TD746
.U544
xvEPA
United States
Environmental Protection
Agency
Office of Water and Waste
Management
Washington, D.C. 20460
January 1981
1990
PRELIMINARY DRAFT
STRATEGY FOR MUNICIPAL
WASTEWATER TREATMENT
OOOD81100D
-------
PRELIMINARY DRAFT 1990 STRATEGY FOR
MUNICIPAL WASTEWATER TREATMENT
TASK IV - COMPLIANCE STRATEGY
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 waste-
water 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 lb . 1981
U.S. Environmental Protection Agency
Region V, Lbrsry
230 South Dc'<:bo-n Street
Chicago, Illinois GOS04
-------
U,S. Environmental Protection Agency
-------
PREFACE
The proposals presented in the strategy are the result of both a major
effort within the U.S. Environmental Protection Agency and extensive partici-
pation on the part of the interested public through meetings and the distribu-
tion of relevant issue and background papers prepared by EPA.
The 1990 Strategy was prepared under the guidance of Eckardt C. Beck,
Assistant Administrator, Office of Water and Waste Management; James N. Smith,
Associate Assistant Administrator, Office of Water and Waste Management; and
Henry L. Longest II, Deputy Assistant Administrator, Office of Water Program
Operations.
The Chairman of the 1990 Strategy effort within the Agency was Merna Hurd,
Associate Assistant Administrator, Office of Water and Waste Management. The
Deputy Chairman was Carl Reeverts, Office of Water Program Operations.
The Chairman of Task IV - Compliance Strategy was Robert Eagen, Office of
Water Program Operations.
-------
CONTENTS
I. INTRODUCTION 1
II. SUMMARY OF THE PROPOSED COMPLIANCE STRATEGY 3
Strategy to Improve the Quality and Utility
of Compl iance Information 3
Strategy to Improve the Compliance Rate of New
POTWs Constructed with the Aid of the Construction
Grants Program 4
Strategy to Improve Continuing Compliance Rates 4
Strategy to Improve the Compliance Rate of Existing
POTWs 5
III. CURRENT PROGRAM DESCRIPTION 7
Background on Current Program—Legislative Authority ;... 7
Current Enforcement Policies. 9
Current Situation: Data/Grants/Noncompliance 12
Status of Enforcement Activities 17
Del egation to the States 18
IV. AVAILABLE OPTIONS AND RECOMMENDATIONS 23
Options to Improve the Quality and Utility
of Compl iance Information 23
Recommendations to Improve the Quality and Utility
of Compliance Information 25
Options to Improve the Compliance Rates of New Plants
Constructed with the Aid of the Grants Program 26
Recommendation to Improve the Compliance Rate of
New POTWs 39
Options to Improve Continuing Compliance Rates 39
Program Management Roles 52
Recommendation to Improve Continuing Compliance Rates 54
Near-Term Recommendations 55
Long-Term Recommendations 57
Program Management Recommendations 58
Summary of The Recommendations to Provide Financial
Guidance 59
Options to Improve Compliance Rates at Existing POTWs 60
Recommendations to Improve Compliance at Existing POTWs 66
-------
CHAPTER I
INTRODUCTION
Since 1973 the federal government has awarded approximately $30
billion in wastewater treatment facility construction grants. Most
of these grant funds have not yet been converted to functioning
sewage treatment plants, primarily because the average grant-assisted
project requires from seven to nine years to complete. Moreover,
approximately 85% of the completed facilities serve less than 10,000
people. Major grants, categorized generally as standard metropolitan
statistical areas (SMSAs), have not, for the most part, completed
planning, design and construction of facilities needed to satisfy
the enforceable objectives of the Clean Water Act. Smaller
communities, however, have been able to move through the program.
Currently, more than 2300 communities have completed construction
activity and now are confronted by the task of operating and maintaining
totally new or upgraded treatment facilities.
As the expenditure of federal grant funds for the construction of
community wastewater treatment plants increases, and as more of these
facilities are placed in operation, public interest will shift from
construction to the performance of the nation's publicly owned
treatment works (POTWs). Numerous studies (1,2,3,4) of municipal
wastewater treatment plants throughout the country have determined
that a significant percentage of these facilities are not meeting
the minimum effluent quality requirements of their National Pollutant
Discharge Elimination System (NPDES) permits. Although the
numbers differ somewhat from study to study, it is clear there
are widespread performance problems. Depending on the criteria
applied, between 30 and 50 percent of the nation's POTWs are
signficantly out of compliance with their NPDES effluent
quality limits, thus failing to yield anticipated water quality
benefits.
Obviously, these facilities represent a major public investment in
pollution abatement which is not producing the anticipated results. This
paper examines the POTW performance problem and discusses options which
EPA and States can pursue to improve the compliance rate of municipal
wastewater treatment facilities. More detailed discussions of these issues
are available in the issue papers which were produced in the earlier stages
of Task IV.
-------
This strategy paper evaluates options available to EPA and the
States to improve the performance of POTWs. Information presented
is drawn from representatives of all levels of government and segments
of the private sector involved in the planning, design, construction,
management and operation of wastewater treatment plants. The proposed
strategy should not be construed as EPA policy, but rather as an
intermediate stage in the adoption of a compliance strategy to pursue
in the next decade. It is intended to elicit comment from interested
parties and reflects the influence of those who have reviewed earlier
issue papers.
-------
CHAPTER II
SUMMARY OF THE PROPOSED COMPLIANCE STRATEGY
The Clean Water Act of 1972, as amended in 1977 and 1980, incorporates
the construction grants program as the primary means of reducing pollutants
discharged from municipal sewerage systems. The publicly owned treatment
works (POTWs) constructed with the assistance of the construction grants
program can achieve the applicable goals of the Act only if they
produce effluents that meet the quality requirements set in their
National Pollutant Discharge Elimination System (NPDES) permits which
govern their operation.
During the early years following the passage of the Clean Water Act,
the primary objective of the construction grants program was to initiate
action necessary to the construction of the required facilities. As the
numbers of POTWs completed increases, it is evident that greater emphasis
must be placed on the performance of these facilities once they are
completed. The 1990 Construction Grants Strategy recognizes this need
and includes a compliance strategy as one of the five major areas of
concern in the overall strategy. This Compliance Strategy attempts
to formulate a sound, practical program which, with the cooperation of
State and local government agencies, will produce improved POTW
compliance rates.
The major recommendations of the compliance strategy are summarized
below:
STRATEGY TO IMPROVE THE QUALITY AND UTILITY
OF COMPLIANCE INFORMATION
EPA presently lacks sufficient information on the performance of the
POTWs constructed with the aid of the construction grants program. Improved
compliance information will enable EPA and the States to better evaluate
the program and to modify it to increase water quality benefits.
1 . The Office of Water Program Operations and the Office of
Enforcement will establish a national compliance data
management system which summarizes self-monitoring data
submitted by POTWs. This system must be coordinated with
State pollution control agencies and cross-referenced with
the Grants Information and Control System (GIGS) to provide
full utilization of the data.
2. EPA will establish requirements for quality control activities
to be performed by the States to improve the quality of the
POTW self-monitoring data.
-------
STRATEGY TO IMPROVE THE COMPLIANCE RATE OF NEW POTWs CONSTRUCTED
WITH THE AID OF THE CONSTRUCTION GRANTS PROGRAM
It*'i« imperative that greater consideration be given to the
perfoi^nance of POTWs during the planning, design and construction of
these"facilities. The following actions are intended to improve the
quality of facilities constructed with the aid of the grants program
and to better equip the POTWs to manage, operate and maintain these
facilities:
1. Encourage the application of the systems approach to the
construction grants process.
2. Strengthen implementation of pretreatment programs to prevent
industrial wastes from degrading POTW effluent quality or
jeopardizing sludge disposal options, particularly where
effluent or sludge reuse alternatives are selected.
3. Modify the Inflow/Infiltration program to reflect the experience
gained in earlier projects.
4. Investigate the feasibility of modifying NPDES effluent quality
requirements for wet-weather conditions at POTWs experiencing
severe I/I problems. This activity will be a part of the
development of a strategy to deal with combined sewer
overflows and stormwater.
5. Modify the definition of secondary treatment to allow the use
of proven biological processes which do not satisfy existing
secondary requirements but which offer benefits such as low
energy requirements, process stability, and/or lower operator
skill requirements. Use of these processes would be limited to
applications which would not adversely affect water quality.
6.
Provide an improved mechanism for the immediate correction
of facility problems if a POTW fails to achieve compliance
during startup, or if it is apparent that it will not be
capable of achieving compliance at design loading.
STRATEGY TO IMPROVE CONTINUING COMPLIANCE RATES
Once a POTW is constructed and sucessfully started up in compliance
with NPDES permit requirements, it is essential that the operating agency
take all measures necessary to assure that the facility continues to meet
effluent standards. Unless the agency applies sound management practices
to the operation and maintenance of the POTW, the public investment in
clean water could be lost within a short time of startup. The following
recommendations form the basis of a strategy to maintain POTWs in compliance
after startup:
-------
1. Provide grantees with financial management assistance.
2. Encourage the establishment of self-sufficient enterprise,
or utility-type organizations.
