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Opinion: SD1 Needs to Fund Improvements to Infrastructure

The following opinion column is written by Brent Cooper.

During a conversation about the Sanitation District (SD1) this week, I shared my concerns about the costs to home and business owners. A friend responded, “Well, I don’t remember you ever speaking up about it. This didn’t just happen overnight. Where have you been?”  

It’s a fair point. Many of us have been sitting on the sidelines, watching the discussions and debate without chiming in. That needs to change. We need to consider all the issues and provide some thoughtful feedback regarding the impact of the decisions being made.

It’s true, wastewater and storm water services aren’t sexy, but we need them.  

Anyone involved with economic development will tell you that the cost, quality and capacity of our utilities is one of the first questions asked by prospective businesses.

Home builders and developers are constantly talking about SD1 because without additional capacity to handle wastewater and storm water, they can’t build new homes or new business complexes. They also understand SD1 costs directly impact our region’s rates, which have gone up nearly 300% over the past 15 years. That sounds astronomical until you look at the numbers.

It should be noted that while those increases are a concern, they appear to me to be below the rest of Greater Cincinnati’s. I believe the average monthly bill for the average homeowner today in Northern Kentucky is around $42 per month. According to David Rager, Executive Director of SD1, that works out to about 5 cents to properly dispose of what we put in the toilet with each flush. A 5% increase would amount to about $2 increase per month or less than 1/10th of a cent with each flush.

But while we talk a lot about the rates, we don’t talk much about the service we’re getting.

In fact, it is a challenge for the average citizen to understand the issues SD1 has to deal with at all. The issues are many, and they are often complicated.

SD1 serves 32 cities and 3 counties for wastewater service and 30 cities and 3 counties for storm water service. That’s a lot of customers. Over 400,000!

They are dealing with 1,700 miles of sanitary sewer pipes. A lot of the infrastructure is old and crumbling, and unable to handle the current capacity. Some was built before the civil war. They are dealing with collapsed pipes, clogged pipes and broken manholes. 

Every time we get a little less than an inch of rain, our region deals with “overflow” issues. This is when raw sewage runs over the top of manholes, down curbs and across backyards into our creeks, streams and rivers. The acronyms for this is SSO’s (Sanitary Sewer Overflows) and CSO’s (Combined Sewer Overflows). Sounds better than what it really is, right?  

If you saw the map of how many places in NKY have SSO & CSO issues, you might cry a little. Over 240 locations and 2.3 billion gallons annually!

I don’t need the 1972 Clean Water Act to tell me that’s bad, do you?  

While they are required to be in compliance with the EPA by 2025, at the moment, SD1 is powerless to stop these overflows, and with the current budget, it is doubtful they will be in compliance by 2025.  

In fact SD1 is negotiating with the Commonwealth of Kentucky and the U.S. EPA for more time arguing that the cost to come into compliance in such a short time is too great of a financial burden on the people and businesses of Northern Kentucky communities. 

While I understand the cost concerns, there is something inherently wrong with the idea of flushing a toilet at one person’s house, and have it come up at somebody else’s house or property. In my opinion, it fundamentally goes against what we want for our community and our environment. It is something that needs fixing.

The problem is SD1 just doesn’t have the money to fix things and accommodate requests for growth. One repair project involved just 500 feet of pipe. But because of the complexity of the project (someone built a house on top of it early in the last century ago), it cost around $1 million to resolve the issue.   

Then there is the issue of broken sewer laterals in river cities like Covington and Newport. If you have the misfortune of experiencing a broken sewer lateral, you could be looking at a surprise bill of $10,000 to $15,000. It isn’t your connection repair that costs so much. It is the public street that gets torn up in order to complete the repair. It is the street repair where a lot of the cost comes from. When SD1 had money, they covered that $10,000 to $15,000 cost. Without a rate increase, they can't afford it. So it is falling to cities like Newport and Covington to cover the cost. And if the cities can’t afford it, it falls on the backs of homeowners.  

Choosing not to increase the rate sure doesn’t feel like a savings to those folks, does it? See how that kind of thing rolls downhill?  

