Written by Larry Limpf
October 22, 2010
Is it time to change the funding criteria for sewer separation projects mandated by the U.S. Environmental Protection Agency so communities aren’t left overwhelmed financially by project costs?
A bi-partisan group of congressional representatives thinks so.
Nine members of congress, including Robert Latta, (R-Bowling Green), is asking the EPA to update its 13-year-old set of rules for scheduling projects to separate combined storm and sanitary sewer systems and assessing the financial capabilities of communities undertaking the projects.
The representatives are asking the chairman and ranking member of the House Transportation and Infrastructure Committee to have the EPA update its guidance document that was adopted in 1997 for combined sewer overflows.
“…EPA has increased the number of enforcement actions it is pursuing against communities with combined sewer systems. In pursuing these enforcement actions, EPA often requires communities to undertake projects to correct these events often seeking rate increases that amount to 2 percent of the ratepayer’s Median Household Income,” a letter from the representatives to the chairmen says.
Relying on median income as the primary indicator of financial ability doesn’t accurately reflect a community’s ability to undertake the projects or correspond to “an equally determinable water quality improvement,” the letter says.
The representatives are asking the EPA weigh other factors more, including the socio-economic status of residents, unemployment rates, the ratio of residents on fixed incomes, and population shifts.
“In addition, community-wide considerations such as a community’s bond rating, bond status, and access to capital” aren’t taken into account, the letter says.
As an example, they cite a major project in St. Louis, Missouri where a mandated $1.9 billion improvement was undertaken by the Metropolitan Sewerage District of St. Louis.
With the city’s unemployment rate hovering around 9.9 percent and nearly 24 percent of the residents below the poverty line, the district has still increased water rates by 60 percent in recent years and a larger hike is being proposed to finance more investments in the future.
Rep. Russ Carnahan (D - St. Louis) is one of signers of the letter.
Rep. Latta introduced a bill last month to address the issue.
If passed, House Resolution 6353 would give municipalities extended loan repayment periods and require states to use 15 percent of funds available through the Water Pollution Control Revolving Fund to cover the cost of upgrades for communities with fewer than 10,000 residents that meet certain criteria.
Latta said he’s heard many concerns from local elected officials in his congressional district about the costs of the mandated projects and the burden the rate increases place on residents.
Jerry Greiner, director of the Northwestern Water and Sewer District, said the bill could help many local governments in the district’s service area.
“From what I’ve seen of the bill, it looks good,” he said. It opens the door for smaller and mid-sized communities to the revolving fund. “
Some sources of financing often require matches of 30-50 percent from the borrowing communities, which are often strapped to come up with the funds, Greiner said, adding smaller towns have difficulty competing with larger municipalities for grant funding.
Dina Pierce, a spokesperson for the Ohio EPA, said the agency was still reviewing the bill.
The bill has been referred to the House Transportation and Infrastructure Committee.