3. Provide increased operator training assistance to the States.
4. Establish a POTW management assistance program for small
communities.
STRATEGY TO IMPROVE THE COMPLIANCE RATE OF EXISTING POTWs
As more POTWs are constructed with the aid of the grants program,
it is increasingly obvious that EPA must formulate a strategy to address
those POTWs which have completed construction but are not achieving the
effluent quality required by their NPDES permits. Although the quality
of available data is not fully satisfactory, there can be no question
that remedial action is required at many POTWs on final NPDES standards.
The following recommendations address this need:
1. Fund diagnostic evaluations of noncomplying POTWs and use
the recommendations of these evaluations as the basis of
enforcement action by the States or EPA.
2. Fund limited remedial construction necessary to correct
deficiencies causing noncompliance at grant funded facilities.
3. Require and assist recipients of remedial construction grants
to take legal action against negligent firms as a condition
of grant acceptance.
Implementation of these recommendations by EPA and the States, in
cooperation with local government agencies, will improve the quality and the
performance of facilities produced with the assistance of the construction
grants program, thus yielding increased benefits to the public and greater
environmental protection.
-------
CHAPTER III
CURRENT PROGRAM DESCRIPTION
BACKGROUND ON CURRENT PROGRAM - LEGISLATIVE AUTHORITY
The present construction grants program is authorized by the Federal Water
Pollution Control Act (Clean Water Act) as amended in 1977. The 1977 Act,
Public Law 95-217 made significant changes to its preceding act, the Clean
Water Act of 1972 (PL-92-500). The 1972 Act provided the legislative basis
for the present construction grants program.
The 1977 Act contains two national goals which were intended to provide
a timetable for restoration and maintenance of the nation's waterways:
0 By 1985 the discharge of pollutants to navigable waters be
stopped.
t By July 1, 1983 (wherever attainable) an interim goal of water
quality that provides for the protection and propagation of
fish, shellfish and wildlife and provides for recreation in
and on the water, be achieved.
In order to carry out the national goals a number of incentives and
penalties were established. Specifically, the following sections shaped
the present program:
Title II - Grants for Construction of Treatment Works
• Section 201 authorizes the granting of federal monies for
construction of treatment works.
t "Section 204 - Limitations and Conditions" provides that no
201 grants be approved unless:
The applicant adopts a user charge system that assures
each user will pay a proportionate share of the costs of
operation, maintenance, and replacement of the system.
The applicant has the legal, institutional, managerial
and, financial capability to ensure adequate construction,
operation, and maintenance of the treatment works.
The applicant has made provision for the industrial users
of the system to pay the applicant for the federal share
of the cost of construction attributed to the treatment
of such industrial wastes (Industrial Cost Recovery).
-------
The last provision of ICR was repealed by Senate Bill
#2725 as passed by the Congress on October 1, 1980, along
with repeal of federal funds for the treatment of
industrial flows in excess of 50,000 gallons per day.
Congress did not prohibit industry from using municipal
facilities. In fact, planning and designs to accommodate
industrial flows are still grant eligible. Industries
and local governments now, however, most jointly develop
programs for raising funds to construct industrial capacity.
Title III - Effluent Limitations
• "Section 301, Standards and Enforcement," makes possible
extensions of permit compliance deadlines under paragraph (i)(l)
if construction is necessary at a POTW but the funds or time are
not available for the construction to be completed. Under this
provision, interim effluent limits can be set but the construction
must be completed by July 1, 1983. This provision was the basis
of the Municipal Management System undertaken by the Office of
Water Enforcement.
• "Section 307, Pretreatment" of industrial wastes sent to muni-
cipal facilities, provides that municipalities shall require
industrial users to remove toxic elements from discharges to
POTW to the extent required by local sludge disposal programs
and the POTW's capability to treat and prevent toxics from
entering the nation's waters.
t "Section 309, Federal Enforcement" contains specific penalties
to be used in the case of violations. Included are provisions
for:
Administrative orders which seek correction of a specific
problem with a deadline generally less than 30 days.
The State in which a municipality is located shall be
joined as a party to any civil action brought against
the municipality by the U.S. Should the municipality
be prevented from raising revenue (by State law), the
State shall be liable for payment of any judgement against
the municipality.
Title IV - Permits and Licenses
r Section 402 establishes a National Pollutant Discharge
Elimination System (NPDES) to issue permits for discharge
to navigable waters. Under the system the State submits
a permit program to the Administrator for approval.
After approval the State may administer the program and
issue the permits.
-------
• Section 402(h) provides for restriction or prohibition of
new connections to a treatment works that violates its NPDES
permit. This adds the moratorium as an enforcement tool
against noncompliant municipalities.
t Section 405 encourages reuse of sludge and the development
of pretreatment programs compatible with sludge reuse programs.
CURRENT ENFORCEMENT POLICIES
The current enforcement policies of EPA can be found in the
National Municipal Policy and Strategy (NMPS) published by the Office
of Water Enforcement in October 1979. This document was followed by
the Municipal Management System published in March 1980 which provided
guidance in implementing the NMPS.
Municipal Enforcement Strategy
• The current definition of non-compliance is failure (generally
a consistent failure) to achieve NPDES permit quality limitations
imposed on the plants effluent. The definition does not lend
itself to a classification or grading system of violation but
the terms "serious" or "minor" are used to quantify noncompliance.
t The National Municipal Policy and Strategy is an effort to
obtain national POTW compliance with the minimum secondary
standard deadline of July 1, 1977. Since 60% of the nations
POTWs did not meet the deadline, a program of correction is
necessary. In addition, a large percentage of treatment plants
cannot meet their NPDES permit limits. By correcting the
"non-compliance" with the secondary deadline the NMPS hopes
to improve the NPDES compliance also. The NMPS established
six categories of POTW compliance:
CATEGORY I POTWs that need construction comply; did
not significantly contribute to the delay in
construction; construction grant funding is or
will be available to assist in complying; and
can complete construction by the 1983 deadline.
CATEGORY II POTWs that need construction to comply; did
not significantly contribute to the delay in
construction; construction grant funding
through Step 3 is available to assist in
complying; but cannot complete construction
by the 1983 deadline.
-------
CATEGORY III
CATEGORY IV
CATEGORY V
CATEGORY VI
POTWs that need construction to comply; did
not significantly contribute to the delay in
construction; for which construction grant
funding through Step 3 does not appear to be
available by July 1, 1983, and consequently,
may not complete construction by the 1983
deadline.
POTWs that need construction to comply and are
causing significant public health or pollution
problems, but due to lack of position on pro-
ject priority lists, may require judicial
action to assure prompt achievement of NPDES
permit requirements.
POTWs that have completed construction and
are not meeting effluent limitations or other
NPDES requirements.
POTWs that need construction to comply and
did not significantly contribute to the delay
in construction.
Through construction grants, permit modification (Section 301(h),
authorizes five-year secondary treatment waivers for "no harm"
discharges to marine waters), permit extension (301(i)) and
enforcement action the NMPS forces all POTWs into a compliance
schedule.
Current Penalties and Priorities
As seen from the categories of POTWs contained in the NMPS, plants
with and without construction grants are treated differently. Also
treated differently are plants which have completed construction and
do not comply - they are targeted for enforcement action.
The NMPS and the Municipal Management System (MMS) have singled out
major facilities for enforcement priority. Since these facilities are
normally associated with significant pollution problems, they are to be
corrected as soon as possible.
The MMS contains a penalty or enforcement response guide for major
permitees which contains sanctions for reporting, compliance schedule
and effluent violations. The severity of the actions taken are usually
tied to the number of times the violations has taken place and the
effect of the violation. The majority of the enforcement actions
recommended involve notices of noncompliance, grant related actions
and administrative orders. The effectiveness of these methods is limited
10
-------
Pretreatment Policies/Penalties
The national municipal pretreatment program is concentrating on the
problem of industrial wastes in POTWs on three fronts:
• Section 301(b)(2)(A)(ii) of the Clean Water Act requires that
all industrial users of POTWs be in compliance with national
pretreatment standards no later than 3 years after such
standards have been established.
• Pretreatment requirements are to be tied to a POTWs NPDES
permit setting a date by which a program must be developed.
• The construction grants program contains regulations which
prohibit grant awards (Step 2-Design after June 30, 1980;
Step 3-after December 31, 1980) and payments (no more than
90% of a Step 3 or 2+3 grant after October 1, 1978) if a
pretreatment program is not being developed.
With this segmented procedure and the delay in providing national
categorical standards for many industries, there has been confusion and
reluctance to act on the part of municipalities, industries and State
officials. The publishing of a Pretreatment Program Guidance Package
on September 23, 1980, by the Municipal Construction Division should
help correct the situation.
Categorical standards represent an attempt by EPA to limit pollutants
from specific industries which have historically caused water quality
problems. These include industries such as metal plating, tanneries,
petrochemical production, etc., that discharge substances that are
harmful to the biological systems of POTWs (oils, fats, toxic metals,
etc.) Since these industries regularly produce biologically toxic
substances they have been singled-out for action as a protective precaution.
