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1974-04-08 - Resolution 1974-09 - Potable Water Charge negotiations S r' ti RESOLUTION NO. 74 - WHEREAS The United States Environmental Protection Agency in their interpretation of the Water Pollution Control Act of 1972 has ruled that ad valorem (property) taxes do not constitute a proportionate means of sharing costs of wastewater treatment; and WHEREAS The United States Environmental Protection Agency intends to deny funding requests for expansion of wastewater treatment facilities to those agencies and districts who use other than user charges for funding; and WHEREAS The United States Environmental Protection Agency has determined that a user charge represents the only method of financing which achieves an equitable distribution of costs between industrial and domestic classes of users for the maintenance and operation of sewerage treatment facilities; and WHEREAS The Metropolitan Sanitary District of Greater Chicago currently utilizes a revenue structure based on ad valorem (property) taxes with an industrial surcharge based on volume and concentration of wastewaters; and WHEREAS The Metropolitan Sanitary District has, in its 80 years of providing service uses its revenues for the operation and maintenance of its treatment facilities and sewer mains; and WHEREAS Any change in the Metropolitan Sanitary District revenue structure would impose additional costs on all users, including, but not limited to, the installation of approximately 350, 000 water meters for those homes in unincorporated areas, for collection costs and water billing costs, and higher costs to those individuals having low property values (which usually represent individuals of lower income) ; and WHEREAS The revenue structure of the Metropolitan Sanitary District currently assures funds for the operation and maintenance of treatment works, and does not permit individual users to underwrite industrial users and thereby satisfies the intent of the Water Pollution Control Act of 1972 and the desires of the United States Environmental Protection Agency. NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees of the Village of Buffalo Grove, Counties of Cook and Lake, in _Buffalo Grove, Illinois, that SECTION I The revenues generated by the Metropolitan Sanitary District are generated equitably between industrial and domestic classes of users for the maintenance and operation of sewerage treatment facilities per the requirements of the Federal Water Pollution Control Act Amendments of 1972 and the rules and regulations implementing the Act. r 1 SECTION II The inclusion of a user charge based upon potable water consumption is not an equitable charge since many homeowners use potable water for other uses, such as lawn sprinkling, which use does not require discharge of water into the sanitary sewer system. SECTION III The inclusion of a user charge will increase the Village' s responsibility in collecting funds for sewerage usage and SECTION IV The Village Clerk is directed to send a copy of this Resolution to Senators Percy, Stevenson, and Muskie and to Representatives Crane and Blatnik and to Federal EPA Administrator Russel E. Train and to John Egan, Valentine Janicki and Bart Lynam of the Metropolitan Sanitary District of Greater Chicago. AYES NAYS O ABSENT % -L`ATED .this f day of G- ° 974. 4-1° Ar Villa• - 'resident Village Clerk -2- N • 'CEO Sr grFS UNITED STATES >' z ENVIRONMENTAL PROTECTION AGENCY ��/� �� REGION V �a e 1 NORTH WACKER DRIVE ��ir G4`O CHICAGO, ILLINOIS 6060E '1- PROZE JUN 14 1974 Honorable Philip M. Crane House of Representatives Washington, D. C. 20515 Dear Mr. Crane: This is in reply to your April 17, 1974, communication to our Washington Office of Congressional Affairs concerning a letter dated March 28, 1974, from Eleanor G. Turner, Clerk of Elk Grove Village, Illinois. Mrs. Turner's letter transmitted to you a copy of Resolution No. 25-74 indicating the Village's support of the existing revenue system used by the Metropolitan Sanitary District of Greater Chicago (MSD). The delay in this response to your communication was occasioned by this agency's extensive efforts to accommodate, in the greatest extent possible, the revenue system currently employed by MSD. We are pleased to advise you that on June 6, 1974, a letter was provided to MSD outlining the parameters within which their system could be considered to fulfill requirements of the Federal Water Pollution Control Act Amendments of 1972. We have out- lined herein a brief resume of the issues involved in this matter for your information. MSD presently employs a combination of ad valorem taxes and industrial sur- charge to finance the operation and maintenance of its treatment works. This agency has recently issued Program Guidance which would permit the use of ad valorem taxes in a Grantee's User Charge System providing that revenues, generated by that method, are proportionate to the cost of pro- viding each user class with wastewater treatment services. Ad valorem taxes are not favored because there is very little potential for correlation between property assessments and the volume or strength of wastes discharged. In addition to the requirement that revenues generated by this method be proportional to costs, recent policy changes also provide that a grantee have a history of using the ad valorem tax method and have no other immedi- ately available system for generating the required revenue without incurring exorbitant administrative costs or undergoing considerable disruptions to its normal way of conducting municipal business. 4 • JUN141974 Letter to Honorable Philip M. Crane - 2 - Although the ad valorem tax revenue method can be used .by a grantee for its User Charge System it cannot be used for an Industrial Cost Recovery System. Public Law 92-500 and implementing regulations clearly require that the Industrial Cost Recovery System recognize all factors which influence the cost of the treatment works. Factors such as strength, volume and delivery flow rate characteristics must be considered and included to insure a proportional distribution of grant assistance allo- cable to industrial use of the treatment works. Ad valorem taxes simply cannot accomplish that requirement. Furthermore, employing ad valorem tax methods in an Industrial Cost Recovery System would mean that some recovered amounts would flow back from general funds to the Federal Treasury. This is considered to be a very undesirable and unintended result. We expect that MSD will be able to meet the requirements herein briefly outlined for you. It is, however, up to the district to demonstrate that it can comply with the requirements of Public Law 92-500. Your interest in this matter is appreciated. incerely, • L � Francis T. Mayo Regional Administrator Attachment J�tED sT,,rFs `� `/ � loan UNITED STATES ENVIRONMENTAL PROTECTION AGENCY aL�'414 P Olt•C' WASH WGTON, D.C. 20460 . I 5 1974 Ms. Verna L. Clayton, Village Clerk Village of Buffalo Grove 50 Raupp Blvd. Buffalo Grove, Illinois 60090 '. Dear Ms. Clayton: ..,_~ Thank you for providing us with a copy(of Resolution No. 74-9, concerning this Agency`s requirements for user`chi a systems. We are pleased to inform you that we have recently modified the user charge requirements to expedite our construction grant program. That revision will allow the Metropolitan .Sanitary District to utilize its existing revenue structure for the operation and maintenance of its treatment facilities and systems. I am enclosing a copy of the most recent guidance to our Regional Offices covering this. If you require further information, please contact us. Sincerely yours, -4 4210-446:-) eiiiiiIIIII, 'a 'old P. Cahill , Jr. Director, Municipal Construction Division (WH-447)', Enclosure J,o/ED sr.