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HomeMy WebLinkAbout04/05/2005, BUS 3 - UPDATE OF RECENT REGULATORY REQUIREMENTS AND STUDIES FOR THE WATER RECLAMATION FACILITY council a r j acEnba RepoiA U 3 CITY OF , SAN LUIS OBISPO FROM: John Moss,Utilities Director Prepared By: David Hix,Wastewater Division Manager SUBJECT: UPDATE OF RECENT REGULATORY REQUIREMENTS AND STUDIES FOR THE WATER RECLAMATION FACILITY CAO RECOMMENDATION Receive and file report REPORT-IN-BRIEF Recent regulatory changes, the 2002 adoption of the Water Reclamation Facility's (WRF) National Pollutant Discharge Elimination System (NPDES) permit and subsequent permit re-opener, may require significant upgrades of the WRF to achieve compliance. The results of recent studies have led to the placement of additional discharge limits in the WRF's permit, but have also identified some possible and reasonable regulatory options for achieving compliance with the new requirements. Several new discharge requirements are being driven by the most stringent beneficial use designation of San Luis Obispo Creek. This designation, plus other conditions in the creek, makes it necessary for the City to continue with technical studies while exploring regulatory options for relief from requirements. The studies will allow the City to consider all options and make the most reasonable and informed decisions regarding the WRF's permit and upgrade. As it stands presently, these new discharge limits will require significant and expensive capital improvements and substantial increases in annual operating costs at the WRF in order to achieve compliance. City staff will continue to work with consultants, regulators and other agencies for the best possible regulatory solutions for the City. DISCUSSION Adoption of the WRF's NPDES permit in May of 2002, included new discharge limitations and special provisions for technical studies. These limits and studies were the result of recent regulation changes that will greatly affect the pollutants the WRF can discharge and may result in significant and costly upgrades to the facility. This report provides an overview of the recent studies, their findings, staff's efforts and the possible consequences of final adoption of these new stringent limitations. The information in this report is detailed and complex by its nature. In an effort to explain the different subjects and their interconnected relationships,this report outlines the history and activities that are responsible for the Update of Regulatory Requirements and Studies for the WRF Page 2 regulations and requirements that currently challenge the City. Provided below is an outline of the subjects discussed in this report: 1. A brief history of the WRF and its last upgrade. 2. Recent regulatory changes and the factors driving more stringent requirements. 3. The WRF's NPDES Permit and the finding of its recent technical studies. 4. Trihalomethanes,nutrients and San Luis Obispo Creek. 5. Regulatory options for the City. 6. The WRF Master Plan. 7. Current,proposed and future fiscal impacts. The City's Wastewater History The City of San Luis Obispo began treating wastewater and discharging effluent to San Luis Obispo Creek in the 1940's. Since construction of the first sewage plant, periodic upgrades have been necessary to expand and upgrade the facility. The last upgrade was completed in 1994, after the City and the Regional Water Quality Control Board (RWQCB) entered into a consent decree to comply with discharge requirements developed for San Luis Obispo Creek. The $25 million upgrade resulted in the City's current tertiary treatment plant that meets acute and chronic toxicity requirements by converting toxic ammonia to nitrate, cools its effluent to preserve the cold water habitat of the creek, filters out the smallest particle in the wastewater, disinfects its effluent to destroy pathogens and finally removes any residual chlorine. The City currently complies with some of the most stringent discharge requirements in the nation. Regulations and Requirements for the Water Reclamation Facility In May of 2000,water quality regulations in California were dramatically changed. The adoption of the California Tonics Rule (CTR) and its corresponding document, the State Implementation Plan (SIP), has resulted in the State mandating compliance with new, stringent water quality objectives for all water bodies. The CTR establishes the maximum concentration of a pollutant based on the receiving water's most stringent beneficial use. San Luis Obispo Creek has many listed beneficial uses that include; cold freshwater habitat, recreation, shell fish harvesting and Municipal and Domestic Supply (MUN). The MUN designation has the most stringent requirements and is the biggest driver of the development of new stringent discharge limitations for the WRF. The City has long maintained that the application of the MUN designation for San Luis Obispo Creek is inappropriate because that use does not exist. Compliance with the limitations established by the CTR is required by May of 2010. The RWQCB's Basin Plan is the document that lists the beneficial uses for San Luis Obispo Creek and other water bodies throughout the region. Because of San Luis Obispo Creek's MUN beneficial use listing in this document, all the water quality objectives and subsequent discharge requirements are developed using this most stringent designation. This document also contains water quality objectives different than the CTR, and contains a limit for nitrates for San Luis Obispo Creek. 