged within this bill. So for now, um, here in this committee, I'm gonna vote no, but going forward, I would love to participate in the conversations and figuring out how we can make sure that as we go forward, as a community and as a state and addressing these issues, we do so in a way that that can leave us feeling all right about the, the burden that we're putting on our, our friends and neighbors.

Thank you, Mr. Chair. Um, I've run a few water bales in my time up here as well, and sometimes you get crucified and sometimes you don't. Today you've had a little of both, but, um, you're a good representative. And I, I share the concerns of Representative Kohler from Heber, uh, or I share the concerns of, uh, the good representative from Carbon with a community of 38. I share the concerns of, uh, the Torrey Mayor. I think you can make this a better bill by tweaking it just a little bit. I would, uh, I, I'm gonna support the bill and, and move it forward, but I hope we can have those discussions. So thank you.

Uh, you know, I would like to just make a few comments as well. It's, uh, this is needed. It really is in our state, and, but there are some concerns about, uh, this, this way of, of doing the fee. And so maybe we need to be looking a little bit differently on how that's structured. I know there's been a lot of work gone into it, but sounds like there's room for more, and I think there's support here to continue with that, those talks and move it forward.

Yeah. Thank you. Um, and this, this hasn't been that fun, honestly, but, uh, as I dove into the, this, uh, it's been shocking to see what the need is for the state. You know, when we run for the legislature, my first time anyway running, um, that was the, the question for my constituents, what do we do about water? What do we do about water infrastructure? And this begins to address that. And I appreciate the work that's, that's been done long before I was here. And, um, I really appreciate the, the groups that have come to me. And we've had civil discussion. Some haven't been that way, but some have, most have. And, uh, I'm committed to, to continue working on this and, and, uh, making it as as good as we can before we get it through the process. So, uh, I appreciate the motion, I appreciate the discussions that we've had today.

Yeah, I would. So we have a sub that is now publicly available and, uh, I just wanted to circle, give people a chance to look at the sub. And then I am also gonna speak to my colleagues today in both the minority and majority caucuses about the bill.

Thank you. Motion to adopt Second substitute. That motion is in order. Would I speak to it? I would. So this is the sub that I presented in both caucuses and I've had really good discussion with, I think about everybody in this room. So that's, that's the sub

Mr. Speaker. So I appreciate the discussion we've had on this colleagues for the last couple of, uh, weeks. I've been working with, uh, the League of Cities and towns, the water districts, and many of you that have rural cities in your districts, and, uh, some of you that have very urban cities in your districts. So anyway, I think this, uh, substitute addressed most of the concerns of those in this room. So I'm gonna give you a little bit of background and, and try not to waste too much of your time by going into some of the details, but I'd be open to questions afterwards. So, in 2024, HB two 80 required a study on how we fund water projects in our state. So as a result of that study, it gave us three steps to take to be able to, to finance water in our state. So we're taking a baby step of one of those steps right now with this bill. So it actually talks about local contribution to water projects. And it gave us, um, a formula to follow, which was local contribution is met by reaching a total magi threshold of one point a half percent for water projects and another one point a half percent for wastewater projects. So this local contribution is not mandated. The bill is simply saying if you're coming to the state for money, which we see RFAs every single year for water projects and roads and different things, but before you come to the state for money, we expect that you have met this threshold or at least have a plan to meet this threshold. So the sub actually allows a two year, uh, leeway to be able to implement a plan before you have to actually get to that threshold. So the other thing we did with this substitute many of you with, with rural cities in your district, we exempted cities that are 3,300 people in less. That 3,300 number is already in water statute, which is why we use that. And, uh, I feel like that was a pretty good compromise. Um, that's basically the bill. I'd be open to any discussion or any questions about the bill.

Thank you, Mr. Speaker. Will the sponsor yield to a question?

So I just want to make sure that I am on the same page. So, um, one of my cities had contacted me and said, oh, this will cause us to raise our water rates by, I don't know, some number, like 500% or something like that. Could you address the, whether under the second sub, if that's the case at all?

So, yeah, good question. Thank you, Mr. Speaker. So the second sub I feel like clarifies it a little bit better. It is, you already take what your water rate is and going up to the 3%. It's not a three that's for waste. If you, if you go wastewater and drinking water, it's a total of what it currently is. And the raise, if that helps clarify.