% 1 y2 $ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 1:4cpRoltP WASHINGTON, D.C. 20460 JUN 5 1974 Ms. Verna L. Clayton, village Clerk Village of Buffalo Grove SO Ramp Blvd. Buffalo Grove, Illinois 60090 Dear Ms. Clayto.: Thank you for providing us with a copy of Resolution No. 74-9, concerning this Agency's requirements for user charge systems. We are pleased to inform you that we have recently modified the user charge requirements to expedite our construction grant program. That revision will allow the Metropolitan Sanitary District to utilize its existing remora structure for the operation and maintememce of tts treatment facilities and systems.. I am enclosing a copy of the most recent "educe to our Regional Offices covering this. If you mire further information, please contact us. Sincerely yours, Held P. Cahill, Jr. Director, Municipal Construction Division (WM-447) Enclosure f. ! cc: Pres. & Bd., Dan, Bill PHILIP M. CRANE OFFICES: MEMBER OF CONGRESS SUITE 1407 12TH DISTRICT,ILLINOIS LONGWORTH BUILDING WASHINOTON,D.C. 20515 02/ 22 3711 BANKING AND CURRENCY QCongreo COMMITTEES: of he Viniteb 'tatet Sum 1urrE tot01 SUBCOMMITTEES: 1450 SOUTH NEW WILKE ROAD INTERNATIONAL FINANCE 3oUzt of ReprecientatibtO ARLINGTON HEIGHTS,ILLINOIS 60005 DOMESTIC FINANCE ����y�y �y ��.µ.�y�y, 312/394-0790 URBAN MASS TRANSPORTATION WN{0bingtYl�,�.C. 20515 SUITE 2524 'J EVERETT M.DIRKSEN BUILDING HOUSE ADMINISTRATION 219 SOUTH DEARBORN STREET CHICAGO,ILLINOIS 60604 SUBCOMMITTEES: 512/353-4138 MECHANICAL AND ELECTRICAL EQUIPMENT ACCOUNTS PERSONNE,. June 17, 1974 Ms. Verna L. Clayton Village Clerk 50 Raupp Boulevard Buffalo Grove, Illinois 60090 Dear Ms. Clayton: I have now received a final report from the Environmental Protection Agency in response to my inquiry on your behalf. Enclosed is a copy of this response for your information. Please do not hesitate to contact me if you have any questions or if I may be of further assistance to you. •rdi- y, Ph ip M. Crane, M.C. PMC/mcm enclosure cc : Pres. & Bd. SAM J.ERVIN,JR.,N.C.,CHAIRMAN Dan JOHN L.MCCLELLAN,ARK. CHARLES H.PERCY.ILA i ftml/ Bill HENRY M.JACKSON,WASH. JACOB K.JAVITS,N.Y. EDMUND'S.MUSKIE,MAINE EDWARD J.GURNEY,FLA. ABM RIBICOFF.CONN. WILLIAM B.SAXBE,OHIO LEVAETCALF,MONT. WILLIAM V.ROTH,JR.,DEL. JAMES B.ALLEN,ALA. BILL BROCK,TENN. 'J Cflzteb Zf of ez ,senate LAWTON CHILES,FLA. SAM MINN,GA. WALTER D.HUDDLESTON,KY. COMM ITTEE ON RODERT BLAND SMITH,JR. GOVERNMENT OPERATIONS CHIEF COUNSEL AND STAFF DIRECTOR WASHINGTON,D.C. 20510 May 21, 1974 Ms. Verna L. Clayton Village Clerk Village of Buffalo Grove 50 Raupp Boulevard Buffalo Grove, Illinois 60090 Dear Ms. Clayton: Thank you for your recent -letter acid- r ution regarding user charges for the Metropolitan Sanitary Distri t of Greater Chicago. You may be interested in the enclosed letter I have written to the Environmental Protection Agency regarding this matter. When I have more information I will be in touch with you again. Thank you again for writing. Sincerely, '74'1 Charles H. Percy/kc United States Senator Enclosure r; SAM J.ERVIN,JR.,N.C..CHAIRMAN V JOHN L.MCCLELLAN,ARK. CHARLES H.PERCY.ILL. HENRY M.JACKSON,WASH. JACOR K.JAVITR,N.Y. it EDMUND S.MUSKIE,MAINS EDWARD J."U 4EY.FI.A. °i ABRAHAM RISICOPV.CONN. WIWAM KBE.OHIO . h'K 1 .�.LEE METCALF MOHT. WIWAM, ITH,JR.,DO.. " JAMES B.ALL N.ALA. RILL N. 1 Gaiteb ,$f a Zenaf e uwra+CHILES.FLIL .. / SAM NUNN.GA. WALTER D.HUDDLSS,TON,KY. " COMMITTEE ON RDBERT BLAND SMITH.JR. GOVERNMENT OPERATIONS CHIEF COUNSEL AND STAPP DIRECTOR WASHINGTON,D.C. 20510 May 10, 1974 k. Mr. Russell E. Train Administrator t- U. S. Environmental Protection Agency 401 M Street, S,. W. ht Washington, D. C. 20460 Dear Administrator Train: a I understand that the Environmental Protection Agency, in its interpretation of the Water Pollution Control Act of 1972, has ruled that the Metropolitan Sanitary District of Greater Chicago must implement a user charge before it may receive federal funds. Apparently the reasoning is that ad valorem taxes, now used by Chicago and other large metropolitan sanitary districts, ' do not constitute a proportionate means of sharing the costs of wastewater treatment. bf I have been working closely with the trustees of the Metropolitan Sanitary District on this matter for several months. In addition, I have been contacted by many of the communities in the metropolitan area who would