City and EPA negotiating stormwater lawsuit, other plaintiffs left out and state attorney fired 

click to enlarge City stormwater manager Rich Mulledy inspects a deep ravine carved by Pine Creek. - PAM ZUBECK
  • Pam Zubeck
  • City stormwater manager Rich Mulledy inspects a deep ravine carved by Pine Creek.
Despite protests from fellow plaintiffs, the Environmental Protection Agency has agreed to revisit a possible settlement with the city of Colorado Springs over alleged Clean Water Act violations caused by the city’s long-term neglect of stormwater management, according to documents obtained by the Independent.

The renewed negotiations come as U.S. District Judge Richard Matsch scheduled an August trial in the lawsuit on May 22, the day after the state’s lead attorney in the case was reportedly fired for a reason the Colorado Attorney General’s Office won’t discuss.

That lead attorney, Margaret “Meg” Parish, first assistant attorney general in the Natural Resources & Environment Section, wrote at least two scathing letters to the EPA and the Department of Justice (DOJ) in recent months, calling the EPA’s action “shocking and extraordinary” and expressing “deep concern and disappointment” that the agency unilaterally reopened settlement talks without consulting co-plaintiffs. Besides the Colorado Department of Public Health and Environment (CDPHE), those include Pueblo County and the Lower Arkansas Valley Water Conservancy District.

The move was particularly alarming, she noted, because the state and EPA signed an agreement not to communicate with the city without the presence of the other.

Some who couldn’t comment on the record due to confidentiality rules labeled the latest moves “pure politics” in an era when the EPA’s reputation is pivoting from protecting the environment to serving polluters.

EPA Administrator Scott Pruitt, who has long-standing and close ties to the oil and gas industry and is under investigation for multiple alleged ethics breaches, met with the Housing and Building Association of Colorado Springs in October when the HBA paid for his night’s stay at The Broadmoor.

A few months later, on March 19, the EPA wrote a letter to the city “as a follow up to the City’s recent request to re-initiate settlement negotiations.”

In a Feb. 5 letter to the DOJ and EPA, Parish noted, “Unless the City is willing to pass these costs on to developers, fixing and installing these controls and otherwise remedying the damage will be very expensive because that damage has been so widespread.”
EPA’s reopening of negotiations has sown suspicion among co-plaintiffs who already distrust the city due to sewage discharges, raging stormwater flows and sediment in Fountain Creek that befoul the creek, threaten levees and block irrigation headgates interfering with raising crops.

The possibility of a settlement was suggested to voters last fall when Mayor John Suthers campaigned for passage of stormwater fees, saying their adoption would help the city end the lawsuit, filed by the EPA and CDPHE in November 2016 after the city flunked compliance inspections in 2013 and 2015 for its MS4 permit (Municipal Separate Storm Sewer System). The lawsuit alleges ongoing violations of the Clean Water Act, saying the city failed to force developers to install proper storm drainage infrastructure, gave waivers to others and didn’t adequately inspect and monitor its waterways. The city spent only $1.6 million a year on those tasks from 2011 to 2014, a pittance considering the city’s drainage needs are estimated at $1 billion.

Approved by voters in November, the fees go into effect July 1 and replace general fund money used to satisfy an April 2016 deal the city made with Pueblo County to spend $460 million over 20 years on stormwater. The agreement grew from Pueblo County’s demands after the city adopted stormwater fees in 2007 and abolished them in 2009 and came as the city activated its $825-million water pipeline from Pueblo Reservoir.

The ballot measure charges $5 a month for every dwelling unit and $30 per acre for other property. But the measure allows City Council to raise the fees without voter approval “to the extent required to comply with a valid court order, federal or state permits, federal or state laws, or any intergovernmental agreement to which the City is a party which was entered into before June 1, 2016.”

That means the cost of any settlement or consent decree could lead to fee hikes for residents, and correspondence obtained by the Indy suggests the current fees won’t be enough. Parish said in the Feb. 5 letter that the fees are “far from enough to remedy the damage the City has already caused,” adding that city compliance with the MS4 permit “will be neither easy nor cheap.”

In a March 19 letter to the city, DOJ trial attorney Heidi Hoffman praised the city for its “significant improvements” in its stormwater program and the adopted fees but also noted the city must comply with clean water rules and mitigate damage caused by years of neglect, a task that will be “technically difficult and potentially costly.”

“With this in mind,” Hoffman’s letter said, “the United States is willing to meet with the City to learn about any alternative measures or additional work the City is willing to undertake... .”

It’s not publicly known why the EPA is willing to reopen settlement talks after a protracted effort ended last year without an agreement, but Suthers says in a statement to the Indy the city has always wanted to “sit down with all parties in the case and review the tremendous
progress that’s been made in its [the city’s] stormwater program....”

Suthers, former Colorado attorney general, side-stepped questions about what, if any, influence was exerted on the EPA or Pruitt, but said he’d rather spend money on compliance, not litigation, contending a settlement agreement “can give the parties all the assurances they need in regard to future compliance.”

But the idea of unilateral negotiations angered the CDPHE. In a March 16 email to the DOJ, CDPHE’s Director of Environmental Programs Martha Rudolph said Pueblo County and the Lower Ark couldn’t sign on to negotiate without their boards’ approvals, which could take a week. “The decision by EPA and DOJ to suddenly shift course to pursue settlement now without first conferring with co-plaintiffs unfortunately risks eroding our good working relationship,” Rudolph said.

On March 26, Rudolph, Lower Ark District General Manager Jay Winner and Pueblo County Commission Chair Terry Hart signed a letter to the EPA asking the agency to “recommit to working in partnership."

In a separate March 26 letter to the EPA and DOJ, Parish cited her “deep concern and disappointment” that the EPA failed to “work with or respect” the CDPHE. “We are on the verge of a trial that is likely to be highly successful for EPA and the State of Colorado,” she wrote, “leading to an outcome wherein the City will finally remedy its ongoing damage to Colorado’s waters, public health, and downstream communities.”

But the EPA’s action, she said, “throws this partnership into doubt” and has undermined chances of securing a “strong settlement.” Moreover, the state can’t legally bring a Clean Water Act action on its own, and moving the lawsuit to state court under state water laws “would cripple and likely destroy the case.”

Finally, Parish said the state could exercise its right to object to any consent decree or dismissal EPA proposes.

The EPA declined to comment, as did Hart and Winner. But the DOJ said in a May 25 letter to plaintiffs a settlement could end the lawsuit quicker than a trial and that all plaintiffs would be involved.

The Attorney General’s Office wouldn’t comment on Parish’s departure but says in an email the office will represent CDPHE “with the highest level of professionalism and with the focus remaining on what is in the best interest of the citizens of Colorado.”

The departure of Parish, who couldn’t be reached for comment, is likely to trigger a court hearing on May 30 or 31 to replace her as the state’s lawyer.

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