Yeah, so think so just I I think then that, that, what that suggests to me is, is that there may, there is an increase for some cities, but it's not the draconian. Like, I'm not gonna pay $180 for my water, probably something like that. Correct? Yeah. And the second part of my question is then, um, if states, oh, so if a city does not need state funding for a project, they can just continue to charge their current rate indefinitely and just pretend like the bill doesn't affect them. Is that right, Mr. Speaker? Yeah.

Thank you for the question. So that's correct. So many cities are already meeting this many cities plan. Well do a good job with planning for water infrastructure and, and sewer systems. Uh, this is only if you're coming to the state for money. And this is a pretty common practice already with the drinking water board and, and others to be able to qualify for, for grants.

Okay, so, so thank you Mr. Speaker. Sounds to me like then that, that, uh, cities can, and many do manage themselves appropriately. They plan for future needs. They plan for pumping station water treatment plans, infrastructure, and they charge water rates accordingly if they have water systems. Um, and some cities may find themselves in a bind and may need to come to the state for assistance. And then we would be asking them saying, are you doing everything that you can do on your own first and then we will help you. So you, you do what you can first and then we'll help you with the rest.

Am I kind of characterizing this correctly? That's correct.

Thank you, Mr. Speaker. I, I, I think this is a, a great, uh, opportunity to meet the city's part way and help, help them address needs. So I, I appreciate the sponsor for the second step. Thank you.

Thank you, Mr. Speaker. I just, uh, when I rise in support of this bill, uh, the, the good sponsor has navigated a pretty tough situation. Uh, I, I'll just for the body's reference, say that we had probably, I don't know, 35 RFAs in natural resources appropriations the last couple of days. And, and, uh, probably over 50% of those were for water requests or sewer requests or whatever for cities. The city or the state has a long list of what we need to do as far as water goes. And so I think he's navigated and worked with the small cities with the 3,300 and less. And those cities who have done a good job, like, like my town Richfield, they've been out the last few years and bought water rights and upgraded their water system. And, uh, they've done a good job. So this, this might help those that are not quite as good a actors as Richfield to do a better job in the future. So I, I commend the sponsor, uh, for navigating a tough road. Thank you.

You, Mr. Speaker. Um, I appreciate your work on this and it makes a lot of sense to have these cities have skin in the game before they start asking for more resources. I'm just wondering, I know we're talking about a lot about cities, but do counties play into this at all and, and what their process normally is, if they want, um, big infrastructure as well for water, or is that normally just a city thing to begin with?

Yeah, thank you for the question, Mr. Speaker. So it would apply to any public water system that supplies water on a retail basis.

Thank you. Would the sponsor yield to a question? Sure. Representative Bolinder, will you yield? Yes, yes. Representative,

Uh, thank you. On lines 4 39 and four 40 of the bill, it defines state money and, um, it defines it as money distributed or administered by the state, including federal grant money. Um, so can you speak to that definition? It's pretty broad. It's broader than state money. Um, it, and I'm wondering about things like, um, the USDA programs that a lot of our communities rely on for water projects.

Yeah, thank you Mr. Speaker. So remind me what line that is for.

Yeah, it's, um, line 4 39 and four 40.

Yeah, that does include any money that the state administers because the federal grants also run through the state As well. Well,

uh, so I'm concerned about a little bit how broad that definition is when we talk about skin in the game for state projects with our political subdivisions. I think, um, I think there's some fairness in that, but, um, this definition feels really broad to me. And, and when you're working with, I know we've, we've kind of exempted some of our smaller communities. Some of these federal grant programs are really critical for them to be able to get, um, some federal dollars. We've had a lot of opportunity in the last while to get federal infrastructure dollars in our state. And, um, I I just wanna be cautious, um, here that, you know, while we, what we want our cities and counties and, and local, um, water districts to participate in, in the water needs in our state, I don't want them to lose out on some other opportunities, um, that may come along for them. Thanks.