The setting of these standards has been a time consuming job for
the agency. The industries affected have not always been involved to
the greatest extent possible and, therefore, many industries have
challenged the standards. The challenges and subsequent discussion have
caused further delay.
Since the pretreatment program is tied into construction grant
regulations and NPDES permit requirements, some of the same enforcement
tools used in the NMPS can be applied to pretreatment noncompliance. An
important difference is the added sanctions given in the case where Step 2
or Step 3 funding has not been obtained. No new grants may be made after
December 31, 1980, without the grantee starting a pretreatment program. With
most new POTW construction being funded by construction grants, this represents
a powerful penalty.
11
-------
CURRENT SITUATION: DATA/GRANTS/NONCOMPLIANCE
Data Information Systems - ADP
At present several EPA systems exist independently which contain
POTW information:
• PCS - Permit Compliance System - contains facility inspection
reports, compliance schedule events and discharge monitoring
report (DMR) data.
t 6ICS - Grants Information and Control System - contains grant
tracking: grant dollars, project description, target dates
for the municipal construction grants program.
• NEEDS - Contains Construction Grants Needs Survey data with
costs and categories of needs.
• Also available is a limited amount of EPA Form 7500-5 Operation
and Maintenance Inspection data.
The fragmented state of the ADP systems at EPA makes information
retrieval difficult at best. Ironically, one reason ADP is used is to
facilitate access to a large quantity of data.
One of the tasks presented in the municipal management strategy is
integration of the EPA data bases containing municipal treatment works
information. Specifically the PCS and GICS are to be combined or cross
referenced so that grant schedules and permit compliance schedules can
be coordinated. Progress on this subject has been very slow.
In short, EPA's present compliance data management system cannot
produce the type of management information necessary to adequately
characterize POTW performance. Furthermore, since compliance data
cannot be readily cross-linked with grants data, the grants program
lacks the capability to adequately assess performance of POTWs con-
structed with the aid of the grants program.
Status of Grant Project Completion vs. Needs
As of October 1980, the following construction grant project
information is available:
• Active Step 3 construction grants - 6,268 representing 24.925
billion dollars.
• Active Step 4 grants (design and construction) - 783 repre-
senting 850.8 million dollars.
• 8,846 PL-92-500 projects have been completed representing
4.106 billion dollars (2,183 Step 3 projects - $3.065 billion;
156 Step 4 - $233.1 million).
• 31.58 billion dollars has been appropriated for the program
(PL-92-500 and subsequent).
12
-------
The following is a summary of the 1978 Needs Survey:
Needs Category 1978 Survey
(in Billions)
I (Secondary Treatment) 15.09
II (More Stringent Treatment)
A. Secondary levels (11.0)
B. Advanced Secondary (6.8)
C. Advanced Treatment (2.7)
Total Category II 20.51
III-A (Infiltration/Inflow) 2.44
III-B (Replacement and/or Rehabilitation) 4.88
IV-A (New Collector Sewers) 19.02
IV-B (New Interceptor Sewers) 18.47
V (Combined Sewer Overflow) 25.74
Total I - V 106.15
VI (Control of Stormwater 61.67
Total I - VI 167.82
Since congressional allocations for the program are running between
3 and 4 billion dollars a year, the program cannot expect to satisfy
even the 1978 Needs. Because of population and urbanization increase
the Needs projection is used primarily to assess the backlog of program
funding deficiency.
Status of POTW Noncompliance
Currently EPA's construction grant and enforcement data management
systems are not capable of displaying compliance profiles for all
existing major and minor publicly owned treatment plants.
Since 1972, the Agency has used its data management resources to track
grant activity and new construction. The existing data system does not adequately
determine and assess continuing compliance. The current emphasis for data
management reflects the Agency's past enforcement and municipal management
strategy.
13
-------
Many of the 33 States administering the NPDES program periodically
compile statistics on POTW compliance.
The methods used and objectives associated with gathering contin-
uous compliance information differ among the States, and EPA Regional
interest in reviewing compliance information varies. In the future
regular, uniform compliance information should be generated by the
States for use by Congress, EPA, and State agencies. Such information
would be useful for determining funding and enforcement priorities.
Before an integrated data management system can be developed, however,
agreement must be reached on several issues, including:
• An acceptable classification system for major and minor
discharges;
• Methods for distinguishing between significant and insignifi-
cant permit violations;
• A universal classification system and manifest system for
industrial users;
• A system for ranking discharge permit noncompliance that is
keyed to displaying water quality impacts;
• The need for reporting financial and management information
related to POTW budgets, staffing, maintenance and rehabilitation.
Nationally, failure to achieve continuous compliance appears to be
a significant problem for POTWs. Recent studies indicate permit non-
compliance will continue to be a problem. Generally, continous noncom-
pliance is not attributable to a single cause, but is the result of
several factors, all of which must be coordinated to secure successful
POTW operations. A recent study of 180 major POTWs conducted by Energy
and Environmental Analysis, Inc., found, for example:
• 64 percent of the noncompliance cases involved influent
problems (infiltration, inflow, and industrial waste flows
were the prevalent cause);
• 49 percent of the cases involved design, construction and
equipment flows;
• 20 percent of the cases involved poor insufficient operations,
maintenance, management procedures or staff.
Although the percentages vary, the above findings are supported by
similar studies conducted by EPA, as well as independent program reviews
conducted by the General Accounting Office. Moreover, all reviews of
noncompliance have reached the same conclusion: in more cases than not,
14
-------
noncompliance is the result of several factors, but the probability of
noncompliance can be reduced if operations costs, staffing, operator training,
influent characteristics and POTW budgets are adequately considered as treatment
systems are designed, equipment is selected, and construction proceeds.
Many of the noncompliance reviews completed indicate influent
characteristics, as well as a grantee's ability to operate and manage a
new sewage treatment plant, are not adequately considered during the
facilities planning process. For example, GAO found in a recent review
of small community treatment systems that installed technologies were
often too complex, requiring skills and revenues that could not be
provided by the operating agencies. In many of the small community
cases examined, GAO found grantee capability was inadequately considered
during facility design, and uniformed grantees failed to question the
need for costly or inadequately sized treatment units advocated by their •
design engineers.
Another study, also completed by GAO, found in many instances
inadequate controls on industrial influent caused significant noncom-
pliance. GAO found numerous cases where industrial users either failed
to adequately characterize wastes and flows prior to system design, or
radically changed production processes once the POTW was placed in
operation, thus altering influent profiles originally used to develop
the treatment processes.
GAO and others also found failure to adequately consider operating
costs and a grantee's capability to raise needed revenues often contributes
to noncompliance.
In some cases user charge cost estimates developed early in the
facility planning process were far below actual operations costs. In
other cases anticipated growth needed to defray fixed costs associated
with reserve capacity did not occur, thus maintaining higher than
projected costs for existing users and restricting POTW management's
ability to secure approval of rate increases as needed. Industrial
plant closures, relocations, or changes in product and need for treat-
ment services also have been identified as causes for noncompliance,
particularly in communities with signficant individual users and a
stable population. Fixed cost associated with the new "reserve"
capacity must be distributed among remaining users, thus elevating per
capita costs to levels which often are not acceptable.
Financial Management
The area of fiscal management of a POTW and how it impacts non-
compliance is just now receiving attention. In recent articles (July
1980, May 1979) the Journal of the Water Pollution Control Federation
has pointed out fiscal self sufficiency as an area of concern for
municipalities in the 1980's. With decreasing federal involvement,
15
-------
inflation, eroding State financial resources, and taxpayer revolt, the
local governments are faced with tighter financial restrictions which
they must balance with good O&M and adequate wastewater treatment
budgeting.
The federal involvement in fiscal management at the local level has
been deliberately minimized,. The only specific requirements in the
Clean Water Act involve:
• A construction grants applicant must have sufficient legal and
financial capability to insure adequate construction, opera-
tion and maintenance of the treatment works.
• An applicant must adopt a user charge system that assures that
each user will pay a proportionate share of the costs of
operation, maintenance and replacement of the system.
EPA and State reviews of financial capability determine primarily
whether a grantee has legal authority to charge users and raise construc-
tion funds through bond issues or other mechanisms. The user charge
system is created and approved during design or construction of the
facility and represents a "best guess" of the costs of O&M and replace-
ment. State and federal reviews do not determine the adequacy of POTW
operating budgets. Instead, the user charge review determines only if
each class of user (industrial, residential or commercial) is assigned a
rate coefficient proportional to demand for treatment services.
Replacement as defined by EPA regulations is an expenditure "for obtaining
and installing equipment, accessories, or appurtenances which are neces-
sary to maintain the capacity and performance during the service life of
the treatment works for which such works were designed and constructed."
This definition excludes costs associated with replacing the plant after
its design life is over, expanding the system, or upgrading treatment
capabilities. With this type system the municipality is destined to
remain dependent on the federal government for new construction and
major upgrading.
