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NACWA Expresses Concern Regarding Tax-Exempt Bond Regulations

puzzleNACWA provided testimony at a public hearing held by the Internal Revenue Service (IRS) and United States Treasury on June 6 regarding proposed regulations to alter the definition of "political subdivision" for the issuance of tax-exempt bonds.  The Association’s remarks echoed concerns raised in written commentspdf button submitted by NACWA and a coalition of organizations representing the municipal water sector.

At the outset of the hearing, a four-member panel of IRS and Treasury officials explained their regulatory goals as limiting undue private control of political subdivisions, overseeing the impact of governing structures, and stemming potential abuses.  The panel addressed, in preliminary form, concerns expressed in over one hundred comments.  They explained that revisions to the proposed regulations are being considered to address three issues: 1) the treatment of multi-jurisdictional bodies (as current proposed language requires that a single state or local government exercise control over the political subdivision); 2) concerns over the requirement that board members be removable at will; and 3) clarifications to the requirement that political subdivision’s activities must have “no more than incidental benefit” to private persons.

After the panel’s preliminary notes, the meeting provided the opportunity for speakers from organizations representing a broad scope of public entities potentially impacted by the regulations, including state universities, government finance officers, publicly owned natural gas utilities, airports, and others.  Chief among concerns expressed by the commenters was the unclear language of the two additional requirements of public purpose and governmental control.  Speakers recognized the potential for abuse, but emphasized the need to redraw the regulations with clearer language leaving less room for interpretation.  The panel officials reiterated that the proposed revisions were intended to combat legitimate governmental concerns of abuse, but conceded the need for changes to denote that certain organizations such as drinking water/clean water utilities, airports, and universities would not be suspect and fail to meet the new standards.  More detailed coverage of the hearing, and NACWA’s comments, can be found in an article published in the June 6 edition of The Bond Buyer.

Senate Leaders Request Utility Help to Advance WRDA

wrdaNACWA joined a meeting on June 8 led by Senate Environment & Public Works Committee Chair James Inhofe (R-OK) and Ranking Member Barbara Boxer (D-CA) regarding the Senate’s 2016 Water Resources Development Act (WRDA). As previously highlighted in the Clean Water Current and in a recent NACWA web seminar, the Senate WRDA bill includes a number of significant reforms to the Clean Water Act and other provisions that would facilitate investment and benefit the clean water sector.

Committee leadership used the meeting to highlight notable bipartisan efforts that went into the bill’s development – and the limited time remaining during this Congress to pass the bill.  They urged the water and infrastructure sectors to reach out to Senators from around the country to encourage them to support floor time and ultimate passage of the bill.  This call for action aligns directly with the targeted outreach strategy NACWA has been developing.  The Association has begun circulating letters among utilities in key states requesting that Senate consider and pass the WRDA bill.  These letters will be sent to each states’ respective Senators.  To join this effort, simply contact Kristina Surfus, Legislative Affairs Manager.  While we have focused on a dozen states with particularly influential Senators for this process, letters to any and all Senators can help!

NACWA is also leading efforts across the water and local government association sector to submit a joint letter in support of the bill.  The membership will be kept apprised of these efforts.  NACWA thanks all who have taken the time to become engaged in this 2016 WRDA process.

NACWA Weighs in on Key Regulatory Issues

aquaticlifeNACWA provided June 10 commentspdf button on EPA’s draft Biological Evaluation (BE) for malathion, a pesticide that is used to treat head lice.  NACWA’s comments concurred with the more detailed information provided by the Bay Area Clean Water Agencies (BACWA) and asked that EPA fully consider the discharge of malathion to sewer systems in its BE, including the potential for the pesticide to interfere with the wastewater treatment process.  NACWA also recommended that EPA consider the byproduct malaoxon, which is hazardous to aquatic life and may be formed when wastewater effluent is disinfected with chlorine.  The Association will continue to work with its members to evaluate pesticide use.

The Association also sent a letterpdf button last week to EPA supporting the Agency’stentative denial of a petition to change the corrosivity level that defines a hazardous waste.  Currently, wastes with a pH greater than 12.5 are considered hazardous, and EPA was asked to lower this level to pH 11.5.  NACWA supports the Agency’s denial of this request as higher pH wastewater can help to reduce production of hydrogen sulfide in sewer systems, reducing both corrosion and hazards to sewer workers.  In addition, lowering the pH level would cause wastewater from more industrial users to be deemed hazardous, which would lead to either more chemical use to lower pH or additional reporting requirements for the industries, according to the pretreatment ordinances used by most utilities.  For more information about these issues, please contact NACWA Director of Regulatory Affairs, Cynthia Finley.

