Feb 1 2012

Analysis: Is the EPA the Taxpayer’s Best Friend?

Throughout the history of the Sewer Fund, there has been tension between spending for sewer maintenance versus spending for sewer mains replacement (rehabilitation).  (See sewer history article.)

In 2000 the sewer tax was tripled.  The increase was to comply with a Cease and Desist Order requiring the replacement of 54% of the Piedmont sewer main in 3 phases and, eventually, replace 100% in 4 additional phases if needed.  The EPA required phases I, II, and III were completed as of 2006, representing 54% of the sewer system.  Rehabilitation work then paused for a number of years. (See chart below.)   Phase IV was not completed until 2010.

During the period of EPA work and oversight, the “transfer out charge” (funds transferred from the Sewer Fund to the General Fund) against the Sewer Fund remained constant – $700,000 or less.  Prior to 2000 the “transfer out charge” had been escalating; and subsequent to the completion of Cease and Desist Order work the charge escalated again.  Today, the “transfer out charge” is $1 million and represents 50% of annual sewer tax revenues.  (See chart.)

The sewer fund history indicates EPA oversight may have assisted in ensuring taxes for sewer mains replacement were dedicated to sewer mains replacement.


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