TD746 .U54 oEPA United States Environmental Protection Agency Office of Water and Waste Management Washington, D.C. 20460 January 1981 I/O I. X C.I 1990 PRELIMINARY DRAFT STRATEGY FOR MUNICIPAL WASTEWATER TREATMENT OOOD81100 ------- PRELIMINARY DRAFT 1990 STRATEGY FOR MUNICIPAL WASTEWATER TREATMENT OFFICE OF WATER AND WASTE MANAGEMENT U.S. ENVIRONMENTAL PROTECTION AGENCY "This paper presents a preliminary draft strategy, proposed by EPA staff, for improving the national municipal wastewater treatment program. EPA is now considering the positions offered here. The document is intended for public review and discussion to assist EPA in developing its final 1990 Strategy." January 21, 1981 U.S. Environmental Protection Agency Region V, Library 230 South Dearborn Street Chicago, Illinois 60604 ------- Protection ------- PREFACE The proposals presented in the prelimiiiary draft strategy are the result of both a major effort within the U.S. Environmental Protection Agency and extensive participation on the part of the interested public through meetings and the distribution of relevant issue and background papers prepared by EPA. Some of the recommendations in the draft represent a compromise among diverse positions of various constituents of the program. Further refinement of those recommendations will continue through public participation and ongoing agency policy review as the draTt~strategy is put in final form. In developing the draft Strategy, recommendations in each area were based on an assumption of continued federal funding support. Given current economic conditions and calls for budget constraints, Congress and the Administration may determine that program funding should be reduced. Substantial changes in funding levels would require re-evaluation of some of the recommendations as well as revision of the timetable for achieving the Clean Water Act goals. A detailed examination of a wide range of funding alternatives can be found in the EPA staff paper prepared on funding (Task I of the 1990 Strategy). Several of the recommendations in the preliminary draft Strategy will depend on Congressional action for their implementation; others will require the amendment of existing regulations for their accomplishment; and some can be accomplished simply by administrative action by EPA or other federal agencies. In developing a final 1990 Strategy and an action plan for its implementation, EPA will work closely with Congressional staffs, other federal agencies and the widely varying constituents of the Construction Grants Program to insure that the future course charted for the program is a workable and effective means to achieve the goals of the Clean Water Act. The 1990 Strategy draft was prepared by an EPA Task Force within the Office of Water and Waste Management. Assistance to EPA staff in this effort was provided by Temple, Barker and Sloane, Inc.; The Synectics Group; and Larry Walker Associates, Inc. Comments on the preliminary draft strategy should be submitted to Merna Hurd, Associate Assistant Administrator for Water and Waste Management, U.S. EPA, (WH-556), 401 M Street, S.W.7 Washington, D.C. 20460 ------- CONTENTS EXECUTIVE SUMMARY "1 Goals ] Key Recommendations and Risks of the 1990 Strategy 3 Planning—The Context of the Program 5 Admi ni strati on of the Program 6 Management—Roles in Program Management: Federal, State and Local 10 The Strategy Devel opment Process 12 I. APPROACH TO THE 1990 STRATEGY 13 Introduction 13 Evolution of the Construction Grants Program ^ Rationale for Undertaking the 1990 Strategy Development 15 The Strategy Devel opment Process 1° Structure of the Strategy Document I7 II. GOALS AND MAJOR THEMES OF THE PRELIMINARY DRAFT CONSTRUCTION GRANTS STRATEGY 19 Program Management Goals for 1990 19 Major Themes for Achieving the 1990 Objectives 22 III. SPECIFIC PROGRAM RECOMMENDATIONS TO ACHIEVE THE GOALS 29 PI anning--The Context of the Program 29 Administration of the Program 35 Management—Roles in Program Management: Federal, State and Local 47 APPENDICES 53 Appendix A: List of 1990 Issue Papers and Detailed Strategies 53 Appendix B: Glossary of Keywords and Acronyms 57 Appendix C: Meetings, Briefings, Work Sessions, and Conferences with Numerous Publics on the 1990 Strategy 63 Appendix D: 1990 National Construction Grants Strategy Workshop Participants 65 ------- EXECUTIVE SUMMARY The preliminary draft 1990 Strategy is the product of the most comprehensive review and redirection that EPA has ever conducted of its Construction Grants Program under the Clean Water Act. The proposed 1990 Strategy embodies substantial changes in areas such as the relative roles of the federal and state governments, a more explicit emphasis on water quality impacts as the basis for decisions, a more flexible and shorter grants process, and a renewed emphasis on eliminating serious compliance problems. Under this 1990 Strategy, the Construction Grants Program will be run primarily by the states, which will have all responsibility for individual project actions. The federal role will be one of setting goals and objectives, working with the states, and evaluating state programs on the basis of progress toward national water quality goals. One of the proposed Strategy's chief goals is to enable tne nation to achieve fishable /swimmable waters wherever attainable. The revised Construction Grants Program will be simpler and shorter for the grantees. It includes a goal of saving more than 25 percent of the time it now takes to receive and carry out a grant under the.program. Also, municipalities and states will have more flexibility in responding to program requirements in ways that are easiest and most appropriate for them. States will be encouraged to simplify the grants process for small communities so it will be tailored to their special needs and circumstances. The changes proposed here are expected to significantly reduce the incidence of facilities in serious noncompliance with their discharge permits. A specific goal is to reduce serious noncompliance from present estimated levels of 30 percent or more to less than 5 percent by 1990. Strict enforcement coupled with diagnostic reviews will be key to achieving such a compliance record. Overall, the 1990 Strategy is expected to make more effective use of the federal funds invested in sewage treatment facilities, to result in a program that is more responsive to state and local conditions and needs, and to yield significant water quality benefits to the nation. The sections that follow summarize the key elements of the 1990 Strategy. GOALS The preliminary draft 1990 Strategy proposes goals for the construction grants program that are based on the Agency's analysis of the viability of achieving the goals of the Clean Water Act related to municipal dischargers. Before these proposed goals could be adopted as program policy it would be necessary for Congress to amend the dates contained in the Clean Water Act. Specifically, the major goals of the Act are the elimination, by 1985, of the discharge of pollutants into the ------- navigable waters, and the achievement, by 1983, of an interim goal of fishable/swimmable waters wherever attainable. Further, the Act states as a purpose of the Construction Grants Program to "require and assist in providing waste treatment practices that provide for the application of best practicable waste treatment technology" (BPWTT). At the time those goals were set, neither the total national cost nor the environmental and technical obstacles to achieving them were foreseen. Based on current cost projections and funding levels, the Strategy proposes two revised goals: t To achieve fishable/swimmable waters wherever attainable, by 1990, and • To achieve BPWTT everywhere. If it is necessary to reduce the funding level of the program, the dates projected for completion of the program will have to be adjusted correspondingly. In any case, these goals will not be easily attained. However, the Agency believes that through the full cooperation of federal, state and local government agencies and the careful selection of priorities, achievement of these goals is realistic. States will be developing individual strategies to achieve these goals for "completion" of the program. They will be encouraged to seriously consider options for lowering the federal share of funding, re-evaluate the eligibilities of various types of projects, and explore alternatives for providing supplemental funds through such means as state loan programs to maximize the benefits from limited federal funds. EPA will also continue to assess the viability of meeting these goals as the Strategy is implemented. Achieving the goal of fishable/swimmable water in many areas depends not only on control of municipal wastewater discharges, but also on the continued installation of industrial controls and the implementation of nonpoint source pollution controls. Industrial control has progressed well and should support attainment of the 1990 goal. Nonpoint source control has been slower, however, and in some cases may delay attainment of this water quality level. There are also areas where fishable /swimmable waters will not be achieved due to natural conditions. The 1990 Strategy, therefore, stresses the importance of realistic judgments regarding the attainability of such water quality levels on individual waterways as a basis for allocating limited technical and dollar resources. At the same time the draft Strategy also maintains the long-term goal of secondary, or biological, treatment everywhere. Achieving this goal may take longer than 1990, depending on funding levels and the personnel and other resources of states and municipalities. It is considered an important national objective to provide a minimum level of removal of conventional and toxic pollutants for the enhancement of surface and ground water quality and the protection of public health. Legislative and regulatory amendments will be required to effect the proposed postponement of dates in the Act - to allow NPDES permits to extend beyond 1983, and to legitimately delay the attainment of goals for fishable/swimmable waters and installation of BPWTT. The draft Strategy recommends these changes in order to allow the states to determine the appropriateness of such extensions case-by-case. ------- KEY RECOMMENDATIONS AND RISKS OF THE 1990 STRATEGY The 1990 Strategy includes numerous recommendations for changes in the program to accomplish the proposed goals and other targets described above. The most significant of these are listed briefly below to highlight the specifics and to illustrate the thrust of the draft Strategy. Actions Related to Increased State Responsibility and Accountability for Program Management • EPA will seek legislative amendments to allow full delegation (including the delegation of grant making authority) to states, thus placing total responsibility for project level decisions and primary responsibility for all other decisions at the state level. • By 1983 each state will develop its own strategy for completion of the Construction Grants Program. The strategy will categorize projects based on water quality impacts, develop a schedule for completion of all projects in the program, and outline the necessary program support activities such as standards reevaluation and monitoring programs. • Each state will establish compliance goals for the POTWs within its jurisdiction. These goals will be incorporated into the delegation agreements and will provide one basis for evaluation of the state's performance. • States will be held accountable for progress towards program goals. EPA will develop a management evaluation system that focuses on direct measures of performance, incl uding the number of projects constructed, the number of plants out of compliance, improvements in water quality, and measures to ensure fiscal integrity. t EPA will request authority from Congress to withold grant funds in extreme cases where states have poor performance records and inadequate programs for correction, as determined by EPA oversight. Actions Related to POTM Responsibility and Accountability • Local POTWs will be held accountable for the long-term successful performance and compliance of their systems: second round grants to communities for expansion will not be grant eligible enforcement actions will be pursued where necessary to ensure compliance ------- a sunset date will eventually be recommended by EPA for the time when the construction grants program can be completed municipalities will demonstrate to the state that they have adequate financial and management resources to become self-sufficient (i.e., long term financial management plans). Local compliance problems will be dealt with through a program of: diagnostic analyses of operating, design and financial characteristics technical and management assistance a strong enforcement program. EPA will request authority from Congress to issue administrative orders imposing sewer bans and other sanctions in the cases of severely recalcitrant communities. Qualified local grantees can be certified by the state so that they are able to proceed through most parts of the process without further review by the states. Actions Related to EPAs Establishment of Reasonable Construction Grants Program Requirements • The technical definition of secondary treatment will be modified to allow other biological treatment such as trickling filters. • A minimum, technology-based standard of secondary treatment everywhere will be maintained, while greater emphasis will be placed on water quality effects in scheduling projects and setting priorities for funding. • The time required to move through the grants process will be reduced by at least 25 percent. EPA will encourage the use of tools such as generic plans to streamline the process for small communities by an even greater amount. • EPA will emphasize state consideration of attainability in revising water quality standards and will issue guidance on the technical, environmental and economic attainability of water quality standard; is. EPA will continue to develop criteria and standards related to toxic pollutants. The Agency will also develop methodologies for evaluation of the tradeoffs between different pollutant sources as they affect municipal discharge requirements. ------- EPA will work with states and local agencies to develop a combined sewer overflow and urban storm runoff control strategy. The strategy will include policies to account for high flows in water quality standards and NPDES permits. EPA will request legislative authority to modify present funding policies for rural projects, innovative projects and alternative projects in the following ways: all states will be encouraged to set aside funds for projects in communities under 10,000. These funds would not be restricted to alternative projects, but would be available for all cost-effective projects innovative projects would be funded from a permanent set aside at a rate ten percent higher than conventional projects; set aside funds not obligated by states would revert to a national pool for innovative projects. Manage- ment assistance will be available for applicants. alternative projects would be funded at the same increased rate as innovative but would not be eligible for set-aside funds. An active national assistance program for alternative systems will be expanded and model state management programs will be developed. Risks of the 1990 Strategy It must be acknowledged that there are risks as well as benefits associated with several of the major recommendations in the 1990 Strategy. Removing the federal agency entirely from project review and decision making could lead to situations where narrowly defined interests take precedence over national concerns with improving water quality; allowing greater flexibility to state and local governments in fulfilling the responsibilities of the program could lead to major inconsistencies and inequities for reviewers and applicants alike; and ironically, the very changes in requirements designed to streamline the process could slow it down during the initial phase of implementation. It is the Agency's judgment, however, that these risks can be minimized by sound management oversight, and cooperative relationships between levels of government, and that the potential benefits to be gained from proposals in the strategy outweigh those risks. PLANNING—THE CONTEXT OF THE PROGRAM Effective planning and priority-setting will be essential in order to achieve the basic goals of the Clean Water Act under the practical resource limitations that face all levels of government today. Any likely level of funding for the Construction Grants Program over the next decade will not support funding of all the sewage treatment needs of communities throughout the nation. Accordingly, the draft 1990 Strategy calls for an explicit emphasis on water quality impacts in planning, ------- priority-setting, and decision making so that the nation will get the most beneficial water quality results from its expenditure of federal funds. In this context the phrase "water quality impacts" is meant to be broad enough to include effects on surface and ground water and to include considerations of public health. No extensive new planning programs are envisioned to achieve these objectives. The 1990 Strategy is calling for effective use to be made of existing data and plans, professional judgment, and the ongoing monitoring which is already being conducted by states and POTWs. The emphasis on water quality referred to throughout the Strategy is a reference to incorporating such information into decision making and priority-setting at all levels of government which many states are already doing. In order to accomplish this emphasis on water quality, each state will be asked to develop its own state strategy for completion of the program and for incorporating national as well as state priorities into its decision processes. Each state will be requested to review its list of future project needs and to classify them, on the basis of existing data, according to the beneficial effect they will have on water quality. The most important category will be those projects that will lead to attainment of water quality standards and beneficial uses of waters. States will be expected to use this categorization of projects as an important factor in their planning and priority-setting activities. Some states may have already accomplished much of this activity through their existing water quality management plan. States will also be asked to develop a schedule of current and future projects for completion of the entire Construction Grants Program. Two schedules will be requested: one based on a funding target established by the Agency, and another showing the fastest possible completion of the program if there were no funding constraints. These schedules, used in conjunction with the strategies that states will perpare will also allow an assessment of the effects of various reduced levels of funding. In conjunction with this emphasis on water quality results, the draft 1990 Strategy also proposes some revisions to standards. One revision is to modify the technical definition of "secondary treatment" to allow biological treatment processes such as trickling filters where appropriate. Another is to develop a strategy for controlling CSOs and urban stormwater runoff that addresses compliance of municipal facilities with permit conditions during wet weather, high-flow conditions. A third revision is to encourage states to gradually phase consideration of toxics into water quality standards. ADMINISTRATION OF THE PROGRAM Significant changes are proposed in the way funding decisions are made, in the operation of the grants process, and in the follow-up to assure that the facilities built are in compliance with their permits. ------- In each area the 1990 Strategy proposed giving states the primary responsibility for administering the program. The federal role will be three-fold: to ensure that states are making reasonable progress toward national goals and effective use of federal funds, to provide management and