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prove water quality and dispose of wastes of all kinds in a rational 

 fashion. 



Mayor Koch. We are willing to pay our fair share. We are op- 

 posed to a penalty fee arrangement because the city of New York 

 would end up paying that fee in addition to the cost of the dump- 

 ing itself. 



Mr. Hughes. Based on the proposition that New York City gen- 

 erates more sludge then your city should be paying more fee. 



Mayor Koch. Well, normally when you talk about a user fee it 

 would be a way of getting the users to pay for that, that is not our 

 situation as it relates to the dumping of this sludge. 



We would have to bear that fee out of our operating budget. We 

 believe that what we should do is to bear a fair share of the cost of 

 such a study. 



Commissioner, would you respond. 



Mr. McGouGH. The only thing in the New Jersey proposal that 

 is a little troublesome is the setting aside of the fee. The reason for 

 setting aside is financial — when you run a sewage authority it 

 might be hard when you come to the decision point in the New 

 Jersey proposal 4 or 5 years from now, after the multimedia analy- 

 sis is done, to suddenly raise the capital for the alternative. 



That is not the situation in New York. We have a capital budget 

 that runs $1,200 million a year and in need of $3 billion. So first of 

 all we don't have a problem if needed, to follow out a disposal 

 option. We have the wherewithal to quickly raise the money. 



Second, to set aside in the interim money that could be used for 

 other purposes, public purposes when we have such a great need, 

 that is the problem we have. It is not that we don't want to pay 

 our fair share of research and monitoring costs — that is our prob- 

 lem from our standpoint. We don't face the same problem that 

 some sewage authorities would have. 



Mr. Hughes. The problem I have with that approach, obviously 

 New York City would have a very difficult time tomorrow to deter- 

 mine scientifically that both the deepwater site and the 12-mile site 

 were out of the question. New York City would have a terrible 

 problem. 



Mayor Koch. Yes, sir. 



Mr. Hughes. The concept of a fee is to recoup some of the costs 

 for monitoring, after all that should be borne by the dumpers. 



Mr. McGouGH. Absolutely. 



Mr. Hughes. Development of baseline data, assessments that 

 have to be made, monitoring the polluters, whoever they are, and 

 to develop a fund that would be there to help finance the alterna- 

 tives, whatever they might be, is important. 



Mr. McGouGH. I think the estimate 



Mr. Hughes. I thought I understood your testimony to be that 

 you found merit to that approach. 



Mr. McGouGH. There were six points in the New Jersey thing 

 and we had trouble only with the fee. My understanding of the 

 New Jersey proposal on how they calculate the fee that New York 

 would pay, the city of New York might raise in this fund at the 

 end of the period some $50 million. If the conclusion of the study 

 was we had to go to land disposal — capital costs alone when we go 

 to that solution would be over $200 million. So maybe I have just 



