January 15, 2004
VIA FACSIMILE AND CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Douglas F. Mundrick, P.E., Chief, Water Programs Enforcement Branch, Water Management Division
U.S. Environmental Protection Agency - Region IV, Atlanta Federal Center, 61 Forsyth Street, Atlanta, Georgia 30303-8960
Mr. Jeffery H. Larson, Program Manager, 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:
On December 4, 2003 the City of Atlanta submitted a "Notice of Delay to EPA and EPD" as required under Section XII, Force Majeure (C), of the Consent Decree (CD) and First Amended Consent Decree (FACD), in anticipation of delays we believed to be eminent as a result of events arising from actions by the Atlanta City Council on December 1, 2003. We are now, with this letter, rescinding the notice of noncompliance in the December 4th letter, and our subsequent letter dated December 16, 2003 sent to provide supplemental information.
On January 5, 2004, City Council met and considered again the issue of water and sewer rates, unanimously approving a rate package that will allow the City to meet the deadlines required by the CD and FACD, provide adequate funding for operating and maintenance costs, meet or exceed minimum debt coverage requirements over the five-year program, and rebuild the financial stability of the water-sewer utility. These actions will place the City in the position to meet the terms of the CDs.
With the passage of the rate increase ordinance, the City will have the ability to issue new bonds in 2004. Previously, we estimated that City Council's action with regard to the initial proposed rate increase and budget requests would undermine the financial strength and stability of the water and wastewater fund, resulting in lost revenue and a declining debt coverage ratio. However, the passage of the legislation on January 5th will provide the necessary revenue, will allow for the issuance of new bonds, and will allow the City to meet the capital needs anticipated for the coming fiscal year. Under the current capital projects schedule and funding levels, the City will be able to initiate new consent decree projects beyond the July 2004 shortfall date that was previously identified. The Department of Watershed Management (DWM) has reviewed and revised our Capital Improvement Program (CIP) with a net reduction in capital requirements of $24 million out of $3.174 billion total for the 2004-2014 period (0.76% reduction). However, the year-to-year distribution of capital projects was significantly changed within the eleven-year period with a transfer of $269 million beyond the 2004-2008 period. The rescheduled projects were largely drinking water related or were FACD projects with completion deadlines well beyond 2008. We do not foresee any compliance problems associated with the revised CIP funding levels or schedule.
In our previous letter, we anticipated the revenue stream would not provide adequate financial resources for the Renewal & Extension Fund, resulting in $30 million worth of smaller capital repair and system improvement projects not being performed as required. Further, we also anticipated that the DWM budget would be reduced by $25 million for 2004. We anticipated the effects of this budget reduction to be inadequate funding to provide the required management, operation and maintenance systems (MOMs) as required under the Consent Decree, and the management system improvements we committed to in our Indian Creek report and presentation. With the passage of the water and sewer rate ordinance on January 5, 2004, we no longer anticipate either of these events will occur. The January 5, 2004 rates are based on a DWM budget reduction of $6.9 million in 2004. We have carefully evaluated the impacts of that budget reduction and we are confident that it will not impede our compliance with the Consent Decrees.
We are available to discuss these issues with you at your convenience.
Sincerely,
CITY OF ATLANTA
Jack E. Ravan, Commissioner
Department of Watershed Management
Cc:
Chief, Environmental Enforcement Section, Environmental and Natural Resource Division, U.S. Department of Justice, Attn: Bill Weinschke, Esq.
United States Attorney, Northern District of Georgia, Attn: Julia B. Anderson, Esq.
Assistant Attorney General, Department of Law,State of Georgia, Attn: John E. Hennley, Esq
David Pope, Esq., Carr, Tabb, Pope & Freeman LLP
William Bush, U.S. Environmental Protection Agency, Region 4
City Team:
Shirley Franklin, Mayor
Lynnette Young, Chief Operating Officer
Greg Pridgeon, Chief of Staff
Linda DiSantis, City Attorney
Robert Hunter, Deputy Commissioner of Watershed Management
Sally Mills, Chief Environmental Officer
Joseph Basista/PMT MWH/Khafra Joint Venture
Stacey Abrams, Deputy City Attorney
Pilar Jan Penn, Assistant City Attorney
Repository (Attn: Marilyn Johnson)