technical assistance, and to represent overriding federal concerns in special instances. Funding A wide variety of alternatives for funding mechanisms, eligibilities, and the program implications of various funding levels has been analyzed in the development of the Funding Strategy staff paper (Task I of the Draft 1990 Strategy), which is available for review. EPA deemed it inappropriate to include specific recommendations related to funding in this draft, in light of current national economic conditions and the necessity for the new Administration to address that situation comprehensively and immediately. Therefore, proposed goals and timetables for completion of the program are based on current funding levels, with the full understanding that those targets may need to be modified in light of revised program funding. As the Administration develops its new budget, the Agency will make those revisions. Operations—An Efficient and Effective Grants Program An important element of the 1990 Strategy is a series of changes aimed at correcting shortcomings in the present process of applying for, obtaining, and carrying out grants under the program. The Construction Grants Program has been criticized for taking too long, sometimes over ten years, to complete a single, moderate-si zed project; for involving excessive paperwork and procedural requirements; and for requiring small systems to meet many of the requirements that are really only appropriate for much larger systems. Several changes are intended to shorten the time required to get through the grants process. The substantial delegation of the program from the federal government to the states should help shorten time requirements by eliminating dual state-federal reviews. In addition, states will be encouraged to hold preapplicantion conferences and otherwise provide guidance to applicants early in the process. EPA will develop and provide aids to the states such as a tracking system with a model CPM chart showing the schedule of activities that other states, such as California, have developed to streamline their programs. ------- A significant change directed at shortening the time in the grants process is the establishment of contracted time schedules. Under this practice, the grantee and the state will agree during the facility planning stage to specific time schedules for' major activities for the remainder of the project. These schedules form a "contract" that is binding on both the grantee as a condition of its grant and on the state for its various review and approval activities. Additional timing improvements will also result from changes in two other areas which are objectives in their own rights—simplifying the grant procedures, and providing more local responsibility and flexibility. Simplifying the grants process is . be accomplished through consolidating some requirements and providing increased flexibility in how localities and states meet other requirements. EPA will revise its grants regulations where necessary to ensure that states have sufficient flexibility to implement and manage their programs as efficiently as possible. States will be encouraged to make their requirements for localities as flexible as possible while maintaining the environmental and economic integrity of the program. The procurement requirements will be simplified as much as possible. EPA will also work with other federal agencies to determine the feasibility of consolidating requirements for compliance with the more than 50 federal laws or regulations that affect construction grants projects. Local responsibility, and with it flexibility, is to be increased for qualified communities under the Strategy. Grantees that have demonstrated adequate capability and sound management will be certified to manage a substantial part of the grants process themselves, without state or federal review of many agreed upon activities. In addition, the Strategy recommends requesting the legislative changes needed to allow advanced work on Step 2, the detailed design activities, before full approval of the Step 2 application. Small communities are of special concern to EPA. They account for the greatest number of grants in the program, but generally lack the technical and management staff who are experienced with projects such as those funded in this program. Their problems are often different from those of the larger cities, yet they are frequently required to follow the same procedures that the larger cities follow. To deal more effectively with the special needs and conditions of small communities, the 1990 Strategy encourages states to greatly simplify the grants processes for small communities. EPA will facilitate the simplification effort by providing generic facility plans that can be used for common small system conditions. EPA will also encourage the use of third-party management arrangements under which an experienced outside person manages the community's grant activities. ------- Compliance—The Integrity of the Program The final step in administering the Construction Grants Program is the follow-up to assure that facilities funded under the program are in compliance with their discharge permits. The draft 1990 Strategy includes proposals to improve the quality of compliance information, to improve the compliance rates of new treatment systems being completed under the program, and to improve the compliance rates of existing treatment systems. To improve the data on compliance, EPA will improve and expand its existing compliance data management system to enable the states and EPA to make maximum use of the present monitoring data that are already being collected and reported. Use of POTW performance reviews by the states is recommended as a means of improving the quality of this self-monitoring data. Some redefinition and ranking of "noncompliance" events must also be developed in order to more easily distinguish those systems that have serious compliance problems from those that have violations less serious in degree, frequency, or type. The proposals that will improve the compliance records of new facilities are designed to improve the design and project management activities of the process to ensure that the systems designed and built will be appropriate and operable under various conditions. The Strategy reaffirms the necessity of a pretreatment program for every POTW which has significant industrial flows into it. Moreover, the Strategy recommends that the start-up assistance eligibility for new plants be expanded to insure that each plant is fully operational before being turned over to the community. Plans to modify the guidance for infiltration and inflow analyses to be more realistic, and a proposal to develop conditions for wet weather deviations in permits under selected circumstances are also a part of the recommendations in the compliance area. The approach to achieve compliance at existing facilities is two- pronged: (1) providing information and assistance, and (2) maintaining a strong enforcement program. A key element in the first area is requiring, where appropriate, diagnostic reviews of facilities that are in serious noncompliance. These reviews can cover all aspects of operation including management, financial management, staffing, operation, maintenance and quality control. One product of such an evaluation would be a composite correction program (CCP) to correct all the deficiencies that contribute to noncompliance. The community would be responsible for carrying out the CCP and achieving compliance. The draft Strategy proposes that the CCP form the basis for the state's assistance to the local community. It may identify specific areas in which the community needs technical, management, or financial assistance, and may even suggest innovative management techniques for the community, such as the "circuit rider" concept. ------- Finally, the CCP would also be a focus of aggressive enforcement actions against recalcitrant communities. Because the CCP cites the specific actions that the local community should undertake to achieve compliance, it is the ideal focal point for enforcement efforts. Strong actions, including court action, sewer bans, and compulsory third-party management, will be taken when necessary to get communities to implement their CCPs on agreed upon timetables. Communities must realize that they, as well as industrial sources of water pollution, will be subject to strong enforcement action and will be responsible for maintaining their facilities in compliance. Enforcement action will be used against existing plants as well as municipalities which have not yet constructed plants, and against minor as well as major facilities. The long-run compliance of sewage treatment facilities rests with the municipalities and will be a function of each POTW's management capability and financial strength. The Strategy seeks to assure long-run compliance by encouraging the financial and management self-sufficiency of wastewater utility systems. Localities must be prepared to collect adequate revenues to cover their long term water quality management needs. This is to be accomplished by clearly recognizing that such long-term responsibilities fall to localities. Each POTW should develop a financial and management plan for the future to demonstrate its ability to become self-sufficient. MANAGEMENT: FEDERAL, STATE, AND LOCAL ROLES As stated earlier, a key element of the 1990 Strategy is changing the roles of the state and federal governments: full delegation of the operational and direct management aspects of the program will rest with the states and policy and managerial oversight efforts will rest with EPA. Under this concept, delegated states will be responsible for managing individual grant projects and for managing the grants program within their states. The states will be given considerable flexibility in how they choose to administer the program and will be held accountable for the achievement of the program objectives. EPA will set national program goals, review and approve state programs, regularly monitor the performance of the states, and have some involvement in those projects where there is an overriding federal concern due to special circumstances. This management approach is built on achieving full delegation of all activities to all states. Delegation is presently being slowed, and in some cases stopped, by institutional barriers. In order to remove these barriers, EPA will look for legislative and regulatory changes allowing all operational responsibilities to be delegated. This would include such responsibilities as bid protest resolution, MBE/WBE, wage rate determinations, NEPA activities, final resolution of audit exceptions, and other currently non-delegable activities. 10 ------- To ensure that water quality objectives are continuing to be met and that the program is running effectively and efficiently, the Agency will have to participate in monitoring and oversight of state programs. State performance will be evaluated against the following four general performance characteristics: quality of projects funded; timeliness of planning, design, and construction of facilities; preservation of program integrity; and management of the program. Specific state performance measures have been developed for each category. These should be used as tools for evaluating each state's program. EPA will develop a national oversight program that combines an annual evaluation (performed by an evaluation team) with periodic regional reviews of state-specific objectives. The annual evaluation stresses program outcomes rather than procedures and will focus on national objectives such as the state program's fiscal integrity, and that high quality, environmentally sound, and cost effective projects are being funded. Specific performance measures to be used in these evaluations will be developed. Some specific state objectives will be negotiated by the state and Regional offices in a system of management by objective. The state will submit an annual report detailing its progress towards meeting the objectives. These reports will be reviewed by the Regional office. This will allow EPA to consider state variations for particular objectives while not losing sight of the national objectives. In conjunction with the monitoring program, EPA will maintain a system of incentives and sanctions to ensure that, once each state has accepted full delegation, its performance is sustained and national interests are protected. An effective system rewards good performance; thus, the emphasis in the EPA system will be placed on the positive and incentive side of management. States with well managed programs will be noted to Congress and used as examples. If, during the course of an evaluation, EPA finds a state's performance is lacking in an area, it will work directly with the state to provide technical or management assistance. In severe cases, or where state performance deteriorates, EPA will request legislative adjustments for the following two authorities: t To withold the 2% of 205(g) monies for use by EPA to administer the program itself, either through contract or other third parties or with in-house staff; and • To terminate or suspend construction grants program assistance to projects in the states, until such time as the state performance meets national standards. These sanctions will apply only in cases of severe performance problems, and will be based on uniform criteria known to the states in advance. This specific criteria will be developed in conjunction with the state and other relevant officials as part of the action plan. 11 ------- THE STRATEGY DEVELOPMENT PROCESS The 1990 Strategy development process has reached a major milestone, but it is not yet complete. The preliminary draft Strategy currently comprises a set of proposals consolidating initial work in a variety of areas that is now ready for public review and comment. The development of these proposals has already involved the active participation of a diverse group of people representing state and local governments, consulting engineers, environmentalists, labor, industry, public interest groups, and the public at large. In the coming weeks, these and other groups will have the opportunity to comment on the preliminary draft strategy in public meetings and in written documents. After receiving comments, the Agency, under the new Administration, will incorporate appropriate modifications and then publish a proposed 1990 Strategy. After further comment and revision, EPA and the states will then begin their implementation of the final Strategy through a combination of legislative, regulatory, and aministrative efforts. 12 ------- I. APPROACH TO THE 1990 STRATEGY INTRODUCTION The preliminary draft 1990 Strategy for the Construction Grants Program proposes changes to improve the program and thereby achieve further progress toward the goals of the Clean Water Act in the next decade. The proposed strategy includes recommendations for changes designed to streamline the program, make the expenditure of grant funds as cost-effective as possible, and reduce unnecessary regulatory require- ments. Implementation of the proposals which constitute the final 1990 Strategy will require the cooperation and joint efforts of Congress, the Administration, the States, and local governments. In some cases legislative changes will be required, in other instances regulations may need to be changed, and in still other cases administrative actions such as State-EPA delegation agreements must be developed or revised. All of this will require time and cooperation. The purpose of this draft is to solicit comments on the substance of these proposals. EPA recognizes that many of the proposals it is formulating in the 1990 Strategy will eventually be made formally as proposals to Congress and could not be implemented unilaterally. The Agency is pledged to cooperate closely with all parties to implement whatever modifications are needed in the program to achieve its goals effectively. This preliminary strategy stems from a comprehensive examination of the Construction Grants Program, including its successes and failures in the past and a view of the challenges facing the program in the future. This process has involved the active participation of hundreds of people outside the federal government, including state, local, and county officials, the public, professional engineers, business and industry representatives, and others. The following sections of this Chapter provide a background perspective for reading and interpreting the recommendations of the subsequent chapters. The first section describes the evolution of the program and of the roles of the federal, state, and local governments. The next summarizes EPA's rationale in undertaking the 1990 Strategy effort. The next section briefly describes the types of activities and organizations that were involved in EPA's 1990 Strategy development process. The final section describes the structure of this document and identifies other sources of information on the Strategy. 13 ------- EVOLUTION OF THE CONSTRUCTION GRANTS PROGRAM The Construction Grants Program grew out of a recognition as early as the 1950's that inadequate municipal sewage treatment was a serious contributor to the nation's water pollution and that it was a problem for which many municipalities were not financially prepared. For almost 25 years the Federal government has participated with state and local governments in controlling and abating water pollution. As a result, water pollution control programs are among the oldest and most established of the government's current environmental programs. Historically, wastewater collection and treatment had been a municipal responsibility; the agencies that handle wastewater treatment had generally not operated as self-sufficient utilities. Unlike their water supply counterparts, many wastewater agencies were dependent on the municipality's general funds, received largely from real estate taxes, to support their operating costs. In the competition for limited money, more apparently desirable public facilities such as schools, libraries, and police and fire stations enjoyed a big advantage over wastewater treatment facilities in obtaining capital improvement funds for facilities. As a consequence, sewage treatment plants often received the lowest of political priorities when funds for public works facilities were allocated. An additional problem involved the long-standing prac- tice of locating wastewater outfalls downstream from water supply intakes—thus passing the buck by transporting one community's wastes to another community's environment. It was this background that forced an environmentally conscious Congress to pass legislation in 1972 designed to protect public waters from further degradation. In the absence of an adequate ongoing local revenue stream for wastewater operation, Congress embarked on a substantial Construction Grants Program to assist local government in building badly needed wastewater collection and treatment facilities. Since local finances were so constrained and many waterways were classified as being under interstate jurisdiction, the federal program was in retrospect the fastest and most assured way to effect large-scale improvement. The Clean Water Act passed in 1972 seeks to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." This legislation is the basis for most of EPA's water pollution control activities, including effluent guideline limitations for industries, and municipal treatment works, nonpoint source programs, and the funding of regional water quality management plans. The Clean Water Act identifies two goals to achieve the basic objective of the Act. These goals, as they appear in the Act, are as follows: • It is the national goal that the discharge of pollutants into navigable waters be eliminated by 1985 14 ------- • It is the national goal that, wherever attainable, an interim goal of water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the water be achieved by July 1, 1983. The Act goes on to require (in Title III) that all publicly owned treatment works provide a