Misunderstanding about pipeline funding
There’s been a misunderstanding – by whom, everyone seems to have a different idea.
But the fate of $7.1 million and the completion of a 26-mile wastewater export pipeline relies on the resolution.
The U.S. Environmental Protection Agency thinks the South Tahoe Public Utility District misunderstood when $7.1 million was appropriated to help complete the rebuilding of a pipeline. STPUD thinks that the U.S. EPA misunderstood Congress’s intentions for the money.
The two agencies are trying to work it out.
“I know we’ll resolve something,” said Ken Greenberg, a member of EPA’s Lake Tahoe project team. “We’re hoping we’ll have a final answer on this shortly.”
STPUD has spent the past few years working to replace its wastewater export pipeline, which carries 1.7 billion gallons a day 26 miles to the Harvey Place Reservoir in Alpine County. The water irrigates 2,000 acres of STPUD land and 2,600 acres of ranch land.
Originally built in the 1960s under mandate to pump wastewater out of the basin, the pipeline had experienced breaks and spills.
Stemming from the 1997 Presidential Summit at Lake Tahoe, $7.1 million was appropriated by Congress in October 1997 to go to STPUD to help for the construction of the new pipeline which the district had already spent millions of dollars.
Everyone agrees on that. However, this is where the confusion begins.
STPUD must have a 45 percent local match to the $7.1 million.
Greenberg said U.S. EPA normally would honor expenses incurred since the time of appropriation – October 1997 in this case. Since that time, STPUD has spent about $5 million, which is not quite its 45 percent of the match.
At this point, Greenberg said, STPUD has two choices. The utility district can have EPA give them about $3 million – 55 percent of what the district has incurred so far – and then reimburse the district 55 percent of all future costs, until EPA has spent the $7.1 million.
The other option, Greenberg said, is for STPUD to spend all of its 45 percent – about $5.8 million – and then be reimbursed the $7.1 million in its entirety.
“They are absolutely entitled to that money if they incur those costs,” Greenberg said.
However, STPUD and members of Congress who supported the appropriations – including California Congressman John Doolittle, who authored the bill – disagree, because STPUD incurred more than $15 million in costs before the bill was appropriated.
“It was always the Congressional intent of the people who carried the ball on this in the House – Congressman (John) Doolittle, Congressman (Jim) Gibbons and Congressman (John) Ensign – for the local match to be considered pre-appropriation, not just the thin, narrow window of the EPA,” said John Martini, field representative for Doolittle. “Quite frankly, the administration is reinterpreting the intentions of Congress. From our perspective, the fact that the district has spent $20 million of its own money – that far exceeds what the district match is supposed to be.”
Duane Wallace, STPUD board member and executive director of the South Lake Tahoe Chamber of Commerce, said there are other reasons STPUD should receive the $7.1 million now. By EPA’s own regulations, when a district is required – such as it was by the Lahontan Regional Water Quality Control Board – to start work before federal appropriations are available, the local match must be considered from a “pre-appropriation” perspective.
Earlier in the 1990s, Wallace said, Congress approved $2.8 million for STPUD’s pipeline project, but those funds were also held up.
Wallace said it was “very clear” Congress wanted the $7.1 million to be considered pre-appropriation to compensate for the $2.8 million STPUD was supposed to get for the project earlier but never received.
Wallace said STPUD, acting in good faith, borrowed $5 million to start the work on the 1997 phase before receiving the money.
“They gave us every indication we would get it. It’s just sitting there in an account with our name on it, and we need it,” he said. “We were so sure and the bank was so sure they gave us the money so we could go forward a year earlier … Without it we would have had to raise our rates 27 percent. Our public wouldn’t accept that, and we won’t do it. We have no room to negotiate. We will not and cannot.”
Greenberg said what STPUD is asking is a “significant deviation” from what EPA would normally do in this situation.
“When they applied they said, ‘EPA, can you please make an exception and deviate from the norm to cover the costs we have previously incurred?'” he said. “They are really asking us to make a fairly significant departure from our normal protocol. And, we are still considering that.”
However, according to Wallace, “The clock is ticking”: STPUD needs to know by Nov. 1 in order to plan for Phase 3, planned for 1999. Phase 1 was completed in 1996; Phase 2 is being finished now.
According to STPUD, Phase 3 will have to be canceled if the district cannot receive the money.
“Ironically, under the way they administer grants,” Wallace said, “if the pipeline stops, if the work stops – which is what’s going to happen if we don’t get the money – then they go back to the pre-award window, and we’ll get the money.”
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