Novato Sanitary District Ends Saga by Paying $344,000 Settlement

A long, stressful ordeal is over for the Novato Sanitary District. Five months after a legal settlement was reached over sewer spills and overflows from 2007-2010, the book has been closed and the total cost to the district — $344,000 in fines — has been finalized.

The saga started with an unannounced visit by officials from the U.S. Environmental Protection Agency — accompanied by armed FBI agents — on May 19, 2009. About a dozen federal agents escorted employees out of the complex and the copied information from hard drives and confiscated 17 boxes of printouts, according to the district's legal representative.

"We are pleased to move on," Manager/Engineer Beverly James said Wednesday. "I think the state and regional boards did a very thorough job and we agree totally with their conclusions. ... It was definitely high stress for a while."

James said the district's budgets for 2011-12 and 2012-13 included sufficient funds to cover the fines.

The district was fined often in the 1990s and 2000s before it made a commitment to upgrade its facilities and hire Veolia Water to operate its new treatment plant. Veolia is in the middle of a five-year, $15.7 million deal to run the plant — a deal that district said would save ratepayers millions.

James said she expects that this will be the last settlement of this size and type facing the district. The 1960s-era system on Davidson Street is undergoing a $200 million makeover spread over 15 years. It will be complete by about 2015, she said.

The fines, covering 30 spills or overflows, all took place when the old treatment plant was still in operation.

"It's been very important to maintain your infrastructure and have an updated treatment plant that is robust with backup equipment," she said. "That's vital in today's regulatory environment. The investments we've been making are going to prevent this type of thing in the future."

The biggest fines were from incidents that took place during winter storms and flooding in 2008, James said.

San Francisco Regional Water Quality Control Board has authorized the district to apply $140,138 of the fines to Audubon wetlands habitat restoration projects in Bahia and Simonds Slough that will eradicate non-native vegetation, install native plant species and improve potential habitat for rare and endangered species including the red-legged frog, according to a release by the Novato Sanitary District.

"We are pleased that the regional board allowed almost half the fine to go toward projects that will benefit the Novato area," James said.

The EPA raid stemmed in part from an accusation that wastewater was discharged incorrectly from the old treatment plant, but the federal investigation was dropped without any action against the district. The issue was referred to state regulators, who filed a report in conjunction with district-hired experts. In the end, there was no merit to the accusation.

James said she was never interviewed by investigators and for a long period had no idea what prompted the raid. Eventually more information was requested, and "we figured out what it was all about based on the questions they were asking," James said. It wasn't until settlement negotiations began that the EPA revealed what it had been looking for, she said.

Part of Veolia Water's contract is to cover any fines associated with spills or overflows from the treatment plant.

James credited district board members and the community for helping the staff get through the ordeal.

"Having a good board and a supportive community has made a big difference," she said. "The community has supported our substantial investment (in the upgrades), and we know we will reliably meet regulations."

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