secondary (biological) treatment as a minimum level of treatment technology everywhere, irrespective of receiving water quality. In addition, the Act requires that all POTWs install the best practicable waste treatment technology (BPWTT) which represents this minimum level of secondary treatment or whatever higher level is required to meet water quality standards. All POTWs are required by the Act to have BPWTT in place no later than July 1, 1983. The Construction Grants Program provides financial assistance to communities for achieving the objectives of the Clean Water Act related to municipal sewage discharges. The program provides funding for up to 75 percent of the eligible capital costs for the construction of conventional sewage treatment facilities and related projects. It also offers incentives to communities for innovative and alternative projects and a set-aside program for rural projects. As of June 30, 1980, $31.6 billion has been appropriated by Congress under this program, of which $26 billion has been obligated by EPA in over 19,000 grants to communities. Of this amount approximately 2,100 projects representing a value of $2.6 billion have been completed. It is important to note that P.L. 92-500 is not the first effort in this area; during the 1956-1972 period, prior to the passage of P.L. 92-500 P.L. 84-600 provided assistance to 13,764 projects in the amount of $5.2 billion. Despite these efforts, preliminary data from the 1980 Needs Survey report a remaining eligible need of $119 billion. RATIONALE FOR UNDERTAKING THE 1990 STRATEGY DEVELOPMENT The Construction Grants Program is a major program by any measure. Not only has it assisted a large number of communities in the past, but its active grants are also aiding approximately 10,000 communities currently. The program is the largest environmental public works effort in this nation's history and has affected nearly every section of the country. This program is also a very significant part of EPA's overall responsibilities. It is a major element of the Agency's efforts to clean up and protect the nation's waters. Further, in dollar magnitude, the Construction Grants Program at $3-4 billion per year has consistently represented approximately two-thirds of the Agency's total budget, all going directly to local communities via a state allocation/administration system. The needs of the communities across the country, as identified in the EPA Needs Survey, will exceed the probable available funding through 1990. However, because the program has always been viewed as remedial--to assist 15 ------- communities in correcting longstanding water pollution problems—not as a federal entitlement program, it is reasonable and responsible to look ahead to a sunset for the program. The development of the draft 1990 Strategy has therefore focussed on recommendations designed to make maximum progress in the coming decade towards achieving the Act's goals of fishable/swimmable waters. As with any program of this size and duration, there have been substantial accomplishments and also criticisms. The accomplishments have included significant improvements in water quality in many areas and notable progress toward the national goal of achieving an appropriate level of sewage treatment in every community throughout the country. • Critics have taken the Construction Grants Program to task for its administrative complexity, burdensome requirements, project delays, facility performance failures, and high costs. In fact, the Agency's own review of the program has documented the numerous administrative requirements placed on grantees and has determined that for a medium-to large-sized treatment project, with construction costs of $10-50 million, the complete grant and construction plrocess can take seven to eleven years. EPA's review has also reaffirmed that many sewage treatment facilities, perhaps as many as 30 percent to 50 percent, are seriously out of compliance with their discharge permits for substantial portions of each year (based on a sample of all sewage treatment plants in operation, not just those funded since the 1972 Act). THE STRATEGY DEVELOPMENT PROCESS In order to overcome these limitations and to extend the program's successes, EPA undertook an extensive reassessment of the Construction Grants Program in five areas: planning, project funding mechanisms and priorities, operations, compliance, and management. EPA's staff reviewed the program's record in each of these areas and prepared numerous issue papers outlining the major issues and options facing the Agency. Throughout the process, EPA has sought the active involvement of individuals and organizations outside the federal government. During the last six months of 1980, over 75 meetings were held to obtain ideas and suggestions. Meetings were held, for example, with representatives of such organizations as the National League of Cities, the National Association of Counties, the Conference of State Legislators, and groups representing sewage treatment plant executives and operators, engineers, and public interest groups. In addition, a Policy Board with represen- tatives from the National Governors' Association and the Association of State and Interstate Water Pollution Control Administrators have also particpated in the 1990 Strategy effort. A milestone in this ongoing series of meetings and reviews was marked by two workshops conducted in November at which all interested groups were represented. These three-day workshops covered key issues 16 ------- in each of the five review areas. The participants debated issues and offered recommendations for basic changes in the program. Those proposals have been a major input to the preliminary draft strategy. In the weeks ahead, EPA will be soliciting comments and suggestions on this preliminary draft 1990 Strategy from all interested parties. As part of that process a series of workshops will be held in several cities across the country. Also, copies of this preliminary draft strategy document, detailed staff strategy documents covering the five major topic areas, and numerous issue papers will be distributed. Following a full comment period on the preliminary draft strategy, EPA will revise the document to reflect the agency's response to issues raised through the process and will include in the strategy an action plan describing the steps needed for implementation of the recommended strategy. That revised document will be the subject of formal agency policy review before it is published in the Federal Register and is the subject of formal hearings. STRUCTURE OF THE STRATEGY DOCUMENT The preliminary draft 1990 Strategy is described in several documents, at differing levels of detail. This one provides a consolidated summary of the major recommendations in each of the areas of the 1990 Strategy. This document is divided into four major sections. The first, an Executive Summary, provides a summary statement of the overall thrust of the Strategy and its major recommendations for change in the current Construction Grants Program. This chapter provides an introduction to the program and the strategy development process. Chapter II describes the proposed revised goals for the Construction Grants Program and the major themes for accomplishing those goals. The final chapter of this document, Chapter III, sets forth the specific recommendations for change in the detailed areas of the program. The detailed Strategy options and recommendations are available from EPA in five separate documents covering: Planning, Funding, Operations, Compliance, and Management. These are the products of the five EPA task recommendations which are summarized in Chapter III of this document. These are available upon request from EPA. They and over 40 detailed issue papers developed during the 1990 effort are listed in an attachment following Chapter III. A glossary is also included describing key words and acronyms used in this and other 1990 documents. A list of all meetings and briefings held to date in connection with the 1990 effort and a list of workshop participants is included as the final attachment. 17 ------- II. GOALS AND MAJOR THEMES OF THE PRELIMINARY DRAFT CONSTRUCTION GRANTS STRATEGY This chapter presents the goals and major foundations of the proposed 1990 Construction Grants Strategy. These will set the tone not only for the construction of publicly owned treatment works over the next ten years, but also for their operation, maintenance, and long-term management. When the Strategy is fully implemented it will bring a more local, flexible, results-oriented character to the program. A strategy does not exist for its own ends--it must be directed toward specific goals. There are two types of goals involved in the 1990 Strategy. One type is the management goals which set forth the direction of the program over the next decade. The other type is intermediate, process goals which set forth the way in which the program should operate, such as the length of time which should be adequate to complete a grant. The two sections below present both types of goals for the 1990 Strategy. The first section presents the ultimate environmental goals, while the following section presents the process goals. PROGRAM MANAGEMENT GOALS FOR 1990 One of the prime purposes of the 1990 Strategy is to define program management goals which will provide overall direction to the program through the 1980s. Ideally, the program management goal for the Construction Grants Program would be to eliminate the discharge of pollutants to navigable waters from publicly owned treatment works. Achievement of this ultimate goal of the Clean Water Act, however, is not financially feasible over the next decade and there is serious doubt as to whether it will ever be feasible. For this reason, the preliminary draft 1990 Strategy has focused on achievement of the interim water quality goal of the Act and the implementation of best practicable waste treatment technology (BPWTT) as the basis for program management goals through the 1980s. The two specific program management goals that EPA proposes to Congress to guide the Construction Grants Program through the 1980s are as follows: • To achieve water quality wherever attainable which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the water, by July 1, 1990. • To achieve best practicable waste treatment technology (BPWTT) at all publicly owned treatment works as soon as practicable. These two program management goals are identical to the interim water quality goal and the BPWTT requirements contained in the Act, with the exception of the dates. The 1983 dates contained in the act are no longer considered feasible, given the magnitude of the costs necessary to achieve these objectives and given the anticipated funding levels of the next decade at federal, state, and local levels. 19 ------- Relative Importance of Each Goal to the Strategy EPA proposes that the first program management goal-achieving fish- able/swimmable waters by 1990-should be given top priority in admini- stering the program. That will obtain the maximum benefit from the limited funding and other resources available, by supporting those projects which will affect water quality the most. While the 1990 date for achievement of fishable/swimmable waters is the final date for completion of projects necessary to achieve this objective, most municipalities will be required to complete their projects earlier, in accordance with the compliance schedules contained in their NPDES permits based on the state strategy. EPA proposes the second program management goal-achievement of BPWTT as soon as practicable-to place further emphasis on achievement of a minimum standard for wastewater treatment everywhere. This goal of BPWTT, presently a minimum of secondary treatment, is needed to provide a minimum level of removal of conventional and toxic pollutants prior to wastewater discharge everywhere. This objective is important for the long-term enhancement of surface water quality, maintenance of public health and protection of ground water resources. Achieving this objective may extend beyond 1990 depending on funding levels and staff resources of states and municipalities. These goals will be difficult to achieve and will require the coordinated efforts of all levels of government. However, EPA anticipates that it would be reasonable to achieve the goal of fishable/swimmable waters by 1990 through the careful selection of priorities and implementation of the changes proposed in the preliminary draft 1990 Strategy. This is based on a review of the Needs Survey data, including a detailed case analysis in four states and extensive discussions with state and Federal officials over the last several months. The states' individual strategies for achieving the fishable/swimmable goal will provide the basis needed to propose a specific date for the achievement of the second program management goal for BPWTT. The basic purpose of these two program management goals is to provide overall national direction to the management of the program through the 1980's, and to direct limited grants funds towards projects which best facilitate achievement of goals of the Act. Modified funding levels would obviously change the time schedule for attainability of both of these goals. Although the goals support the concept of directing limited funds first to projects which have the greatest impact on water quality, this should not be viewed as a weakening of EPA's commitment to achievement of secondary treatment everywhere. EPA feels strongly that technology based treatment standards must remain a key element of the national municipal treatment program and that all communities must achieve this goal. Given limited funding for all desired projects, however, it is preferable to fund those secondary treatment projects which result in fishable/swimmable waters, or which significantly improve water quality, prior to funding secondary treatment projects with limited water quality impacts. Eventually, all secondary treatment projects should be constructed, as they are the foundation for the national water pollution control program under the Clean Water Act. 20 ------- The proposed program management goals raise the question of whether EPA might recommend "sunset" of the program after the achievement of the fishable/swimmable goal. In response to this, EPA's position is that there should be a sunset to the construction grants program. The challenge is to identify a realistic date for sunset. It will depend on the economy, the rate at which progress is made toward program goals, and the potential availability of alternative funding at the Federal, State or local level to complete the program. So, while EPA believes there should be a sunset to the program, the agency also believes strongly in the need for the program to be completed, i.e., that all required BPWTT projects should be constructed. While continuing to support the federal grant program as a major source of funding for achieving this goal, EPA also proposes, in the draft strategy that States maximize the use of limited federal funds by reducing the federal share of project costs, eliminating or restricting the eligibility of certain types of projects, and developing state financed loan programs. Yet another option which merits careful consideration is the eventual substitution of a federal loan program for the present grant program, as discussed in the Funding Strategy paper. EPA believes that the successful achievement of these two program management goals is essential if the goals of the Clean Water Act are to be realized. The Agency, therefore, recommends that these two goals be the dominant guideposts for both management of the national Construction Grants Program and for state management of the program over the next decade. EPA intends to maintain its focus as well as the focus of the states on these goals by using progress toward these goals as the primary basis for evaluating each state's performance in administering the program. Relationship of Goals tn the National Municipal Policy & Strategy (NMPS) These proposed program management goals have some implications for implementation of the National Municipal Policy and Strategy (NMPS), which directs EPA enforcement towards major municipal dischargers and establishes a system of coordination between those enforcement efforts and the Construction Grants Program. A major goal of the NMPS is to assure that grant funding is available to major municipalities with projects necessary to meet enforceable requirements of the Act. The proposed program management goals for the 1990 construction grants strategy emphasizes the funding of projects with substantial water quality impacts, whether or not they are major municipal projects. In most cases, major projects will have a significant impact on water quality, but for some major projects, this will not be the case. It is likely, therefore, that the priorities established for some major projects with minimal water quality impacts will not be emphasized under the 1990 Strategy as strongly as they were under the Municipal Policy and Strategy. This is not to say these large municipalities will go unfunded. On the contrary, in order to meet the BPWTT program management goal, the major municipality will be involved in planning, design and construction over many years, because of the magnitude of the projects. Thus the 1990 Strategy could result in a more extended schedule for these major projects, but it is likely that planning, design and construction activities will be underway at a significant rate over these next 10 years. It is EPA's intent to continue to utilize the National Municipal Policy and Strategy to track 21 ------- the progress of the major projects and, where appropriate, take enforcement actions. The 1990 Strategy may lead to the extension of the compliance schedules for some of these projects, but the NMPS will continue to be used as a prime mechanism for keeping these projects moving ahead in accordance with the revised compliance schedules and should be developed jointly with the State strategies. MAJOR THEMES FOR ACHIEVING THE 1990 GOALS To achieve the two goals identified in the previous section the preliminary draft 1990 Strategy has seven major themes for change or redirection of the program. These often cut across the specific areas of funding, compliance, and so on, to provide a common underpinning for the program's redirection at this time. These seven major themes are: • Maintenance of minimum, technology-based treatment standards, but greater emphasis on water quality impacts of projects as a basis for priority-setting and decision-making; • Expanded state responsibilities, through legislative and regulatory changes, to the point that virtually all project-related activities will be delegated to states, and EPA will concentrate on achievements of national objectives through the state-administered program; • Streamlining the grants process to make it more flexible, faster, and less burdensome; 0 Establishment of a simplified grants process for small grantees; • Emphasis on future need for POTW self-sufficiency, to sustain compliance on a long-term basis; • Increased management attention to compliance of municipal treatment facilities; and • Continued encouragement of innovative and alternative technologies. Each of these major themes is discussed in the following sections. Emphasis on Water Quality Impacts in Setting Priorities In this preliminary draft 1990 Strategy, EPA is proposing to reaffirm the basic water quality orientation of the Clean Water Act. The draft recommends explicitly that decisions and priorities under the Construction Grants Program should accord significant weight to the potential water quality impacts of proposed projects. 