Transcript City of Kenner LDEQ Consolidated Compliance Order and

Response to
LDEQ Consolidated Compliance Order
and
Notice of Potential Penalty
LPDES Overview
♦
Wastewater system discharges to the Mississippi River.
♦
Requires a Louisiana Pollutant Discharge Elimination System (LPDES)
permit.
♦
Permit requires operating the collection and treatment facilities under
the terms and conditions of the LPDES permit or face civil fines.
♦
The Louisiana Department of Environmental Quality (LDEQ) is
responsible for enforcement all permit requirements.
CORRECTIVE ACTION PLAN
2
LDEQ Background
♦
LDEQ conducted several inspections of wastewater facility records and
discovered 444 overflows had occurred within the system.
♦
Age of the system, poor soil conditions causing subsidence, and lack of
maintenance over the years contributed to the overflows within the sewer
system.
♦
On August 26, 2009, the City received a Consolidated Compliance
Order and Notice of Potential Penalty Enforcement Tracking No. WECN-09-0174 for noncompliance activities from February 1, 2004 through
May 31, 2009.
CORRECTIVE ACTION PLAN
3
Summary of Overflows
Mainline Blockage
Broken Force Main
Power Failures a.)Hurricanes
b.)Normal
Rain Storm/ I a).Heavy
& I Issues
(Sewer System
b). Normal
Up)
2004
2005
2006
2007
2008
2009
36
4
34
7
40
5
29
5
22
5
9
15
1
Hurricane
15
6
18
1
29
5
15
18
4
7
SubTotals
190
31
15
75
19
19
2
26
3
2
80
1
1
2
1
7
6
4
4
4
27
82
73
85
79
28
Miscellaneous overflows from 2
grit chamber, aeration tank,
etc.
Mechanical Failures of Lift 9
Station
Totals
89
CORRECTIVE ACTION PLAN
4
36
444
Grand
Totals
190
31
90
99
34
444
Importance of Regulatory
Compliance
Why is it important for the COK to meet its LPDES permit requirements?
♦
Overflows discharge raw sewerage into nearby roads, drainage, and waterways
♦
Threat to public health, animals, the environment and the federal and state
waterways.
♦
Violation of the Federal Clean Water Act
♦
The City’s failure or refusal to comply with the Compliance Order could result
in the assessment of a civil penalty in an amount of not more than $50,000 for
each day of continued violation or noncompliance resulting in possible millions of
dollars of fines.
CORRECTIVE ACTION PLAN
5
Response to the Compliance Order
♦
In response to the Compliance Order, related to the reported Overflows, the
City was required to prepare a Sanitary Sewer System Overflow
Corrective Action Plan.
♦
Purpose of Corrective Action Plan
-mitigate, reduce, and prevent Overflows in the City
-comply with LPDES discharge permit requirements, related
Louisiana Laws, and the Federal Clean Water Act.
♦
$62,137,196 total in capital improvements to reduce and prevent future
overflows
♦
Corrective Action Plan only considered the SSO’s cited in the LDEQ
compliance order and was not meant to correct every deficiency in the City’s
system.
CORRECTIVE ACTION PLAN
6
Corrective Action Improvements
Funded
Funded Improvements
Project Funding Source
Total Amount Funded
LRA/CDBG Grant
$4,145,275
LDEQ Low Interest Loan
$10,510,613
City Capital Funds
$3,428,255
Total Funded Improvements
$18,084,143
♦
These improvements will be completed without any additional tax or fee
increase
♦
LRA/CDBG Grant Money does not have to paid back.
♦
A list of funded improvements is available separately
CORRECTIVE ACTION PLAN
7
Corrective Action Improvements
Future Funded Projects
Contingent Upon Sewer Fee Increase
Future Funds Required
Project Funding Source
Total Funds Required
LDEQ Low Interest Loan
$12,067,440
Municipal Bonds
$31,985,613
Total Funds Required
$44,053,053
♦
A list of future projects is provided separately
♦
$6,900,000 planned for “Green Project”
+ Discharge to La Branche Wetlands
+ Provides wetland restoration and enhanced Hurricane Protection
CORRECTIVE ACTION PLAN
8
Budget Observations and Comparisons
♦
Last user rate increase 19 years ago (1991)
♦
Cost of equipment, repair, services and electricity, chemicals and
inflation have risen significantly.
