Nutrient Trading Discussed at MWRD Study Session

Metropolitan Water Reclamation District Special Study Session – February 23, 2017

Three Items were on the Agenda for Discussion – Presentation by David St. Pierre, Executive Director

1. Background and rationale for purchase of farm land and Nutrient Trading.
2. Extension of Survivor Pension Benefits for MWRD retired employees that married after it became legal for LGBT community to marry.
3. Presentation on proposed investment vehicle to maximize income from leased MWRD properties.

Purchase of Farm Land/Nutrient Trading

• By 2025 the national and Illinois EPA(s) require a 25% reduction in Phosphorus [fresh water] and a 15% reduction in Nitrogen [salt water] effluent in the waters leading to the Mississippi River and Gulf of Mexico.  
• Most of the phosphorus comes from point sources such as the MWRD [83%].  
• A huge reduction has already been achieved, but to get to the last percentage needed to reach the target goal of .1 discharge requires as much as $211 million additional expenditure per year by the MWRD without the guarantee that .1 can be reached.    
• Currently the discharge acceptable by the EPA is 1.0 with a targeted reduction to .072 by the end of 2018.  
• Since 17% of the runoff comes from agriculture which is not regulated, and MWRD's Ex.Dir, St. Pierre, does not expect it to be regulated in the foreseeable future, a pilot program is being undertaken to see if by purchasing agriculture land and eliminating the use of phosphorus on the land, enough reduction can occur to get to the required target.  
• Another discussed approach is called Nutrient Trading.  If the regulations and parameters can be worked out, this could be the most affordable way of getting to the target.  Farmers would be encouraged to use Best Practices to reduce runoff and could sell Nutrient Trades to utilities such as the MWRD.  St. Pierre estimates the cost could be $20 million per year which is a 10 times reduction.  
• Mr. St. Pierre posits that this plan needs to be adopted state wide for it to be effective and several entities including the state's Pollution Control Board support nutrient trading including "downstream" trading.

Survivor Pension Benefits Extension

• Several board members want the extension to happen yet this year.  
• St. Pierre would like the opportunity to research the number and ramifications involved, if any, and implement in 2018.  
• One problem is that the MWRD currently does not know how many retired employees entered into a marriage after 2011 when gay marriage became legal.  Stay tuned as this likely will come up in future board meetings.

Proposed Investment Vehicle to maximize income from Leased MWRD Properties

• Mr. St. Pierre said he was not prepared to make a presentation on this proposal for this  study session.  Further analysis is necessary by the legal teams to ensure that this type of investment is possible for a public body.​
  

Post Meeting on-line Observation by Diane Edmundson​