22 ------- Implementation of this emphasis on water quality-based priorities is described later in the detailed recommendations related to planning. In order to emphasize this commitment and to be able to evaluate states' progress in this area, EPA has established two programs goals: • By early 1983, all States should have categorized their construction grants projects according to water quality impact and completed their State Strategy outlining the ways they will achieve the two program management goals. • Annually, in the EPA review of state programs, states will demonstrate that they are funding projects in accordance with their state strategy and maintaining adequate programs to achieve the two program management goals. Management: Federal, State, and Local Roles Another central theme to the 1990 Strategy is a commitment to full and rapid delegation of the Construction Grants Program to the states. This extends the current policy to include delegation of activities previously considered nondelegable, such as payments to grantees and deciding most disputes, grant offers, appeals, and protests. This element of the preliminary draft strategy is also a direct response to numerous recommendations made to the Agency by representatives of public, local and state governments, and others during the strategy development process. The rationale for this recommendation is twofold. First, it was felt that the states have more knowledge of local and regional circumstances, are better able to follow-up local implementation within the state, and are doing much of this already. Second, full delegation will allow EPA to focus limited resources on the national, programmatic aspects of the Construction Grants Program, and to perform a valuable function in policy-setting, long-range planning, management oversight, and technical and management assistance. It will also allow EPA to focus on the most critical areas of national interest in environmental and fiscal areas. It has been acknowledged by many that states have differing levels of experience, resources, and readiness to assume full delegation of the program. Accordingly, delegation may be slower and may require more assistance in some states than in others. Nonetheless, EPA has been urged not to delay, but rather to delegate rapidly and to assist states which request assistance in making the transition. Consequently, the following goals are incorporated into the 1990 Strategy: • By the beginning of FY 1983, all States will have agreed to accept delegation of all activities (including those currently non-delegable), with assumption of the program no later than 2 years after the signed agreement. • By the beginning of 1983, a management evaluation system will be in place so that EPA can oversee state performance to ensure that national objectives are met. 23 ------- Steamlininci For various reasons, including congressional mandate, many require- ments have been added to the construction grants program. The result is now a maze of paperwork and specific requirements that frustrates local communities and helps stretch the time for completion of a moderately sized treatment facility to an average of seven to eleven years. There are literally dozens of specific requirements, ranging from giving adequate technical considerations to alternative waste treatment techniques, such as land application, to ensuring that minority businesses are included at appropriate levels. Some improvements can be made within the current construction grants process. Delegation of the program to the states will help ease these problems by eliminating dual state and federal reviews and by placing program responsibility at a level of government which is closer to local communities. Likewise, within the present program structure, time requirements can be shortened by improved time management, including scheduling more activities in parallel, combining some review and approval steps, and establishing time targets for reviews and approvals. These are important steps in easing the administrative burden and shortening the time it takes a community to get through the grants process, but EPA intends to go one step further. The Agency is proposing a basic shift in its grant regulations, from specifying procedural requirements to focusing instead on results and giving grantees more flexibility in how to achieve them. The combination of these changes—delegation to the states, improving time management and providing more local flexibility in how to meet program requirements—should result in significant streamlining of the program. EPA is establishing the following goal for these efforts: • On average, a greater than 25 percent reduction will be achieved in the time required to complete the grants process, from the initial Step 1 application through project closeout without sacrificing project quality or achievement of national goals. Small Community Grants Process In its meetings with various organizations and the public in developing the preliminary draft 1990 Strategy, EPA has heard an almost universal plea for a greatly simplified grants process for small communities. The experience of state and local officials and others in the field indicates that the needs of small and large communities are usually quite different, as are their technical and managerial resources to deal with the grants process. The general feeling has been that many of the requirements which are appropriate for medium to large communities are not needed for most small communities. Examples might include intensive waste surveys, complex procurement requirements, and the evaluation of very sophisticated treatment processes. Many people have also felt that the paperwork required of small communities could be greatly simplified. 24 ------- The present grants process already does provide flexibility in some of these areas but it is not fully utilized in practice. For example, a number of small communities are currently able to complete the grants process in just a few years for simple projects, but for most small communities the process takes much longer. Furthermore, widespread experience indicates that small communities generally find themselves complying with requirements and filling out administrative forms which they feel are not relevant to their waste treatment and disposal situations. As a result, EPA is proposing, as an element of the 1990 Strategy, that each state be encouraged to develop a simplified grant process for small grantees. States will be encouraged to develop separate management procedures and requirements to assist small communities and to facilitate their compliance with program requirements. EPA will allow states considerable flexibility in this regard and will also provide states with tools to be used in this effort. For example, generic facilities plans for use by small grantees will be developed. Also, EPA will encourage funding of third party managers to assist grantees in managing their projects. The accompanying goal of the strategy in this area is: • By January 1983, the states electing to establish a separate grants process for small communities will have established processes that reduce the overall time required to complete projects by 50 percent. Muni c i pal Self-Suffi ci ency The ultimate success of the Construction Grants Program rests not with the federal government, nor even with the states, but with the local communities. It is the municipalities which bear the responsibility for operating the treatment plants effectively, maintaining their systems in good working order, replacing capital equipment over time, and expanding their systems where necessary. The municipalities also have the accompanying managerial responsibilities for hiring and supervising qualified staff, planning and overseeing various activities, and maintaining a sound financial position to support these activities. Currently, grantees are required to develop financial plans which identify how they will fund construction of a proposed facility and its subsequent operations and maintenance. In general, however, grantees do not develop financial or management plans aimed at meeting their long-term needs. The need for a sound financial position is an especially critical point. In these times of increasing pressure to hold down government costs, municipal sewage districts will continue to operate with tight budgets. Yet an adequate budget is crucial for communities to successfully carry out those local responsibilities. In that sense the financial position of the sewage district may be the "acid test" of whether the facilities will be operated, staffed, maintained and expanded as necessary so that they achieve the long-run water quality objectives for which they were constructed. 25 ------- EPA will assist POTWs to achieve self-sufficiency by allowing funding for the development of a long-term financial and management plan for each municipality. The purpose of this plan will be to identify the long-term financial needs of the municipality, in terms of the operation, maintenance, and expansion of its wastewater facilities and the means by which those needs can be satisfied. In addition, the plan should provide a management element to insure that any necessary expansions or modifications are initiated in sufficient time to insure compliance with effluent requirements. As a result, the following goals are established in this area: • All grantees will have developed long-term management and financial plans prior to completion of their grant project, or otherwise demonstrated to the satisfaction of the state that they have adequate plans and resources to become self-sufficient and to maintain continuous long-term compliance with effluent requirements. t States will be required to include in their state strategy to meet program management goals a program to ensure that POTWs are self-sufficient, that they remain in compliance, and that they initiate plans for needed expansions in ample time to maintain continuous compliance. Management Attention on Compliance One major thrust of the preliminary draft 1990 Strategy is to meet the challenge that too many treatment plants are operating out of compliance with their discharge permits. The problem is not just that many plants are in "technical" violation of their permits, but also the analyses that estimate 30 to 50 percent are seriously out of compliance. Several detailed actions are recommended later in the Compliance section of the next chapter to focus significant management attention at all levels of government on compliance as a major goal of the Construction Grants Program. In order to accomplish this commitment, the Strategy includes recommendations in three areas. One is improving the availa- bility, use and quality of current monitoring data. That includes expanding the concepts of "compliance" and "noncompliance" to differentiate better between instances of serious versus minor noncompliance. Another area of recommendations is related to assuring the compliance of new facilities which are yet to be completed. The third area is shaping a strong diagnostic assistance, and enforcement program to substantially reduce the incidence of serious noncompliance at existing facilities. A strong enforcement program will be an important element of the 1990 Strategy for achieving compliance at both major and minor facilities. An important long-term aspect of this approach is also encouraging the financial self-sufficiency of treatment works, as described above, to ensure that communities are able to maintain their systems in good condition and operation in the long run. 26 ------- To this end, the following goals are incorporated into the draft 1990 Strategy: • The percentage of communities with serious noncompliance problems will be steadily reduced in all states from the present levels estimated to be 30 to 50 percent, to less than 5 percent by 1990, and strong enforcement action will be taken against those communities remaining out of compliance. t Each state will establish intermediate goals related to reduction of the percentage of communities with serious noncompliance problems, in conjunction with its state strategy. Innovative and Alternative Technology The Clean Water Act includes significant emphasis on the role which innovative and alternative technology should play in the Construction Grants Program. Congress envisioned that innovative and alternative technology would be significantly more cost-effective than conventional processes in many situations, and that it could offer superior environmental benefits, such as reducing water usage by increasing water reuse. The 1990 Strategy proposes not only to continue the current innovative and alternative technologies program, but to strengthen it in several ways. First, innovative technology will be further encouraged through the direct sponsorship of selected pilot projects. These will be geared to demonstrate the technical and financial viability of emerging innovative technologies in order to reduce the risks to localities, and speed up acceptance. Second, the 1990 Strategy also includes recommendations to make the present higher funding percentage for innovative projects fully applicable whenever over one-half of a project can be considered innovative. The draft 1990 Strategy proposes a recommendation to Congress that a 1 percent set aside be made permanent for innovative projects to remove present uncertainty. Third, EPA intends to encourage and assist states in the development of small systems offices which will promote the use of innovative and alternative technologies in small communities. These offices will also disseminate technical information to these communities and their consultants. To emphasize this commitment to innovative and alternative technology, the draft 1990 Strategy includes the following goal: • Each state will be encouraged to develop specific targets in its state strategy for the numbers of innovative and alternative projects which it will attempt to fund throughout the next four years. 27 . ------- III. SPECIFIC PROGRAM RECOMMENDATIONS TO ACHIEVE GOALS This chapter presents the preliminary draft 1990 Strategy's major recommendations for changes in three basic aspects of the Construction Grants Program. The first, the planning process, provides priorities and the overall context for the Program. The second focuses on the administrative elements: funding; operations of the grants process; and activities designed to ensure compliance of facilities with their permits The third area describes realigned management roles for federal, state, and local governments in the revised Construction Grants Program. The changes listed here represent only the highlights of the 1990 recommendations in each study area. This description characterizes the major issues dealt with in each area and the key changes suggested. Further elaboration of the issues, rationale, options, and detailed recommendations can be found in the full Strategy Document available for each of the five topics under separate cover. PLANNING: CONTEXT OF THE PROGRAM The water quality planning process has significant impacts on the Construction Grants Program. This process is an important first step in the construction grants process, since it provides the perspective of problems, solutions, and results, and thereby focuses attention on the most important water quality problems. A small investment in planning, compared to the costs of installing and operating controls, can save money by solving problems early. Planning efforts become even more important when the limited funding confronting the Construction Grants Program is considered. In this situation, the evaluation of the attainability of water quality standards, the need for advanced waste treatment facilities, and the definition of minimum technology-based standards are critical. The major areas of the planning process discussed in the 1990 effort centered on emphasizing water quality impacts in setting project priorities and evaluation of some water quality standards to achieve program objectives. Each of these areas and the resulting recommendations are discussed in the sections that follow. Water Quality Impacts Will Receive a Greater Emphasis in the Planning Process Extensive discussion supporting an increased emphasis on water quality impacts when evaluating project priorities occurred throughout the 1990 process. However, there was also a strong feeling that 1990 recommendations should not require extensive new planning efforts. The 29 ------- changes outlined below recognize the validity of these two points as well as the reality of limited funds and a continued commitment to minimum technology-based standards. 1. Planning efforts under the 1990 Strategy will make maximum use of existing data, plans, and programs but will re-direct resources to address the most critical water quality problems. Many States and EPA Regions have strong water quality-oriented programs which use existing data effectively in directing their construction grants programs. Also, the portions of the State WQM plans which deal with municipal point sources are the most complete parts of those plans. However, despite the amount of information available, in some States and Regions the links between water quality data, problem assessments, plans, and actions have been severed, making their programs less effective. EPA will work with the States to develop overall planning and management approaches directed toward meeting the fishable/swimmable goals and to set priorities tied to problem assessments for WQS reviews, monitoring, waste load allocations, nonpoint source planning, evaluation, and other activities. The States should concentrate data gathering and analysis on streams where States are considering extensive capital investments, such as AST/AWT plants, or where problems (e.g., toxics) aren't clearly identified. 2. Water quality impacts will be emphasized in setting project priorities and in developing state strategies. There are several potential ways of emphasizing water quality impacts in implementing a priority system. EPA could develop uniform national priority ranking criteria based on water quality and require each state to utilize these criteria in developing its annual construction grants priority list. Another possible method would be to improve existing water quality monitoring data to provide a better foundation for the establishment of priorities. A third option would be to utilize existing water quality management plans as the basis for priorities. All these approaches have merit, but at the same time, they have limitations. The recommended approach offers yet another alternative. It does not involve the development of national uniform priority criteria. Rather, it places responsibility on each state for developing a strategy to meet program management goals. The state strategy will categorize all projects within the state into one of three broad classifications of water quality impact and will include a schedule for the eventual completion of all POTWs within the state. The strategy will be reviewed and approved by EPA. The state strategy will result in a shift away from the concept of carefully ranking the projects to receive grant funding each year and toward a concept of scheduling project completions based on priorities and, specifically, water quality impacts. The priority list will remain the vehicle for determining which projects are funded in a given year, but the list must be consistent with the schedule of POTW completions detailed in the state strategy. Due to planning and construction time constraints, etc., the annual fundable priority list may show projects of lower classification with high priority. This may be necessary to get large or complex projects started so that they can be completed on schedule. 