September 19, 2006
CLEAN WATER FUND FINANCING AND LONG ISLAND SOUND
By: Paul Frisman, Principal Analyst
You asked several questions about the Clean Water Fund in relation to a September 3, 2006 opinion editorial (op-ed) in the New York Times. The op-ed, “Who Is Killing Long Island Sound?” by Tom Andersen, states that cuts in state funding have jeopardized efforts to reduce the amount of nitrogen that Connecticut municipal sewage treatment plants discharge into the Sound. Andersen called upon the legislature and governor to restore the funding.
Before answering each question separately below, we provide some background information on nitrogen reduction in Long Island Sound.
The federal Clean Water Act requires states to establish Total Maximum Daily Loads (TMDL) for waterbodies that do not meet minimum water quality standards. In 2001, the U.S. Environmental Protection Agency approved a TMDL plan submitted by Connecticut and New York to reduce the amount of nitrogen their sewage treatment plants discharged into Long Island Sound. Excess amounts of nitrogen cause greatly reduced levels of oxygen (“hypoxia”), which in turn can disrupt the feeding, growth and reproduction of nearly all forms of aquatic life. Connecticut and New York agreed to reduce nitrogen discharges by a combined 58.5% by 2014. Connecticut set a 64% reduction goal for its 79 municipal treatment plants.
To achieve this goal DEP issues general permits that set out annual, gradually declining discharge limits for each plant. The first permit, issued January 2, 2002, specified the individual plant goals through 2006. A second five-year permit was to be issued this year. However, DEP issued a revised permit in 2005, one year early, allowing the plants to discharge more nitrogen in 2006 than originally planned. According to DEP commissioner Gina McCarthy, this was because the limited availability of state Clean Water Funds slowed the pace of new treatment facility construction. She said the annual permit limits for 2006 were revised upward based on a “more realistic project of expected performance.”
For example, according to the original plan, the Stamford water pollution control facility must reduce its nitrogen discharges to 926 pounds per day by 2014 through gradual annual reductions. The original permit set the facility's limit at 1,362 pounds per day in 2005 and 1,132 pounds per day in 2006. The 230 pound per day difference between the 2005 and 2006 limits represented a 16.9% decrease. But the 2005 reissued permit allows the facility to discharge 1,346 pounds per day in 2006, a decrease from 2005 of only 16 pounds daily, or 1.2%.
The original 2006 nitrogen reduction limit for the state's 79 municipal sewage treatment plants was 22,518 pounds (11.26 tons) a day. The revised 2006 discharge limit is 26,808 pounds (13.4 tons) a day, or 19% more than originally planned.
Q. Has money been withdrawn from the fund for non-environmental purposes beginning in 2003, and if so, how much?
The Clean Water Fund provides financial aid to municipalities through grants and loans for the planning, design and construction of wastewater treatment facilities. It is financed through a combination of federal funding, state General Obligation (GO) bonds for the grant portion, and state revenue bonds for the loan portion. Nitrogen reduction programs receive grants equal to 30% of the project cost associated with nitrogen removal and 20% grants on the balance of eligible project costs. The remainder of the costs is funded with a 20-year loan at 2% interest.
According to William Hogan, of the Department of Environmental Protection's (DEP) Bureau of Water Management, the average annual Clean Water Fund bond authorization was $47.9 million from 1987 to 2002. Hogan states that the legislature reduced this authorization by
$18 million in 2003 and $60 million in 2004 (PA 04-1, May Special Session). According to the Office of Fiscal Analysis, however, the legislature reduced the FY 03 authorization by $16.8 million (PA 01-7, June Special Session and PA 02-5, May Special Session).
The legislature did not authorize any Clean Water Fund bonding in FY 05; it has authorized $20 million in each of the 2006 and 2007 fiscal years. This $20 million annual funding level is significantly less than the $144 million and $120 million DEP requested for FY 06 and 07, respectively. Hogan said DEP based its requests on the number of treatment plants that had completed the design phase of their projects and were ready for construction.
We were unable to determine if the rescinded funds were used for non-environmental purposes.
Q. Has the reduction in funding caused DEP to reduce its goals for nitrogen reduction in Long Island Sound?
No. According to Hogan, the state can still reach its goal of reducing nitrogen discharges from municipal sewage treatment plans by 64% by 2014 if it approves additional funding.