be affected by this change. I am- aware that a request to the Senate Public ( Works Committee has been made for an interpretation of the 1972 law. It is argued that a proven revenue system such as the one for the Metropolitan k" Sanitary District of Greater Chicago, which incorporates an ad valorem tax and an industrial surcharge, does accomplish the intent of Congress by providing adequate and dedicated funds for system operation via an ecuitblc ,, and proportionate distribution of costs to system users. It is hoped tht the longer and more difficult route of corrective legislation will not be necessary and that some conclusion favorable to sanitary districts who use ad valorem taxes will be found. I would appreciate your giving every consideration to accepting the Chicago Sanitary District's revenue producing system as equitable and cost effective, and, therefore, eligible for federal funds from the Environmental Protection Agency. a Sincerely, , '.----1://--- "'"--r-C/7 Go i. Charles H. Percy/mm United States Senator. NINETY-THIRD CONGRESS L/ `/ JOHN A.BLATNIK,MINN.,CHAIRMAN Committee on )ubIic AI orkt ROBERT E.JONES,ALA. WILUAM H.HARSHA,OHIO JOHN C.KLUCZYNSKI,ILL. JAMES R.GROVER,JR.,N.Y. JIM WRIGHT,TEX. JAMES C.CLEVELAND,N.H.KENNETH J.GRAY,ILL DON H.CLAUSEN,CALIF. Congregg of the alntteb ,tateg FRANK M.CLARK.PA. GENE SNYDER,KY. IY// HAROLD T.JOHNSON,CALIF. ROGER H.ZION,IND. W.J.BRYAN DORN,S.C. JOHN PAUL HAMMERSCHMIDT,ARK. ffpoutie of Repreitentatibeg DAVID N.HENDERSON,N.C. WILMER D.MIZELL,N.C. RAY ROBERTS, LAMAS BAKER,7ENN. Room 2165,lapburn 3ouge Office 3uilbing JAMESS J.J.HOWARDRD,NJ. E.G.SNUSTER.PA. ��r""" GLENN M.ANDERSON,CALIF. WILLIAM F.WALSH,N.Y. �( 0.C. 20515 ROBERT A.ROE,N.J.. THAD COCHRAN,MISS. �'4 a8 if Ofl TENO RONCALIO,WYO. I..A."SKIP"BAFALIS,FLA. MIKE MC CORMACK,WASH. JAMES D.ABDNOR,S.DAK. TELEPHONE:AREA CODE 202,225-4472 JAMES V.STANTON.OHIO ROBERT P.HANRAHAN,ILL. BELLA S.ABZUG,N.Y. GENE TAYLOR,MO. JOHN B.BREAUX,LA. GERRY E.STUDDS,MASS. YVONNE BRATHWAITE BURKE, CALIF. BO GINN,GA. April 24, 1974 DALE MILFORD,TEX. RICHARD F.VANDER VEEN,MICH. RICHARD J.SULLIVAN,CHIEF COUNSEL LLOYD A.RIVARD,ENGINEER-CONSULTANT LESTER EDELMAN,COUNSEL CARL H.SCHWARTZ,JR.,CONSULTANT— PROJECTS AND PROGRAMS CLIFTON W.ENFIELD,MINORITY COUNSEL JAMES L OBERSTAR,ADMINISTRATOR Ms. Verna L. Clayton Village Clerk Village of Buffalo Grove Fifty Raupp Boulevard Buffalo Grove, Illinois 60090 Dear Ms. Clayton: Thank—you for your letter—of April 10 in which you enclosed a copy of Resolution No. 74-9 re21nding the user charge provisions of the Federal Water Pollution Control Act Amendments of 1972. The Environmental Protection Agency advises me that they are in the process of revising their policy with regard to the implementation of these provisions. In particular, under certain circumstances ad valorem tax systems may be substituted for a system of user charges. I consider this change in their policy to be a reasonable interpretation of the intent of Congress. With warm wishes. Sincerely, I, j Q11 • n A. Blatnik airman •mmittee on Public Works cc: Pres. & Bd. PHA P M. CRANE DanO�CES: MlMBER OF CONGRESS `/ SUITE 1407 '72TN DISTRICT,ILLINOIS LONGWORTH BUILDING WASHINGTON,D.C. 20515 2 BANKING AND CURRENCY �Congrelz of t je niteb *fates; 2 SUITEU 10 11 1 SUBCOMMITTEES: 1450 SOUTH NEW WILKE ROAD INTERNATIONAL FINANCE oulie of 1eprefientatibeO ARLINOTON HEIGHTS,ILLINOIS 60005 DOMESTIC FINANCE JJ 312/984-0790 URBAN MASS TRANSPORTATION (ngton,D.C. 20515 SUITE 2524 EVERETT M.DIRKSEN BUILDING HOUSE ADMINISTRATION 219 SOUTH DEARBORN STREET CHICAGO,ILLINOIs 60604 SUBCOMMITTEES: 312/353-4138 MECHANICAL AND ELECTRICAL EQUIPMENT ACCOUNTS PERSONNEL May 23, 1974 Ms. Verna L. Clayton Village Clerk 50 Raupp Boulevard Buffalo Grove, Illinois 60090 Dear Ms. Clayton: I am enclosing a copy of the reply which I have received from the United States Environmental Protection Agency in response to my recent inquiry on your behalf. I believe the letter is self explanatory. You may be sure that I will be in contact with you as soon as I have received