30 ------- Ranking projects or establishing priorities in this way is not a departure from technology-based goals; it is a method to determine which of the BPWTT projects to build before others. Priority rankings will be established for all projects within the state, but those with the greatest impact on water quality will be built first, thus insuring the maximum environmental result from limited resources as quickly as possible. Another aspect of the recommended approach is that it focuses the gathering of additional water quality data on site-specific problems where a determination has been made that additional data will be needed to make a rational priority or funding decision. The recommendation recognizes that existing data will be adequate for decisions on most projects but not on all. It provides for additional data collection and analyses only where needed, and allows other projects to proceed through the grants process without delay. Thus, the strategy will be used as a management tool to prioritize standards evaluations, waste load allocations, and additional water monitoring data needs, as well as assisting in scheduling the various project phases of the construction grants process. The strategy will also indicate to communities the long range likelihood of federal funding for their local projects and assist them in decisions to develop alternative funding options. The specific aspects of the recommended approach for implementing a priority system which emphasizes water quality impacts are listed below: t In the state strategy, states will identify all projects or parts of projects that are necessary to comply with the water quality and BPWTT objectives described in Chapter II and classify each project as follows: —Necessary for achievement of, or significant progress toward, fishable/swimmable waters, protection of outstanding natural resource waters, or protection of public health. --Necessary only to meet minimum treatment standards (i.e., BPWTT}. --Not necessary to meet the enforceable requirements of the Act. The state strategies should also set forth in broad terms the methods that the state will use to meet the program objectives. For example, the state may plan to lower the federal share of eligible project costs, eliminate some eligibilities or implement a state loan program in order to support more projects, or it may plan to review attainability on certain critical stream segments (e.g., those covered by blanket standards or where AWT projects are planned). Methods such as these should be enumerated in the strategy. The state strategy is not meant to be an elaborate or voluminous report requiring extensive new analyses. It should be straightforward and concise based on available data, professional judgment, and, infrequently, on new analyses. 31 ------- • In the state strategy, states will Include a master schedule for all projects in the first two categories above, which would complete the Construction Grants Program. The strategy will also include schedules for completion of projects categorized as not necessary to meet the enforceable requirements of the Act. Consideration by the states of these lowest priority projects (which may not receive federal funding) is necessary because the states must manage the complete municipal wastewater treatment program, not just those projects funded by federal grants. The schedules will be based on national funding levels. The strategy will be continually updated as additional progress is made toward program goals. States will also develop strategies for program completion under the assumption that annual funding is not constrained. States will place the time schedules derived above in the NPDES permits for each project. This schedule will thus become an enforceable element of the permit. The schedule will also become a condition of the grant thus obligating those involved to hold to the schedule. Time schedules for major dischargers will be tracked through MMS. States will administer the Construction Grants Program to maintain the master schedule designed to achieve program objectives. The annual state priority list should be consistent with this schedule and the state should closely track projects to maintain them on schedule. The state will be evaluated on its performance against its plan in annual reviews with EPA (see Management Recommendations for details). 3. Nonpoint source and industrial point source pollution must be evaluated when assessing the priority of a project. Meeting the goals of fishable and swimmable waters involves much more than just the construction of POTWs--nonpoint sources and industrial point sources can affect the attainability of water quality standards. The existence or likelihood of significant progress in these areas must be considered when evaluating the priority of a municipal discharge project. Many site- specific problems involve tradeoffs among these sources. The compliance efforts of industrial point sources are relatively far along (they must meet a 1984 BAT goal); nonpoint source control efforts, on the other hand, are not as far along. Efforts dealing with the issue of nonpoint source control include the continuing national EPA effort that focuses on building a technical base of knowledge appropriate for support of state planning in the nonpoint source area (through the present Water Quality Management Strategy and outside the 1990 effort). In addition, the facility planning process will be expanded where necessary, to include an evaluation of the tradeoffs between different pollutant sources as they 32 ------- affect municipal discharge requirements for advanced wastewater treatment systems. Where complex analyses are required, they will generally be performed i/-"^" other funding programs. 4. iTient water quality emphasis by improving fiscal, financial, and instit i'ona7 aspects of planning. The abilities of communities, counties, ^e states to fully implement the plans and realize their goals de1 '-^'cantly on fiscal, financial, and institutional factor? « often given little attention, while major effort is di> i-cal aspects such as water quality monitoring and eval- ''ant specification. ------- standards and the determination of attainability. States should include attainability determinations in the present required cycle relating to review and revision of water quality standards. 2. Modify the technical definition of "secondary treatment" to allow other biological treatments such as trickling filters where they are suitable^ The current definition of secondary treatment requires the I) of highly efficient and often costly and complex treatment pities that have an existing form 5 not quite ------- affect municipal discharge requirements for advanced wastewater treatment systems. Where complex analyses are required, they will generally be performed under other funding programs. 4. Augment water quality emphasis by improving fiscal, financial, and institutional aspects of planning. The abilities of communities, counties, and the states to fully implement the plans and realize their goals depend significantly on fiscal, financial, and institutional factors. Yet these are often given little attention, while major effort is directed toward technical aspects such as water quality monitoring and evaluation and treatment plant specification. The states should focus on the problems and capabilities of their local management agencies, especially for capital budgeting and long- term operation and maintenance of septic systems, POTWs, sewers, and nonpoint source controls. This municipal self-sufficiency is necessary to long-term success of the program and is also discussed under the Compliance Recommendations. In addition, where economic reasons are a major barrier in attaining standards, the state should examine options for innovative financing or such ideas as a change in the service area to improve financing capability or to reduce per capita cost impacts. Selected Revisions of Standards for Achievement of Water Quality Objectives Four efforts in the standards area are recommended.. These changes provide the flexibility needed at the local level to achieve water quality goals in a timely and cost-effective manner. Each is discussed in detail in the following paragraphs. 1. Emphasize the "attainability" of water quality standards. While the law establishes an interim goal of achieving fishable/swimmable waters where attainable, EPA and the states have not given much consideration to the concept of "attainability" in the development of water quality standards or in the establishment of construction grants priorities. In several states, many streams were classified for uses which are simply not attainable, often due to natural background conditions or a lack of adequate treatment technology. As a result, some advanced waste treatment projects which will not significantly impact water quality have been given priority and been funded. The reassessments of stream uses are necessary to avoid building costly AWT or CSO systems that will not impact water quality. It is recommended that these reassessments be based on the Water Quality Standards Strategy which EPA developed and circulated extensively for public comment several months ago. The preliminary draft proposes emphasizing the concept of attainability in the development or reevaluation of water quality standards. To assist states in evaluating attainability as they develop and update water quality standards, EPA will prepare guidance for the states. This guidance will deal with the technical, environmental, and economic factors that should be considered in the development of 33 ------- standards and the determination of attainability. States should include attainability determinations in the present required cycle relating to review and revision of water quality standards. 2. Modify the technical definition of "secondary treatment" to allow other biological treatments such as trickling filters where they are suitable. The current definition of secondary treatment requires the construction of highly efficient and often costly and complex treatment processes. There are a number of communities that have an existing form of biological treatment, such as a trickling filter, which does not quite meet the current definition of secondary treatment. Many of these existing facilities are also simpler and less costly to operate than the more efficient forms of secondary treatment. The question arises as to whether EPA should allow a lower level of secondary treatment than acceptable under the current definition if it can be demonstrated that a lower level of secondary treatment will not adversely affect water quality. EPA has examined this issue and has concluded that a lower level of secondary treatment would, in many cases, result in considerable cost savings both nationally and locally without adversely affecting water quality. EPA has also evaluated two different approaches for allowing a lower level of secondary treatment. The alternatives evaluated include allowing a case-by-case waiver similar to the approach allowed for discharges to deep ocean waters and establishing a second, lower level of secondary treatment to be allowed under certain circumstances. As a result of these analyses, EPA will soon open the issue of the definition of secondary treatment to public consideration, through an Advance Notice of Proposed Rulemaking. The definition could possibly be broadened to take into account local factors, presense or absence of toxic pollutants, and treatment works performance requirements. EPA would maintain a technology-based requirement of biological treatment, while attempting to trim the costs of "treatment for treatment's sake." 3. Develop a strategy for controlling pollution from combined sewer overflows and urban storm runoff. The problems of combined sewer overflows (CSO) and urban storm runoff (USR) are accompanied by great uncertainty regarding their severity and control. The solutions to these problems involve the difficult task of accounting for high-flow (i.e, wet weather) conditions in setting water quality standards and writing and enforcing NPDES permits. EPA will work with the States and local agencies to develop a CSO and USR control strategy by the end of FY 83 and continue to build its data base on problems and controls. 4. Phase toxics criteria into water quality standards. While concern about toxics has grown considerably over the past several years, many unknowns exist regarding their pathways, fates, and environmental effects. In addition, toxics monitoring is extremely expensive. Strong tools, however, are available for assessing conventional pollutant treatment impacts. Because of this, EPA proposes that states continue to focus efforts on conventional pollutants over the near term, but gradually phase toxics into water quality standards and effluent requirements as information providing the basis to do so becomes available. 34 ------- Some tools and information do exist for assessing toxics problems. These should be used in areas where toxics are a significant issue and where the impact on toxics control should be considered in determining project priorities. As a result, some POTWs that would receive low priority on the basis of conventional pollutant control impacts would receive high priority upon consideration of toxic pollutant control impacts. Furthermore, recent sampling and analysis have shown that secondary treatment can provide effective removal of some toxic pollutants. Therefore, the continued application of technology based standards requiring secondary treatment to meet the BPWTT goal will also contribute significantly to eliminating toxics. EPA has developed ambient criteria for some toxic pollutants and will define the state of the art in toxics control. In addition, EPA will issue effluent guidelines covering toxic pollutants. States should incorporate toxics into state standards and monitoring programs as information becomes available from EPA. ADMINISTRATION OF THE PROGRAM Three of the major areas addressed in the 1990 Strategy development process deal with administrative aspects of the program. Those three are described in the sections which follow and include funding, operations of the grants process, and the activities related to ensuring compliance of POTWs with their permits. Funding The $119 billion preliminary estimate of needs from the 1980 Needs Survey is much greater than the funding likely to be authorized and appropriated by Congress by 1990. In light of that fact, it is crucial that projects be selected strategically to achieve further progress toward the goals of the Act. Moreover, funding mechanisms and eligibilities should also reinforce the objectives of the program. EPA deems it inappropriate to include in the present draft strategy specific recommendations related to funding, since the new administration will almost immediately be addressing program funding in light of current national economic conditions. The Funding Strategy staff paper (Task I of the draft 1990 Stategy) which discusses specific recommendations and their implications for the program, is available for review and comment. Essentially, those recommendations are that: (1) while basic funding mechanisms should not be altered substantially, states should be strongly encouraged to implement measures such as state loan programs and reduction of the federal share to maximize the benefits from federal funds; and (2) priorities for project funding should be based on potential water quality impacts as well as requirements for secondary treatment. 35 ------- Because one of the objectives in developing the 1990 strategy has been to identify all ways in which the Construction Grants Program could be made more effective, many of the recommendations in other areas of the preliminary draft could result in reducing the estimates for federal funds needed to complete the program. The chart below outlines the potential impacts of those recommendations on the needs reported in the 1980 Needs Survey. Table III-I COST IMPACT OF MODIFICATIONS ON 1980 NEEDS CATEGORY ESTIMATES CATEGORY I. Secondary Treatment 1980 NEEDS* (billions) $ 28.8 il. Advanced Treatment IIIA. I/I $ 5.6 $ 2.5 HIB. Rehabil- $ 5.6 nation IVA. Collectors $ 18.4 IVB. Interceptors $ 20.8 V. CSO (Recrea- $ 36.5 tlonal Uses) (Fish & $ 23.0 Wildlife) *Preliminary estimates COST IMPACTS OF MODIFICATIONS Could be reduced by $840 million to $4.6 billion over a ten-year period by including trickling filters In definition of second- ary; further reductions possible if other processes included; use of Industrial Cost Exclusion (ICE) could save $5.9 billion in Categories I and II. Could be reduced by attainability reviews. Could be reduced by modifying cost-benefit evaluations. Could be reduced by restrictive definitions of eligible projects Could be further reduced as full effect of PRM 78-9 restricting collectors is felt. Could also be reduced by greater use of alter- native systems. Could be reduced by restricting eligible projects to those neede for integrity of entire system; use of ICE could save $1 billion Could be reduced by focus on attainable uses. Change to this water quality objective could save approximately 13.5 billion. ------- Operations—An Efficient and Effective Grants Program The Construction Grants process includes a complex set of requirements relating to planning, design, and construction that currently takes from seven to eleven years to complete for a moderately sized plant. Besides the preparation of applications for each Step, there are multiple reviews throughout the process and requirements to comply with over 50 other federal laws in completing the process. The grants program is generally one of the largest financial and administrative programs that many municipalities, especially small ones, will ever undertake. While the program is divided into only three main Steps, each Step has a significant number of requirements which can be complex and time-consuming. For example, in Step 1 (Planning) grantees are required to analyze innovative and alternative treatment processes and techniques that reclaim and reuse wastewater, evaluate potential opportunities for recreation, open space and access to bodies of water, and conduct an assessment of the primary energy requirements for each considered treatment system. All of this is in addition to meeting basic technical and economic requirements and waiting for the state and EPA to review the facilities plan. Clearly, there is a plethora of activities and actions required of grantees. Step 2 is also complex because a complete plant design plan must be developed and approved (by the state and/or EPA). Step 3 involves actual construction of the POTW and the time needed here can be significant depending on the type of facility being constructed. The grants process is long and involved and few municipalities have had experience which is directly relevant to helping them through it. Nearly every evaluation of the Construction Grants Program has identified similar issues as problems for grantees. To summarize these issues, the complexity of the grants process, the changing of regulations while grantees are in the process, and the length of time required to complete it all- reduce the program's potential effectiveness. These problems are compounded by the fact that despite the program's reviews, plants coming on line are not consistently in compliance. Many small systems share other types of problems in their dealings with the construction grants process, such as a lack of management resources, a lack of financial planning, and use of accounting systems that differ from those required by EPA. The current grants process, with its significant time delays and increased costs, has caused financial problems for small municipalities which, typically, are the least able to afford such costs. The issues described above cover the broad areas of shortening the process time, lightening the administrative load, and improving or maintaining project quality (building POTWs that meet NPDES requirements) in the grants process. Discussions have led to a wide variety of suggested actions. These include optimizing the present grants process, altering the process to eliminate duplicative requirements, and the use of generic plans to expedite the facility planning process for small communities. 