Given the large federal liability for satisfying unmet treatment
needs (approximately $80 billion), it appears unlikely that munici-
palities will receive federal grants for system expansions, future
rehabilitation, and process improvements. The Water Act does provide
that grantees should raise sufficient revenues to operate and maintain
their POTWs in compliance with discharge permits. Currently national
user charge revenues are estimated to be $46 billion annually. POTW
operating revenues, based on increasing the current federal investment
from $30 billion to $70 billion by 1990, must increase to approximately
$30 billion to assure adequate operation, maintenance and expansion of
municipal treatment capability. It appears, however, that without
significant changes at the local level, revenues needed to maintain
newly constructed facilities will not be available. The record for
existing POTWs indicates that current operations, maintenance and
replacement revenues fall short of needs. Unless this trend is reversed,
16
-------
maintenance of treatment facilities now put in place is likely to be
deferred, necessitating massive future investments if water quality
is to be maintained. It appears a joint federal-State effort to assist
municipalities in developing user charge and treatment system financial
management programs, and periodically review POTW operating budgets is
warranted. The effort for new facilities should involve identification,
during the preliminary planning, of domestic and industrial revenue
sources, actual and anticipated. This information would assist the
grantee in selecting treatment alternatives, assessing operating
capability, designating services areas, and developing financial
profiles necessary for securing local construction funds.
The effort for upgraded, one-line facilities should involve
preventive maintenance scheduling, review of service agreements,
assessment of existing charges and schedules for r"ate increases,
and the development of revenue sources for capacity expansions or
significant future upgrades.
Under current program conditions, municipalities are "conditioned"
to expect POTW replacement funds from federal programs. Consequently,
unless some fundamental financial management changes are made, the
long term outlook for continual compliance, with decreasing federal
participation, is bleak.
STATUS OF ENFORCEMENT ACTIVITIES
Implementation of the Municipal Strategy
The Municipal Management System (MMS) is the implementation process
for the national municipal policy and strategy. The operation of the MMS
is currently being phased in. Headquarters evaluation of the MMS
operation is scheduled for January 1981.
Federal Court Orders
Under the current policies of enforcement, municipal strategy has
been focused on plants to be constructed. The anticipated large increase
in court cases has as yet failed to materialize:
• 1978 - Six federal court orders
• 1980 - 28 federal court orders against plants under
construction
17
-------
Other EPA Enforcement Actions under the Water Pollution Control Act
1977 1978
Type of Action Non- Municipal Non- Municipal
municipal municipal
Administrative
Order 354 265 436 556
Referral to the
Department of
Justice 88 20 107 26
Source: Information supplied by U.S. Environmental Protection
Agency, Office of Water Enforcement.
Although EPA's enforcement resources are shifting toward POTWs which
are not meeting effluent quality requirements, the agency's enforcement
.capabilities are of necessity limited to the most serious violators among
the nation's more than 18,000 POTWs. Clearly, other measures are
necessary to supplement existing federal enforcement programs if POTW
compliance rates are to improve.
DELEGATION TO THE STATES
In accordance with the 1977 amendments to the Clean Water Act, EPA
is actively engaged in the transfer of the operation of the construction
grants program to the States. Delegation of the NPDES permit program
has been in progress since 1972, when the Act was first passed. The
following table shows the status of NPDES and 205(g) construction
grant delegation.
At present, 33 States have been delegated permitting authority,
37 states have assumed a significant portion of the administration of
the construction grants program (see Figure III.I). While slightly more
States have obtained 205(g) delegation than NPDES delegation, the differences
become significant when it is realized that the NPDES delegation was
presented in the 1972 Act but the 205(g) delegation did not come
into existence until the 1977 Amendments.
The obvious explanation for the difference is the incentives
provided for 205(g) delegation. After October 1, 1977 a State may
receive up to 2% of its construction grants allocation (or $400,000, which-
ever is greater) each year to administer the construction grants program
in the State. This monetary incentive, together with the States opportunity
to "run its own show", make the construction grants delegation attractive
to State governments.
18
-------
Figure III.l
NPDES AND CONSTRUCTION GRANTS PROGRAM DELEGATION
REGION STATE NPDES Delegation 205(g) Delegation
I
II
III
IV
V
VI
VII
Maine
New Hampshire
Vermont
Massachusetts
Connecticut
Rhode Island
New York
New Jersey
Virgin Islands
Puerto Rico
Pennsylvania
West Virginia
Virginia
Maryland
Delaware
North Carolina
South Carol ina
Kentucky
Tennessee
Georgia
Alabama
Mississippi
Florida
Wisconsin
Minnesota
1 1 1 i no i s
Indiana
Ohio
Michigan
New Mexico
Texas
Oklahoma
Arkansas
Louisiana
Nebraska
Iowa
Kansas
Missouri
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
19
-------
FIGURE III.l CONTINUED
REGION STATE NPDES Delegation 205(q) Delegation
VIII Montana X X
North Dakota X X
South Dakota X
Wyomi ng X X
Utah X
Colorado X X
IX California X X
Nevada X
Arizona X
Guam
Hawaii X
X Oregon X
Idaho X
Washington X X
Alaska X
20
-------
One of the provisions of Senate bill #2725, passed by the Congress on
October 1, 1980, allows the State management assistance grant (for 205(g)
delegation) to be based on the authorized construction grant fund amount rather
than the allocated amount. This was changed because the Congress has been reducing
the allocation for the program year after year. If this situation was to continue,
the States would be faced with dwindling program budgets to support their delegation
staffs. More stable state programs should result from the change.
The delegation program, however, also has run into problems. Those States
assuming responsibility for managing construction activity have experienced budget
constraints, hiring freezes, and high rates of staff turnover. Moreover, the
volume of grant activity has forced delegated States as well as EPA to focus on
new construction as opposed to assuring continuous compliance at recently constructed
facilities.
Recently, Congress approved changes to the Water Act which permit the agency
to base 205(g) awards on program authorizations as opposed to appropriations. This
change will enable the agency to substantially increase State management grants,
but it in no way removes internal State restrictions on personnel. Without adequate,
qualified staffs the States will be unable to address continuous compliance and
will be pressed to adequately oversee construction, design and planning activity
for the approximately 11,487 grant projects now in the system. The potential for
management problems at the State level could increase in the near future as major
grantees move through facilities planning into design and construction. In the
near future State staffs will be pressed to manage their workload. Over the long
run, if States increase staff capability, State revenue sources will have to be
secured because the federal 205(g) management grants could become inadequate.
21
-------
CHAPTER IV
AVAILABLE OPTIONS
AND RECOMMENDATIONS
Chapter III, in describing the existing compliance situation and the
EPA programs which affect POTW compliance rates, raises several issues:
• The quality of EPA's compliance data management system
t The compliance rate of new POTSs constructed with the
aid of the grant program
• The compliance rate of POTWs which have gone through the
grants process and are now on line
t POTW financial management capabilities
• POTW staffing needs.
This section of the strategy paper discusses options EPA might employ
to improve POTW compliance rates.
The issue papers which have been written as a part of Task IV have
discussed a great many options which EPA might employ to improve POTW
compliance. In addition, other options have come to light in comments responding
to the issue papers or from other sources. These options represent a wide
variety of actions, and some are in conflict with others. Some would require
legislative action to implement, while others require only administrative
action. Many of these options are discussed below. For greater detail, the
reader should refer to the Task IV issue papers.
OPTIONS TO IMPROVE THE QUALITY AND UTILITY
OF COMPLIANCE INFORMATION
One of the difficulties encountered in an attempt to formulate an EPA
strategy to improve POTS compliance rates is the scarcity of high quality
compliance data. Although essentially every POTW in the country is required
to submit standardized quarterly self-monitoring reports on plant performance,
there is no coordinated national data management system to enable the Agency
to effectively utilize the information contained in these Discharge Monitoring
Reports (DMRs). Furthermore, although the DMRs report self-monitoring data,
there is no systematic means of insuring that the information in these reports
is accurate. In fact, the limited efforts which have been made by EPA to
evaluate the quality control capabilities of POTWs indicate that there is a
strong probability that DMR data accuracy is not good.
23
-------
Presently, only the DMR data submitted by major (flows greater than 1
mgd) POTWs is included in a national data processing system. Because of the
lack of standardized procedures at various State and EPA Regional offices,
this information is of limited value in assessing POTW performance. EPA's
office of Enforcement is presently implementing a new system called Permit
Compliance System II (PCS II), which should improve the present situation
somewhat. However, there is little activity now underway to improve the
quality of DMR data. The options listed below are designed to improve EPA's
ability to evaluate the performance of the nation's POTWs.
Option 1
Establish a national POTW performance information system which would summarize
self-monitoring effluent data submitted in the quaterly Discharge Monitoring
Reports (DMR's) and utilize existing cross-links between enforcement and grants
information files to examine the relationship between performance and location,
type of treatment, capacity, flow, etc.
