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Columbia’s years of neglecting its crumbling sewer system may cost customers as much as $1.5 million in environmental fines and about $386 million in improvements over the next five years.

City wastewater officials and attorneys hired by the city are closing in on a final, binding agreement with the U.S. Environmental Protection Agency. That comes as many of Columbia’s water and sewer customers are complaining about rates that this summer doubled and tripled some monthly bills.

The EPA has been breathing down the city’s neck to improve its sewer plant, pump stations and miles of old sewer pipes to meet wastewater standards. Columbia, with the state’s largest sewer system, has been plagued for years by overflowing manholes and pipes that collapse with age and the ravages of sewage fumes.

Suspicions that the city and a private lab it once hired had tampered with mandated wastewater tests led to a raid by environmental agents almost four ago at the sewer treatment plant south of Columbia near Interstate 77. No criminal charges resulted from the Dec. 8, 2008, raid.

Still, despite ongoing improvements to the sewer system – costing hundreds of millions of dollars – negotiations with the EPA have led the federal agency to proposed civil fines of between $1 million and $1.5 million, three sources told The State. They said they could not speak publicly because of a confidentiality agreement with the EPA.

Efforts Friday to reach EPA officials at their Atlanta regional headquarters were unsuccessful.

Columbia is seeking to negotiate the fine down to about half of what the EPA ultimately decides to impose, the sources said.

The settlement, called a consent agreement, is to be final by the end of the winter, city manager Steve Gantt said Friday. Some city officials said it might be January.

Asked about the $1.5 million figure, Gantt said, “I can neither confirm nor deny that.

“The city is trying to negotiate down,” Gantt said. “That’s normal (settlement) procedure.” He declined to discuss fines or details of what the EPA might require in further improvements.

In July, the EPA fined the city of Chattanooga, Tenn., $476,400, forced it to make $250 million in improvements to its sewer system and to spend $800,000 to restore a polluted stream.

Bill Davis was hired by Columbia to oversee its sewer system within a week of the raid.

“With the EPA, it’s going to be black and white,” Davis said of improvements and timelines that will be in the settlement. “There is no gray. There’s an equation for it – no leeway.”

Raid exposed city

The extent of Columbia’s problems burst into public view on that Thursday morning in early December 2008.

State and federal environmental agents, some equipped with guns and bulletproof vests, swarmed the sewer plant. Their search warrant said they had tips that Columbia wastewater officials and a private testing lab hired by the city had altered pollution records and illegally discharged sewerage into the Congaree River.

The allegations ranged from employees of the private lab, Data Resources Inc., saying they saw city workers illegally dump untreated wastewater to plant managers making workers adjust chlorine readings to bring them in line with regulatory standards.

Almost two years went by before the EPA and the S.C. Department of Health and Environmental Control decided that criminal charges were not warranted. The city has reinstated an assistant plant superintendent who had been placed on leave, Gantt said.

Though the raid did not produce criminal charges, regulators discovered the depth of a crumbling sewer system beset by 15 years of neglect.

Gantt said the raid “had nothing to do” with the impending settlement. The agreement stems from the fact that the EPA issued the city’s current operating permit that normally would have been handled by DHEC, Gantt said.

In September 2010, utilities and engineering director Joey Jaco said publicly that a fine “is a possibility.” His comments followed a closed-door session with City Council.

During the spring of last year, an EPA spokeswoman in Atlanta confirmed that the agency was negotiating with Columbia officials.

“We’re trying to get ahead of them,” city chief financial officer Bill Ellis told council in April 2011. “Everything we’ve done has been trying to take the wind out of their sails.”

A few months after the raid, the S.C. Sierra Club analyzed DHEC records and reported that Columbia had 558 sewer spills during the previous decade – more by itself than all other wastewater systems in the state combined. In a single 2004 spill, 20 million gallons of sewage poured for about a week from a failed pump station. In 2009, the city reported 460 sewer spills caused just by cooking grease buildups in sewer lines. Those spills exceeded 2.1 million gallons.

Spills continue but at a lesser rate.

During the fiscal year between July 1, 2010 and June 30, 2011, the city had 262 spills, 65 percent of which were caused by grease buildups or a combination of grease and roots, Davis said Friday.

During the next fiscal year that ended June 30, 2012, the number dropped by about 14 percent to 226, he said. But after a program to cut grease in the lines, the percentage caused by grease dropped by 56 percent, according to Davis’ figures.

Council caught between rock, hard place

Critics have blamed City Council for letting the utility system – the city’s cash cow – fall into disrepair. This fiscal year alone, water and sewer revenue is projected to reach $120.7 million.

Records analyzed by The State newspaper in 2010 showed council had taken nearly $79 million from water and sewer income the previous 11 years to cover expenses from the police department to business-recruitment efforts.

Caught in an overspending binge in 2007 that required severe budget cutbacks, council weighed scaling back rate hikes. Just last year, it balked at keeping rates high enough to keep the EPA at bay after council also approved a 2 percent increase in its franchise fee to all electricity customers to bolster the failing metropolitan bus system.

Jaco warned council against pulling back on its commitment to the EPA. “All maintenance projects, they expect us to do annually,” he said at the April 26, 2011, meeting. “They won’t understand us deferring.”

This summer, council adopted new rate hikes and completely rearranged the way the city calculates water and sewer bills. The rate structure was devised to raise $500 million over the next five years for the entire water and sewer system. Much of that investment is to satisfy the EPA, Gantt and other city officials said. About $386.3 million of the $500 million will be for sewer upgrades.

To arrive at $500 million, council adopted an overall increase of 7.6 percent on water consumption. Sewer bills are based on water use, so they rose in tandem.

Because of base rate changes, some bills skyrocketed from a minimum of 16 percent higher for in-city residential customers to 28 times higher for the largest users, mostly businesses.

Jaco’s department is to present council on Tuesday with options on how to deal with the outcry over higher rates.

But if council backs off on the rates, it could find itself in the EPA’s crosshairs.

“Knowing what we’re facing,” Councilwoman Tameika Isaac Devine said Friday of the impending settlement, “we really don’t have much choice.”

Reach LeBlanc at (803) 771-8664.