TRANSMITTAL LETTER FOR BOARD MEETING OF OCTOBER 2, 2014
COMMITTEE ON ENGINEERING
Mr. David St. Pierre, Executive Director
Title
Authority to amend extraterritorial service agreement with the City of Chicago pertaining to 994 acres of land located in DuPage County at O'Hare International Airport, outside the territorial limits of the Metropolitan Water Reclamation District of Greater Chicago
Body
Dear Sir:
On September 18, 2008, the Board of Commissioners authorized the District to enter into an extraterritorial service agreement with the City of Chicago (City) for treatment of sanitary sewage, industrial wastes, and contaminated stormwater coming from 994 acres of land located in DuPage County at O'Hare International Airport, outside the District's territorial limits. Development of this acreage was part of the modernization and expansion of the airport pursuant to the O'Hare Modernization Act (620 ILCS 65/1 et seq.). Under the District's Enabling Act, the District is authorized to enter into agreement with any municipality whose boundaries are located partly, but not entirely, outside the District's corporate boundaries to perform collection and treatment services for any sewage and industrial wastes originating on and discharging from those outside areas, provided those areas are located within the boundaries of the District's current Facility Planning Area (FPA). All 994 acres are presently located within the boundaries of the District's FPA.
On November 19, 2008, the parties entered into an agreement entitled "Extraterritorial Service Agreement between the City of Chicago and the Metropolitan Water Reclamation District of Greater Chicago for the O'Hare Modernization Program within DuPage County" (Agreement). The Agreement authorizes the City to discharge sanitary sewage, industrial wastes, and contaminated stormwater originating on, or being discharged from, the DuPage County acreage into the District's system. This includes stormwater contaminated by runway deicers that enters the system through two detention basins located on airport property. The basins are called the North Airfield Detention Basin (NADB) and the South Airfield Detention Basin (SADB). Of the two, SADB is larger and discharges water at a higher rate consistent with the terms of the Agreement.
Discharges from both basins are conveyed to connected District interceptors, then to the Stickney Water Reclamation Plant for treatment. In exchange for these services, the City pays the District an extraterritorial impact fee in the amount of $7,455,000.00 in ten annual installments; an annual service charge based upon the acreage's total EAV (Equalized Assessed Value) multiplied by the District's Tax Rate, then by 140%; and standard user charge fees for any and all discharges originating from the DuPage County acreage.
The Agreement expressly prohibits the discharge of groundwater into the District's system. It also prohibits discharges of any kind from either detention basin during the months of May through October of each year, unless written consent is obtained from the Director of Engineering, which is not to be unreasonably withheld. Written consent was required because the City had already obtained a National Pollutant Discharge Elimination System (NPDES) permit for NADB and was in the process of obtaining an NPDES permit for SADB. It was expected that these permits would allow the City to discharge water from each basin directly into nearby outfalls without entering the District's collection system during these months when deicers were not typically used on airport runways.
District staff and the City now recommend amending the Agreement to allow discharges from SADB during the months of May through October without obtaining written consent from the Director of Engineering. They also seek additional amendments to the Agreement, including authorization to discharge groundwater from NADB into the District's collection system.
Regarding discharges from SADB during the months of May through October, the City has since obtained an NPDES permit that authorizes discharging water from SADB into an outfall provided the discharges meet the permit's water quality standards. However, meeting those standards has proven to be difficult and resulted in limited use of the outfall to date because of the deciers' slow rate of decomposition, as well as the exceptionally high cost involved should the City be required to treat the contaminated stormwater onsite, which the City does not consider economically viable.
District staff has communicated its concern to the City about using SADB to discharge into the District's collection system all year round. Based on these communications, the parties have agreed in principle to replace the written consent requirement as it pertains to SADB with an incentive program that imposes penalties for discharges from SADB into the District's collection system during the months of May through October. Specifically, the City would be given five years to work with the District and other collaborators to improve decomposition and treatment technologies pertaining to SADB. During those five years, no new surcharge would be assessed for any discharges from SADB during the months of May through October, with the understanding that the City would nevertheless be required to discharge to an outfall whenever allowable under the permit. In the sixth year, a 10% surcharge would be assessed above and beyond standard user charge fees for SADB discharges into the District's collection system during the months of May through October that year. Each year thereafter, a 3% surcharge would be added to the previous surcharge imposed on user charge fees (13%, 16%, etc.) whenever SADB is used to make May through October discharges into the District's collection system. This new approach, if adopted, is expected to increase use of the outfall, while minimizing the City's need to use the District's collection system, during warm weather months in the future.