The system would feature a POTW performance index assigning a numerical
index to each facility based on the frequency and magnitude of permit violations
Composite indices would be calculated for various groups of plants (e.g., types
of treatment, location, capacity, etc.). Concise reports would be issued
quarterly, allowing readers to quickly evaluate the performance of the nation's
POTW's.
Although setting the criteria for these degrees of noncompliance involves
the exercise of professional judgement, once the criteria are accepted, classi-
fication of a given POTW's compliance status can easily be accomplished by a
computer program which surveys data from DMR's/ A five-point performance index
is suggested:
Effluent quality Performance index
compliance with NPDES effluent limits 5
insignificant noncompliance 4
minor noncompliance 3
significant noncompliance 2
serious noncompliance 1
Such a system would provide a more meaningful gauge of the performance
of POTW's than is now available. In addition to providing a yardstick to
evaluate the effectiveness of the construction grants program, the system
would serve as a means of setting priorities for enforcement actions taken
by EPA and the States. It would also identify problem areas, thereby serving
as an aid to the formulation of corrective programs and policies.
24
-------
Although the system would overlap with systems now in service in some
States, it would provide most States and EPA with valuable information not
presently available.
Option 2
Increase surveillance and analysis efforts by EPA and the States to improve
the reliability of DMR data.
Although this is a resource intensive activity, it is essential if the
DMRs are to have any utility as indicators of POTW compliance. EPA has developed
a procedure called the Performance Audit Inspection (PAI), which is designed
to evaluate the quality control capability of POTWs. PAIs must be conducted
on a continuing basis to achieve an acceptable level of self-monitoring data
quality. The delegated States would perform the vast majority of PAIs. EPA's
role would be that of setting minimum requirements for PAI procedures, minimum
numbers of inspections to be performed, and program quality assurance. The
inspections would also benefit the POTWs by supplying a written evaluation of
plant quality control activities and some on-site training by experienced,
skilled inspection personnel.
Option 3
EPA, through the delegated States, establishes a POTW effluent sampling program
independent of the self-monitoring program.
This effort would eliminate the dependence on self-monitoring data to
evaluate POTW performance. However, it would necessitate a great increase in
cost to provide meaningful information. Furthermore, since a significant portion
of the self-monitoring data is also used for in-plant process control, this
option would not eliminate the need for self-monitoring activities. It is
unlikely that such a massive monitoring program would produce benefits worthy
of the large resource requirement.
RECOMMENDATIONS TO IMPROVE THE QUALITY AND UTILITY OF COMPLIANCE INFORMATION
Because the self-monitoring system is well established, it should remain
as the foundation of the POTW compliance information gathering effort of EPA
and the States. However, both EPA and the States must increase efforts to
improve the quality of the self-monitoring data if this system is to be of
25
-------
any significant value in measuring POTW performance. Secondly, the various
agencies which receive the discharge monitoring reports (DMRs) from the POTWs
must standardize their data management system outputs if EPA is to effectively
use the information to manage the national program. EPA must expand its compliance
data management system to include data on all POTWs, not just majors, as is now
the case. If the grants program is to fund the construction of minor POTWs,
it must have the ability to track their performance; otherwise, it cannot
effectively manage the program. Finally, EPA's Office of Water Program Operations
and Office of Enforcement must improve coordination of their programs by
accelerating implementation of the National Municipal Policy and Strategy and
work closer together to improve the management of POTW compliance data which is
vital to both programs.
These improvements, which are incorporated in Options 1 and 2, can be
achieved with a modest increase in State and federal resources. Without these
improvements, EPA will have a limited ability to evaluate the impact of various
enforcement and grants policies, procedures and programs, and therefore will
be handicapped in its ability to manage the grants program. The implementation
of Option 3, on the other hand, would require excessive resources at the State
level, and would not be cost effective.
These recommendations would best be implemented through the formation of
a task force of representatives from EPA's Office of Enforcement, Office of
Water Program Operations (both Headquarters and Regional personnel) and several
State program officials.
OPTIONS TO IMPROVE THE COMPLIANCE RATE OF NEW PLANTS
CONSTRUCTED WITH THE AID OF THE GRANTS PROGRAM
A number of factors influence the performance of a wastewater treatment
plant, and the interrelationship of those factors is complex. For example,
the choice of process in the facility plan has a profound influence on the
skills and revenues required to operate a POTW. Conversely, a skilled operator
can often compensate for poor design or faulty equipment by modifying operational
practices. Obviously, improving the quality of facilities through improved
facility plans, improved design and improved equipment will enhance the probability
that the facility will comply with its NPDES permit conditions. However, without
adequate funding and sound management even the finest POTW will eventually fail.
EPA must take measures to assure that compliance is factored into every step
of the construction grants program, from facility plan through startup.
The impact of the facility plan on compliance is often underestimated.
Many major decisions which affect plant performance, including the selection of
process and the estimation of project capital and O&M costs, are made in the
26
-------
facility plan. If unnecessarily complex technology requiring highly skilled
operators is selected for a small rural community POTW, the probability of
compliance is reduced. Failure to accurately characterize the wastewater to be
treated has resulted in the construction of facilities unable to achieve effluent
quality compliance at startup. Specific options to improve the quality of
facility plans are discussed in detail in Task III, Operations. This selection
of the Compliance Strategy will discuss some options which affect facility plan
quality in a more general manner.
Obviously, the design of a POTW has a profound impact on the operability
and maintainability of the facility and, consequently, on the probability of
compliance of the completed plant. Ideally, every POTW design would be developed
in close coordination with individuals skilled in the operation and maintenance
of wastewater treatment facilities, communicating with design professionals as
equals. Unfortunately, this is too seldom the case. A specific design-related
problem which has received a great deal of attention is the selection of equip-
ment for use in POTWs. The Federal Government, like most States and many local
governmental units, encourages open competition in procurement and prohibits
the use of proprietary or "lock out" specifications. Many designers contend
that this policy has on occasion resulted in the installation of inferior
equipment in grant-funded POTWs, subsequently causing poor effluent quality due
to mechanical breakdown or failure to attain adquate performance levels. EPA
is continuing to work with appropriate representatives of the private sector to
develop methods and policies to assure that appropriate equipment is installed
in POTWs.
As wastewater treatment facilities become more complex to meet higher
effluent quality requirements, the efficient management becomes a greater
challenge to operating agencies. Operators needed to staff sophisticated
treatment systems may be unavailable or unaffordable, particularly outside
of major metropolitan areas. Many grantees, especially in small towns or
those located in rural areas, are unable to operate and maintain complex
treatment systems. Sometimes, the grantee's capabilities are not adequately
considered as system designers develop treatment alternatives and operation,
maintenance and replacement programs. In the past, the primary emphasis of all
participants in the construction grants program has been on the construction
of facilities. Relatively little attention has been devoted to the subsequent
operation of the plants once construction has been completed. It has generally
been assumed that grantees possessed or could quickly develop the capabilities
to successfully manage the POTWs produced with the assistance of the grants
program. In many cases this assumption has proven to be incorrect. This is
not surprising, since the POTW often represents the largest, most complex
capital and operations project ever undertaken by the grantee. EPA must adopt
policies which will better prepare POTWs to manage their projects from facility
plan through startup and beyond.
27
-------
A major cause of noncompliance in many POTWs is the existence of influent
conditions which exceed the ability of the plant to treat and discharge within
effluent quality limites. There are two primary types of influent problems:
• Industrial wastes, and
• Inflow/Infiltration (I/I).
Industrial wastes cause noncompliance by imposing excessive organic or hydraulic
loads on the treatment units or, less frequently, contributing toxic substances
which inhibit biological treatment processes and severely limit sludge utiliza-
tion and disposal options available to the POTW. EPA must implement measures
which will address these serious influent problem areas as a part of the
construction grants strategy.
In those cases where toxic loadings from industry contaminate sludge and
preclude reuse, local disposal costs are fixed at high levels, thus raising
overall treatment costs for all users. Often increased costs for sludge disposal
will stimulate efforts to reduce costs in other areas such as preventive maintenance
or operator staffing and salaries. Noncompliance will result from such cost-
cutting measures.
Frequently, those preparing facility plans fail to adequately characterize
the wastes to be treated by a proposed POTW, especially where significant
industrial discharges are involved. Also, municipalities, fearful of jeopar-
dizing the economy of the community, are often reluctant to impose effective
controls on industrial dischargers. Changes in industrial processes sometimes
lead to the discharge of wastes which the POTW is not equipped to treat, causing
NPDES permit violations. Currently, there are no requirements for binding use
agreements between industrial users and POTW managers. The absence of such
agreements leaves many POTWs unprepared to treat or pay for system modifications
needed to treat process waste which changes significantly during the life of a
POTW. Moreover, the absence of user agreements between a POTW and industrial
users impairs the POTW management's ability to develop preventive maintenance
schedules, forecast future treatment needs, and project long-term revenues. At
any time an industrial user may withdraw from this sytem and face little or no
financial or legal penalty. This new "excess capacity" can cause noncompliance
in an otherwise sound treatment system.
