CHICAGO — Federal authorities announced the filing in court late last week of a $4.7 billion settlement agreement in their lawsuit against the Metropolitan St. Louis Sewer District.
The district reached a preliminary agreement in June with the U.S. Justice Department, the Environmental Protection Agency and environmental groups. Based on that plan, MSD submitted a proposal to its rate-setting commission to allow it to ask voters for authority to issue $945 million of bonds in coming years to fund capital projects.
The agreement calls for the district to spend $4.7 billion over the next 23 years to install a variety of pollution controls, including three large storage tunnels ranging from two miles to nine miles in length, and to expand capacity at two treatment plants to reduce overflows into nearby streams and rivers along with other projects aimed at curbing untreated discharge.
“By moving forward with this Clean Water Act settlement, the community is facing its responsibilities,” EPA regional administrator Karl Brooks said in a statement. “This agreement will bring jobs and long-term economic investments while significantly improving the environment for future generations.”
The settlement resolves claims brought against the district in 2007 in the U.S. District Court for Eastern District of Missouri. The state has not yet signed off on the agreement. Like other actions taken against cities across the country, the EPA sued the district, alleging it violated federal clean-water laws by allowing untreated sewage to seep into area waterways and the ground.
Many of the projects outlined in the decree are already in the district’s long-term $6 billion capital program, so they are not expected to have a material financial impact, though the timing of projects could change, according to district treasurer Karl Tyminski.
The district hopes to win new borrowing capacity in order to limit the size of rate increases. The borrowing would fund projects planned for between 2012 and 2016. The district expects the commission to act on its proposal by the fall. The bond question could appear on the ballot next April.
The sewer district, which has ratings in the double-A category, has about $92 million remaining from past bond referendums but will exhaust that authority this year. The 57-year-old agency provides wastewater treatment and stormwater services to 1.4 million residents in St. Louis and most of St. Louis County.