further word from the EPA Regarding this matter. '•rdi y, If a* 1 0100440 Phi ip M. Crane, M.C. PMC/mcm enclosure V MAY 201974 Honorable Philip M. Crane House of Representatives Washington, D. C. 20515 Dear Mr. Crane: This is in response to your letter of April 17, 1974 regarding the concerns expressed in a resolution submitted to your office by the Elk Grove Village Board. The resolution addresses the user charge requirements of the Federil Water Pollution Control Act Amendments of 1972 as they apply to the Metropolitan Sanitary District of Greater Chicago. The user charge requirements have been the subject of several recent meetings between U.S. EPA and the Metropolitan Sanitary District of Greater Chicago. The matter is presently under con- sideration by our Office of General Counsel in Washington and a final decision is expected in the very near future. We will advise when a final decision has been reached. Thank you for your interest in the environment. Sincerely yours, Francis T. Mayo Regional Administrator PHILIP M. CRANE OFFICES: MEMBER OF CONGRESS SUITE 1407 12TH DISTRICT,ILLINOIS LONGWORTH BUILDING WASHINGTON,D.C. 20515 BANKING AND CURRENCY Cofgre�ti of the liftteb Otateo 2 SUITE-3711 101 SUBCOMMITTEES: 1450 SOUTH NEW WILKE ROAD INTERNATIONAL FINANCE 3EpOU$e Of iepreoentatibe$ ARLINGTON HEIGHTS,ILLINOIS 60005 DOMESTIC FINANCE 812/394-0790 URBAN MASS TRANSPORTATION �.7L{fgtpn, D.C. 20515 SUITE 2524 EVERETT M.DIRKSEN BUILDING HOUSE ADMINISTRATION 219 SOUTH DEARBORN STREET CHICAGO,ILLINOIS 60604 SUBCOMMITTEES: 312/353-4138 MECHANICAL AND ELECTRICAL EQUIPMENT Accouters PERSONNEL April 17, 1974 Ms. Verna L. Clayton Village Clerk 50 Raupp Boulevard Buffalo Grove, Illinois 60090 Dear Ms. Clayton: Thank you for sending me a copy of the Resolution adopted by the Village Board protesting the Environmental Protection Agency's ruling that ad-valorem taxes do not meet the requirements of the Federal Water Pollution Control Act Amendments of 1972. I appreciate your advising me of the Board's views on this ruling. I have received similar views from other villages and I have contacted EPA about it. I shall be glad to let you know as soon as a reply is received. ordial , / � 1 Philip M. Crane, . C. PMC/kmr r _-r., , . cc: Pres. & Bd. ;r. Dan & Bill UN' I i_ I ) I ,. I ::5 r_t':' i,vsiN:.iL.NT,:'1 PI;CI- CTION AGENCY 4 ,\. .C_)N, D.C. 2.04:-/i .. • 18 JUN 1974 C iCL O P [NI ORCEMEN1 ANG CENTRAL COUNSEL i Honorable Charles H. Percy United States Senate • Washington, D. C. 20510 Dear Senator Percy: - . We appreciate the concern you expressed in your letter . - of May 10 regarding the acceptance by this Agency of the • . • "user charge" system proposed by the Metropolitan Sanitary District of Greater Chicago. The Sanitary District has historically funded the operation - and maintenance of its system through ad valorem taxation. On June 4, 1974, the Environmental Protection Agency D&}jinn y nffirn na tont,,tivn n "a ,ir l to the Sanitary District for development o ��n r a user c erge1 syst.em based on ad valorem taxes. We believe teat this can be accomplished within the framework of existing legislation (section 204(b) , Federal Water Pollution Control Act Amendments of 1972) . However, opinion is divided on this issue, as you are no doubt aware. Presently, the General Accounting Office is reviewing a legal opinion of this office authorizing use of =�1 ad valorem taxes, in certain special circumstances, as a basis for user charge systems. We do not yet know what will be the „t k GuI.CGil1C-. of l,i,�il, t '.tiii��'d, ,;:1ii:�l, �,'e are l'f1:Gi'iiled, was UisUE t,cl..L'n at the request of a in mbar of the Sew.t.c. 11 i l f b] resolutionthe t tie arc hopeful or a ora e of this issw at the earliest time, so hat the Chicago Snitary District, and �j other prospective grantees similarly situated , will shortly be ., able to receive nosh n?. funding for construction grant n ojects. � Sincerely yours, ) ( A' in G. Ti:i r II ' Aesic.f6nt Ae iili stretor �? fr . Cris ,ti .,� m��• c� �It. t`�` i_ ,1-' "M"� I C� Yi� lf! Pl (Et _J. :i)