Peshtigo Plans To Hike City Sewer Rates Jan. 1Issue Date: November 11, 2020
At its meeting on Wednesday, Nov. 4, Peshtigo City Council took the first step toward increasing sewer rates for everyone who uses the Water and Sewer Utility. If approved the new rates will go into effect on Jan. 1, 2021. The increase will add approximately $37.71 per quarter to the bill for an average household using 36,000 gallons of water per year, a 49.24 percent increase. If approved, bill each quarter for the average household will rise from $76.58 to $114.29.
Impact on businesses and industries using greater amounts of water will be much higher.
While the proposed new rates will affect everyone who discharges wastewater into the city's sanitary sewer system, BPM Inc. (the former Badger Paper Mills, Inc.) will be the hardest hit.
A rate sheet distributed during the discussion shows increases to Class B and C customers of the utility (commercial and industrial) are based on BODs (biological oxygen demand) and Suspended Solids content in addition to quantity of wastewater.
For BPM Inc. charge for BODs would rise from 32.4 cents per pound to 93 cents per pound, and from 10 cents per pound of suspended solids to 70.3 cents.
During discussion, BPM Inc. General Manager Jim Koronkiewicz showed data based on 2019 numbers that for BPM the price hike would be 187 percent for BODs and 603 percent for total Suspended Solids. In all, had those rates been in effect in 2019, costs to the paper mill would have been $424,858 higher than they actually were, Koronkiewicz said.
The proposed price hike requires a change in city ordinance, which in turn requires a public hearing. The hearing is scheduled for 6:30 p.m., on Tuesday, Dec. 1, just prior to the next regular December Council meeting, at which Council action would be expected.
The new rates were recommended by the city's Water and Sewer (W&S) Committee to cover increased costs of disposing of sludge from the wastewater treatment plant, which can no longer be spread on nearby farm fields due to elevated levels of PFAS contaminants. The facility produces approximately 1 million gallons of sludge per year, and the price difference between field spreading and hauling to a distant incinerator site for disposal is estimated at about $800,000 per year. Currently the utility has about two million gallons of sludge being stored while awaiting resolution of the disposal dilemma.
During time for public comment at the start of Wednesday's Council meeting Koronkiewicz said the price calculations proposed at the W&S Committee meeting on Oct. 28 would increase cost to the paper mill by more than $420,000 per year, and declared, "This cannot be accepted by BPM," Koronkiewicz declared.
Koronkiewicz said because BPM, Inc. is a major contributor to the city's Water and Sewer Utility, he felt it necessary to provide input on two items on the agenda - the proposed sewer rate hike and the "River Crossing updates."
The River Crossing refers to the main sewer line that carries wastewater from the city's west side across the Peshtigo River to join the main on the east side before being pumped back across the river to the wastewater treatment plant south of the paper mill on the west side.
For months the city and the mill have been negotiating terms for use of BPM-owned property for the River Crossing improvements. Originally the city and the mill were partners in constructing the wastewater treatment plant and the lift station is located on BPM property.
After declaring the proposed price increase approved by the Water and Sewer Committee on Wednesday, Oct. 28 was unacceptable, Koronkiewicz listed questions BPM, Inc. would like clarified:
*Is this the cost for disposal of the current volume of sludge at the Treatment facility?
*Is this the annual cost going forward for "anticipated" sludge disposal? and
*Will this rate be reduced/adjusted based on future approved methods of sludge disposal?
Alternative solutions to the sludge disposal problems have been discussed numerous times at recent meetings of the W&S Committee. There were suggestions to look into the possibility of constructing a nearby disposal facility in cooperation with the City of Marinette, which faces the same PFAS problems as Peshtigo but on a larger scale, to compress sludge and somewhat dry it to cut transport costs, and on the possibility of resuming field spreading once the state establishes allowable PFAS limits.
"BPM Inc. requests a written response to these questions as this will determine our direction going forward We have received a WPDES Permit from the Wisconsin DNR to build our own Water Resource Recovery Facility. Currently this project is being fast forwarded with construction and completion by mid 2021 so as to avoid these proposed major cost increases to our manufacturing and remain a viable company in the future," Koronkiewicz continued.