The following options to improve the compliance rate of new POTWs have been
discussed in greater detail in earlier issue papers prepared as background for
the 1990 Strategy:
Option 1
Implement the pretreatment program in accordance with the Clean Water Act,
Section 307(b) and (c) and other sections as applicable.
28
-------
Federal requirements for industrial pretreatment programs are being developed
at this time. These requirements involve three major components: categorical
standards, general pretreament regulations and construction grants regulations.
Three of the 34 categorical pretreatment standards have been issued. The remainder
are under development. General pretreatment regulations are expected to be issued
in final form before the end of 1980. Construction grants regulations pertinent
to. pretreatment were issued in 1978. A class deviation was issued this June
extending the dates for submission of pretreatment programs.
-------
Option 3
Requirement of a binding agreement between POTWs and major industrial waste
dischargers.
-------
Federal requirements for industrial pretreatment programs are being developed
at this time. These requirements involve three major components: categorical
standards, general pretreament regulations and construction grants regulations.
Three of the 34 categorical pretreatment standards have been issued. The remainder
are under development. General pretreatment regulations are expected to be issued
in final form before the end of 1980. Construction grants regulations pertinent
to. pretreatment were issued in 1978. A class deviation was issued this June
extending the dates for submission of pretreatment programs.
A Municipal Pretreatment Program Guidance Document has been developed and
will be issued shortly. Currently, municipalities are utilizing 201 grant funds
to undertake the first phase of the pretreatment program which includes industrial
surveys.
In addition to the activities already underway, this option includes a
vigorous public awareness and implementation assistance effort, including the
distribution of material to explain the importance of pretreatment programs,
emphasizing the benefits to POTW operation. Also, a minimum of one pretreatment
seminar would be held in each Region to acquaint POTW administrative and technical
personnel with the pretreatment program. Each Region would sponsor seminars for
State personnel to fully acquaint them with the pretreatment program.
Option 2
Improve the quality of facility plans by increasing the emphasis on characterizing
industrial wastewaters (quality and quantity) to be discharged to POTWs.
This can be accomplished by the following actions:
• Encourage the active involvement of significant industrial
dischargers in the preparation of the facility plan.
• Issue guidance to A/E firms, grantees, and reviewers regarding
the importance of industrial wastes to POTW performance.
t Liberalize funding of industrial waste surveys and other facility
planning activites necessary to determine the impact of industrial
wastewaters on the POTW.
t Require those preparing facility plans to cross-reference all
industries in the study area with the industrial waste survey
information on file with EPA and the States.
29
-------
Option 3
Requirement of a binding agreement between POTWs and major industrial waste
dischargers.
The discharge of industrial wastes into a municipal system can have major
impacts on operations if the flow or waste characteristics change dramatically
from original design conditions. This is particularly true if the industrial
loads are a large percentage of the total waste loads. Dramatic changes may
occur due to a plant shutdown, a major plant expansion or a major change in an
industrial process.
Currently, as a condition of participating in the grants program, a grantee
is required to obtain from an industry a letter of intent as to projected waste
loading. However, the letter of intent is not binding. Considering the financial
commitment on the part of the grantee, this option requires an agreement between
the grantee and industrial user as to existing and future waste loadings. Modi-
fications to the agreement would involve a penalty clause, probably including
financial considerations. The concept should be applied only to the large
industrial users, e.g., those contributing loading greater than ten percent of
system capacity, or where an industry discharges a lesser quantity of a waste
which might present significant problems to the treatment process or sludge
disposal.
Option 4
Modify the Inflow/Infiltration (I/I) program to reflect findings of recent
studies.
Recent investigation has revealed that grant-assisted projects to reduce
I/I problems in collection systems have, to a great extent, failed to provide
predicted results. Since excessive I/I is a well-documented serious problem
at POTWs--often a leading cause of noncompliance in large areas of the country--
significant changes must be made in the present I/I program. In a recent issue
paper on Infiltration/Inflow, the following three-phased implementation plan was
formulated to modify the I/I program:
Phase I - Interim Guidelines for I/I (Ongoing):
Issue PRM providing interim I/I guidelines which emphasize the
following:
30
-------
• Addressing I/I problems in service lines separately in terms
of quantity and proposed rehabilitation.
• Using concurrent pressure testing and sealing techniques in
plance of TV whenever applicable. This would be especially
emphasized where TV was previously used for quantifying
infiltration sources.
• Determining excessive I/I on the basis of a 30% to 50% maximum
removal efficiency. This will ensure that other factors such
as groundwater migration and I/I from service lines will be
taken into consideration in the cost-effectiveness analysis.
• Proposing an acceptable sewer maintenance program as part of
Step 1 work.
• Limiting all field work to I/I problem areas only. Problem
areas must be identified by flow monitoring or other means
first in order to minimize unnecessary field work and thereby
improve the overall effectiveness of the program.
Phase II - Input for Final Guidelines for I/I;
1. Conduct four I/I program review meetings to be held in four
different strategic locations. The meetings will serve two
major functions:
t Inform the public (including States, municipalities and private
sector participants) of the results and findings of the recent
study on the effectiveness of the I/I program.
• Request the public to participate in the development and formula-
tion of solutions to the problems identified in the I/I program.
2. Initiate joint effort of OWPO and ORD to develop new approaches
and technical procedures for I/I.
Research efforts will be initiated to develop more effective
technical procedures. Briefly, the new I/I procedures will
emphasize the following issues:
• Increase the efficiency of the I/I program and the treatment
plant by more effectively rehabilitating sewers to remove
excessive I/I.
31
-------
• Improve the reliability of the I/I program by accurately
determining the I/I conditions in the sewer system.
• Expedite the Step 1 grant process by simplifying and
streamlining the I/I procedure.
• Maintain the useful life of the treatment plant by
minimizing the effect of I/I migration.
• Ensure an effective O&M program for the rehabilitated
sewer system.
3. Initiate a program to further evaluate the effectiveness of
both the technical and administrative aspects of the I/I
program, and to recommend additional modifications as appropriate.
Phase III - Final Guidance for I/I:
1. Formulate and propose final I/I guidelines to supplement or
supersede the PRM issued in phase I.
2. Circulate for comment and implement through statutory changes,
regulatory changes, or policy development, previously identified
initiatives found to be beneficial and productive. These initiatives
may include, but are not limited to the following:
• increased enforcement of sewer use ordinances
0 increased enforcement of required O&M programs
• expanded grant funding for service line rehabilitation
• construction grants sanctions for accountability (i.e., assist
municipalities recover funds where jobs are not satisfactorily
completed)
• technical changes to guidance and/or methodology
• continue R&D effort
• continue short-term and long-term program evaluations.
32
-------
Option 5
Modify NPDES permit effluent standards on a case-by-case basis for POTWs
experiencing excessive inflow and/or infiltration.
As explained above, recent studies have shown that the efforts to correct
I/I have often fallen far short of expectations, indicating that it is not as
feasible to reduce I/I as was originally assumed when the sewer system rehabili-
tation program was initiated. On the other hand, it is often equally difficult
to effectively treat large hydraulic surges associated with I/I and maintain
effluent quality. Biological treatment processes do not generally respond well
to rapid changes in hydraulic loading rates. Flow equalization, while useful
in some situations, is often ruled out by cost or space considerations.
This option would allow, on a case-by-case basis, the relaxing of
federal secondary requirements, as is now permitted for POTWs which treat combined
sewer flows during periods when flow exceeds the capacity of the secondary treat-
ment units. In effect, POTWs in this category would be assigned a dual effluent
standard with the NPDES permit stipulating the conditions which would permit the
discharge of wastewater receiving less than secondary treatment. During periods
of high peak flow (i.e., wet weather flows from collection systems with excessive
I/I) all flows in excess of design flow should be diverted for physical treatment
(e.g., swirl device clarifier), disinfection and discharged to receiving waters.
During this period of peak flow the normal (design) flow would be treated as
usual, so that relatively stable conditions of the unit processes can be maintained.
The legal definition of "significant" influent problems should be based on a
cost-effectiveness analysis showing that dual discharge levels would result in a
significant life-cycle cost savings and improve POTW compliance with minimum impact
on water quality.
The imposition of dual effluent standards will increase secondary unit
process reliability by minimizing hydraulic surges. In most cases, there will
be negligible impact of the poorer effluent quality on receiving water quality
because of the receiving waters' high flow. During periods of receiving water
high flow, surface runoff (nonpoint) pollution can contribute more pollutants
than POTW effluent. The decision to allow a POTW to operate under dual effluent
standards would be based on assessments of the environmental and health effects
of reduced treatment levels. The pollutant load on receiving waters may be
increased slightly under this option.
Option 6
Modify the definition of secondary treatment to allow the use of biological
processes which do not meet the existing criteria but which have other signi-
ficant advantages.
33
-------
The present definition of secondary treatment found in Federal Regulations
(40 CFR 133.100) requires the concentration of effluent BOD and total suspended
solids (TSS) concentrations to be no greater than 30 milligrams per liter (mg/1)
and a reduction in BOD and TSS of at least 85%. These limits have shifted the
economics of wastewater treatment toward the more sophisticated unit processes,
such as activated sludge, and away from fixed-film processes such as trickling
filters and other biological processes which are less demanding of operator
skill and less energy intensive. In general, activated sludge becomes more
cost-effective as plant size increases and is more suitable for large facilities.
