Great Lakes Water Quality Bond Proposal – History and Background

Traditionally in most American cities, one set of sewers has served to transport both sewage from homes and businesses, and stormwater runoff from pavement and other impermeable surfaces. These combined sewers transport all of this material to municipal wastewater treatment facilities, where it is treated before being released back into the watershed in a form which does not damage the environment. Combining sanitary and stormwater sewers saved taxpayers the expense of building two parallel sets of sewer systems, but the practice has one serious drawback: After heavy rainfalls sewage treatment plants are unable to handle the massive influx of stormwater. The result is “combined sewage overflows” or CSOs, in which untreated sewage is discharged from the system into lakes and streams.

Many people believe that CSOs are a major source of water pollution, in particular high levels of E. coli bacteria contamination which can lead to beach closings. Others contend that they are just one of many sources of high bacteria levels present in surface water after heavy rainfalls, such as runoff of fertilizer used in agriculture, animal wastes, failing residential septic systems, illegal discharges (often by units of government), etc. For example, in 2001 a Detroit News article reported that an analysis at one popular beach on Lake St. Clair using sophisticated genetic fingerprinting showed that 69 percent of the bacteria were from bird droppings and other animal waste. This finding is controversial, but may show that high surface water bacteria may be a natural outcome of heavy rainfall. Alternatively, it could be a byproduct of more land area being covered with pavement and other impermeable surfaces, causing more rainwater to flow into lakes and streams rather than soaking into the ground. In either case, the study shows that CSOs may not be the primary source of the problem.

Nevertheless, beginning in the 1960s and 1970s, state and federal laws began requiring either the separation of sanitary and storm water sewers, or construction of massive holding basins for combined sewage awaiting treatment. Court decisions have imposed deadlines on many communities to undertake these projects. For older systems, including Detroit and the entire metro area, this could potentially mean tens of billions of dollars in costs. Furthermore, many cities have deferred maintenance on existing sewer systems, anticipating that they may have to be replaced anyway. The result is a widespread decline in existing municipal wastewater infrastructure. An April 2001 report on sewer infrastructure needs by SEMCOG, the Southeast Michigan Council of Governments, reported that, "Over the next 30 years, an additional $14-26 billion will be needed to maintain and improve the region's sewage collection and treatment systems." Federal regulations expected soon may even impose new mandates on treatment of stormwater even when not combined with sewage.

Local governments have complained that they cannot afford such investments without help from the state and/or federal governments. Yet according to SEMCOG, the federal government is reducing the amount of assistance it provides, from $255 million to Michigan sewer infrastructure projects in 1974 to just $68 million in 2000.

Aside from annual revenue sharing payments, the primary means by which the State of Michigan assists local governments with the cost of sewer projects is the State Water Pollution Control Revolving Fund (also known as the “state revolving fund,” or SRF). The nonpartisan House Legislative Analysis Section describes the SRF and the demands upon it as follows:

“The SRF provides subsidized low-interest loans to municipalities for use in upgrading wastewater treatment systems. Eligible projects include treatment plant upgrades and expansions, combined sewer overflow abatement, new sewers designed to reduce existing sources of pollution, nonpoint source pollution management, sludge management, and similar efforts to address the problems of the state's aging wastewater treatment infrastructure. (Nonpoint sources include runoff from the land and deposits from the air.) Federal funds are channeled to local units through this fund; the state is required to provide a 20 percent match. The fund is administered jointly by the Department of Environmental Quality and the Michigan Municipal Bond Authority. Municipalities apply for the loans, which are repaid into the fund. Assistance is awarded based on a project priority list developed by the DEQ. According to recent information from the DEQ, 189 projects have been funded totaling $1.61 billion over the life of the program. However, the needs today far outstrip the available revenues. The fund anticipates providing about $200 million annually for new project loans. (In fiscal year 2000, local units made applications for projects totaling $350 million.)”

90 percent of the $1 billion borrowed under the Great Lakes Water Quality Bond proposal would go into the SRF. The remaining 10 percent would go to a new Strategic Water Quality Initiatives Fund to subsidize local projects to reduce the amount of groundwater or storm water entering sewer systems, or, to upgrade or replace failing (private) on-site septic systems. All subsidies would be through low interest loans to local units of government.