Everyone Seems To Agree On One Thing: Sewer Rates Stink

Cleveland Plain Dealer

CLEVELAND, Ohio -- Everyone seems to agree on one thing: Sewer rates stink, and they're going to keep getting worse.

Beyond that, there's a dispute over the negotiated settlement agreed to Dec. 2 by the Northeast Ohio Regional Sewer District and federal authorities.

In short, the deal will result in a $3 billion, 25-year pollution-control plan paid for by eventually nearly tripling our sewer rates. Pollution controls must be in place to comply with the Clean Water Act of 1972.

The agreement itself was filed Wednesday in U.S. District Court. The action soon starts a 30-day public comment period. After that, the agreement becomes legally binding.

The high cost of the agreement already has stirred up or scared hundreds of Northeast Ohioans, who have made plenty of comments about the rate hikes among themselves or in online postings.

Here are some of the questions they're asking -- and in some cases, the still-evolving answers:

Won't this rate hike break already financially strapped Northeast Ohio families?

This is easily the most ardently and frequently asked question -- and probably the hardest to answer.

For starters, sewer rates have actually been climbing steadily in Northeast Ohio for 30 years -- from the point in the 1980s that the federal government began phasing out subsidies for pollution control (the district received $600 million from 1972 to 1990, but little since.)

Northeast Ohio rates -- after no increases from 1972 to 1987 -- essentially doubled in each of the last two decades.

So even today's sewer bills -- compared with the less than $50 a year the average customer paid in 1972 -- may already be too heavy a burden for some residents.

"I have to plead to you today not to do this," Edwin Figueroa of Parma told the sewer board last Thursday. "I'm a senior citizen who lives on a fixed income, and Parma is in a community of senior citizens on fixed incomes.

"The poor people of this community are going to suffer. We can't afford this type of increase."

The average customer in the sewer district, which serves Cleveland and more than 60 suburbs (go online to neorsd.org/in_your_community.php to see a list), is already paying about $370 a year -- $400 a year for suburban residents.

That average will rise to $404 and $432 a year, respectively, by the end of next year, the last year of an ongoing schedule of rate increases.

All of that is without even addressing the $3 billion plan.

The rate increase that will be needed to pay for the new settlement with the Environmental Protection Agency hasn't even been officially proposed yet, much less approved by the sewer board.

But when it hits -- and it will -- it will be huge, even as it's phased in over 25 years.

Predicted increases of 13 percent a year from 2012 through 2016 will drive the average annual sewer bill cost to $744 in the city and $800 in the suburbs by 2016.

It will take the remaining 20 years to finally push that average bill up to the $1,000-a-year mark, the district has estimated.

Finally, the coming sewer bill increases are coming at the same time that the sewer district is proposing an average $57-a-year fee on property owners to fund a new storm-water management program.

That separate storm-water fee is being opposed in court by more than a dozen communities in both Summit and Cuyahoga counties, and the Cleveland NAACP has petitioned to join the suit.

Meanwhile, Doug Price of K&D Group, an owner of numerous Northeast Ohio apartment buildings, said he has launched a campaign to stop the agreement with the EPA from going forward.

Didn't federal authorities push local negotiators around, leaving Northeast Ohio with a terrible settlement?

Without having actually been in the room from the time negotiations began in earnest in 2007, it's hard to say with absolute certainty that the sewer district got the best deal -- but sewer district officials have said it could have been worse.

It's clear that the U.S. and Ohio EPA and U.S. Department of Justice had federal law and precedence on their side.

Northeast Ohio is only one among more than 100 U.S. communities either under a consent decree or in negotiations with federal or state authorities to meet clean-water laws.

Nationally, an average annual bill was just under $250, a 25 percent increase from a year earlier, according to a survey by a national association of water quality agencies. The national average is projected to reach about $475 by the year 2014 -- the same year the average Northeast Ohio bill will already be between $580 and $620.

Cincinnati is already higher than that -- a recent 8 percent increase upped the average annual bill in Hamilton County to about $664.

In fact, sewer bills are spiraling in hundreds of other U.S. cities, mostly those with older systems that have combined sewer and storm-water overflow pipes, said Ken Kirk, executive director of the National Association of Clean Water Agencies.

"This is not just a problem in Cleveland -- far from it," he said. "Officials in water quality agencies in the East, Midwest and the upper Northwest, particularly, are faced with explaining to their customers why the rates are increasing so much."

Darnell Brown, chief operating officer for the city of Cleveland and president of the regional sewer board, said one other thing is often lost in the debate: It's still illegal to pollute.

"We're in violation and we've been in violation for a long time," Brown said. "Our negotiators got only the second deal in the country at more than 20 years to pay for it."

Brown and sewer district Executive Director Julius Ciaccia have said sewer district negotiators also persuaded the federal bargaining team to consider Northeast Ohio as being under a "high financial burden."

That allowed the district to spread the projects over 25 years instead of a shorter time period the feds were seeking.

"The EPA wanted our plan completed in 12 to 15 years and they started out at $3.7 billion," Brown said. "Can you imagine the rate increases that would have been needed to come up with that much money in that short of a time period?

"No one wants to consider that, but it would have been much, much worse."