3 'ea Update of Regulatory Requirements and Studies for the WRF Page 3 San Luis Obispo Creek is an intermittent coastal stream that during the drier portions of the year may have no flow if not for the WRF's discharge. This condition is referred to as an Effluent Dominated Waterbody(EDW) and complicates regulatory conditions. Because there is no dilution with natural stream flow, the water quality objective from the CTR has to be met at the WRF's outfall. The SIP does allow for dilution, but provides no guidance for agencies that discharge to EDWs, so permit writers have assigned discharge limits without any dilution credit making them the most stringent limit possible. Currently a group of cities and agencies are working with State Water Resources Control Board (SWRCB) staff to develop State-wide guidance for EDWs. City staff participate in this working group and are hopeful some useful guidance can be developed. However, the RWQCB has determined that they cannot wait for this guidance and must therefore apply the rules of the current, most stringent requirements found in the CTR and SIP to the City permit. The WRF's NPDES Permit and Recent Re-Opener The WRF's current permit contains several requirements for special studies and some new discharge limitations. The studies, which were required to be completed by Fall of 2004, were prepared by the City's consultant, Larry Walker Associates, Inc., (LWA). The studies were performed to determine if development of additional discharge limitations for the WRF were warranted,and to determine the fate of certain pollutants in the creek and groundwater. The City's NPDES permit has just recently been re-opened and additional limits and a study have been added as requirements. This re-opener was a provision of the previous permit and allows the permit to be changed, if necessary, based on the findings of the studies. The City's permit will again be reviewed, with possible additional requirements, in May of 2007. Below is a brief explanation of the recently completed studies and their results; 1. Reasonable Potential Study (RPA). This analysis is required for all wastewater facilities to determine if the water quality objectives for their receiving waters are being met. The study required extensive sampling to determine what pollutants are being discharged from the WRF into San Luis Obispo Creek. An analysis is then performed to determine if any of the pollutants are being discharged in concentrations that exceed the water quality objective for the creek. The RPA determined that some pollutants exceeded the water quality objective and required discharge limitations. These pollutants are. bromoform, cyanide, selenium, chlorodibromomethane, and dichlorobromomethane. Because these pollutants exceeded the water quality objectives,a discharge limitation has been placed into the WRF's permit. The Trihalomethanes, chlorodobromomethane and dichlorobromomethane have been given interim achievable limits until we can comply with the more stringent final limits. The three remaining pollutants were only detected once in nine sampling periods and staff feels confident, based on sampling records, that immediate compliance with the final limits can be achieved. 2. Trihalomethane Fate Study. The City requested a trihalomethane(THM) fate study to determine if THMs volatize or attenuate somewhere downstream of the WRF's outfall. Staff knew from previous correspondence with the RWQCB and preliminary sampling that THMs were an issue and requested the study to determine if compliance could be achieved within the water body. THMs 3 - 3 Update of Regulatory Requirements and Studies for the WRF Page a are the by-product of chlorine, used at the WRF as a disinfectant, and organic matter found in wastewater. The development of the objective is based on the MUN beneficial use designation and the federal human health criteria that has assumed an exposure path that if someone drinks 2 liters of untreated creek water and eats 6.5 grams of fish, everyday, for seventy years, they stand greater than a one in a million chance of contracting cancer; a completely unlikely scenario for San Luis Obispo Creek. It is also important to note the WRF's current discharge concentration for THMs meets the California Department of Health Services drinking water requirements. The study sampled the creek, the WRF's discharge and created a model for THM concentrations and their fate in the creek. The study showed that THM's met the CTR requirement approximately 29,000 feet below the WRF outfall and developed an accurate and scientifically valid model and method for determining THM fate in San Luis Obispo Creek. This distance or "point of compliance" was too far downstream for the RWQCB staff to accept as compliance with this objective, but does provide an opportunity for the City to continue fiuther studies in an effort to establish amore acceptable point of compliance. 