Loading...
HomeMy WebLinkAboutA001 - Council Action form dated April 24, 2007 ITEM # DATE April 24, 2007 COUNCIL ACTION FORM SUBJECT: STAFF REPORT ON PROPOSED REVISIONS TO HIGH-STRENGTH SURCHARGE PROGRAM BACKGROUND: The City of Ames sewer utility is self-funded entirely by user rates. The basic rate structure assumes wastewater strength that is a "normal, domestic strength." Wastewaters that are higher in strength than normal domestic sewage are more costly to treat. To recapture this additional cost of treatment, the Water and Pollution Control Department administers a high-strength surcharge program. The purpose of the program is to provide an equitable means of assessing the higher treatment costs for high-strength wastes back to the individual contributor. Having a high-strength surcharge program is a requirement of the Federal Clean Water Act (Section 204b). The calculation of high-strength surcharges is based on the actual strength of the wastewater being discharged as determined by sampling and analysis of the waste stream. There are three primary components evaluated for surcharge; namely, solids, oxygen demand, and nitrogen. To calculate the surcharge, the concentration of "typical domestic strength" is subtracted from the actual measured strength to determine the strength that is in excess of typical domestic wastewater. The normal user rates cover the typical domestic-strength portion, and the surcharge rates are assessed on the excess portion. Staff are proposing to revise the surcharge calculation procedures for the oxygen demand and nitrogen components. Oxygen demand can be measured by a number of different methods. The current surcharge program uses two methods. The primary method is the Five-day Carbonaceous Biochemical Oxygen Demand (CBOD5). This method uses bacteria normally present in wastewater to degrade the organic components in the wastewater and then measures the amount of oxygen consumed by the bacteria over a five-day period. This test method is considered to be a good representation of the impact a waste stream would have if it were discharged directly into a river. However, it often does not measure the true strength of complex wastes discharged by some non- domestic sources, either because the bacteria cannot completely break down complex wastes or because there may be other toxic components in the wastewater that inhibit biological activity. A second method of evaluating oxygen demand is a Chemical Oxygen Demand test. This test method uses an acid solution to chemically break down the wastes. It is able to measure organics that often times go undetected in the traditional CBOD5 test. Often, the COD is two to two and a half times higher than the CBOD5. The current surcharge program calls for the CBOD5 test to be the primary test method but permits the COD test to be used in lieu of the CBOD5 if, in staff's professional judgment, there is reason to believe that the CBOD5 is unrepresentative of the actual oxygen demand of the sample. Staff are proposing to change from using CBOD5 as the primary test method to using COD. With the change in test methods, staff are also proposing to change the definition of "typical domestic" strength from 250 mg/L as CBOD5 to 550 mg/L as COD. Because COD values by definition are higher than corresponding CBOD5 values, staff are proposing to reduce the surcharge rate for COD from $0.20 per pound to $0.10 per pound. Like oxygen demand, the nitrogen composition of a waste can be measured in different ways. The method currently used in the Ames surcharge program is to examine the concentration of nitrogen present in the form of ammonia (NH3-N). However, the NH3-N test is not able to pick up complex proteins (such as might be present in blood or animal products) that are converted to NH3-N and then subsequently removed by the treatment process at the Water Pollution Control Plant. An alternate method for evaluating the nitrogen content of a waste stream is the Total Kjeldahl Nitrogen (TKN) test. The TKN test uses a chemical process to break down the complex proteins and allow them to be measured. Typically, TKN concentrations are 1.4 times higher than NH3-N concentrations. Staff are proposing to change from using NH3-N to using TKN as the primary test method for measuring nitrogen concentration. With the change in test methods, staff are proposing to change the definition of "typical domestic" strength from 40 to 45 milligrams per liter. Staff are proposing to adjust the surcharge rate for nitrogen to account for the change in test methods. Surcharge rates were last adjusted in 1999. In addition to the proposed adjustments to the surcharge rates because of changes in test methods, staff are also proposing to adjust the surcharge rates to account for increases in the annual operating expenses of the treatment plant that have occurred since 1999. Finally, staff are proposing to relocate the surcharge rates from Chapter 28 (Utilities) of the Ames Municipal Code to Appendix Q of the Municipal Code. Appendix Q contains several other fees and charges for the Water and Pollution Control Department that are updated annually. Staff propose to include adjustments to the high-strength surcharge rates annually at the same time other fees and rates are adjusted. Below is a summary of the proposed changes. Threshold Concentrations Surcharge Rates (milligrams per liter $ perpound) Existing Proposed Existing Proposed Oxygen Demand CBOD5 250 250 0.20 0.26 COD 250 550 0.20 0.10 Nitrogen N H3-N 40 30 0.70 0.94 TKN 40 45 0.70 0.61 Solids TSS 300 300 0.35 0.40 Staff have notified all industries that are currently impacted by the surcharge program and explained the proposed changes. Staff held an open forum on April 19 for industries who were interested to hear the same presentation that will be presented to Council. The customer that will be most impacted by the changes is Iowa State University. Staff have met specifically with representatives from ISU to discuss the proposed changes. During fiscal year 2006, the surcharge program generated revenues of $53,200, accounting for 1.1 percent of the total revenue to the Sewer Fund. The impact of the proposed changes to the overall revenue generated by the program will be variable over time, being dependent on the actual wastewater concentrations being discharged. Staff estimate that the changes will result in a modest decline in surcharge revenues, on the order of 10 to 20 percent. ALTERNATIVES: 1. Approve the proposed changes to the high-strength surcharge program as outlined above and direct staff to work with the City Attorney to develop the appropriate code revisions. 2. Do not approve changes to the high-strength surcharge program at this time. MANAGER'S RECOMMENDED ACTION: The high-strength surcharge program is an important element in the sewer rate structure, as it allocates the cost of treating higher-than-typical domestic-strength wastes to the discharger. Having a surcharge program is also a federal requirement. Staff are proposing to update the program to improve the method of allocating costs. Staff are also proposing to begin regular, annual adjustments to the surcharge rates by moving the surcharge rates from Chapter 28 to Appendix Q of the Ames Municipal Code. Therefore, it is the recommendation of the City Manager that the City Council adopt Alternative No. 1 , thereby approving the proposed changes to the high-strength surcharge program and directing staff to work with the City Attorney to develop the appropriate code revisions.