Thank you, Mr. Speaker. I, I rise in support of this and maybe even piggybacking on the last question is, as the body will remember over the last several years, we have combined the process whereby cities can apply for water. So there is not a bifurcation or water money, excuse me, there's not a bifurcation right now in terms of the application process. There is one board and there is one process. And after discussion that board divvy out between the various pots, including USDA, which was referenced on the floor or EPA, this bill streamlines that effort with existing policy. As to the question about what federal funds they may or may not be eligible for moving forward, some of those federal programs, Mr. Speaker, have significantly higher magi requirements than this nominal one that we are doing this, it, it's been said that they will miss out on funds. This is actually a knife that cuts both ways and some of those federal dollars have higher magi requirements. This allows a streamlined, seamless process that is consistent with the process that we've established as a legislature over the last several years. Now, the the other thing that I think is critical for the body to know we have significant water needs, but nearly every water system in this state is publicly held at a municipal level. That means the money when they come to us at the state, is actually going to a very specific local issue. And I think it is, is prudent on behalf of the state to assist where we can and where we must when those local projects have needs. But first and foremost, all of those needs must come from the state in the first in or from the local community in the first instance. So I think this bill aligns that with the realities of the world, the state is here to help those who cannot help themselves, but they must at least first try that initial first step and have a fairness before they come and ask all taxpayers of the state to pay for a local project. Thank you, Mr. Speaker.

Yeah, thank you for the discussion. This has been a really fun bill to work on. I've enjoyed it. It's probably my favorite bill that I've done in my legislative career. And, uh, ask for your support. Thank you.

I would. So this is the sub that I presented in both caucuses and I've had really good discussion with, I think about everybody in this room. So that's, that's the sub

Mr. Speaker. So I appreciate the discussion we've had on this colleagues for the last couple of, uh, weeks. I've been working with, uh, the League of Cities and towns, the water districts, and many of you that have rural cities in your districts, and, uh, some of you that have very urban cities in your districts. So anyway, I think this, uh, substitute addressed most of the concerns of those in this room. So I'm gonna give you a little bit of background and, and try not to waste too much of your time by going into some of the details, but I'd be open to questions afterwards. So, in 2024, HB two 80 required a study on how we fund water projects in our state. So as a result of that study, it gave us three steps to take to be able to, to finance water in our state. So we're taking a baby step of one of those steps right now with this bill. So it actually talks about local contribution to water projects. And it gave us, um, a formula to follow, which was local contribution is met by reaching a total magi threshold of one point a half percent for water projects and another one point a half percent for wastewater projects. So this local contribution is not mandated. The bill is simply saying if you're coming to the state for money, which we see RFAs every single year for water projects and roads and different things, but before you come to the state for money, we expect that you have met this threshold or at least have a plan to meet this threshold. So the sub actually allows a two year, uh, leeway to be able to implement a plan before you have to actually get to that threshold. So the other thing we did with this substitute many of you with, with rural cities in your district, we exempted cities that are 3,300 people in less. That 3,300 number is already in water statute, which is why we use that. And, uh, I feel like that was a pretty good compromise. Um, that's basically the bill. I'd be open to any discussion or any questions about the bill.

Thank you, Mr. Speaker. Will the sponsor yield to a question?

So I just want to make sure that I am on the same page. So, um, one of my cities had contacted me and said, oh, this will cause us to raise our water rates by, I don't know, some number, like 500% or something like that. Could you address the, whether under the second sub, if that's the case at all?

So, yeah, good question. Thank you, Mr. Speaker. So the second sub I feel like clarifies it a little bit better. It is, you already take what your water rate is and going up to the 3%. It's not a three that's for waste. If you, if you go wastewater and drinking water, it's a total of what it currently is. And the raise, if that helps clarify.

Yeah, so think so just I I think then that, that, what that suggests to me is, is that there may, there is an increase for some cities, but it's not the draconian. Like, I'm not gonna pay $180 for my water, probably something like that. Correct? Yeah. And the second part of my question is then, um, if states, oh, so if a city does not need state funding for a project, they can just continue to charge their current rate indefinitely and just pretend like the bill doesn't affect them. Is that right, Mr. Speaker? Yeah.

Thank you for the question. So that's correct. So many cities are already meeting this many cities plan. Well do a good job with planning for water infrastructure and, and sewer systems. Uh, this is only if you're coming to the state for money. And this is a pretty common practice already with the drinking water board and, and others to be able to qualify for, for grants.

