Recent reports on how Ohio’s small and medium-sized cities are performing economically vs. their larger peers.
Major report in 2015 on Ohio’s water and sewer infrastructure needs – Ohio’s cities and villages are collectively spending billions of dollars to comply with EPA regulations and upgrade their aging infrastructure. We will talk about:
These regulatory challenges and the evolution of infrastructure planning away from “gray” toward “green” infrastructure How water infrastructure is financed and growing concerns about increasing user charges and AFFORDABILITY Flint, MI and issue of lead poisoning – implications for the rest of the country
About 90 Ch 6119 districts in state
5,000 drinking water utilities in OH (some serve less than 500 people)
MS4 permits – municipal separate sanitary sewer systems for stormwater control
CSO project often involving large tunnels to store millions of gallons of stormwater a few times per year
MS4 = municipal separate sanitary sewer system permits (phase I, 1990, large cities with popl over 100,000; phase II, 1999, smaller cities)
Areas around state are much different situation. Older legacy cities with falling populations are struggling with aging systems that were built for larger populations. Some rural areas in SE Ohio still are trying to find ways to connect to sewers and public drinking water. CSO correction work is common across the state. Financial ability of cities varies tremendously. Columbus can continue to borrow from OWDA and issue its own bonds others are running up against limits.
MSD of Greater Cincinnati: Phase One, 2009 – 2018, $1.1 Billion Phase Two, after 2018, $2.1 Billion for 256 separate projects
Columbus: total $3.6 Billion over about 30 years (2005 – 2035)
Cleveland: $3B over 35 years
Akron $1.4B from original LTCP now being brought down by integrated planning
Source: Constructing or rehabilitating surface water intake structures, drilled wells, and spring collectors.
Treatment: Construction, expansion, and rehabilitation of infrastructure to reduce contamination through filtration, disinfection, corrosion control. Usually makes up a large portion of regulatory need
Storage: Construct, rehabilitate, or cover finished water storage tanks, but excludes dams and raw water reservoirs
Other: Ex: system-wide telemetry, supervisory control and data acquisition (SCADA) systems, and water system security measures that were not assigned to another category.
Water and sewer rates have been increasing faster than consumer price inflation
Inflation adjusted averaged combined water and sewer rates increased by 31.5% increase from 1999 – 2014, from $912 to $1199;
Median household income dropped by 13 percent over same time period
For comparison, Median monthly housing cost for Ohio is $739 (ACS 2013)
U.S. Rep. Marcia Fudge bill to help low income families to pay for costs of water and sewer; modeled after the LIHEAP program; a few of large utilities have customer assistance programs but hard to reach tenants because they are not paying bills directly. This is large portion of low income families.
Compare to other utilities??
Basic idea is to lessen need for deep tunnels and other large storage basins
Philadelphia is national leader, 70% of control plan devoted to green infrastructure; degree of control is an issue
Blueprint Columbus plan modified original long term control plan, allowed for $1.8B in spending over 20 years with better stormwater control, vs. $2.5B over 30 years with all “gray” plan
WPCLF annual capacity over $700 million DWAF over $150 million
OWDA started in 1968 with $100 million GO bond issuance;
OWDA Fresh Water Fund offers market rates; the borrower’s ability to repay is primary criterion. Monthly application.
EPA funds offer substantial discounts but environmental studies are required. EPA revolving loan funds would save $147,000 over the life of the loan in this scenario but come with higher compliance issues
Both EPA and OWDA offer special interest for small communities or those facing economic hardship. The OWDA “Community Assistance” loan is for areas with population under 5,000 that meet hardship criteria based on User rates as % of median household income (2.6% combined water and Sewer), limit is $5M maximum
P3s – Ohio do not have a comprehensive P3 statute Regionalization – cooperative agreements do not require
AMP – age is not always the best predictor of when pipes will break; emergency repairs to water mains are major expense; water loss for drinking water systems is a major issue; survey of 42 utilities nationwide found median water loss rate of 22 percent (volume). Acceptable industry standard is 15 percent.
SB 333 (Sen. Hite) is still in the Senate but may move in lame duck. It would require public water systems to have an asset management program no later than October 1, 2018. EPA can require earlier completion at its discretion.
SB 333 requires the following: Inventory and evaluation of all assets; operation and maintenance programs, contingency planning, criteria and timelines for infrastructure rehab and replacement; approved capacity projections and capital improvement planning; long-term funding strategy to support AMP implementation;
The biggest risk to children is still from lead paint. Lead is a neurotoxin particularly devastating to children’s development. The effects are irreversible. Although the EPA sets a lead action level guideline of 15 parts per billion THERE IS NO SAFE LEVEL. It can cause lifetime learning disabilities and is linked to behavioral issues.