If SD1 doesn’t generate additional revenue, we will likely see the canceling of projects, like the Ash Street pump station and sewer line in Silver Grove. True, that project is expensive and does not create any great development opportunity, but it does clean up one of the largest remaining sanitation overflows in NKY - 26 million gallons of sewage in an average year of rainfall! Not to mention, the effluent dumped out on the ground there flows into a creek and thence to the river just above the drinking water intakes for Cincinnati and NKY water. 

The SD1 staff and the governing board are having to make really tough spending decisions. According to David Rager, “with limited resources they are trying to address issues that are of strategic importance to the entire community.”  

Rager receives direction from the SD1 Board, which is appointed by the Boone, Kenton and Campbell Fiscal Courts.  

Let me pause right here and say that I have a great deal of respect for anyone that is willing to serve on this board. It is often a thankless job and very stressful role to play. I hope you will join me in thanking them for their time and their service.

To their credit, the SD1 staff through a variety of changes over the past three years has been able to cut the sanitary utility’s annual operating costs by 10% or $4 million. That said, there is less money being spent on the rehabilitation and replacement of failing sewers, pumps, and equipment today than three years ago. SD1 literally has sewers that have been laying on the ground for several years because they don’t have the money to properly install them below ground. That doesn’t make sense to me, knowing the amount of overflow issues we are seeing, the repair issues listed, the requests for growth, and the costs involved with fixing the problem.  

SD1 receives a fine every time raw sewage goes into the river. How much are the fines? Up to $32,000 a day. Because they assumed the responsibility, SD1 pays the fines, not the cities and counties.   

According to Rager, they paid fines for 3 overflows over the past 12 months.

SD1 is also faced with reduced revenue projections from homes and businesses. Just like cars that have become more fuel efficient and generate lowered gas taxes, our toilets have become more efficient and generate lower waste fees. So, SD1 will be taking in fewer dollars for the same facilities.

The Board is responsible for the day to day operations, and the Judges/Executive, as a committee, act on behalf of the Fiscal Courts to approve the annual operating and capital budgets. The Judges/Executive can approve increases up to 5% per year, but anything above 5% has to be approved by all three fiscal courts.  

Knowing that some of our elected county commissioners won’t consider a rate increase under any circumstances, it seems to me our Judges/Executive need to at least approve a 5% increase.  

I don’t want higher fees, who does?  But I definitely don’t want raw sewage going down the street and into the river either.  

Monday at a 2 p.m. meeting, the Judges/Executive will consider the proposed budget. There will be plenty of folks championing “no additional rate increases”. I’ll be in the camp asking us to spend more on infrastructure to get our community cleaned up. 

SD1 is losing money each year. The budget recommended by the SD1 Board last week spends $10 million more than the district takes in. They have charted a financial path that spends $4.5 million more in 2017 than they take in. The cycle continues for 2018, 2019, and 2020. Without any rate increases, by 2019, they will be facing a 
$10 million deficit. By 2020 the imbalance grows to $18 million.  

And that assumes no money is spent on rehabilitation or replacement of sewers in those years. Folks, that’s only 5 years away!  

How did we get here? The community in the past enjoyed nearly 20 years of no rate increases from SD1. Unfortunately that came with no investment in aging pipes and pumps at a time when the problems were smaller and the costs would have been a lot less. Now the problems are much bigger and costs are going to be significant.

Because of the direct impact on our region’s economic growth, the challenges SD1 faces need to be dealt with head on. We need more discussions about it at NKY Forums, we need it to be a topic at our Rotary meetings, and we need our NKY Chamber to take a leading role in facilitating progress.

No doubt about it, the current situation stinks. But we can’t sit on the sidelines anymore. Let’s work together to come up with some solutions to our collective infrastructure.

Brent Cooper is the president of C-Forward, a Covington-based technology firm. In 2014, he served as interim president of the Northern Kentucky Chamber of Commerce and recently chaired the fundraising campaigns for the United Way and ArtsWave.