Haven't other regions or cities like Florida or Detroit been more successful at either fighting the EPA or less expensively reducing their pollution?

Several residents who spoke at the sewer board meeting on Thursday mentioned a recent news story out of Florida in which state officials had persuaded the EPA to wait 15 more months before enforcing an environmental law because of tough economic times.

Middleburg Heights Mayor Gary Starr first brought up the story to editors at The Plain Dealer in mid-November. Starr also publicly requested a year's delay in signing the contract, although Ciaccia argued that every year would cost an additional $100 million in inflation costs for the construction projects.

But while the Florida case shows that the U.S. EPA is willing to give Florida the next 15 months to comply, it is a reprieve from brand-new rules geared toward reducing excessive nutrients being washed into waterways -- not from meeting requirements of a more than 35-year-old law.

There has been no sign that federal authorities would wait longer to get a deal with local officials. Ciaccia said the opposite is true. "They're motivated to get this consent decree with us filed in federal court before the end of the year," he said.

Other readers have suggested that Cleveland ought to consider following Detroit's example. Detroit recently scrapped an underground tunnel -- the same types that are the centerpiece of the Northeast Ohio pollution-control plan -- and is now studying alternatives.

That's also true, but Detroit is still under a state permit and not yet under a consent decree with federal authorities. It's also a smaller system in that it services only the city, not a sprawling suburban region like the Northeast Ohio district, which requires three separate pollution treatment plants and a significantly greater number of pipes.

Wouldn't it have been better for Northeast Ohio to just wait to be sued by the EPA like Akron did?

A number of residents have also suggested that the Northeast Ohio sewer district yielded too easily to federal authorities and should have allowed the government to sue the district as it did with the city of Akron.

It's probably still too early to say if that's true -- mostly because Akron does not have a final settlement with the EPA as the Northeast Ohio district does.

But in late 2009, the Akron City Council, anticipating the expense of a coming settlement, approved a four-year rate schedule that essentially doubles bills for the average customer by 2013, said Andre Blaylock, city business services administrator.

So in Akron, a residential customer currently paying $25 a month will be paying $49.05 by 2013 -- that's about $600 a year.

The next rate schedule will likely reflect the next round of federal demands in a final settlement, Blaylock said.

"Right, we know the short term, but it's the remaining 15-16 years that's up in the air," he said. "It's not out of the question to see rates tripling eventually, though that's not for me to say."

Akron's original proposed agreement with the EPA requires the city to curtail sewer overflows in 19 years, expand the sewage treatment plant, pay a $500,000 penalty and provide $900,000 to remove a Cuyahoga River dam in the Cuyahoga Valley National Park.

Ciaccia argued that even "simple math" will show that the regional district has done better than Akron.

Here's his reasoning: Right now, Akron has a proposal on the table of $575 million over 19 years. Dividing that by its 85,000 users, that's about $362 per year, per customer.

The Northeast Ohio district's deal, is $3 billion over 25 years for 330,000 customers, but Ciaccia uses a figure of $2.7 billion because he says negotiators purposely overshot on projected construction costs.

That works out to $327 per customer, per year.

"So even if they get what they have proposed -- which has already been rejected -- we've negotiated a better deal for our customers," Ciaccia said.

Didn't convicted thief and former law director William Schatz negotiate this deal with the government?

Yes and no.

Schatz, who pocketed more than $800,000 in bribes and stolen checks in a long-time scam with certain sewer district contractors, left the district in the summer of 2007 when negotiations with the EPA under Ciaccia were just picking up.

Schatz was sentenced earlier this year to nearly six years in prison.

But the longtime sewer district lawyer, who resigned during a Plain Dealer investigation that preceded the FBI probe that led to his conviction, certainly played a role in formal negotiations once they began in 2004.

"He's the one who tried to get the state, the governor's office to keep the negotiations between us and the state and not get the feds involved and he was the one who delivered the original $1.6 billion, 30-year proposal to the feds, but that was about it," Ciaccia said. "He had nothing, zero, to do with the details of the consent decree -- which was built around a $40 million engineering study, something he would have no role in."

What Schatz did do during his nearly 30 years with the district, however, was run a scheme in which contractors overcharged the sewer district for a number of high-profile construction jobs, including the Mill Creek Tunnel, the prototype for a half dozen other deep storage tunnels yet to be built.

That fact also worries a number of readers.

But sewer officials point out not only that the district is suing one contractor to get some of the money back, but also that no construction jobs have been over the estimated budget since Ciaccia took over in 2007.

Still, Ciaccia said he understands that readers don't trust him or the sewer district, in part because of the actions of Schatz and others who have also been convicted in the scam.

"It's going to take a long time for the general public to believe that we can deliver projects honestly," he said.

How can you make public comment to the U.S. District Court?

It is uncertain right now. A U.S. EPA spokesman said Wednesday that when the comment period begins sometime after the holidays, more information will be posted at www.justice.gov/enrd/Consent_Decrees.html. Scroll down and hit the icon for U.S. & Ohio v. Northeast Ohio Regional Sewer District.

Plain Dealer reporter Tom Feran contributed to this story.

To reach this Plain Dealer reporter: This e-mail address is being protected from spambots. You need JavaScript enabled to view it , 216-999-414

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