In a major legal victory Thursday, Atlanta got 13 years of breathing room on mandatory sewer upgrades, as U.S. District Judge Thomas Thrash approved the city’s request to push out deadlines on some remaining work to 2027.
Under a federal order, the city faced a deadline of July 1, 2014 to finish construction projects that would stop sewage spills that contaminate the Chattahoochee River and its tributaries. More time would help shore up the city’s strained finances and protect ratepayers from further burdens.
“We’ve had major compliance victories, but we’re feeling financial constraints,” said Susan Richardson, an attorney with Kilpatrick Townsend & Stockton LLP, who represented the city.
The extension is critical to the city’s financial plans. Atlanta officials had promised that current water and sewer rates would stay flat for the next four years if the extension was approved. Those bills combined are already among the highest in the nation.
The average resident’s bill has spiked by more than 250 percent in a decade, from $49 to $152, as the city repeatedly raised rates to help pay for more than $1 billion of required upgrades. Those bills chew up more than 2 percent of the median household income in Atlanta, according to data presented by the city.
But residents hoping the city’s legal maneuvering would bring rate cuts or other relief will be disappointed. Top city officials, including Mayor Kasim Reed, have said rates are not expected to drop anytime before 2016. The city’s financial models call for rates to begin rising again after that.
Thrash’s decision does not free the city from serious financial challenges. Vacant properties, foreclosures and a slack economy have reduced the revenue collected from a 1 percent sales tax that funds sewer upgrades. The city’s Department of Watershed Management carries $3.2 billion in debt, largely to pay for the mandated improvements. Payments on that debt take up about 40 percent of the department’s annual budget. Because of the heavy debt load, credit markets are effectively closed to the city, Richardson said.
Meanwhile, Atlanta’s drinking water system, which draws less public attention than the sewer system, also needs hundreds of millions of dollars in upgrades and repairs.
The city plans to complete inspections of more than 1,500 miles of sewer lines by the end of the year. Atlanta has cut sewage overflow volume by 97 percent from 2004 to 2011, and plans to reduce those spills by 99 percent by 2014.
Atlanta officials said the extension would not reduce the city’s motivation to protect local waterways from sewage spills. Eventually, federal and state environmental regulators agreed with that argument.
“We set a high bar for the city,” said William Weinischke, an attorney with the U.S. Department of Justice. “The city has made considerable progress. It was admirable performance. The city came in with clean hands.”
Thrash, who has overseen Atlanta’s sewer improvements for 15 years, said he was initially skeptical when he learned of the city’s request for more than a decade of extra time.
“Actually, my first reaction was ‘over my dead body,’ ” he said. “My position has been consistent over the years: The consent decrees will be complied with, period.”
But on Thursday, Thrash said he believes the changed schedule is justified.
“I can assure you, I’m not rubber-stamping anything,” Thrash said during the hourlong hearing Thursday morning. “I think the extension will put the city’s water and sewer systems on a sustainable basis.”