Permitting, Compliance, and Enforcement Program
Georgia Environmental Protection Division
4220 International Parkway, Suite 101
Atlanta, Georgia 30354
RE: Upper Chattahoochee Riverkeeper Fund, et al.,
v. City of Atlanta Civil Action o. 1:95-CV-2550
and 1:98-CV-1956
Gentlemen:
I have received your December 11, 2003 letter in which the United States Environmental Protection Agency (EPA) and the Georgia Environmental Protection Division (EPD) request the City of Atlanta (City) to provide additional information regarding specific consent decree compliance impacts that will be caused by the rate increase ordinance and other associated ordinances passed by the Atlanta City Council at the December 1, 2003 Council Meeting. You have requested that the City quickly respond by December 16, 2003, and this letter reflects the degree of specificity that was possible within that timeframe.
The 6ccf rate ordinance that the Mayor vetoed was insufficient to meet the requirements of the program. If the City Council overrides the veto and reinstitutes the 6ccf ordinance, the City will not be able to comply with the Consent Decrees as indicated in the City’s letter of December 4, 2003. If the City Council takes no action then a one-year 10% rate increase is effective. The 10% increase will also be insufficient to meet program needs.
The rate increase ordinance and the Department of Watershed Management budget ordinance situation is currently fluid and a review of both past and potential near-term actions may be helpful. In order to fund the construction and operational actions necessary for compliance with the Consent Decrees and Consent Orders, maintain compliance with regulatory requirements and insure the safety and reliability of the City’s drinking water and wastewater systems, the Administration proposed a rate increase on October 13, 2003 of both water and sewer rates of 45% in 2004, 45% in 2005, and 11% in 2006, 2007 and 2008. The City Council voted on November 17, 2003 to send this proposed ordinance back to the City Utilities Committee. The committee amended the ordinance to include a 3ccf conservation rate that eliminated the rate increases for the first 300 cubic feet every customer uses per month. One ccf (hundred cubic feet) is approximately 750 gallons. The Atlanta City Council further amended and passed the ordinance to include a 6ccf conservation rate during the December 1, 2003 meeting (Ordinance 03-O-1713). Also passed at that meeting was a senior citizen, low-income exemption ordinance (Ordinance 03-O-1967) and a Department of Watershed Management budget ordinance with a $25 million reduction (Ordinance 03-O-2145). These actions prompted the Department’s letter of December 4, 2003 under the notification provisions of Section XII, Force Majeure [C], of the Consent Decree (CD) and First Amended Consent Decree (FACD). In that notice, the City notified the agencies that the funding levels included in the ordinances would delay or prevent the performance of the CD and FACD obligations. A memo describing the financial impact of the 6ccf rate structure from Ms. Renay Blumenthal of the City’s Finance Department is attached.
Subsequent to our letter of notification, the Mayor vetoed the three pieces of legislation because they would not adequately fund the program requirements and because approval of the measures would have knowingly violated the legal obligations of the CD and FACD. Therefore, the current situation is that no new rate increase ordinances and no departmental budget ordinance are in effect.
A new rate increase ordinance with a 4ccf conservation rate has been introduced, has had a public hearing and is scheduled to be addressed at the January 5, 2004 City Council meeting.
Possible actions at the January 5 City Council meeting include:
a. No legislation is passed by the
City Council and the existing water and sewer
rates continue with the preprogrammed effective
combined increase of 10% (2.9% water & 13%
wastewater) that was passed in 2001;
b. The City Council overrides the
Mayor’s veto and the 6ccf
conservation rate is reestablished;
c. The 4ccf ordinance, or an amended
version at some other ccf level, is
passed.
Our letter of December 4, 2003 noted the impracticability of the 6ccf proposal and attendant legislation. Similarly, this letter is intended to reflect the deleterious effects of a rate structure that does not provide adequate funding. We anticipate that the rate increase issue will be clarified at the January 5, 2004 City Council meeting and we are available to provide a status report of the situation at that point. In the meantime, as the 10% rate increase will become effective on January 1, 2004, rather than the earlier proposed 6ccf rate, it is the basis of our response to your letter of December 11, 2003.
The program impacts of the 10% increase (i.e., no further action) are extreme in terms of financial and compliance shortfalls. No new revenue bonds could be issued and to meet the debt service payment and debt coverage requirements on existing bonds, the operation and maintenance budget would need to be severely impacted. With no additional bond funds and a severe operational budget impact, compliance with mandatory construction and operational requirements would be impossible and the provision of essential services would be put at risk.
The Consent Decree milestone schedule for 2004 and specific milestones not achieved along with impacts to the MOMS programs are summarized in the attachments. The first construction milestone that would be missed would be related to the West Area CSO Tunnel project. The City will not advertise the construction project on January 2, 2004 as scheduled. This schedule would have provided 62 days of float through the final construction deadline. Without appropriate funding, the City will not meet the Contractor NTP milestone of July 12, 2004.
Impacts to the MOMS program would begin immediately in January 2004 with the decrease in funding and the associated decrease in staff and consultant availability. These would preclude the compliance with the certification milestones April 5, 2004.
In August, 2003 the City of Atlanta presented a report to EPA and EPD on the causes of compliance failure and corrective actions related to the Indian Creek sewer construction project. Conditions and actions contributing to the compliance failure included inadequate and delayed financing, delayed project initiation, a protracted purchasing process and a non-continuous design and construction process. The City of Atlanta committed to specific corrective actions in order to insure that future projects would meet Consent Decree milestones. EPA and EPD cited the improvements the City of Atlanta had made in their enforcement letter of November 5, 2003. Unfortunately, the financial consequences of the 10% rate action will engender the exact conditions that led to the Indian Creek failure.
We are available to discuss these issues between now and the City Council meeting of January 5, 2004 at which point we will be able to give a status report of what we hope will be a successful resolution of the rate issue.
Sincerely,
CITY OF ATLANTA
Jack E. Ravan, Commissioner
Department of Watershed Management
Encl.
Cc:
Chief, Environmental Enforcement Section
Environmental and Natural Resource Division
U.S. Department of Justice
P.O. Box 7611
Washington, D.C. 20044-7611
Ref: DOJ Case No. 90-5-1-1-4195
Attn: Bill Weinschke, Esq.
United States Attorney
Northern District of Georgia
Richard B. Russell Federal Building
75 Spring Street, S.W.
Suite 1800
Atlanta, Georgia 30303
Attn: Julia B. Anderson, Esq.
Assistant Attorney General
Department of Law
State of Georgia
40 Capital Square, S.W.
Atlanta, Georgia 30334
Attn: John E. Hennley, Esq.
David Pope, Esq.
Carr, Tabb, Pope & Freeman LLP
10 North Parkway Square, N.W.
4200 Northside Parkway
Atlanta, Georgia 30327
William Bush
U.S. Environmental Protection Agency, Region 4
Atlanta Federal Center
61 Forsyth Street, S.W.
Atlanta, Georgia 30303