Problems with Common Lead Testing Protocols: Pre-stagnation Flushing Step: Residents told to run faucet the night before testing, then not use water for at least six hours – letting it sit in the pipes – before drawing the sample. Method used by Columbus and many other municipalities around the country. February 2016 memo - EPA said the practice could ‘potentially lower the lead levels’ in test results by possibly removing lead-tainted water from the pipes the night before. - Heidi Griesmer Ohio EPA U.S. EPA recommends the removal of pre-flushing from testing protocols and the use of wide-mouth sample bottles so residents could fill them just like they’d fill a glass of water. Olsen, Erik and Kristi Pullen Fedinick, “What’s in Your Water? Flint and Beyond: Analysis of EPA data reveals widespread lead crisis potentially affecting millions of Americans. National Resources Defense Council. Report. Print. 2016.(https://www.nrdc.org/sites/default/files/whats-in-your-water-flint-beyond-es.pdf)
Sebring – water system operator did notifiy residents of lead contamination within required 30 day window. Operator faces criminal charges. 2 Ohio EPA employees fired
Lansing, MI and Madison, WI went ahead and replaced all of the LSLs; Lansing raised rates and was able to bear the entire cost of a $42 million plan that replaced about 14,000 LSLs; city owned entire supply line
Madison – more typical situation in which homeowner owned line starting at edge of property line, and offered $1,000 rebates to homeowners, paid for by selling space on utility water towers to cell phone companies
High concentrations of lead may continue due to plumbing fixtures and pipes inside home – this is being shown in Flint
Corrosive water also linked to outbreak of Legionnaires diseases at hospital.
LATEST RESULTS SHOW THAT LEAD LEVELS CAN SPIKE IN WATER EVEN IN HOMES WITH NO LEAD SERVICE LINES TEST RESULTS TAKEN FROM THE SAME HOME ARE NOT CONSISTENT – LEAD LEVELS CAN RISE OR FALL SIGNFICANTLY WITHIN A MATTER OF DAYS
CURRENT FEDERAL RULES CALL FOR NOTIFICATION OF HOMEOWNER WITHIN 30 DAYS OF VIOLATION, AND PUBLIC NOTIFICATION WITHIN 60 DAYS IF THE SYSTEM IS OUT OF COMPLIANCE
HB 512 - For test from an individual home, notification of results above lead threshold level must take place within 2 business days by direct notification such as email, phone call, or hand delivery; AND provide notice of blood level testing and health screening
If system exceeds LEAD ACTION LEVEL (10% of samples are above 15 parts per billion) then notice must be provided to all consumers within 2 business days. Provide information on availability of health screening and blood level testing.
Laboratory that receives sample must complete analysis within 30 days
No general state commitment to replacing LSL (Michigan is pledging $27M)
US EPA is revising Lead and Copper Rule but not expected to release draft until 2017. Federal policy continues to push CSO corrections. U.S. Senate passed its version of the Water Resources Development Act with $100 Million for Flint and a $300 million national grant programbut that provision is not expected to be sustained by the House version.
$12M available from Ohio Facilities Construction Commission
List subjects of panels
Water Infrastructure Presentation
OHIO’S WATER & SEWER
Jon Honeck, PhD
Senior Policy Fellow
Greater Ohio Policy Center
GREATER OHIO POLICY CENTER (GOPC)
An outcome-oriented statewide non-profit organization that
champions revitalization and sustainable redevelopment in Ohio:
Drinking water and wastewater usually separate
Can be organized as municipal, county, or regional
(RC Ch 6119) entities
Largely supported by customer charges (enterprise
New concept of “Stormwater utility” fees (MS4)
EPA regulation and permit process is large driver
of capital spending
Aging infrastructure, some still dates from late
19th or early 20th Century
Ohio has est. 650,000 homes or businesses served
by lead water supply lines (6.1 million nationally)¹
OVERVIEW OF WATER, WASTEWATER AND
¹AWWA National Survey (2016).
Clean Water Act
National Pollutant Discharge Elimination System
(NPDES) – state EPA permits for municipal,
stormwater, industrial discharges
Combined sewer overflow (CSO) correction
87 Ohio cities are under EPA consent decrees, over
100 others under EPA findings and orders
Created need for large capital projects taking
decades to complete
MS4 – municipal stormwater discharges
EPA REGULATORY ENFORCEMENT
Primary Drinking Water Regulations
Enforceable standards for Inorganic Chemicals,
Organic Chemicals, Radionuclides, Microorganisms
“Lead and Copper Rule” is being revised
Secondary Nonenforceable standards for cosmetic or
aesthetic purposes (taste and smell)
SAFE DRINKING WATER ACT
SEPARATE SEWER SYSTEM
OHIO NEEDS $14.1 BILLION FOR
WASTEWATER TREATMENT, 2012 - 2032
U.S. EPA Office of Water. Clean Watersheds Needs Survey 2012 Report to Congress – State Fact Sheets. Ohio CWNS 2012.