3. Nutrient and THM Groundwater Study. These studies looked at concentrations of THM's and nutrients in the groundwater above and down gradient of the WRF's outfall. Sampling and record review determined that the WRF was not degrading or responsible for degradation of the groundwater below its outfall. Trihalomethanes,Nutrients and the MM. The results of the RPA will mean that several new constituents will be added to the WRF's NPDES permit for monitoring and compliance. While several of the new discharge limits can be met immediately, THMs cannot, and will be the most difficult in terms of achieving compliance. The encouraging result of the THM study is that it appears THMs are attenuated and/or volatize in the creek and the RWQCB has agreed to allow the City to determine if we can bring the point of compliance closer upstream to the WRF's outfall. The City has proposed to investigate options for reducing THMs and then seek to negotiate conservation easements along the creek to ensure that no MUN use would occur prior to the point of compliance in the creek. This will depend on the RWQCB's acceptance of the study, demonstration of THM reduction, acquisition of the easements and on-going protection of the creek. If successful, this study could save significant capital and operating costs versus the possible redesign and construction of new compliant disinfection processes at the WRF to meet the 2010 deadline. Currently staff and consultant are investigating the sources of THMs within the WRF and possible reduction strategies. Several processes where chlorine is added to control algae and bacteria have been identified and sampling has confirmed that THMs are generated in significant concentrations. The hope is that using the model of attenuation of THMs in the creek to analyze the effects of reducing the in-plant generation of THMs, significant reduction and an acceptable point of compliance can be realized. This summer the City will begin pilot testing chlorine dioxide, a disinfectant that does not create THM's. Chlorine dioxide is a powerful disinfectant that shows promise for use at the WRF in areas of the plant where THM generation is most prevalent. Staff is J Update of Regulatory Requirements and Studies for the WRF Page 5 hopeful a reasonable compliance scenario for THMs can be found that would avoid having to construct costly new facilities. The other constituent of concern for the WRF is nutrients, specifically nitrates. The most significant change to the WRF during the 1994 upgrade was the installation of the nitrification process. This process uses biological organisms to convert toxic ammonia to nitrates that are less toxic to aquatic life, and allows the WRF to comply with all of its acute and chronic aquatic toxicity requirements annually. Recently the RWQCB informed staff that it would be requiring the City to comply with the basin plan water quality objective of 10 mg/L for nitrate. This limit is the same as the drinking water requirement and is currently about 2 %i times lower than what the WRF is discharging. To reduce nitrate to this level will require a costly upgrade and result in significant on-going operating costs. Currently a nutrient study of San Luis Obispo Creek is being prepared by the RWQCB. This study, called a Total Maximum Daily Load (TMDL), determines the acceptable amount of nutrients, specifically nitrates, from the entire watershed that may be allowed into San Luis Obispo Creek while protecting the most stringent beneficial use, in this case the MUN designation. The WRF is the largest point source of nitrates to the creek and therefore likely will feel the greatest impact from this study's outcome. This study is in draft form and will probably be adopted sometime within the next year. Staff and LWA will closely monitor the progress of this TMDL, work with RWQCB staff and provide comments. The nutrient and THM limits are both being driven by the MUN beneficial use designation for San Luis Obispo Creek. As previously stated, the MLN beneficial use does not exist in San Luis Obispo Creek and it is unlikely it ever will. The MUN is designed to protect water quality for anyone who takes surface water for a municipal or private system for drinking water. In San Luis Obispo Creek no one is,or has been taking water for this use. There are two major reasons for this: 1. San Luis Obispo Creek is Effluent.Dominated. As previously discussed, the majority of the flow in San Luis Obispo Creek is from the WRF and during portions of the year may make- up the entire flow. This condition makes the creek inappropriate and unreliable as a drinking water source. It is highly unlikely that a water purveyor would be allowed to use the creek as a drinking water source. 2. The WRF's flow has been dedicated to habitat. By agreement, the WRF is required to discharge a minimum amount of flow to the creek for fishery habitat. Only a few appropriate water rights exist for the creek and they are for irrigation. Additional removal of water,for any use, is unlikely to be allowed. Regulatory.Options In California, beneficial uses are assigned to water bodies by the Regional Boards. Designations can be changed, but it requires significant studies and efforts to initiate and complete a de- designation. California has a policy that all inland water bodies be given the MUN designation on the assumption that they should be "drinkable". This policy has led to wide-spread problems Update of Regulatory Requirements and Studies for the WRF Page 6 throughout the State with many wastewater agencies facing costly upgrades and compliance issues. De-designation is allowed if it can be demonstrated that the beneficial use is inappropriate, not present,will not be in the future or is unattainable. There is also a regulatory opportunity to develop Site Specific Objectives (SSOs) for the present WRF's discharge that would be less stringent than the current proposed limit. SSOs may be developed if it is found that a discharge limit may be inappropriate for the water body. SSOs don't change the beneficial use designation, but grant special water quality objectives within the waterbody. De-designation of the MUN beneficial use or SSO development may help to significantly reduce the impact and cost of the stringent new discharge requirements. De-designation and SSOs are regulatory options that the City needs