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Response to LDEQ Consolidated Compliance Order and Notice of Potential Penalty.

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Presentation on theme: "Response to LDEQ Consolidated Compliance Order and Notice of Potential Penalty."— Presentation transcript:

1 Response to LDEQ Consolidated Compliance Order and Notice of Potential Penalty

2 LPDES Overview 2CORRECTIVE ACTION PLAN ♦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.

3 LDEQ Background 3CORRECTIVE ACTION PLAN ♦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. WE- CN for noncompliance activities from February 1, 2004 through May 31, 2009.

4 Summary of Overflows CORRECTIVE ACTION PLAN Sub- Totals Grand Totals Mainline Blockage Broken Force Main Power Failuresa.)Hurricanes15 90 b.)Normal Rain Storm/ I & I Issues (Sewer System Up) a).Heavy1 Hurricane b). Normal Miscellaneous overflows from grit chamber, aeration tank, etc Mechanical Failures of Lift Station Totals

5 Importance of Regulatory Compliance 5CORRECTIVE ACTION PLAN 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.

6 Response to the Compliance Order 6CORRECTIVE ACTION PLAN ♦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.

7 Corrective Action Improvements Funded 7CORRECTIVE ACTION PLAN Funded Improvements Project Funding SourceTotal 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

8 CORRECTIVE ACTION PLAN8 Corrective Action Improvements Future Funded Projects Contingent Upon Sewer Fee Increase Project Funding SourceTotal Funds Required LDEQ Low Interest Loan$12,067,440 Municipal Bonds$31,985,613 Total Funds Required$44,053,053 Future Funds Required ♦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

9 Budget Observations and Comparisons 9CORRECTIVE ACTION PLAN ♦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

10 Proposed Rates 10CORRECTIVE ACTION PLAN ♦ 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

11 CORRECTIVE ACTION PLAN11 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

12 Proposed Rate Chart 12CORRECTIVE ACTION PLAN Calendar Year Residential Customers Monthly Usage Charge per 1,000 gal$1.35$2.01$2.63$2.68$3.31 Avg. Monthly Sewer Bill$10.81$16.04$21.02$21.43$26.45 Commercial Customers Monthly Usage Charge per 1,000 gal$1.59$2.36$3.09$3.15$3.89

13 Sewer Rate Comparisons 13CORRECTIVE ACTION PLAN Municipality /Parish Sewer Fee/1,000 gallons Monthly Min Avg. Bill/8,000 gallons Additional Fee Harahan$1.02$5.25$8.16None Kenner (Current) $1.35$3.27$10.80None Jefferson Parish (2012) $2.41$3.90$20.45$1.17 monthly Kenner (2014) $3.31$8.01$26.45None Gretna$3.70$10.14$29.60None Slidell$3.96$29.64$31.68None New Orleans$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$48.00None Houston$6.52 $53.30$1.14 additional service fee for more than 7,000 gallons

14 CORRECTIVE ACTION PLAN14 Utility Comparisons UtilityAvg. Monthly Bill 2010 Sewer Fee$ Sewer Fee$26.45 Avg. Gas Bill Based on 100 ccf usage$ Avg. Electric Bill Based on 1,000 kWh usage$ Basic Cell Phone Based on 450 minutes usage per month $39.99

15 Options CORRECTIVE ACTION PLAN15 ♦ 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

16 CORRECTIVE ACTION PLAN16 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.)

17 Conclusions 17CORRECTIVE ACTION PLAN ♦ 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


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