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City agrees to cough up $236,000 more to Sparrows Point owners

The increase is a temporary measure. In the long run, Baltimore is faced with the costly rebuilding of the former steel mill’s pipeline.

Above: The L blast furnace looms over Sparrows Point, whose new owners will receive more money to discharge city wastewater.

Baltimore will increase the fee paid to the new owners of Sparrows Point so that some of its treated sewage can continue to be discharged through the vacant steel mill’s property into the Patapsco River.

The agreement to raise the city’s monthly fee to $105,000 from $80,000 for the next ten months will temporarily end a legal dispute with a pair of salvage companies that purchased the mill from bankrupt RG Steel last year.

So far, the city has paid $1.2 million for the right to discharge as much as 40 million gallons of treated sewage a day at Sparrows Point.

The new agreement, approved by the Board of Estimates on Wednesday, will increase the total payments to $2.1 million through next September 13.

Without the agreement, the city risks going out of compliance with its NPDES (National Pollutant Discharge Elimination System) permit at its Back River Wastewater Treatment Plant and subject to heavy fines.

For many years, the city depended on Sparrows Point to use a portion of the treated Back River sewage. The “industrial water” wound up in the Patapsco River, which reduced the sewage outflow into Back River, thus keeping the city in compliance with environmental regulations.

City Backed itself into a Corner

Remarkably, the city continued to rely on this system even as Sparrows Point experienced severe financial troubles, culminating in the 2001 bankruptcy of its owner, Bethlehem Steel, and the passing of the mill to multiple companies, each of whom cut back on operations.

When Hilco Industrial and Environmental Liability Transfer purchased the mill’s assets at a bankruptcy auction in August 2012, the city was faced with an owner who had no interest in maintaining the flow of effluent through the mill.

Thus it was no surprise (except, apparently, to city officials) when Sparrows Point LLC demanded that Baltimore stop the flow of sewage – or pay substantially more for the privilege.

Fresh Litigation and a Costly Fix

Faced with the potential shutdown of the pipeline, the city won a temporary restraining order in October from Baltimore City Circuit Court Judge Sylvester Cox, who ordered the parties to work out a compromise.

The negotiations did not go as the city expected and – with litigation by Sparrows Point LLC pending in federal court – the city agreed to increase its monthly payments, retroactive to December 1.

In terms of a permanent solution, the Board of Estimates approved a $400,000 contract with Whitman, Requardt & Associates to evaluate the pipeline and to review “alternatives for future discharge to the Patapsco River from the treatment plant.”

The most likely scenario is for the city to buy the pipeline from the salvage companies, then undertake a reconstruction of the system.

The purchase and reconstruction of the pipeline would cost millions of dollars, city officials acknowledge.

City granted temporary order against sewage shutdown by Sparrows Point owner (10/4/13)

City given month to work out deal with Sparrows Point (10/10/13)

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