BRADENTON, Fla. — Columbia, the capital of South Carolina, has promised to spend more than $750 million to settle federal charges related to contaminating local waters with untreated sewage.
An estimated $750 million will go toward overhauling the city’s aging sewer system as part of a consent decree with the U.S. Environmental Protection Agency, the U.S. Department of Justice, and the South Carolina Department of Health and Environmental Control.
The city also will pay civil penalties of $238,200 to the federal government and $238,200 to the state to settle violations of the Clean Water Act.
Another $1 million must be spent on a supplemental environmental program, which includes cleanup, flood, and water-quality projects for three local high-priority water bodies.
The proposed consent decree, announced Tuesday, comes as the city prepares to sell $90 million of water and sewer revenue bonds.
“Implementing the terms of the settlement will call for a significant investment in the city’s wastewater system,” the city said in a release Wednesday. The civil penalties will be paid with funds included in the fiscal 2014 budget.
“This settlement will bring badly needed improvements to Columbia’s aging sewer infrastructure, reduce the dangers of sewage contamination, and improve the quality of waterways in historically disadvantaged communities,” said a statement by Robert G. Dreher, acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.
The consent decree, which is available for public comment the next 30 days, requires Columbia to implement a comprehensive sewer system assessment and rehabilitation program to address existing problems of raw sewage overflows.
The city will develop and implement remedial projects and infrastructure upgrades in addition to infrastructure upgrades that are already underway or planned, federal officials said.
The work also will include specific programs designed to ensure proper management, operation, and maintenance to prevent future sewer overflows.
In anticipation of the settlement, Columbia launched a program called Clean Water 2020 and a website to inform the public about upgrades to the sewer system, some of which is more than 100 years old.
The work, to be implemented over the next seven to 10 years, will include projects required of the consent decree, upgrades, and modernization of the system, according to Victoria Kramer, spokeswoman for Utilities and Engineering Department.
While work related to the consent decree is estimated at $750 million, she could not immediately say if that would cover the entire CW2020 work program.
The program will be financed from the water and sewer enterprise fund, and the city has hired CDM Smith Inc. to be the program manager and conduct a rate study that will be completed next year, Kramer said. No details concerning the plan of finance were available.
Documents authorizing the sale of $90 million of water and sewer revenue bonds were approved by the City Council Aug. 13. The planned sale date was not released.
Bond proceeds will be used for ongoing capital improvements to the city’s water and sewer systems, according to city documents.
The deal will be underwritten by Raymond James & Associates Inc. and Terminus Securities LLC. Merchant Capital LLC is the city’s financial advisor.
McNair Law Firm PA and Johnson, Toal & Battiste PA are co-bond counsel. Parker Poe Adams & Bernstein LLP and Starkes Law Firm PA are co-underwriters’ counsel.
Columbia had $372.2 million of outstanding water and sewer revenue bonds at the end of fiscal 2012. The debt is rated Aa1 by Moody’s Investors Service and AA by Standard & Poor’s.