Modifying the secondary requirements would permit the use of simpler processes
in the small POTWs, which are generally less able to afford highly trained
personnel. Because these simpler processes usually cost less to operate—especially
in small facilities—it is likely that the change in secondary treatment require-
ments will enhance compliance rates and reduce O&M costs in smaller systems. It
is possible that this modification should be restricted to POTWs below a certain
capacity, as is the present exception applicable to waste stabilization ponds.
The reduced requirements would be limited to those applications where it could
be demonstrated that receiving water beneficial uses would not be jeoparized by
the modification.
The existing requirement that secondary treatment remove 85% of BOD and TSS
is another requirement which often causes compliance problems at POTWs which treat
unusually "weak" sewage. Since NPDES permits set limits on the total weight of
these pollutants to be discharged from a POTW, as well as the maximum concentration
of those pollutants, dropping the 85% removal requirement would increase compliance
rates and avoid expenditures for unnecessary advanced waste treatment units without
jeopardizing water quality. The quality and quantity of effluent discharged, not
percentage removal, determine the impact of a discharge on receiving water quality.
Therefore, this option also proposes the elimination of the 85% removal requirement
from the definition of secondary treatment.
The precise effluent quality limits to be applied in the modified definition
and the restrictions or its application will require extensive technical evalua-
tion and consultation with State water quality management agencies and other
interest groups.
Option 7
Increase federal POTW operator training assistance in areas of special need.
In general, the federal government has determined that operator training
is a State function. Accordingly, EPA has discontinued its direct POTW operator
training program. However, recent studies (2,3) which evaluated the performance
of 103 POTWs concluded that improper operator application of concepts and testing
to process control was the most frequently occurring factor limiting the perfor-
mance of the selected facilities. This finding indicates a need to improve the
effectiveness of existing operator training efforts, especially in the area of
process control. Although the States provide direct training of operators, there
34
-------
are some training-related functions which are more appropriately accomplished at a
national level. These include the preparation of operator training materials and
assistance in developing an effective training delivery system. This latter
function would logically include workshops for trainers and other similar activities
designed to improve the effectiveness of trainers of POTW operators.
Although EPA's National Training and Operational Technology Center (NTOTC)
in Cincinnati, is now performing this function, these activities must be accelerated
if the process control training is to meet existing and future needs. Competent
operators are an indispensable element in any program to improve POTW compliance
rates.
Option 8
Promote operability in the design and review of plans and specifications for new
POTWs.
The focus of facility planning and design and their review is not usually
directed towards those things which most affect the ability of a POTW to attain
compliance with permit conditions. In addition, there may be an issue that
treatment plants should be designed more conservatively based on the variable
characteristics of sewage. There are indications that treatment plants in
England operate very consistently at high levels of removal. The English plants
seem to be immune to many of the problems found in this country. Although
English and American treatment systems are very similar in most respects, the
English plants are designed more conservatively. A study of English plants is
presently in progress through a cooperative project by AMSA, EPA and the British
Water Research Center.
A recently completed EPA-sponsored study (4) of 50 POTWs in nine Western
States found that many of the design faults contributing to noncompliance
were failures to design treatment units and sludge handling facilities
conservatively enough. EPA is cooperating with the Water Pollution Control
Federation (WPCF) and the American Society of Civil Engineers (ASCE) in the
production of a series of design guidance manuals which should assist designers
to improve the quality and operability of new POTWs.
Promoting operability in design and review could be established by:
• Reviewing existing requirements for planning and design and their
resultant impacts on operations
• Complete study on English plants
• Establish design parameters and/or modify requirements
35
-------
• Observe program in Illinois which is currently being revamped to
focus on operations
e Train State reviewers to focus on operations during review of
facility plans and design plans.
Such a program may be difficult to establish in a short time period. Also,
too rigid application of design parameters could reduce designer initiative and
flexibility. More conservative designs may increase costs of treatment. Effec-
tive training programs to enhance reviewers' abilities to evaluate operability
will be difficult to develop.
Option 9
Promote the automation of wastewater treatment process control through research,
development, demonstration, and technology transfer.
Two recent EPA-sponsored studies (2,3) investigating operation and maintenance
of POTWs found that the failure of operators to apply wastewater treatment concepts
and process control testing to the control of the wastewater treatment process was
the most prevalent operational deficiency at the facilities studies. Operators
skilled in process control are in extremely short supply. The development of
reliable automated control of wastewater treatment processes will allow more
efficient utilization of the scarce talents available. In July 1980, EPA's
Municipal Environmental Research Laboratory released a report entitled "Assesment
and Strategy for Automated Process Control in Wastewater Treatment," (5) which
reports on the existing status of the development of automated process control
and recommends a strategy to accelerate improvements in plant performance using
automated process control. A summary of the strategy follows:
Short Range Objectives:
1. Transfer state-of-the-art, demonstrate and document integrated micropro-
cessor control of small plants and document design approaches on available
automation for energy conservation.
a. Transfer present SOA technology to the field so that the cost
effective instrumentation and automation presently proven feasible
is appreciated, understood and properly applied.
b. Demonstrate and document integrated micro-processor control of
small treatment plants.
c. Document design approaches for use of authomation and instrumenta-
tion for energy conservation.
36
-------
2. Develop centralized management of multiple small plants using digital
technology.
3. Document benefits of overall plant automation.
Long Range Objectives:
1 . Develop improved automated approaches to achieve energy conservation.
2. Develop automated process control for new technology and improve
approaches on existing technology.
3. Develop automated areawide management for plants and collection
systems.
4. Support as needed, the continuing development of instrument specifica-
tions by the National Bureau of Standards (NBS) and the establishment
of a non-federal instrument certification laboratory.
Option 10
Apply the systems approach to the construction grants process.
The planning, design, construction and subsequent operation of a waste-
water treatment facility is often the largest, most complex project ever
undertaken by a municipality or other local government unit. Successful
implementation requires a wide variety of specialized skills seldom found in
a single firm. Presently, the consulting engineer is usually called upon by
the POTW owner to coordinate the entire project. Under this option, a project
manager with specific skills and training would act as the POTW owner's agent
to direct and coordinate the activities of all the participants throughout
the project, from facility plan through startup. This would facilitate the
involvement of specialists in fields such as financial management, user charge
systems, pretreatment and operations and maintenance in addition to the more
conventional areas of planning, design and construction.
An example of this process is the separation of those tasks associated
with operations and maintenance of the POTW from the design contract. A team
of specialists skilled in the management, operation and maintenance of POTWs,
with capabilities to train O&M personnel, would institute a comprehensive
startup program including staffing, training, and initiating operations of the
POTW in order to provide the grantee with a stable, competent operating organi-
zation. This process expands and modifies the present grant-eligible startup
activities now associated with the operation and maintenance of the POTW.
Specifically, the activities would include the following:
• Preparation of a series of plant-specific training manuals for
each functional unit of the POTW.
37
-------
• Preparation of a comprehensive plant operations manual focusing
on process control.
• Initiation of a Preventive Maintenance Management System prepared
specifically for the POTW.
t Preparation of a Plan of Operation.
• Periodic consultation with the designer regarding process control
features, plant layout and equipment selection.
• Plant-specific training of operating and maintenance personnel.
t Coordinating and supplementing training supplied by equipment
manufacturers.
• Supervision of startup of the POTW.
The design engineer would supervise equipment testing and determine if the
installed equipment meets the requirements of the plans and specifications.
The startup service could be provided by firms to be prequalified by the
States to perform this work. Where it possesses the capability, the design
firm could provide the startup service. Otherwise, any firm meeting the require-
ments of the certifying State would provide this service. In any case, the
contract would be separate from the design contract, and all activities would be
coordinated by the project manager.
Although the use of the systems approach may add to the capital cost of
the POTW, it will improve the quality of the resulting facility and, just as
importantly, it will establish the POTW as a fully operational unit, with a
trained staff and a functional management capability at the outset of operations.
Where conflicts between the designer and the O&M team arose, they would
be resolved by the project manager, who would have authority over the entire
project. If this option is to have a significant beneficial impact on the
compliance rate of POTWs, there must be some system implemented to assure that
qualified firms are selected for the various tasks. A significant advantage
to this system lies in the fact that it does not assume that the many diverse
capabilities required to plan, design, construct and startup a POTW must be
obtained from a single firm. Rather, it allows the project manager to tap the
strengths of several firms.
38
-------
Option 11
Mandatory starting services.
Under present EPA policies, the provision of startup services is optional.
This option would require that all grant assisted projects include startup
services unless specifically exempted by a Regional Administrator or appropriate
State official. Even the smallest, simplest POTWs have operating and maintenance
needs. It is important that POTW operational personnel be adequately trained
and that the facilities be placed in full operation while the designer, contractor,
and others under contract with the grantee are still actively engaged in the
project. This requirement will facilitate the transition from construction
project to functional POTW. Startup services would be provided by the same
O&M team described in the previous option.