♦
City does not collect enough revenue currently to operate and
maintain the system
♦
There is insufficient funds within the City to pay for the plan
along with operation and maintenance costs
CORRECTIVE ACTION PLAN
9
Proposed Rates
♦
An estimated $44,053,053 of additional funding is needed.
♦
Necessary to consider a user rate increase or face possible civil
penalties.
♦
Phased increase to meet future expenditures for principal and
interest.
♦
Pay as you go for citizens through increases over four years
♦
Two separate bond issues proposed to spread out the increase
CORRECTIVE ACTION PLAN
10
Proposed Rates
♦
2011 increase to $2.01 per 1,000 gallons covers operating and maintenance
and remaining LDEQ loan money
♦
2012 increase to $2.63 per1,000 gallons covers first municipal bond
of $16 million
♦
2013 increase to $2.68 per 1,000 gallons covers the estimated
CPI increase in 2013
♦
2014 increase to $3.031per 1,000 gallons covers second municipal bond
of $16 million
CORRECTIVE ACTION PLAN
11
Proposed Rate
Chart
Calendar Year
2010
2011
2012
2013
2014
Residential Customers
Monthly Usage Charge per 1,000 gal
$1.35
$2.01
$2.63
Avg. Monthly Sewer Bill
$10.81
$16.04 $21.02
$2.68
$3.31
$21.43 $26.45
Commercial Customers
Monthly Usage Charge per 1,000 gal
CORRECTIVE ACTION PLAN
$1.59
12
$2.36
$3.09
$3.15
$3.89
Sewer Rate Comparisons
Municipality
/Parish
Sewer
Fee/1,000
gallons
Monthly
Min
Avg.
Bill/8,000
gallons
Additional Fee
Harahan
$1.02
$5.25
$8.16
None
Kenner
(Current)
$1.35
$3.27
$10.80
None
Jefferson
Parish (2012)
$2.41
$3.90
$20.45
$1.17 monthly
Kenner
(2014)
$3.31
$8.01
$26.45
None
Gretna
$3.70
$10.14
$29.60
None
Slidell
$3.96
$29.64
$31.68
None
New Orleans
$4.04
$4.04
$40.40
$1.01/1,000 gallons toward Federal consent
decree with US EPA
Baton Rouge
$4.36
$13.08
$34.91
$.30 cents/100 gallons for more than 3,000
gallons. $2,150 one-time connection fee
Covington
$6.00
$15.18
$48.00
None
Houston
$6.52
$6.52
$53.30
$1.14 additional service fee for more than 7,000
gallons
CORRECTIVE ACTION PLAN
13
Utility Comparisons
Utility
Avg. Monthly Bill
2010 Sewer Fee
$10.81
2014 Sewer Fee
$26.45
Avg. Gas Bill Based on 100 ccf usage
$103.78
Avg. Electric Bill Based on 1,000 kWh usage
$111.08
Basic Cell Phone Based on 450 minutes usage
per month
$39.99
CORRECTIVE ACTION PLAN
14
Options
♦ Do nothing – Millions of dollars in possible fines from LDEQ and EPA
plus the City still will be expected to pay for repairs to the system
♦ Increase fees to levels shown
+ Fair to users because proportionate use pays for system
+ Few City services produce revenue to pay for itself
CORRECTIVE ACTION PLAN
15
Consequences of No Action
♦
If sewer fee increase is not approved outstanding bills owed to system operator (Veolia)
will continue to increase
♦
LDEQ will take back the remaining $11,000,000 in low interest (0.95%)
loan money
♦
EPA will step in for violation of Clean Water Act
♦
Taxes may increase to pay fines
♦
City services may be cut that don’t generate revenue (Recreation,
Community Services, etc.)
CORRECTIVE ACTION PLAN
16
Conclusions
♦
Fee increases are not popular but to take no action would be
irresponsible and cost more over time
♦
2014 the average residential homeowner would pay $26.45 per
month for its wastewater services.
♦
Comparable to other utilities and municipalities the proposed
rates are not out of the ordinary
CORRECTIVE ACTION PLAN
17