Region 4 Utilities Participate in Clean Water Leaders Dialogue

communicationsNACWA and the Georgia Association of Water Professionals (GAWP) convened over 30 utility and municipal leaders from North Carolina, Alabama, Florida and Georgia for a Region 4 Clean Water Utility Leader Dialogue, in Atlanta, Georgia on June 8.  Open discussion on a range of issues was followed by a debrief from EPA Headquarters and Region 4.

During the meeting, NACWA highlighted key issues affecting clean water utilities nationally and their potential to impact clean water utilities in the southeast.  Major themes included water quality standards issues – in particular nutrients and toxics, enthusiastic debate around the viability of Integrated Planning in the region, and the politics around rate setting and affordability.  The discussion was robust and allowed utility leaders from across Region 4 to discuss common concerns and network with peer clean water agencies.

NACWA regularly hosts regional meetings across the country, allowing a wide cross section of utilities to network with peers and express their priorities directly to Association staff.  Association members, the City of Atlanta and Macon Water Authority, acted as utility hosts, and played an integral role in executing this successful meeting.  The next regional meeting will convene in July for utilities in Region 8 as part of NACWA’s 2016 Utility Leadership Conference, Leadership Strategies for the Smart Utility, in Denver.

Last week’s Region 4 dialogue was held in cooperation with the U.S. Water Alliance'sOne Water Summit 2016, which drew a large crowd of water professionals, advocates, and thought leaders to discuss critical water issues facing the nation as a whole.  Association CEO Adam Krantz participated in the Summit as did many NACWA Member Agencies.

NACWA Comments on Akron Consent Decree Amendment

scalesNACWA submitted commentspdf button June 7 in support of the First Amendment to Member Agency Akron, Ohio’s Consent Decree.  The Amendment, lodged by Akron, the U.S. Department of Justice, and the State of Ohio on May 2, modifies two projects to maximize use of existing infrastructure with less disruption of surrounding natural areas and neighborhoods, and provides $30 million in cost savings while achieving the same level of benefit required by the original project designs.  NACWA’s comments focused on the complex nature of consent decree negotiations and argued in favor of allowing Akron flexibility to determine the appropriate technical solutions that balance environmental benefit with affordability.

The Association is always happy to submit comments in support of Member Agency consent decrees and enforcement orders, if appropriate.  Contact NACWA General Counsel Amanda Waters for more information.


Also of Interest

Association Board Member Testifies on Capitol Hill

george.hawkinsNACWA Board Member George Hawkins, Chief Executive Officer & General Manager of DC Water, testified last week before the Senate Environment & Public Works Committee’s Subcommittee on Superfund, Waste Management, and Regulatory Oversight at an oversight hearing examining EPA unfunded mandates on State, Local and Tribal Governments.  Hawkins’ testimonypdf button focused on the growing affordability challenges facing low-income ratepayers within his DC Water’s service area and called for establishing an assistance program similar to what the federal government provides for low-income energy users to aid low-income residents with water and sewer bills.

Hawkins was joined by several representatives of local and state government, including the Honorable Mark Norris, Majority Leader of the Tennessee Senate, the Honorable Christian Leinbach, Commission Chair of Berks County, PA, the Honorable John Berrey, Chairman of the Quapaw Tribe of Oklahoma, and Robert Glicksman, Professor of Environmental Law at The George Washington University.

Congress Sends Toxic Substance Control Reform to President

whitehouseSignificant environmental reform passed out of Congress last week when the Senate passed legislation reforming how EPA regulates toxic substances, following the bill’s earlier passage by the House.  NACWA anticipates that the President will sign it into law soon.  The bill, H.R.2576, the Frank R. Lautenberg Chemical Safety for the 21st Century Act, reforms the 1976 Toxic Substances Control Act (TSCA).

Unsuccessful attempts at reform have been made over the years, making the passage of the bill this week a significant event – and a major win for retiring Environment & Public Works Ranking Member Barbara Boxer (D-CA) and outgoing Chair Jim Inhofe (R-OK).  A major point of negotiation was the balance between states’ rights to protect their citizens by regulating chemicals and federal preemption of state authority in order to provide uniformity in the marketplace.

