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Stoney says city sewer project could be less expensive than expected

Shockoe Retention Basin: catwalks lined in a grid marked by pipes and columns
Scott Elmquist
VPM News File
Inside the Shockoe Retention Basin, one of the city's storage locations for stormwater.

The Richmond mayor’s hoping for $300M in state funding over the next three fiscal years.

Richmond engineers have been devising ways to reduce Combined Sewer Overflow rehabilitation costs, according to Mayor Levar Stoney and Department of Public Utilities Director April Bingham.

Until recently, the city expected to spend $1.3 billion to reduce the amount of bacteria flowing out of the sewer in heavy rain by 2035, when the project must be finished under state law. The sewer system currently overflows during some heavy rain events, dumping a mixture of pollutants into the James River that disrupts wildlife and recreation in Richmond and downstream.

Mayor Levar Stoney speaks at a 2021 press conference
Crixell Matthews
VPM News File
Richmond Mayor Levar Stoney speaks at a 2021 press conference.

“After some exploration of different technologies and innovation that might be out there that we can get that number down to $650 million,” Stoney told reporters Thursday.

For instance, instead of planning to store excess CSO water in a quarry near Shockoe Bottom, the city is considering less expensive high-rate disinfection. That process combines two steps: the removal of solids from the water and disinfection. The approach has long been researched as a way to improve the efficiency and cleanliness of CSO systems.

Still, the city’s final sewer plan hasn’t fully taken shape yet; it's due to the state Department of Environmental Quality in July for evaluation. The city is working with outside consultants and local stakeholders to evaluate potential components of the project.

Despite the cost reductions, Stoney is still asking for $300 million from the state over three fiscal years: $100 million in the FY24 caboose budget, and $200 million over FY25 and FY26. Although most of that won’t be spent right away, the city wants to have a pile of cash on hand when construction costs ramp up around 2029 and 2030.

Overall, Richmond is asking the state for $500 million by 2029.

In a yearly report to DEQ, Bingham said if the state doesn’t contribute the funding, a mandated 2035 deadline would be in jeopardy. As a result, Richmond residents could see a 160%-220% increase in wastewater rates. Bingham said that would be difficult in Richmond, where wastewater rates are already the highest in the state as a percentage of the city’s median household income.

Fewer state dollars could also affect the city’s bond rating — currently AA, according to S&P Global and Fitch Ratings. Because utility projects are often paid for over time through bonds, a lower bond rating would also contribute to higher bills for residents.

Richmond has already received $150 million in grant funding from the state, as well as an additional $150 million from the federal American Rescue Plan Act. The ARPA cash, however, must be spent by December 2026, well before the city plans to ramp up construction costs. The state funds will be used to match those federal contributions.

Gov. Glenn Youngkin has proposed sending $50 million to the city in his caboose budget — about half of what Stoney is seeking.

Patrick Larsen is VPM News' environment and energy reporter, and fill-in host.