He went on, "As for the River Crossing update, it is currently being reviewed and discussed between BPM (ARATH- owner James D. Azzar) attorneys and the City of Peshtigo Attorney. BPM Inc. proposes a long term solution of redirecting the West Front Street sanitary sewer main south on West Front Street to an agreed upon location, then going east crossing the City of Peshtigo property, Wisconsin Railroad property or the south end of BPM property to get to the current Lift Station located by the City Municipal Garage as an alternative to replacing the sanitary sewer line crossing BPM property and current Peshtigo River crossing structures. We strongly recommend pursuing this approach." Koronkiewicz concluded.
W&S Committee member Dan Seymour and Chair Tom Gryzwa were on hand for the Council meeting, along with W&S Utility engineering consultant Taryn Nall and Public Works Director George Cowell.
Alderman Mike Behnke, who has been filling the role of mayor during the illness of Mayor Cathi Malke, gave the monthly report for the W&S Committee at meetings on Sept. 30, Oct. 3, 21, and 28, and then recommended that Council approve the rate increases as proposed.
Aldermen Brigitte Schmidt and John Berendt commented they had no information on the proposed new rates. Gryzwa said he had expected them to be included with Council packets and provided some bullet point information sheets with the proposed new prices were distributed.
In his prepared statement, Gryzwa explained in spring of 2019, because of the JCI/Tyco PFAS issue, and because JCI/Tyco had been operating a facility in the city on Pine Street, the Peshtigo utility was asked to have sludge tested.
"Prior to that, we had been land applying our sludge to farm fields at a cost of approximately $70,000 annually," Gryzwa said. When the PFAS content came in high, he continued, "The DNR immediately informed us that option (land spreading) was banned until some studies were done. For the past two plus years we have been storing the sludge at our WWTP. We now have over two million gallons stored with nowhere to go. The tanks very near capacity with us using aeration basins also."
DNR standards for land spreading still have not been set.
Gryzwa said the committee had met with the DNR and legislative representatives regarding the PFAS issues, and found no easy solutions in the near future. He added, "In the meantime the sludge volume continues to grow."
He said the committee had reached out to companies that deal with disposal of PFAS contaminated sludge and found only two - one in the state of Oregon and the other in Canada. They have a quote of $878,970 to dispose of one million gallons per year, which is approximately the volume produced.
The W&S Committee met several times over the issue and decided to raise the sludge disposal line item in the budget by $800,000. Gryzwa explained this amounts to an increase of $37.71 per quarter for a residence averaging 9,000 gallons of water per quarter. This is variable, based on usage, and there is no fixed charge increase, Gryzwa said.
"The W&S Committee is committed to continue to pursue better and less costly options on a regular basis," Gryzwa went on. "Should one be found the rates will then again be reviewed." he pledged, and then concluded: "PFAS are known as the Forever Chemical. This does not solve the problem of the stored sludge."
Also provided to Council was a letter from City accounting advisor David Maccoux, who Nall had asked to analyze the proposed new sewage prices. Maccoux said he had reviewed calculation for the residential customer increase and the user charge system update for sludge handling. "Our review consists primarily of evaluating the calculation of rate changes due to the anticipated $800,000 increase in annual sludge disposal costs, which are allocated on the BODs and Suspended Solids based on the City's user charge system.
He said using the data provided in regard to average plant loadings, and relative BOD and SS loadings, "The allocation of these costs was consistent with the City's user charge system, and sludge disposal costs should be recovered through the city's BODs and SS rates. He said the residential customer increase for a customer using 36,000 gallons was consistent with the revised BODs and SS rates, and concluded, "Nothing came to my attention to indicate the determination of rates was not reasonable."
Cowell pointed out the price change will require an ordinance change, and after brief discussion motion to schedule the public hearing was approved without further discussion and without dissent. Aldermen present in addition to Behnke, Schmidt and Berendt were Archer Leupp and Richard Berth. Alderman Debbie Sievert was absent. The public hearing is scheduled for 6:30 p.m. on Tuesday, Dec. 1, rather than in conjunction with the budget hearing. Immediately after the motion was approved Koronkiewicz left the building.
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