37 ------- EPA has formulated a series of recommendations to address many of the problems discussed above. In general, EPA will simplify the grants process by Devaluating the current process to reduce the administrative burden and time needed for grantees to complete it. In addition, full delegation of the grants program will aid in eliminating some problems such as duplicative reviews. The combination of these actions will substantially reduce the process time (by at least 25 percent), simplify the administrative process, and maintain the quality of facilities. Some specific actions which will be taken are: 1. The time needed to move through the grants process will be reduced by at least 25 percent. Full delegation of the grants program will aid in eliminating many time-consuming duplicative state and EPA reviews. EPA will develop aids and recommend procedures that will reduce the time in the grants process. These tools will then be made available for use by the states. Types of time-saving measures will include development of model Critical Path Method (CPM) charts, such as ones produced by the state of California, which offer broadly applicable optimization techniques for concurrent processing of several grants requirements. Other tracking methods which will help keep projects moving efficiently through the process will also be developed and made available to states by EPA. In addition, EPA will continue its efforts in the area of critical path analysis of the grants process to determine the areas where regulatory or legislative changes might have the greatest impact on the time involved in the process. As an added measure to reduce the time required in the grants process, states and grantees will be encouraged to develop contracted time schedules as part of the application for each of the three steps in the grants process. In this way the mutually agreed-upon schedule will provide a realistic time target to which both parties will adhere. 2. The grants process will be simplified and streamlined. EPA will take several steps to simplify and streamline the grants process thereby easing the administrative, technical, and management requirements and burden on grantees. • Simplification of A/E procurement regulations through conformance with OMB Attachment 0, continuing inter-agency review of Attachement 0, issuing bid qualifications procedures and issuing flexible guidelines for reasonable profits. • Simplification of the eligibility of grantees' administrative, legal, and fiscal costs by amending regulations to allow an option for lump sum payment for those costs based on cost curves developed from examination of typical historical cost levels. • Revision of the regulations to remove unnecessarily prescriptive requirements and replace them with responsiblity for the states to ensure that the functions are carried out properly. This will be carried out in connection with full delegation and will be designed to provide states maximum flexibility in implementing the program as efficiently as possible. 38 ------- • Implementation of certification. Ongoing pilot certification projects will be used to provide future guidance for regional, state, and grantee personnel. Qualified grantees, having a history of successful administration of construction grants, will be certified by the states to proceed with many activities in the process without further state review. • Request legislative changes needed to modify current procedures to allow grantees to proceed with design prior to formal approval of the Facilities Plan. Eligible costs incurred would be reimbursed at the time the Step 2 grant is awarded. t Examination of the consolidation of procedures for complying with other applicable federal requirements. EPA, acknowledging the need for consolidation of the requirements for compliance with the more than 50 federal requirements impacting construction grants projects, will work with other federal agencies to determine the feasibility of consolidating some of these requirements and will cooperate in pursuing any legislative changes needed for effective implementation. • Special consideration of NEPA. The requirements of the National Environmental Policy Act (NEPA), because of their integral relation to EPA's environmental objectives, will receive special attention regarding delegation. A process for allowing full delegation of EPA's NEPA responsibilities will be developed consistent with the need to acknowledge that certain projects due to special environmental, international, or interstate concerns, are of particular federal concern, require federal assistance to assure program integrity and achievement of EPA's national environmental objective. 3. The grants process will be greatly simplified for small grantees. Many small, rural communities have similar background conditions and constraints in such areas as suitability for on-lot disposal, demographic characteristics, and quality of existing facilities. An abbreviated planning process and set of generic facility plans is being developed by EPA for use by the states to greatly simplify the Step 1 facility-planning process for communities of less than 10,000. This will ensure that all requirements can be met by small grantees without undue complexity. These communities will be screened and all, except those communities which the states feel have special complications, will be able to use the simplified process and generic plans for their own facilities. The generic plans will be a means of taking advantage of these common conditions by offering cost-effective, appropriate solutions for small communities developing facility plans. EPA and states choosing to do so will modify the program to assist small communities with the administration of the revised grants process. This will take the form of funding third-party management. Third-party management will offer communities the option of using state or private consultants to aid them through the grants process. This will expedite the application process and help to ensure that communities build functional plants suited to their needs. Other actions will also be taken to aid facilities, such as encouraging preapplication conferences and intermediate state reviews to help ensure that small systems are "on target" with their plans and understand what to expect throughout the steps of the process. 39 ------- 4. The Agency will continue to clarify policy guidance in areas having significant effects on the grants process. These areas include infiltration/inflow problems, innovative and alternative projects, and integrated waste management. EPA will modify the infiltration/inflow (I/I) program to make it more cost effective and accurate and to reduce the time needed to complete it. The agency will also encourage states to assist applicants in the development of effective sewer maintenance programs in conjunction with planning and designing wastewater treatment projects. Legislative changes to the innovative and alternative (I/A) program will be recommended by the Agency in order to encourage greater use of innovative technology. The strategy recommends confining the use of set-aside funds to innovative projects but continuing to fund both innovative and alternative at a higher rate than conventional projects. There are also recommendations to simplify administration of the funding. The set-aside would be a mandatory minimum level of one percent with a national pool established to which unobligated set-aside monies (not to exceed one percent) would revert. In light of the recent burgeoning of waste disposal problems being faced by public officials at all levels of government, EPA is developing a new and more comprehensive multi-media/multi-waste approach to those problems. Integrated Waste Management, the umbrella term being used to describe this approach, involves agency initiatives and pilot projects in a variety of areas. Of particular concern in this area to the 1990 Strategy are the problems being faced by present and future operators of POTWs. Treatment of greater volumes of wastewater at higher levels is producing greatly increased volumes of sludge for which beneficial or acceptable disposal methods must be found. At the same time the options available for sludge disposal are being severely curtailed by restrictions on incineration and ocean dumping, the presence of toxics in sludge and the public concern with sitting issues. The pretreatment program is designed to solve major parts of this problem by removing toxics from sludge so that it can be used beneficially in such ways as soil reclamation. The mandated development of local pretreatment programs is being funded through the construction grants program as are several pilot projects intended to demonstrate the feasibility of an integrated approach to local waste management problems. These activities are described in more detail in the Operations Strategy. Compliance--The Integrity of the Program The present level of performance of grant-funded POTWs is not satisfactory. Numerous studies of municipal wastewater treatment plants throughout the country have estimated that 30 to 50 percent of existing facilities may be seriously out of compliance for several months a year. POTWs represent a major public investment of public funds in pollution abatement that is not producing the anticipated results. Making sure the plants and other facilities funded under the Construction Grants Program work as they were designed to work—that they are in compliance--is critical to achieving the objectives of the Act. Unless facilities funded through this program are operating in compliance with 40 ------- requirements, the public funds expended for this program will not have accomplished their intended purpose—to clean up the nation's waters. EPA's proposed strategy to bring existing POTWs into compliance and to ensure that future facilities are in compliance will contain three elements. First, the major thrust of the compliance program will be an aggressive enforcement effort. The existence of violations of the technology-based requirements of the Clean Water Act will indicate the need for potential enforcement actions. Facilities which are in serious noncompliance, and especially those which are recalcitrant in their efforts to comply with the Act, will be targeted for strict enforcement. Second, the management of POTW compliance data will be improved to better determine the significance of compliance violations. This information will provide additional input to ongoing enforcement actions. The information will also aid in funneling advisory and direct assistance to facilities which have the worst problems. Third, the preliminary compliance strategy encourages the concept of municipal self-sufficiency for operating and maintaining POTWs. The enforcement program and data systems have as their ultimate aim municipalities taking full responsibility for meeting NPDES requirements on a consistent basis, as required by the Clean Water Act. As can be seen in the discussion below, states will be the primary vehicles for direct interface with POTWs in the areas of technical assistance and assuring long-term municipal self-sufficiency. EPA will offer guidance at a national level and maintain an aggressive enforcement program in conjunction with those states which have been delegated authority to manage the NPDES program within their jurisdiction. Compliance Data In order to make better evaluations of the significance of noncompliance or the means to bring about a return to compliance, there must be better coordination of compliance data that is currently available. Information obtained from self-monitoring reports, compliance inspection Reports, Quarterly Noncompliance Report, 0 & M Reports, Grants and Needs Reports, and other compliance-monitoring studies must be processed more rapidly and communicated more accurately. Greater use of this information should be made during compliance evaluations and enforcement follow-up. In order to facilitate the use of this information, the Agency will emphasize and support the following efforts: 1. A common database of compliance and grant information designed around the specific needs of the Agency and the states will be developed. The basic data elements of such an information pool are outlined in the Municipal Management System (MMS) guidance document. The data currently maintained in various permit and grant systems can be integrated using the NEEDS cross-reference index. This capability exists and is available to all users. This database is to be augmented by information from state pollution control agencies as determined in Agency/State MMS working 41 ------- agreements. Under MMS operating procedures, the exact types of compliance data necessary to coordinate the evaluation of and return to compliance will be identified as to their priority and recipient. The Agency will continue with its efforts to develop and bring on line an automated violation detection system (PCS-II) so that self-monitoring information can be rapidly processed and supplied to the common database. This will enable State agencies to monitor trends and degrees of noncompliance more accurately. It will also make it easier for the agency to measure the effectiveness of various types of responses. Based on State/EPA agreements, certain types of compliance inspection information will also be supplied to the data base. The intent is to use the vast amount of such information already available. 2. Means to assess compliance-monitoring information more rapidly and to provide continuous quality assurance of the data will be established.The Agency has initiated the DMR Quality Assurance Program specifically to address the quality of DMR data and provide follow-up compliance inspections where problems are detected. In addition, EPA has developed a quality control inspection procedure. This will be used to assess a permittee's sampling and analytical work and to upgrade performance where necessary. Corrective measures can be supplied to the permittee immediately along with copies to the State agency serving the POTW. These efforts, in conjunction with PCS II, will lead to higher quality monitoring data. This will also make permit limits and self-reported data more accessible to EPA and State users who must manage the return to compliance. EPA and State permit and enforcement authorities will use this information in the developoment of MMS procedures which streamline traditional compliance-review activities across interdependent programs. Compliance data necessary to assess discharge performance or plant operation will be produce more rapidly, achieve wider distribution, and be prepared in a more reviewable format. MMS operating procedures will insure expeditious handling and follow-up. Compliance for Future Facilities It is expected that the entire compliance program will help to ensure the integrity not only of existing POTWs but also of future facilities. As lessons are learned from close examination of the compliance problems of existing POTWs, appropriate changes will be incorporated in the planning, design, and construction of new facilities. Over time, as current problems are corrected and plants are brought into compliance, steps will be taken to prevent compliance problems in the future. The actions which EPA is proposing to ensure the integrity of future facilities can be summarized as the following elements: • Refinement in characterization of influent. • Extension of the start-up program. • Use of a systems approach in the grants program. 42 ------- • Addressing the problems of high flow conditions. In addition to these measures, the implementation of pretreatment programs already required will assist in ensuring compliance at plants affected by industrial wastes. One of the major causes of noncompliance at some plants is that the actual influent is not consistent with that for which the plant was designed, and part of that problem often stems from industrial sources. This can interfere with a plant's operation, including reuse, recycling or disposal of sludges. Effective implementation of the pretreatment program will, by itself, make POTWs easier to operate and more reliable. The following recommendations describe tools which will be made available to states as mechanisms to help ensure a high rate of compliance for future facilities. They are: 1. Municipalities will be encouraged to more thoroughly evaluate the characteristics of their influent to ensure that treatment facilities are matched to the influents and properly sized to accommodate the volume flow. This will obviate many influent and treatment design problems. More specifically, grantees will be encouraged to increase analyses and influent monitoring in Step 1 and Step 2. There will be an emphasis on reliability and operability by focusing on the importance of considering influent constituents and volume flow in the design of POTWs. 2. The start-up program will be extended to ensure that POTWs are able to meet NPDES specifications prior to local municipalities assuming full responsibility for their operation.EPA's intent will be to ensure the operability of POTWs such that they will be in compliance before they come into service. The concern about operability at start-up will include examination of staffing, training of personnel, and initiating operations to provide grantees with a stable, competent operating organization. More specifically, this will include examination of items such as: plant specific training manuals, preventive maintenance programs, training programs for operations and maintenance personnel, and review of the adequacy of user change rates. In cases where it is clear that a POTW will not meet NPDES requirements, the project will not be closed out until corrective actions have been taken. While it is not the intent of EPA to fund necessary corrective steps, in exceptional cases, where it is apparent that a POTW will not be capable of achieving compliance at design loading and is in need of additional funding to expedite corrective action, some limited funding may be considered. However, it is expected that in the vast majority of cases, corrective action for start-up will be a local responsibility. 3. A systems approach will be encouraged in the Construction Grants Process. In order to provide a smooth and orderly transition through the planning, design, construction, and start-up of a POTW and service, use of a project manager will be encouraged. The manager will be an agent of the grantees, most probably a private contractor, whose job it will be to direct and coordinate the activities of all participants through the three Steps of the Construction Grants Program. The manager will take administrative oversight responsibility so that potential compliance problems, which might otherwise remain unseen due to 43 ------- the complexity of the grants process, will be quickly identified and addressed by the municipalities. In this way the managers will aid in the prevention of POTWs coming into service that have compliance problems from their first day of operation. 4. EPA wi11 exami ne and recommend methods to prevent noncompli ance due to high flow condition's^High flow conditions, especially during wet weather, can cause considerable problems for POTWs in their ability to treat the additional volume of water, thereby causing the facility to be out of compliance. A significant effort in reducing high flow volume conditions will be undertaken through modification of the infiltration/ inflow (I/I) program. Excessive I/I is a well-documented, serious compliance problem for some POTWs and the current I/I program has not been effective in controlling the resulting problems. Types of actions which are being examined include: t Allowing funding and development of an acceptable sewer maintenance program as part of the Step 1 process, and t Initiation of a joint effort with offices within EPA (OWPO and ORD) to develop new approaches and technical procedures for I/I. Over time, as the I/I program is reviewed and amended, interim guidelines will be issued by EPA as a bridge between the current and a revised program. Final I/I guidelines will be developed using several avenues to collect information, such as public participation and initiation of a program to further evaluate the effectiveness of both the technical and administrative aspects of the I/I program. The outcome of these efforts will be the development of final guidance for I/I which will be comprehensive in nature covering areas such as: technical change, funding, and enforcement. Compliance at Existing Facilities Improvement of compliance rates in existing facilities is necessarily a complex and time-consuming process. No one individual action will be sufficient to bring all noncomplying POTWs into compliance. Therefore, EPA will institute a compliance strategy for existing POTWs which comprises three principle elements: • Identifying solutions to compliance problems through diagnostic analyses * Developing a technical assistance program for use where needed • Developing an aggressive enforcement program. Each element is examined below. 