Legislation filed this week would require new nonmunicipal wastewater treatment plant owners to pay more funds into the Arkansas Department of Environmental Quality's trust fund for emergency plant repairs.
House Bill 1550, sponsored by Rep. Andy Davis, R-Little Rock, would alter a bill that Davis, a wastewater plant operator, sponsored in 2015 that reduced the financial assurance required of such plants.
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Davis filed another bill -- House Bill 1549 -- Tuesday that outlines ways in which a city can extend wastewater services beyond its own boundaries into its extraterritorial jurisdiction. The bill only requires municipalities to extend such services if a nonresident property owner or consumer requests the service, provides easements, has paid for the infrastructure, deeds sewer infrastructure and signs a pre-annexation agreement with the municipality.
Davis worked on the bills with department officials and members of a constituent group, Concerned Citizens of West Pulaski County, which had raised concerns about Davis' 2015 legislation and opposed the proposed construction of two plants just outside Little Rock. Group members were concerned about the small trust fund created by the 2015 legislation and its ability to successfully remediate pollution from problematic plants.
"I think the combination of those two bills is a marked improvement from the status quo where we currently are," said Joe Carter, a member of Concerned Citizens of West Pulaski County who discussed the bills with Davis.
"I'm really proud of this bill," Davis said. "I think we're addressing a lot of these concerns about these systems."
Under HB1550, plant owners would pay larger amounts into the trust fund upon initially applying for a permit. The current initial fee is the same as the annual fee. HB1550 would require a one-time, first-time fee based on $2 per gallon of the plant's daily capacity, plus 50 percent of the five-year operation and maintenance costs.
Davis said he thought the new structure might be cheaper than the pre-2015 structure for smaller plants but would probably be more for larger plants.
HB1550 also raises the maximum amount of money an owner pays annually into the trust fund from $200 to $1,000 for no-discharge permits and from $1,000 to $5,000 for discharge permits.
Davis and department officials said they were unsure if the annual trust fund fee would be higher than plant owners currently pay. Additionally, they said they weren't sure yet what the overall impact of the bill would be on the trust fund, given that it's unclear how many people may apply to operate such plants.
"First we'll just have to see what becomes of the change of the caps [on annual contributions]," said Caleb Osborne, chief of the department's water quality office. "There's a lot to be determined on the annual contribution to the trust fund."
The trust fund, less than 2 years old, contains $50,300, according to the department. Before Davis' 2015 bill reduced financial assurance requirements, plant owners needed to set aside enough money to fund their plant's operation and maintenance for five years, which for some was in the tens of thousands of dollars. Davis' 2015 bill got rid of those set-asides and established the trust fund, which would be accessible by all plant operators with department approval, that is capped at $2.1 million.
A plant owner could be an operator, a developer, an improvement district or a property owners' association. HB1550 would prevent a property owners' or homeowners' association from owning a plant after Jan. 1, 2018. Associations that already own a plant can keep it if they provide an assessment of anticipated operations and maintenance funds during a five-year period, as well as a financial plan. Critics of the plants have argued that property owners' associations are ill-equipped to oversee them.
Osborne said no plants have required the use of the trust fund since its establishment. He said people have mentioned Washington County Property Owners Improvement District No. 5 -- a plant that had sewage overflows and no money in the bank and required more than $300,000 in loans from the state to fix -- but that plant wouldn't be covered by the trust fund because it's an improvement district. Improvement districts can levy funds on the people who live there to pay for services or repairs.
HB1550 additionally outlines who can receive reimbursements from the trust fund for capital expenditures to maintain compliance and under what conditions. For instance, a plant is limited in how much it can be reimbursed, and "chronically" noncompliant plants are ineligible.
The bill also would require municipalities to issue conditional-use permits to plants in their extraterritorial jurisdiction before the department would consider a permit. The department used to determine whether a permit was proper before cities would consider the permits, but the department has shifted its policy in recent years to wait for cities to decide first.
HB1550 would prevent noncompliant plants from expanding.
"At least the problem can't get worse and worse by increased development under a system that is facing enforcement action," Carter said.
Carter also expressed strong support for HB1549, which outlines how a city may expand its sewer services into its extraterritorial jurisdiction. He lives along Nowlin Creek, where developer Rick Ferguson had sought to discharge wastewater from a plant for a proposed subdivision.
The Little Rock Planning Commission denied a conditional-use permit for Ferguson, whose subdivision would be within the city's extraterritorial jurisdiction, but Ferguson has appealed before the city board.
Little Rock City Director Lance Hines, who represents Ward 5 in the western part of the city, has proposed a resolution for city directors to authorize Little Rock Wastewater Utility to study extending services into the city's extraterritorial jurisdiction.
Hines doesn't like septic tanks or rural wastewater "package" plants, but he said the plants were preferable to septic tanks because they are easier for utilities to connect to and make an area more appealing for a city to annex. If the plants can't get permitted, developers will resort to septic tanks, he said.
City directors have long hesitated to extend sewer beyond city limits, Hines said, because they fear that if an area already has essential city services, people who live there would have no reason to agree to later be annexed into the city.
Metro on 02/18/2017