Okay, so, so thank you Mr. Speaker. Sounds to me like then that, that, uh, cities can, and many do manage themselves appropriately. They plan for future needs. They plan for pumping station water treatment plans, infrastructure, and they charge water rates accordingly if they have water systems. Um, and some cities may find themselves in a bind and may need to come to the state for assistance. And then we would be asking them saying, are you doing everything that you can do on your own first and then we will help you. So you, you do what you can first and then we'll help you with the rest.

Am I kind of characterizing this correctly? That's correct.

Thank you, Mr. Speaker. I, I, I think this is a, a great, uh, opportunity to meet the city's part way and help, help them address needs. So I, I appreciate the sponsor for the second step. Thank you.

Thank you, Mr. Speaker. I just, uh, when I rise in support of this bill, uh, the, the good sponsor has navigated a pretty tough situation. Uh, I, I'll just for the body's reference, say that we had probably, I don't know, 35 RFAs in natural resources appropriations the last couple of days. And, and, uh, probably over 50% of those were for water requests or sewer requests or whatever for cities. The city or the state has a long list of what we need to do as far as water goes. And so I think he's navigated and worked with the small cities with the 3,300 and less. And those cities who have done a good job, like, like my town Richfield, they've been out the last few years and bought water rights and upgraded their water system. And, uh, they've done a good job. So this, this might help those that are not quite as good a actors as Richfield to do a better job in the future. So I, I commend the sponsor, uh, for navigating a tough road. Thank you.

Yeah, thank you for the question, Mr. Speaker. So it would apply to any public water system that supplies water on a retail basis.

to the bill representative Corinne Peterson. Thank you. Would the sponsor yield to a question?

Uh, thank you. On lines 4 39 and four 40 of the bill, it defines state money and, um, it defines it as money distributed or administered by the state, including federal grant money. Um, so can you speak to that definition? It's pretty broad. It's broader than state money. Um, it, and I'm wondering about things like, um, the USDA programs that a lot of our communities rely on for water projects.

Yeah, thank you Mr. Speaker. So remind me what line that is for. Yeah, it's, um, line 4 39 and four 40. Yeah, that does include any money that the state administers because the federal grants also run through the state As well. Well,

uh, so I'm concerned about a little bit how broad that definition is when we talk about skin in the game for state projects with our political subdivisions. I think, um, I think there's some fairness in that, but, um, this definition feels really broad to me. And, and when you're working with, I know we've, we've kind of exempted some of our smaller communities. Some of these federal grant programs are really critical for them to be able to get, um, some federal dollars. We've had a lot of opportunity in the last while to get federal infrastructure dollars in our state. And, um, I I just wanna be cautious, um, here that, you know, while we, what we want our cities and counties and, and local, um, water districts to participate in, in the water needs in our state, I don't want them to lose out on some other opportunities, um, that may come along for them. Thanks.

Thank you, Mr. Speaker. I, I rise in support of this and maybe even piggybacking on the last question is, as the body will remember over the last several years, we have combined the process whereby cities can apply for water. So there is not a bifurcation or water money, excuse me, there's not a bifurcation right now in terms of the application process. There is one board and there is one process. And after discussion that board divvy out between the various pots, including USDA, which was referenced on the floor or EPA, this bill streamlines that effort with existing policy. As to the question about what federal funds they may or may not be eligible for moving forward, some of those federal programs, Mr. Speaker, have significantly higher magi requirements than this nominal one that we are doing this, it, it's been said that they will miss out on funds. This is actually a knife that cuts both ways and some of those federal dollars have higher magi requirements. This allows a streamlined, seamless process that is consistent with the process that we've established as a legislature over the last several years. Now, the the other thing that I think is critical for the body to know we have significant water needs, but nearly every water system in this state is publicly held at a municipal level. That means the money when they come to us at the state, is actually going to a very specific local issue. And I think it is, is prudent on behalf of the state to assist where we can and where we must when those local projects have needs. But first and foremost, all of those needs must come from the state in the first in or from the local community in the first instance. So I think this bill aligns that with the realities of the world, the state is here to help those who cannot help themselves, but they must at least first try that initial first step and have a fairness before they come and ask all taxpayers of the state to pay for a local project. Thank you, Mr. Speaker.

Yeah, thank you for the discussion. This has been a really fun bill to work on. I've enjoyed it. It's probably my favorite bill that I've done in my legislative career. And, uh, ask for your support. Thank you.