to pursue concurrently with on-going studies and preliminary activities to ensure every last possible avenue for regulatory relief has been investigated. The hope is to have at hand every reasonable alterative, with supporting information, when discussing final regulatory options with the RWQCB. Staff will begin the investigation of regulatory options for San Luis Obispo Creek next month with the results being available in November of this year. The study will provide a cost and implementation schedule if the City wishes to pursue one or both of the options. These two options have unknown implementation costs but may be the most affordable and reasonable options the City possesses. WRF Improvements and Upgrades The WRF Master Plan work began in 2003 to look at necessary capacity, facility and regulatory upgrades required to maintain the efficiency and compliance of the facility for the future. Besides the need to increase the facility's capacity for projected build-out of the City's General Plan and necessary facility improvements to address efficiency and deteriorating infrastructure, the recent changes in regulatory requirements may significantly increase upgrade costs. The addition of a denitrification process to remove nutrients and a completely different disinfection process to comply with THMs will drive construction costs and impact annual operations cost significantly. If there are no changes in the requirements and the proposed studies and compliance options are not accepted by the RWQCB, a facility upgrade to meet the anticipated needs of the community may cost as much as 40 million dollars. Currently the most significant driver to completion of the Master Plan is the outcome of the THM study. The compliance deadline with the THM requirements will be 2010, which is an extremely short period of time considering the almost impossible task of design and construction of a new disinfection process in less than 5 years. Staff is hopeful that the point of compliance scenario will be successful to avoid beginning construction prior to the 2010 compliance date. From a fiscal perspective,construction prior to 2010 will mean assumption of new debt on top of the several years remaining on the debt service from the 1994 upgrade. This situation would result in several years of substantial sewer rate increases to cover both debt service payments. Presently the draft Master Plan is being finalized and includes all of the necessary upgrades to comply with the proposed regulations. Regardless of the regulatory requirements, capacity and facility improvements need to be completed within the next 5 to 7 years to meet anticipated 3 '1 Update of Regulatory Requirements and Studies for the WRF Page 7 demands. Staff will return to Council when the Master Plan has been finalized and the current round of studies are complete, and more information is available following discussions with the RWQCB and upcoming technical studies. Summary Staff continues to work with consultants, the RWQCB and SWRCB, and agency working groups. To date the RWQCB has been very open and cooperative to the City's proposals, and staff is hopeful that satisfactory regulatory,solutions can be found. Staffs goal is to investigate every possible regulatory alternative with supporting documentation to ensure the City has every possible option available before making decisions that will lead to the final design and ultimate construction of the WRF upgrade. Having all of the regulatory information and options along with the comprehensive design alternatives will allow Council the selection, if needed, of the most cost effective and efficient WRF upgrade choices. Staff will return periodically with updates of the studies,possible requests for additional studies and the WRF Master Plan when finalized. FISCAL IMPACT There is no fiscal,impact associated with this report. Significant funding has been approved and is being requested in the 2005-07 Financial Plan to meet the on-going required regulatory studies and prepare for possible options the City may need to pursue: Provided below is a summary of the costs associated with the on-going studies, pilot testing, and subsequent design and construction at the WRF. Table 1. Lists the cost of current regulatory studies and approved funding, including the WRF Master Plan. Table 2. Lists the requested funding for necessary studies within the next year. Table 3. Shows possible costs for preparation of a de-designation and/or Site Specific Objective study and best and worst case projections for upgrades at the WRF. Assumptions for the WRF upgrade include compliance with THM requirements in 2010. Table 1. Current Regulatory ShudyActivities . Activity Implementation Date Completion Cost WRF Master Plan Study Ongoing Summer 2005 $190,000 RPA,THM, Groundwater Studies July 2002 Fall 2004 $147,000 In-Plant THM Study February 2005 November 2005 $59,000 Total $396,000 Table Z Proposed Regulatory and Study Activities Activity Implementation Date Completion Cost Regulatory Options Study May 2005 November 2005 $89,000 Pilot Testing of Chlorine Dioxide June 2005 November 2005 $150,000 Total $2399000 1 1 Update of Regulatory Requirements and Studies for the WRF Page 8 Table 3. Possible Future Regulator: ,Stud Design and Construction Activities Activity Im lementation date Completion Cost De-designation/SSO study Winter 2005 Fall 2006 $250,000 Design and Construction Spring 2007 Spring 2008 $3,700,000 to Management ofUpgraded WRF $7,400,000 Construction of Upgraded WRF Summer 2008 Spring 2010 $20,000,000 to Facilities $40,000,000 Total $23,725,000 to$47,650,000 3 —q