OHIO NEEDS $12.1 BILLION FOR DRINKING
WATER INFRASTRUCTURE, 2011-2030
U.S. EPA Office of Water. Drinking Water Infrastructure Needs Survey and Assessment.
Fifth Report to Congress. EPA 816-R-13-006. April 2013.
Average Annual Ohio Water and Sewer Rates
INCREASES IN RATES LEAD TO
31.5% Real Increase
FULL COST PRICING IS DIFFICULT
Percentage of Large/Medium U.S. Water and Sewer Utilities
with revenues sufficient to cover maintenance, debt service,
capital investment, and reserves
Source: Black & Veatch, 2016 Strategic Directions.
Cost of Consent Decrees Led to Search for Alternatives
US EPA encouraging “green infrastructure” and “integrated
planning process” that allows modification of plans
Columbus original WWMP $3.5 Billion over 40 years
“Blueprint Columbus” avoided deep tunnel and saved $700
million, achieve better stormwater control results
NEORSD – providing grants for green infrastructure
Cincinnati MSD – stream “daylighting” and other green
infrastructure in Lower Mill Creek Valley
oGreen Infrastructure is new, hard to evaluate long-term impact
o Maintenance issues – responsibility and cost
o Stormwater installations on private property
GREEN INFRASTRUCTURE: A NEW
Bio Retention Ponds
GREEN INFRASTRUCTURE EXAMPLES
Federal funding switched from grants to loans in late 1980s,
partnering with states to create revolving loans funds (SRFs)
Ohio EPA and OWDA Revolving Loan Funds:
Water Pollution Control Loan Fund (subsidized)
Drinking Water Assistance Fund (subsidized)
OWDA Fresh Water Fund (market rate)
Combined loan volume over $1 Billion from these three funds
Ohio Public Works Commission -- Grants and Loans for water and
sewer disbursed through 19 district integrating committees
Other federal sources, ARC, USDA, CDBG for small systems
Navigating through various sources is a challenge!
OWDA Market Rate,
INTEREST PAYMENTS ON
20 YEAR $1M LOAN
August 2016 interest rates; level amortization
Asset Management Programs (AMP) tied to capital planning
and rate structures
Predictive maintenance and prioritization
Senate Bill 333 would tie AMP to wastewater permits (Oct. 2018)
Regionalization for small systems
Cooperative agreements do not require Ch. 6119 regional govt.
Property-assessed stormwater infrastructure for private
concept similar to PACE, but water not included in Ohio PACE law
Public-Private Partnerships (P3s)
Ohio has limited P3 statute for ODOT, not for water
NEW FINANCING AND MANAGEMENT
No safe level of lead exposure in children
Lead service lines mostly installed before Second World War;
Ohio estimated to have about 10% of the 6.1 million total
lead service lines nationally (AWWA National Survey)
Corrosion can controlled through chemical treatment but risk
Work on main supply line or construction work can disturb LSL
Risk from lead fixtures and pipes within building itself
EPA requires testing under “lead and copper rule” but
protocols criticized as weak and not enforced (e.g., pre-
flushing techniques and failure to target test sites)
Customers usually own service line from street to the home,
leading to disputes about who pays for replacement
FLINT, SEBRING AND LEAD POISONING:
INFRASTRUCTURE AND PUBLIC HEALTH
The water system did not know the location of lead service
The water utility and state regulators employed dubious lead
Customers had little or no awareness of the potential for lead
in their drinking water
Utility construction was taking place without notifying
customers of the potential for lead contamination
Lead service line replacement is often looked at as
unnecessary, costly, and complex
-- Eric Rothstein, Member of Michigan Governor’s Flint
Water Advisory Task Force (Journal AWWA 2016)
WHAT IS NOT UNUSUAL ABOUT FLINT?
Holds public water systems more accountable for recording
and reporting lead and copper levels.
Imposes stricter monitoring of public water systems’
compliance with lead and copper rules and imposes
penalties for not complying with reporting and recording
Requires mapping of possible lead pipe lines by water
systems every five years
Requires of notice to resident within two days of receiving
contaminated results from tests.
HB 390 - $12 million for grants to schools to replace
lead fixtures ($15,000 per school, OFCC)
OHIO HOUSE BILL 512 (2016)
March 7th & 8th, 2017
More information is available at: www.GreaterOhio.wix.com/2017-Summit
The Westin Columbus
310 South High Street
Columbus, Ohio 43215
Investing in Ohio's Future:
Maximizing Growth in our Cities and Regions
More information is available at: www.GreaterOhio.wix.com/2017-Summit
Jon Honeck, Ph.D.
Senior Policy Fellow
FOR FURTHER INFORMATION