44 ------- 1. Diagnostics will be utilized where states feel they are appropriate to determine problems causing noncompliance!The lilterrelationship of the many facets of operating a POTW indicates a need for a.comprehensive diagnostics program for some facilities which are out of compliance. Diagnostics will include examination of plants' design characteristics, influent constituents, management systems, financial condition, and operating and maintenance activities. Depending upon individual circumstances, diagnostic reviews could be performed by qualified private-sector firms, state personnel, or other qualified groups. Since diagnostics will be a vital component of determining the types of compliance problems facing certain POTWs, they will be 201 funding eligible with each state deciding which specific POTWs will require diagnostics. Details of the mechanism for funding diagnostics will have to be worked out, since the diagnostics must be completed on a more expedited schedule than the regular grant process would allow. A POTW as a complex system witti any number of potential problem areas. As a result, Lhe diagnostic analysis may occur on any level of detail as required by the particular circumstances. In many cases, the causes of noncompl iance will be readily apparent and only a very limited diagnostic review will be performed. These facilities will then immediately commence with corrective actions. However, for facilities with more complex compliance problems, a full, comprehensive diagnostic analysis might be appropriate. For example, in a complex situation, as a first step, a POTW's operating procedures and design would be reviewed. Areas examined in detail to determine a possible relationship with noncompl iance would include the compatibility of the design with influent conditions, operator training and level of skill, operating procedures for dealing with changing influent conditions, and maintenance procedures. Identification of the primary causes of noncompliance would be followed by an examination of management and financial procedures that may have contributed to noncompliance. Areas such as adequacy of user charges and maintenance expenses would also be examined. The diagnostics will set forth the changes needed in all areas to achieve compliance. In order to make full use of the findings from diagnostics, a composite correction program (CCP) will also be developed which identifies deficiencies contributing to noncompliance. Facilities will then make necessary agreements with states to take the appropriate steps necessary to rectify the problems detailed in the CCPs. These plans will be enforceable agreements committing communities to specific actions and dates. The need to address the complex interrelationships of a plant's operations and financial states can be highlighted through an example: a rate structure that is inadequate to cover operating and maintenance costs could lead to the hiring of a skeletal staff of plant operators with limited experience. That staff might not be able to adequately respond to changes in influent conditions, which could adversely affect a plant's operations, putting it out of compliance. This emphasizes the the need for a comprehensive approach to diagnostics. 2. Technical assistance will be offered by states in accordance with the needs specified in the CCPs. Technical assistance could take many forms, depending on the individual needs of a facility as detailed 45 ------- in the CCPs. Specific types of assistance will be determined through discussions between states and municipalities. However, some categories of assistance which will be offered will include: • General — such as,, tracking of equipment failures leading to published reliability analyses for use by grantees, • Financial—such as, aid in establishing user charge systems which will provide adequate revenue to ensure the financial integrity of the facility, • Technical and operational—such as, advanced operator training programs to familiarize operators with the full capability of equipment and treatment systems, and • Management—such as, aiding facilities in determination of the appropriate staffing levels for technical and nontechnical personnel. In addition to direct technical assistance offered by states for use in meeting CCPs, EPA will encourage facilities to use innovative management techniques such as: • "Circuit rider" programs—Groups of communities will hire experts to assist in specific elements of the grants process such as planning, design and construction, and operation. In this way, several communities will share the cost and benefits of one group of experts. • Financial Guidance Documents--Issued and compiled by EPA, these will contain typical financial data to be used as benchmarks by local systems and states. • Model Financial Management Systems—These documents would describe typical information systems that local systems can use as models in establishing their own financial management systems. In very special cases, the Construction Grants Program may even provide some limited funding of capital-related needs. This will be a "fast track" mechanism for the exceptional case which the Agency believes requires expeditious action based on recommendations in the CCP. Eligibility for this type of funding will be determined on a case-by-case basis. However, it will be extremely limited and, for example, will not be available for correcting noncompliance caused by deficient operations, new industrial flows, or capacity expansion. 3. Implementation of CCPs will be the objective of aggressive enforcement action by states and EPA. Since CCPs contain specific activities necessary to bring individual noncomplying municipalities into compliance along with a timetable for such activities, they are the logical basis for enforcement action. Communities which are recalcitrant in their efforts to achieve compliance will face serious consequences including court action, sewer bans, compulsory third-party management, 46 ------- and absorption of inflated costs of necessary construction due to serious delays by POTWs in implementing CCPs. In order to implement a comprehensive enforcement program, EPA will request from Congress additional authority to issue administrative orders imposing sewer bans and other sanctions in the cases of recalcitrant, non-performing communities. This authority will be utilized in serious cases of recalcitrant communities. In addition, industrial dischargers to POTWs will also face strong enforcement action if they fail to resolutely implement agreed-to pretreatment programs. In this way both municipalities operating POTWs and industrial dischargers to POTWs will have strong and explicit incentives to cooperatively and expeditiously bring facilities into compliance. A result of this type of enforcement program will be a broadening of the scope of the Municipal Management System whereby environmental concerns and not only the size of the facility will be the focus of enforcement efforts. This more comprehensive enforcement coverage will help to ensure the success of a national effort to raise compliance rates for all sized facilities. MANAGEMENT—ROLES IN PROGRAM MANAGEMENT: FEDERAL, STATE. AND LOCAL The preliminary draft 1990 Management Strategy proposes a significant departure from the current management plan. It present a new perspective for the Agency and the delegated states, as each assumes new responsibilities. The Strategy responds to the already changing nature of program management (i.e., delegation), and the movement toward state management of the program. At the same time, it responds to the need to protect national interests and ensure that national objectives are met through systematic monitoring of state program performance. The Strategy represents a realistic image of this changing nature in the program and of EPA's role in managing the transition while ensuring that national goals are satisfied. The preliminary draft 1990 Strategy proposes major changes in the range of activities delegated to states and in the federal role anticipated after delegation. The state will take over the day-to-day operational concerns of the program while EPA will concentrate its efforts on the oversight of state performance and on technical development (e.g., training, R&D). States will be held accountable for the achievement of national program objectives and for the maintenance of program integrity and will have a role in policy development at the national level. In posing these changes, EPA recognizes that the system will be improved, but not perfected. The strategy proposes a more comprehensive form of delegation than is now in effect. It also proposes an oversight role that is keyed to state performance based on program objectives rather than the present procedure-oriented review. Additional changes to technical assistance are also warranted to support the management and technical needs of state staff. 47 ------- The major element of discussion in the management area has centered on the state and federal roles under delegation. The resulting reconmendations are detailed in the sections that follow. The State Will Be the Primary Local Program Manager The key issue here concerns the appropriate role of a federal agency in meeting national program objectives. Under the current concept of delegation, EPA transfers the responsibility for certain project-level processing activities to the states but retains responsibility for a number of project-level decisions, such as the environmental sign-off on projects, the issuance of grant awards, the processing of bid protests, payments and other activities. The proposed roles in the 1990 strategy transfer virtually all these responsibilities to the states. There are three key recommendations in this area. 1. Delegation to the states will be comprehensive and expedited. Under this concept, delegated states will be responsible for managing individual grant projects and for managing the grants program within their states. The states will be given considerable flexibilty in terms of how they choose to administer the program, and will be held accountable for the achievement of the program objectives identified in Chapter II. EPA will delegate all operational responsibilities related to individual projects, including bid protest resolution, minority business enterprises, National Environmental Policy Act determinations and actions, final resolution of audit exceptions, and other currently nondelegable activities. In addition, EPA will delegate grant offers, payments, and other fiscal responsibilities that have been traditionally the responsibility of the federal government. States accepting delegation will have to accept responsibilities for all activities. Partial delegation will not be possible. EPA's goal is to have signed delegation agreements with all states by 1983 and full delegation in all states by 1985. EPA also has a continuing responsibility to assure that environmental integrity is an integral part of the delegated program. In order to fulfill this responsibility, EPA must retain the flexibility necessary to provide assistance to these states on a project-specific basis when appropriate to assure attainment of our national objectives. EPA will develop specific guidelines with state participation for EPA's involvement in projects. It is anticipated that such projects will involve special issues of an environmental, interstate or international nature which are of such significant national concern that they constitute an overriding federal interest. 2. States will be involved in negotiating the next Corps of Engineers agreement including determination of their respective roles. In order to be consistent with the concept of delegation and the need for a single manager, the Corps and the states will be encouraged to -develop a relationship in which the Corps will be responsible to the state for the parts of Steps 2 and 3 that the Corps currently manages.. At a 48 ------- minimum, states will have a role in the next Corps agreement negotiations. 3. The administrative grant mechanism will be reoriented to allow states to fully administer the grant.The existing federal categorical grant made' by EPA to municipalities is inconsistent with the thrust of the preliminary draft 1990 Strategy. Categorical grants direct to the states would be consistent but offer many potential adverse impacts (applicability of federal laws to localities, enabling legislation at the state level, etc.). The recommended option is a grant provided to the municipalities but approved and awarded by the states. Since the states will be making the grants to municipalities under this proposal, some EPA regulations may be amended to cover the EPA-state relationship. The Federal Role Under Delegation Will Be Directed Toward Oversight and Assistance The two recommendations relating to the federal role under delegation concern a proposed oversight framework and the nature of assistance to the states. 1. State-managed programs will be evaluated by EPA based on performance rather than procedures. After initial demonstration that a state is following suggested program requirements, and has developed approved procedures, continued state conformance with program requirements will be generally presumed. Ongoing EPA evaluation of state performance will focus on the adequacy of each state's progress toward the program objectives described in Chapter II and other indicators that provide an early indication of tiate management toward objectives. In addition, specialized monitoring of a limited scope and for a short duration will be performed. State progress toward 1990 program objectives is to be evaluated annually. The specific elements of the proposed program to oversee and evaluate delegated state performance is as follows: • State progress toward program objectives is to be evaluated annually: --States will initially develop an overall strategy (see Planning recommendations for details) to achieve the basic program objectives. The state strategy will include a schedule for the funding and completion of all projects deemed necessary to achieve the objectives and will be negotiated with and certified by EPA. — States will annually submit a report to the appropriate EPA regional office identifying their progress toward the program objectives over the past year and describing their planned progress for the coming year. These documents will be reviewed and approved by EPA in conjunction with the state-EPA agreement process. 49 ------- — Evaluation will focus on state progress toward achievement of goals and the fiscal and managerial integrity of the state program. — In evaluating state performance, the EPA regional office will utilize direct measures of performance such as the number and population of communities meeting BPWTT versus the total number of communities and their population; the number and miles of waterways not meeting fishable/swi rumble goals; and the percentage of projects not meeting scheduled completion dates. --In conjunction with the monitoring program, EPA will maintain a system of incentives and sanctions to ensure that, once each state has accepted full delegation, its performance is sustained and national interests are protected. An effective system rewards good performance; thus, the emphasis in the EPA system will be placed on the positive and incentive side of management. States with well managed programs will be noted to Congress and used as examples. — If, during the course of an evaluation, EPA finds a state's performance is lacking in an area, it will work directly with the state to provide technical or management assistance. In severe cases, or where state performance deteriorates, EPA will request legislative adjustments for the following two authorities: (1) To withold the 2 percent 205(g) monies for use by EPA to administer the program itself through contract, other third parties, or with in-house staff. (2) To terminate or suspend construction grants program assistance to projects in the state until the state performance meets national standards. These sanctions will apply only in cases of severe performance problems and will be based on uniform criteria known to the states in advance. This specific criteria will be developed in conjunction with the state and other officials. During the first year after full delegation to a state, the EPA regional office will monitor state procedures to ensure (1) that the state has understood and implemented the federal program requirements and (2) that only high quality projects capable of compliance with permit requirements are likely to be approved. Every three to five years, EPA will evaluate state procedures relating to the fiscal integrity the grants program. It is proposed that this evaluation be performed by an independent management/accounting firm for the purpose of assuring that each state is making every effort to protect the fiscal integrity of the program. 50 ------- • EPA will conduct periodic program evaluations in selected areas of interest or concern. The purpose of these evaluations will be to determine the effectiveness of particular aspects of the program and to recommend program improvements where appropriate. Examples would be NEPA compliance, evaluations of the effectiveness of the infiltration/inflow program, the public participation process, and the minority business compliance. • EPA regions will conduct limited-term monitoring of state operations and/or procedures under the following circumstances: --If serious questions arise regarding a state's progress toward program objectives. --If significant new program requirements or performance objectives are developed by EPA. --If a state significantly changes its procedures or the conduct of its program. 2. EPA will develop a national program for specialized technical and managerial assistance to delegated states. Assistance is needed in several areas, as delegation and EPA's changing role create a greater dependency on the technical abilities of state and local personnel. The program will focus on technical and managerial areas. This assistance will be provided to states desiring it through the technology transfer program and/or through direct, individualized assistance. In general, technical assistance will include the identification and transfer of information on new and improved technology and innovative information; the identification of knowledge gaps and negotiations for specific research and development to support the program, as well as integrated training programs for state agencies in technically complex program areas and with new initiatives. The technical areas currently targeted for EPA technical assistance include: • Management systems for the grants process. t Operations and management of treatment works. • Innovative and alternative technology. t Pretreatment and sludge management. • Water conservation and energy efficiency. t Financial management. it is anticipated that this expertise will be located in one or perhaps several EPA offices throughout the country, with the EPA regions serving as the link between these offices and the states. The states will be the vehicle for providing assistance to the localities. 