The second proposed amendment to the Agreement concerns discharging groundwater from NADB for collection and treatment by the District. NADB's underdrain system, which collects and discharges groundwater, is tied directly to a dewatering lift station that presently discharges into the District's collection system. This underdrain system is necessary for the structural integrity of NADB and cannot be disconnected. Recently, the City provided a geotechnical report to the District that concluded that, considering this design, it is far more cost effective to discharge groundwater from the underdrain system into the District's collection system than to provide a separate lift station that would allow the groundwater to be discharged directly into an outfall. Unlike with NADB, which was constructed before SADB, SADB's underdrain system allows groundwater to be discharged directly into an outfall without entering the District's collection system, so the discharge of groundwater into the District's system, if approved, would be limited to discharges from NADB.
Standard user charge fees would be assessed for all such discharges of groundwater, and the authorization to discharge groundwater from NADB would terminate immediately upon NADB being permanently placed out of service or expanded in size. Upon due consideration, the District's Engineering Department has concluded that the Stickney Plant and conveying interceptors have the capacity to accommodate these discharges of groundwater expected to be received from the airport.
Lastly, District staff and the City further recommend that the Agreement be amended as follows:
· The Agreement contains a schedule for the development of the O'Hare Modernization Program (OMP). Under the Agreement, the Phase II development deadline was December 31, 2014. The requested amendment is that the deadline be extended to an unspecified date in the future, which is not expected to affect the District's collection system.
· In addition to all fees and charges already provided for in the Agreement, the Agreement will be amended to reflect that the City will pay the District a fee for pumping contaminated stormwater from the airport out of the District's Tunnel and Reservoir Plan facilities (TARP) for treatment at the Stickney Plant. Payment of this additional charge shall be based upon the total gallons discharged to TARP in a year from both detention basins multiplied by the average cost of electricity per gallon pumped at the Mainstream Pumping Station over the previous year.
· The Agreement provides for routine District sampling of discharges from the airport into the District's collection system. To ensure the District's access to necessary sampling points, the Agreement will be amended to reflect that the City shall provide the District with 24 hours per day, 7 days per week access to the airport for all such sampling.
· The Agreement requires that the City provide the District with an accurate depiction of the DuPage County acreage and of the buildings located thereon that have been assigned an assessed valuation in conjunction with paying the annual service charge described above. In addition to the other documents that are required to be provided under the Agreement, the Agreement will be amended to reflect that the City shall also provide the District with the latest available aerial photographs of the DuPage County acreage, as well as an affidavit signed by the appropriate agent of the City verifying that, to the best of his or her knowledge, the information and documentation provided by the City in conjunction with payment of the annual service charge is true and correct.
· In 2009, after conducting a pretreatment compliance audit of the District, the United States Environmental Protection Agency (USEPA) submitted to the District a compliance audit summary report delineating certain pretreatment program responsibilities and obligations consistent with USEPA requirements. On December 15, 2011, the Board of Commissioners authorized the District to negotiate and execute an amendment to the Agreement (along with other extraterritorial agreements) that expressly delineates such responsibilities and obligations. Though no pretreatment of the DuPage acreage's discharges has been performed or is expected to be performed in the near future, the Agreement will nonetheless be amended to reflect that the City shall incur such responsibilities and obligations in the event that pretreatment there is voluntarily undertaken by the City or mandated by law.
These are the essential terms of the proposed amendment to the extraterritorial service agreement. It is requested that the Executive Director recommend to the Board of Commissioners that it authorize the District to enter into the proposed amendment to extraterritorial service agreement with the City of Chicago pertaining to 994 acres of land in DuPage County at O'Hare International Airport, outside the territorial limits of the Metropolitan Water Reclamation District of Greater Chicago.
It is also requested that the Executive Director, the Chairman of the Committee on Finance, and the Clerk be authorized and directed to execute the proposed amendment on behalf of the District after it is approved by the Director of Engineering as to technical matters and by the General Counsel as to form and legality.
Requested, Catherine A. O'Connor, Director of Engineering
Recommended, David St. Pierre, Executive Director
Respectfully Submitted, Frank Avila, Chairman Committee on Engineering
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for October 2, 2014