NACWA weighed in on the bill to urge negotiators to ensure that POTWs will retain their ability to ban chemicals when necessary, regardless of whether a given chemical has been federally-reviewed or regulated – and to ensure that all utilities qualify for important exceptions to federal preemption that are provided for political subdivisions under the bill.  In the end, the consensus of most stakeholder groups seems to be that while the bill will increase federal preemption of state authority, it modified through negotiations and includes valuable exceptions, resulting in an overall a win-win for industry and consumers.  Many associations, including NACWA, will keep an eye on the implementation of the legislation.  Contact NACWA Director, Regulatory AffairsCynthia Finley or Manager, Legislative Affairs, Kristina Surfus to discuss these issues further.

State Clean Water Administrators Briefed on Permit Shield Litigation

gavelNACWA briefed the Legal Committee of the Association of Clean Water Administrators (ACWA) last week on pending litigation that could create significant legal vulnerabilities for Member Agencies and other holders of National Pollutant Discharge Elimination System (NPDES) permits.  The discussion focused on Ohio Valley Environmental Coalition et al. vs. Fola Coal Company, where a federal court pdf button ruled  that, despite the absence of a specific effluent limit, the permittee’s discharge caused – or materially contributed to – a significant adverse impact in violation of the narrative water quality criteria incorporated by reference into the permit. The court also found that the discharger was not protected by the NPDES permit shield. 

NACWA previously filed a brief in the case to help preserve the permit shield as a strong defense for NPDES permit holders. The Association is working with ACWA to determine which states are incorporating water quality standards into permits and why they are doing so.  NACWA encouraged states to review this practice and consider omitting such provisions in future permits.  It is apparent that the interests of the two Associations align with regard to the need to establish the appropriate role of the court in the water quality based effluent limit process in order to provide regulatory certainty, and ensure protection for the regulated community when in compliance with issued permits.

NACWA’s June 15 Hot Topics in Clean Water Law web seminar will also address pending permit shield litigation. Participation is complimentary, but registration is required.



State Clean Water Administrators Briefed on Permit Shield Litigation

baltimoreNACWA Member the City of Baltimore, along with EPA and the State of Maryland, recently lodged a modified consent decree with the United States District Court for the District of Maryland.  The modified decree, which addresses remaining work to eliminate sanitary sewer overflows (SSOs), allows Baltimore to prioritize projects based on environmental benefit and will eliminate more than 80 percent of remaining SSOs over the next five years.

The modified decree employs a two-phased adaptive management approach.  Phase I includes the Back River Headworks project to correct a 10-mile sewage backup created by the displacement of a huge sewer main leading into the wastewater treatment plant, along with 34 individual sewer cleaning and maintenance projects, and will be completed by January 1, 2021.  Completion of Phase I will be followed by 18 months of flow monitoring after which Baltimore will study the results and propose projects for Phase II.  All projects under the modified consent decree must be complete by 2030.

Baltimore’s original consent decree, entered in 2002, was one of the first in the country of its kind – an action aimed at the entire sewer system of a major metropolitan area.  As work under the original decree progressed, and the parties gained a more detailed understanding of the City’s sewer system, it became clear that, like many early consent decrees, the schedule was unrealistic and did not reflect an accurate estimate of the work that would be required.  The modified consent decree builds on the extensive work already accomplished under the original decree, and provides for a system that will capably serve the City and protect the environment for generations to come.

Not to be Missed

  • Don’t miss the opportunity to register now for NACWA’s 2016 Utility Leadership Conference, Leadership Strategies for the Smart Utility. The July 10-13 conference will explore not only how utilities can best adapt management approaches to meet the changing expectations of both ratepayers and employees – but also how even more innovative management techniques will be needed as clean water agencies become increasingly complex and information becomes more widely available.  Plan now to join your colleagues in Denver for Leadership Strategies for the Smart Utility.


Have you gotten involved in NACWA's online community – Engage™?  Ranked high in value in a survey of NACWA's members, Engage™ offers solutions to utility challenges and a platform to network with colleagues.

If you haven't yet engaged in this valuable member resource, now is the time!  Discussions are currently underway on FOG compliance and local limits; Capital Improvement Plan metrics; and permit shields and general provisions in NPDES permits. Why not add to the conversation and join our community?  Get engaged today!