CU sewer rate hike requests head for city
by RICK NORTON, Associate Editor
Sep 25, 2012 | 1344 views | 0 0 comments | 6 6 recommendations | email to a friend | print
SEVERAL CLEVELAND UTILITIES LEADERS have been involved in the design of the comprehensive Strategic Commitment to Protect the Environment plan which is most commonly referred to as SCOPE 10. CU officially introduced the 10-year initiative to the Cleveland City Council during a rare joint session Monday. Making presentations, from left, were Greg Clark, CU wastewater rehabilitation manager who is heading up SCOPE 10; Tom Wheeler, CU president and CEO; Ken Webb, senior vice president and CFO; and Craig Mullinax, vice president of the Water Division. Banner photo, RICK NORTON
SEVERAL CLEVELAND UTILITIES LEADERS have been involved in the design of the comprehensive Strategic Commitment to Protect the Environment plan which is most commonly referred to as SCOPE 10. CU officially introduced the 10-year initiative to the Cleveland City Council during a rare joint session Monday. Making presentations, from left, were Greg Clark, CU wastewater rehabilitation manager who is heading up SCOPE 10; Tom Wheeler, CU president and CEO; Ken Webb, senior vice president and CFO; and Craig Mullinax, vice president of the Water Division. Banner photo, RICK NORTON
slideshow
Cleveland Utilities will ask the City Council at next spring’s budget hearings to commit to four years of sewer rate increases designed to help pay for a comprehensive $30 million sewer rehabilitation program.

Until then, the Cleveland Board of Public Utilities and Council members anticipate plenty of direct dialogue.

It started Monday with a rare joint session between the pair of governing bodies that was used by CU leaders and engineers to deliver a detailed crash course on Sewer Rehabilitation 101. In utility corners, it is known as the Strategic Commitment to Protect the Environment, or SCOPE 10 — a nine-month-old project expected to span the next decade.

SCOPE 10 is an expensive initiative, but it is not an optional one. That was the gist of the midday, working lunch message by Tom Wheeler, CU president and CEO.

“This is a real important subject,” Wheeler told Council members.

Its importance lies in two arenas. One, CU is tackling issues with sewer overflows that are worsened by area flooding during periods of heavy rainfall, and that are creating public health hazards. And two, the local utility is taking a proactive approach in hopes of pre-empting involvement by the Tennessee Department of Environment & Conservation and the federal Environmental Protection Agency.

If CU eventually is found to be in violation of its NPDES (National Pollutant Discharge Elimination System) Permit, it could lead to EPA penalties that could include a sewer moratorium until issues are corrected. A sewer moratorium could shut down new connections to the existing CU wastewater system, thereby stalling future construction and economic development.

Other Tennessee cities are already facing EPA mandates for sewer rehab projects to the hefty sum of $2.5 billion, according to Greg Clark, CU engineer who is heading up the SCOPE 10 project. The EPA directive has not only forced the start of sewer rehab campaigns in cities like Chattanooga, Nashville, Brentwood, Oak Ridge and Knoxville, but is also requiring sewer rate hikes ranging from 50 to 330 percent in order to pay for the improvements.

Through SCOPE 10, Cleveland Utilities is hoping to circumvent any such EPA mandates against the city of Cleveland; and if the federal agency does step in, local leaders will point to SCOPE 10 as the city’s strategy for alleviating sewer overflow and public health hazard concerns.

Much of Monday’s joint session included presentations by CU project engineers and department heads who reviewed past sewer rehabilitation projects since 1978. During this period, CU has spent more than $72 million on a string of improvements in response to the federal-level Clean Water Act of 1972.

“It’s our plan right now to bring this [official] proposal to you at next year’s budget meetings,” Wheeler told the Council, as well as City Manager Janice Casteel and other municipal personnel. But for now, he added, “... we want to lay out the magnitude of this problem.”

Wheeler said CU has been working to upgrade its aging wastewater system since 1978 when the city’s existing water and electric systems were combined. The consolidation came in response to the federal act of 1972.

“It is a huge undertaking and it has lasted for years,” Wheeler said of CU’s ongoing efforts. The “good news,” he stressed, is that the local utility is not too many years away from completing the complicated, and expensive, task.

But until then, much remains to be done and it won’t be cheap. Ken Webb, CU senior vice president and CFO, pointed out the utility had already budgeted about $14 million to eliminate — or at least, drastically reduce — the amount of inflow and infiltration impacting the sewer system. However, the figure jumped to more than $28 million when SCOPE 10’s initial efforts began to flush out the severity of damage to the existing system and the amount of money needed to fix it.

Currently, Webb’s extended CU budget through 2022 calls for 4.5 percent sewer rate hikes for four consecutive years from FY 2014 through FY 2017, and then 5 percent increases in FY 2019 and 2020. For the average residential customer who is now paying $28.66 per month for 5,000 gallons, this would rise to $29.95 in 2014, $31.30 in 2015, $32.71 in 2016, and $34.18 in 2017.

A 5 percent hike in FY 2019 would raise the monthly bill to $35.89 based on 5,000 gallons, and another 5 percent in 2020 would hike the bill to $37.68.

Wheeler said much of SCOPE 10’s design came in response to the floods of September 2011, which forced the utility to realize its existing I/I reduction initiative needed to be stepped up in order to address Cleveland’s overflow issues more quickly.

“It’s (SCOPE 10) an aggressive program,” Wheeler told Councilmen. “It’s a responsible program.”

And it’s an affordable program, provided the Council authorizes the scheduled CU rate hikes, Wheeler pointed out.

“[This] appears to us to be a manageable problem,” Wheeler said of SCOPE 10’s goals. He added, “We know what needs to be done and what funding will be required.”

Wheeler said the projected rate hikes, small in number as compared to some of those facing other cities, should enable CU to achieve its goals of reducing I/I to the point that overflows are minimal.

The CU leader pointed out getting the Council’s commitment next spring to allow the sewer rate hikes will satisfy loan regulators that future SCOPE 10 funding packages to the utility are secure.

In part of his Sewer Rehab 101 presentation, Clark pointed to the role played by I/I in CU’s overflow issues. I/I is a common industry term for Inflow & Infiltration into the wastewater collection system, he said. Both terms deal with invading water, but from different sources.

“Inflow is water from rainfall that enters the wastewater collection system through direct sources such as yard drains, roof drains and downspouts, cross-connections with storm drains, foundation drains, sump pumps and manhole covers,” Clark explained. “Infiltration is water or groundwater that enters the wastewater collection system through holes and cracks in defective manhole structures, pipes, joints and lateral connections.”

Inflow occurs during, or as the result of, rain events. Infiltration contributes to the wastewater collection system on a daily basis.

“The SCOPE 10 program has been in effect for approximately nine months and has developed a reliable process to evaluate the wastewater collection system,” Clark said. “This process has allowed for the identification of problem areas and the development of rehabilitation plans for these areas.”

Fully putting these plans into effect, and introducing a way to pay for them, was the key purpose of Monday’s joint session.

“We’re looking for a commitment ... to lock into the 4.5 percent increase [over] the next four years,” Wheeler told Council members.

The commitment will be sought when the City Council convenes its next round of budget hearings in early 2013.