51 ------- APPENDIX A LIST OF 1990 ISSUE PAPERS AND DETAILED STRATEGIES Proposed 1990 Strategy for Municipal Wastewater Treatment (1/81) DETAILED STRATEGY PAPERS CONSTITUTING THE PROPOSED 1990 CONSTRUCTION GRANTS STRATEGY 1. Task I Funding Strategy (1/81) 2. Task II: Management Strategy (1/81) 3. Task III: Operations Strategy (1/81) 4. Task IV: Compliance Strategy (1/81) 5. Task V: Planning Strategy (1/81) WORKSHOP MATERIALS 1. Workshop Notebook (11/80) 2. Draft Funding Strategy (11/80) 3. Draft Management Strategy (11/80) 4. Draft Operations Strategy (11/80) 5. Draft Compliance Strategy (11/80) 6. Draft Planning Strategy (11/80) BACKGROUND ISSUE PAPERS I. FUNDING STRATEGY 1. First Concept Paper (2/80) 2. Second Concept Paper (6/80) II. Management Strategy 1. Roles of EPA (6/80) 2. Third Party Management Options for Small Communities (9//0) 3. State Resources Under 205(g) 4. Technical Support Centers (8/80) 5. National Program Management (9/80) 6. Grantee Marketing (8/80) 53 ------- APPENDIX A CONTINUED jerat1ons Strategy 1. Background and Problem Definition Paper on Grants Process (6/80) 2. Small Alternative Wastewater Systems Strategy (5/80) 3. Streamlining Option Papers a. Overview of Option Papers on Streamlining (7/80) b. Certification (7/80) c. Simplification of A/E Procurement Procedures (7/80) d. Economic Incentives for POTW Compliance with Enforceable Schedules (7/00) e. Procedures for Reviewing the Profit Element of Architectural/Engineering Contracts (7/80) f. Regional Authority for Deviation to Title II Regulations (7/80) g. Peer Review (7/80) h. Simplifying Eligibility of Grantee Administration, Legal, and Fiscal Costs (7/80) i. Extended Use of Steps 2 and 3 Grant Awards (7/80) j. Implementation of Attachment 0 to OMB Circular A-102 of the Construction Grants Program (7/80) k. Advance Work on Step 2 (7/80) 4. Facility Planning Process (9/80) 5. Integrated Waste Management (9/80) 6. Innovative and Alternative Program (9/80) 7. Quality Assurance (9/80) 8. Inflow/Infiltration (9/80) 9. Other Federal Laws (9//8) 10. Generic Plans for Small Communities (9/80) IV. Compli ance Strategy 1. Background and Problem Definition Paper on Compliance (7/80) 2. Quality of New Treatment Facilities (10/00) 3. Improving POTW Compliance by Correcting Influent Problems (10/80) 4. Improving Performance of POTWs Through Construction Grants Program (9//0) 5. Improving Compliance at Existing Municipal Treatment Facilities (9/80) 6. Financial Management (9/80) 7. Enforcement Aspects of Compliance (11/80) 8. Compliance--Existing Plants 54 ------- APPENDIX A CONTINUED V. Planning Strategy 1. Water Quality Standards Strategy (9/80) 2. Policy Statement Water Quality Standards Attainability and Upgrading (9/80) 3. Water Monitoring Strategy (9/80) 4. Background Paper on Planning (10/80) 55 ------- APPENDIX B GLOSSARY OF KEY WORDS AND ACRONYMS A/E AJE AST/AWT BAT BPWTT CGP Circuit Riders Col lectors CPM - Architectural and Engineering - Alternative Justifiable Expenditures is a method of allocating the costs of a multiple-purpose project to the individual project purposes. - Advanced Secondary Treatment and Advanced Wastewater Treatment are required where treatment more stringent than secondary treatment is needed. These treatments greatly reduce levels of effluent and are useful for removing pollutants such as phosphorus, ammonia, nitrates, or organic and other substances. - Best Available Technology is defined as a wastewater treatment method for toxic and conventional pollutants that most effectively and economically achieves the effluent standard set for a particular facility. - Best Practicable Wastewater Treatment Technology is a designation given to the minimum secondary level of treatment or whatever higher level of treatment is needed at a specific POTW to achieve the water quality standards there. The water quality standards include a consideration of the technical, economic and environmental feasibility of reaching them. At present, BPWTT requires secondary treatment as a minimum for treatment and discharge of conventional and toxic pollutants. - Construction Grants Program - Circuit riders are government-sponsored technical staff who would be available to a number of treatment plants within a region to aid in the management of a facility or help in the correction of an operational or compliance problem. - Collectors are the part of the sewer system designed to transport wastewater from individual buildings to the main interceptor sewerage lines. New collectors are necessary to correct violations caused by raw discharges and the seepage of waters from septic tanks. - Critical Path Method is a method of operations analysis designed to optimize the time spent on and the costs of any process or operation. This method could be used on the Construction Grants Program to eliminate redundancies in the process and expedite the processing of individual steps. 57 ------- APPENDIX B CONTINUED cso Combined Sewer Overflows are sewer system designs that allow for the bypassing, during high flow periods, of untreated wastes directly into surrounding bodies of water. Monies directed to this category are for the purpose of preventing or controlling this periodic bypassing. CWA - The Clean Water Act (P.L. 92-500) passed in 1972 is the major legislative authorization for many of EPA's water quality initiatives, including the Construction Grants Program. It was amended again in 1977. DMR - Discharge Monitoring Report is a quarterly report filed by all treatment plants to the state or other authority giving the results of effluent quality tests performed during the testing period. The DMR is the method through which compliance with NPDES permits is ascertained. GAO - General Accounting Office GICS - The Grants Information and Control System is an agencywide computer-oriented management system that contains general purpose information on all EPA grant programs, whether the program is administered through EPA headquarters or through the Regions. Hydraulic Overload - Hydraulic overload refers to the state of a treatment facility when incoming flows of wastewater are too large in volume to be adequately handled and treated by the facility. This state may be due to infiltration problems, especially after rain storms or excessive domestic flows, to cite two possible explanations. I/A - Innovative or Alternative. Innovative project designs are those that incorporate new technologies in the treatment process. Alternative project designs, on the other hand, step away from the conventional treatment methods for wastewater and utilize site-specific characteristics which produce new methods of waste treatment; usually alternative projects are most feasible in low density areas. These two types of designs are provided with funding for 85 percent of their eligible project costs by the Construction Grants Program. ICR - Industrial Cost Recovery refers to the plan each facility must develop during the application process, through which industries served by the facility must repay their fair share of the project's capital costs (part of which goes to the U.S. Treasury). However, the clause was postponed by Congress in the 1977 Amendments to the Clean Wat*-*- Act. 58 ------- APPENDIX B CONTINUED I/I Interceptors I PA IWM Land Treatment MGD Needs Categories Needs Survey NEPA - Infiltration/Inflow. Infiltration is ground water entering a sewer system through defective sewer pipes, joints, connections, or manhole walls. Inflow is caused by cross connections from storm sewers and combined sewers, manhole covers, and yards, cellars, and foundation drains. Because of I/I problems, flow greater than the capacity of the treatment plant can result in wastes bypassing the treatment process. - Interceptors are the part of the sewer system designed to transport bulk wastewater from the collector system to the treatment plant. Transmission pumping stations are also part of the interceptor system. - Interagency Personnel Agreements loan EPA experts to the state or local levels for one or two years in order to provide training of personnel and expertise in needed areas. - Integrated Waste Management. The planning, design, and construction of facilities for the treatment and disposal/utilization of all wastes (e.g., municipal solid wastes, hazardous wastes, radioactive waste). - The application of treated wastewater to land surfaces for ultimate disposal either with or without the use of this waste for irrigation purposes. - Millions of gallons per day - Needs Categories are the seven major types of projects funded by the Construction Grants Program. They are: (I) Secondary Treatment; (II) Advanced Secondary Treatment/Advanced Wastewater Treatment; (IIIA) Infiltration/Inflow; (IIIB) Rehabilitation; (IVA) Collectors; (IVB) Interceptors; and (V) CSOs. - The 1978 Needs Survey is a detailed estimate of the costs of construction of all needed publicly owned treatment works in all of the states. This survey was completed in order to provide a basis for the Congressional allotment of funds to the Construction Grants Program. - The National Environmental Policy Act dictates that federal agencies must take into consideration the environmental affects of any proposed actions when making decisions. Its most conspicuous requirement is the preparation of an Environmental Impact Statement for projects with a potential to cause significant environmental impact. 59 ------- APPENDIX B CONTINUED Non-Point Source Programs NPDES O&M Pipeline Pipes POMS and PRMS POTWs Replacement and Rehabilitation Secondary Treatment Set-aside - Non-point source programs are attempts to control pollutants from areawide sources, such as runoff from agricultural and forest lands, runoff from mining and construction, and storm runoff from urban areas. - The National Pollutant Discharge Elimination System is a national permit program designed to control the discharge of pollutants into waterways from all specific point sources including industrial and municipal treatment facilities and commercial activities. It is administered by EPA or an EPA- approved state .agency. The permits are enforceable and must be renewed at least every five years. - Operations and Maintenance - The status of projects that have begun the Construction Grants Process but have not yet completed it is often referred to as "in the pipeline." - Pipes are those project types relating more to the delivery of wastewater to the treatment plant than to the actual treating of the wastewater. Specific categories in the "pipes" class are (IIIB) Rehabilitation, (IVA) Collectors, and (IVB) Interceptors. - Program Operations Memorandum and Program Requirements Memorandum state EPA's interpretation of portions of the CWA and EPA's related policy statements. - Pub! icly owned treatment works is the general term used to refer to all treatment facilities funded under the Construction Grants Program. Replacement and Rehabilitation is the project category name for the correction of structural problems in existing sewer systems. Secondary treatment is the treatment of wastewater by biological methods after primary treatment by sedimentation. A set-aside is the mechanism for specifying the particular amount of money to be used for a particular type of project, such as I/A or rural. 60 ------- APPENDIX B CONTINUED Sludge Management - Sludge management is the management of the disposal of solid waste products from a wastewater treatment plant. SMSAs Step 1 Step 2 Step 3 Step 4 Storrnwater TMDL User charges Standard Metropolitan Statistical Areas are defined by the U.S. Department of Commerce either as one city of 50,000 or more inhabitants or as a city with at least 25,000 inhabitants which, together with contiguous places, has a combined population of 50,000 inhabitants and is for all general purposes considered a single economic and social community. Step 1 of the Construction Grants Program initiates the planning and engineering of a POTW. Often Step 1 is a combination of what has come to be known as a pre-Step 1 and Step 1. Pre-Step 1 planning includes expected costs, work schedules, and project compatability with regional plans. Step 1 itself produces a facility plan which defines the problem, examines alternative solutions, and selects one solution for implementation. Step 2 of CGP develops the detailed plans for the treatment plants based on the facilities plan produced in Step 1. Both technical and administrative requirements must be addressed in the plans along with cost estimates from which bids for construction can be judged. Step 3 of CGP is the combination of Step 3 and post-Step 3. In Step 3 the plant is actually constructed and put into operation. Post-Step 3 involves the final project reviews, reports, and financial audits. Step 4 is the combination of Steps 2 and 3 of the Construction Grants Program. Step 4 grants are awarded to facilities whose total project cost will not amount to over $2 million. Stormwater is water that flows over hard surfaces, such as roads and parking lots, and into municipal drainage systems as a result of rainfall or other precipitation. Total Maximum Daily Loads are the greatest amounts of pollutants that an individual facility may discharge into a body of water on a daily basis. This level is defined in each facility's NPDES permit. User charges are the rates whereby users of the treatment facility are charged for the service so 61 ------- APPENDIX B CONTINUED that all operating and maintenance as well as any capital repayment costs of the facility are collected from the system's users. User charges are usually based on metered water usage. WLA - Waste Load Allocations allocate pollutant loads that may be imposed on a water body by individual dischargers and also help identify point source permit conditions. WQM - Water Quality Management is the attempt to control and manage all factors that affect the quality of a body of water. Included in this is the control of both point and non-point sources of pollutants. WQS - Water Quality Standards are legal designations of the desired use for a given water body and of the water quality criteria appropriate for that use. 62 ------- APPENDIX C MEETINGS, BRIEFINGS, WORK SESSIONS, AND CONFERENCES WITH NUMEROUS PUBLICS INDIVIDUALS ON THE 1990 STRATEGY Meetings, Briefings, and Work Sessions Environmental and Rural Interests, State and Local Government, and Economic Interest Monthly Briefings 1990 Policy Committee Monthly Meetings 1990 EPA Steering Committee Monthly Meetings Association of Metropolitan Sewerage Agencies, Sledge Committee Monthly Briefings and Work Sessions Construction Grants Advisory Group Association of Consulting Engineers Council Environmental Industry Council National Utilities Contractors Association National League of Cities Local Government Work Session and Policy Meeting League of Women Voters National Association of Counties U.S. Conference of Mayors Water and Wastewater Equipment Manufacturers National Food Processors Association American Society of Civil Engineers Building and Construction Trades State of Maryland 201-208 Advisory Committee Management Advisory Group to EPA's Municipal Construction Division Society of the Plastics Industry American Clean Water Association National Council of State Legislators July-December July-December July-December August-December August September September September September October October October October October October November November November November December December December 63 ------- APPENDIX C CONTINUED 1990 National Combined Interest Group December Conference Report-Back ASIWPCA Mid-Winter Meeting January Conferences National Society of Professional Engineers September American Society of Civil Engineers October White House Rural Policy Conference October Water Pollution Control Federation October 1990 National Strategy Workshop November ------- APPENDIX D 1990 National Construction Grants Strategy Workshop November 16-22, 1980 Participants J. Stanley Alexander National Conference of Black Mayors Washington, D.C. Fred Burton Bluefield City Manager West Virginia Warren L. Carter State Water Control Board Virginia Frank Cervi National Assn. Development Org. Colorado Edith Chase League of Women Voters Ohio Ray Chavez New Mexico Water D&S Corporation New Mexico Lee H. dayman Metropolitan Washington Council of Governments Maryland Maurice Dorton Dept of the Metropolitan Council Minnesota Andy Ellicott Water Pollution Control Federation Washington, D.C. Paul Freese Camp, Dresser, McKee, Inc. Maryland Joseph Frisella Frisella Engineering Rhode Island Steve Garman Pensacola City Manager Florida Louis Gilde Campbell Soup, Inc. New Jersey James E. Gutman State Water Quality Advisory Comm. Maryland Mark Hammer University of Nebraska Nebraska Fred Harper Orange County California Sanitation District Ted Heemstra Citizens Advisory Streams Pollution Control Board Indiana Andrew Howarth Rural Community Massachusetts assistance Program Eric Kaston New York City Dept. of Environmental Protection New York William Katz Milwaukee Metropolitan Sewage District Wisconsin Paul B. Kelman Atlanta Regional Georgia Commission Lane Kendig Lake County Planning Illinois D. J. Kirk Environmental Pennsylvania Engineer Ruth Kretschmer Supervisor DuPage County Illinois 65 ------- APPENDIX D CONTINUED 1990 National Construction Grants Strategy Workshop November 16-22, 1980 Participants (Continued) Tex LaRosa Dept. of Water Resources Vermont Susan Lofgren League of Women Voters Arizona W. J. McKee National Society of Professional Engineers Washington, D. C. Tess McNulty League of Women Voters Colorado Bob Nicholson Zimpro, Inc. Wisconsin Jack Odgaard Nebraska Water Resources Assoc. Nebraska Tarn R. Osborne Virginia Water Project Virginia Ervin S. Queen Appalachian Water & Sewer Development Association West Virginia William Reinhard State Office of the Comptroller Tennessee John Scheaffer Scheaffer & Roll in Illinois James P. Schafer Havens & Emerson, Inc. Ohio Wayne Schmidt Michigan United Conservation Clubs Michigan Dale Twachmann Institute of Water Resources Florida Larry Walker Larry Walker Associates California Barbara Webber Natural Resources Indiana Committee John B. Wells, Jr. Water Resources Assistance Corp. Kentucky Clyde Wilber III Greeley & Hansen Washington, D.C. Betty Woodruff League of Women Voters Missouri Kenneth Bartal States Conference on Water Quality Pennsylvania Susan Boyd Concern, Inc. Washington, D. C. Ron Buckhalt National Utility Contractors Assn. Washington, D. C. Gould Charshee, Jr. Regional Planning Council Maryland Fred Cooper Mississippi Institute Mississippi for Small Towns 66 ------- APPENDIX D CONTINUED 1990 National Construction Grants Strategy Workshop November 16-22, 1980 Participants (Continued) Glen Enrich County of Fairfax Public Works Virginia I. B. Ellis W.S. Dickey Co. Kansas Senator Fred Finlinson Utah State Senate Utah John Flynn International Union of Operating Engineers Washington, D.C. Patrick C. Glisson DeKalb County Office of Finance Georgia Edward Graham Washington Surburban Sanitary Comm. Maryland Audrey Jackson League of Women Voters Oregon Lynn Judd University of Wisconsin Wisconsin Charles Kaiser, Jr. Metropolitan St. Louis Sewage District Missouri Charles Kamasaki National Council of La Raza Texas Austan Librach Washington Metropolitan Council of Governments Washington, D.C. Robert McGarry Washington Suburban Sanitary Comm. Maryland Peggy McNeil! Mercer Company Soil District New Jersey Conservation Patricia M. Nesbitt Environmental Consultant Virginia E. J. Newbould National Clay Pipe Institute Washington, D. C. Bob 01t Union Carbide Corporation New York Neal Potter Councilman for Montgomery County Maryland Clem Rastatter The Conservation Foundation Washington, D. C. Merilyn Reeves League of Women Voters Maryland Robert Robinson Michigan Township Assoc. Michigan Samuel H. Sage Sierra Club New York Frederick Schauffler New England Interstate Water Pollution Control Commission Massachusetts 67 ------- APPENDIX D CONTINUED 1990 National Construction Grants Strategy Workshop November 16-22, 1980 Participants (Continued) Garrett Sloan Miami Water Sewer Authority Florida Joel Smith Oklahoma Wildlife Federation Oklahoma Raymond J. Smit National Society of Professional Engineers Michigan John Wander Peat, Marwick, and Mitchel, Inc. Washington, D. C. Joe Waters Heart of Georgia Planning and Development Commission Georgia Laurence Weatherholts National Utilities Contractors Asso. Maryland Calvin E. Weber Westchester County Dept of Health New York John J. Wright Greater Birmingham Association of Home Builders Alabama L. Carl Yates McGoodwin, Williams & Yates, Inc. Arkansas •U.S. GOVERNMENT PRINTING OFFICE: 1981-0-7ZO-016/:>985 68 ------- |