Q. Is Connecticut doing less than New York or New York City to clean up the Sound?
It is difficult to compare the relative accomplishments of New York and Connecticut, because New York, and particularly New York City, discharges a far greater amount of nitrogen into the Sound than Connecticut. For example, in 2005 New York's point source nitrogen load was 124,099 pounds per day (117,873 pounds per day in 2004), compared to Connecticut's load of 36,073 pounds per day (36,100 pounds per day in 2004), according to the 2005 Long Island Sound Study Comprehensive Conservation and Management Plan report.
But Connecticut has removed more nitrogen on a percentage basis than either New York state or New York City, according to DEP's Gary Johnson. Through 2005, New York City and New York state had each reduced their nitrogen discharges by about 22%; Connecticut's municipal sewage treatment plants by about 32.7%.
There are other indications that both Connecticut and New York are making progress in reaching their nitrogen reduction goals.
Connecticut has completed 31 nitrogen removal constructions projects, 11 of which involved major construction, according to the management plan report. The reported estimates that 75 of the state's 79 plants will have completed a detailed engineering study by the end of 2006.
New York City and New York State earlier this year resolved years of discussions and legal disputes when New York City agreed to retrofit four of its waste water treatment plants to meet the 58.5% reduction goal by 2017, about 2½ years after the original deadline. The agreement followed a 2005 New York State Supreme Court decision denying the city's effort to change an earlier nitrogen reduction plan
We have attached a section of the 2005 Long Island Sound Study Comprehensive Conservation and Management Plan report dealing with hypoxia. It includes, among other things a chart (Figure 1) showing the point source nitrogen load discharged into the Sound from New York and Connecticut from 1994 to 2005. The Long Island Sound Study is a bi-state partnership that includes federal and state agencies, concerned organizations and individuals dedicated to restoring and protecting the Sound. More information on the organization and the Sound is available on its website.
Q. Has the oxygen level in the Sound become worse since 2002?
DEP Long Island Sound Study Coordinator Paul Stacey states there has been a steady improvement in oxygen levels in the Sound for the past 15 years, due at least in part to nitrogen reduction efforts (natural variability also is a factor). Stacey said a slowdown in upgrading the treatment plants has slowed the pace at which the oxygen level is improving.
According to Sound Health 2006, published by the Long Island Sound Study, the area and duration of hypoxia has become less severe in recent years compared to the 1980s, but hypoxia levels can “spike,” as they did in 2003, when the hypoxic area covered 345 square miles. According to the Management Plan report, the Sound's area of hypoxia in 2005 covered an estimated 177 square miles at its peak and lasted 69 days, compared to a 19-year average of 203 square miles and 58 days.
Variables affecting nitrogen levels in the sound include weather and sewage treatment plant construction. According to the Management Plan report, nitrogen loads in 2005 increased by more than 6,000 pounds a day over 2004 in large part because several New York City plants were taken off-line for construction of nitrogen removal upgrades. According to the Nitrogen Credit Advisory Board's 2005 Annual Report, 2005 also was the first time that Connecticut failed to meet the permitted discharge levels. According to the board, the permit limit for 2005 was 13,434 pounds per day, but the state's sewage treatment facilities discharged an average of 14,930 pounds per day. This was 1,496 pounds per day over the limit. According to the board, the failure to meet the 2005 discharge limits was caused both by higher than average rainfall and the failure to receive funding needed to complete treatment plant projects “at the rate originally assumed.”
IMPACT OF FUNDING DELAY
The advisory board report states that there is a $410 million backlog of projects that need to be funded by 2009, when the plants must reach 75% of the reduction required in 2014. The report states that “the 2006-07 Clean Water Fund budget as approved by the General Assembly and governor is inadequate to support progress in meeting the requirements of the TMDL.”
At the $20 million funding level, it said, “only one in five projects ready to proceed will be funded in FY 06 and only one in seven in FY 07.”
“The ability to achieve further progress towards meeting a continually decreasing permit limit…becomes more difficult as projects are delayed or not built at all due to a lack of funding assistance,” the report said. But it states that this trend can be reversed if projects are funded and completed in future years.
The report notes that there were 29 facilities waiting to be funded as of May, 2006. According to DEP's funding priority list, 12 of these projects, with an estimated project cost of $107 million, would be partially funded. Work on the remaining 17 projects and the non-funded portion of three projects cannot proceed because of the limited funding. But the report says these projects must be built to meet the August 2009 discharge limit.
“Projects that are in design today will require two to three years to complete construction and achieve nitrogen removal operation,” the report says. “Given that the 2009 TMDL nitrogen reduction limit is less than four years away, it is imperative that the 17 projects be funded in the next 12 to 18 months.”