RECOMMENDATION TO IMPROVE THE COMPLIANCE RATE OF NEW POTWs
None of the options listed above can insure that all new POTWs constructed
with the aid of the grants program will meet effluent quality requirements
when placed in service. Compliance at startup depends upon the skill,
cooperation and dedication of all of the participants in the complex process
which produces a sucessfully operating facility. Regulations and requirements
cannot compensate for a lack of these necessary qualities. However, the ten
options listed above do address many of the major causes of noncompliance of
new POTWs. They attempt to propose reasonable, workable approaches to the
correction of these problems. Many of the concepts incorporated in these
options have been sucessfully demonstrated projects and programs throughout
the country.
OPTIONS TO IMPROVE CONTINUING COMPLIANCE RATES
Once a POTW is constructed and sucessfully started up in compliance with
NPDES permit requirements, it is essential that the operating agency take
all measures necessary to assure that the facility continues to meet effluent
standards. Unless the agency applies sound management practices to the operation
and maintenance of the POTW, the public investment in clean water could be lost
within a short time of startup. The performance of many facilities constructed
with the assistance of the grants program has deteriorated because the operating
agencies have failed to provide such basic requirements as preventive maintenance
programs, personnel training and advancement programs and adequate financial
support.
Obviously, many of the practices and policies required to assure continuing
compliance must be established before the POTW is constructed. User charge systems
and plans for equipment replacement or other contingency funds must be developed
before a facility starts up, if financial emergencies are to be avoided. Effective
39
-------
maintenance management systems must be in place from the first day of operation
if mechanical reliability and long equipment service life are to be realized.
Sewer maintenance programs, industrial waste monitoring and control, and effective
hookup policies and tracking are required to assure that treatment capacity is
not exceeded. Many of the measures required to assure initial compliance,
discussed in the previous section, are also necessary to maintain compliance
throughout the life of the facility.
The options listed below address the issue of continuing POTW compliance.
They discuss various measures EPA and the delegated States might employ to
favorably influence the compliance rates of grant-funded POTWs beyond startup.
Option 1
Increase availability and quality of process control training for POTW operating
personnel.
Although basic training for entry level wastewater treatment plant operators
is widely available, high quality training in the control of biological
processes is difficult to obtain. Yet lack of process control skill is the
most prevalent operational problem encountered at non-complying POTW's. EPA
has assumed the role of catalyst in operator training, relying on others to
provide direct training to operating personnel. EPA's National Training and
Operational Technology Center (NTOTC) in Cincinnati is now developing process
control training packages for basic introductory level courses. Under this
option, this activity would be accelerated and senior level course packages
would also be developed immediately. NTOTC would increase the availability
of process control training opportunities to experienced operators through
the following activities:
t Development of process control training materials.
• Development of curriculum for process control instructors.
• Training of process control instructors.
t Assisting States in delivery of process control training.
It is an undeniable fact that the successful performance of all POTWs
ultimately depends on the availability of competent, dedicated operators. The
Federal Government has taken the position that operator training is the responsi-
bility of the States. However, there are certain training-oriented activities,
such as the development of training packages and reference materials, information
exchange and the development of improved training delivery systems, which are
most efficiently carried on at the national level. Under this option, EPA would
increase it's activities in this area to assist the States in their efforts to
equip senior POTW operators (and those who advise these operators) with the
training necessary to operate modern wastewater treatment facilities.
4o
-------
Option 2
Establish an assistance program for small communities, emphasizing sound innovative
and economical mangement schemes.
Approximately 85% of the nation's POTW's serve communities with populations
of less than 10,000. Because of the high unit costs of operating small waste-
water treatment facilities and a general lack of resources, many small communi-
ties have difficulty maintaining POTW effluent quality at a satisfactory level.
Modern wastewater treatment plants often require skilled personnel and expensive
equipment which are beyond the financial means of small communities.
The development of cooperative, multiple-system management arrangements,
in which several POTW's could join together to share administrative and
technical resources, would allow each participant to enjoy an economy of
scale otherwise available only to larger organizations. Arrangements could
vary widely, drawing on private sector resources where they would offer the
most economical solution to a specific problem.
EPA would implement this initiative primarily thorugh the delegated
States, offering a variety of services.
• Demonstration grants for innovative management alternative
for small POTW's, emphasizing cooperative efforts and private
sector services.
0 Preparation and distribtion of guidance material for small
communities, emphasizing efficient and effective management
options.
t Establishment of a small multi-disciplined resource team in
each EPA region to work with the States to assist small communi-
ties in the formation of effective management programs. The team
would include experts on the financial, administrative, legal, and
technical aspects of operating small POTW's.
• Distribution of case histories of successful small POTW management
arrangements to States and small communities.
Option 3
Encourage the establishment of self-sufficient enterprise, or utility-type
organizations to provide wastewater collection and treatment services.
41
-------
Most POTWs are operated as an integral part of local government, often
as a section of the department of public works. It is often difficult to
separate the actual POTW costs and revenues in this situation. EPA construc-
tion grants regulations require that a user charge system be established to
provide adequate funding for the operation, maintenance and repair of the
POTW. Unfortunately, EPA and the States do not have sufficient resources
to assure that realistic user charge systems are implemented and updated,
and, if they are, that the user charges are dedicated to the support of the
management of the POTW. Local governments also have difficulty establishing
sinking funds for the replacement or repair of major equipment because of
competing demands for funds. The establishment of independent, financially
self-sufficient utility-type organizations would alleviate many of these
financial management problems. EPA has encouraged financial self-sufficiency,
but has not yet developed an effective program which will have any appreciable
impact on this issue. Because of the profound influence of wastewater service
on development patterns, and the economic significance of wastewater utility
policy on local government, many jurisdictions are reluctant to surrender control
of the wastewater service function. EPA must develop a program which provides
incentives to local government to convert to financially self-sufficient organi-
zations or to accomplish the same ends by assuring financial integrity and
independence of POTWs with the local government. EPA must provide POTWs with
realistic, practical financial mangement assistance and must enforce existing
regulations governing the self-sufficiency of POTWs.
Option 4
Encourage POTWs to conduct comprehensive periodic performance audits.
As with any enterprise, it is usually quite beneficial to conduct periodic,
comprehensive audits of POTW performance. These audits would be performed by
a multidisciplined team which would address, at a minimum, the following areas:
• Financial management
- User charges
- Placement funding
• Staffing
- Qualifications
- Salaries
- Training
• Process control
• Laboratory
• Preventive maintenance management
42
-------
• Solids handling and disposal
• Administration
• Energy conservation.
The results of the audit would provide the POTW with guidance to modify
its management program before deficiencies lead to compliance problems. The
report would also be available to regulatory agencies and the public, thus
providing additional incentive to implement measure necessary to maintain the
facility in compliance with NPDES effluent quality requirements.
Although the audit would add to the O&M budget, it would, at least in
some cases, improve operating efficiency, thereby saving operating expenses.
Option 5
Provide grantees financial management assistance through the delegated States.
Without adequate financial support, a POTW, no matter how well planned,
designed, and constructed, cannot long continue to comply with effluent quality
requirments. For this reason, financial management must be considered the
foundation of continuing POTW compliance. Yet lack of sound financial management
is a common problem in both major and minor wastewater treatment facilities.
Because of the complexity of the financial management issue, this option is
broken down into several sub-options which are discussed below.
This section first presents the various types of assistance options EPA
might wish to implement, briefly sets forth some considerations relating to
the delivery of technical assistance, and discusses EPA and State roles in
managing the assistance programs.
Assistance options fall into two major areas- financial planning and
financial oversight—which are outlined on the following page (Figure IV.1) and
presented in the matrix shown as Figure IV.2. Planning assistance is designed
to address financial management obstacles before they become serious impediments
to a project. Oversight assistance involves corrective action to ensure that
difficulties beyond the scope of financial planning are overcome.
The type of assistance offered will depend on grantee needs (or areas of
concern) the project phase, and grantee capabilities. The purpose of providing
financial management assistance is to address the following areas of concern--
to remove the financial management barriers to achieving and maintaining compliance,
to reduce the economic burden on the users, and to achieve POTW economic self-
sufficiency. Although many of the assistance options address all areas of
concern, they may do so to different degrees of effectiveness. Others focus
on one or two areas, even though all areas are somewhat related.
43
-------
Figure IV.1
TYPES OF FINANCIAL MANAGEMENT ASSISTANCE OPTIONS
03
O
c
to
f)
CO
C
C
to
en
•r—
to
S-
-------
Some of the assistance options, such as studies dealing with the feasibility
of consolidating service areas, are suited to a POTW's entire life cycle, both
the pre-operational and operational phases. Others, such as the early fiscal
assessment and the compliance diagnostic, are designed to respond to needs
arising in a particular phase.
Grantee capabilities will also guide the selection of assistance options.
Planning and oversight assistance may well be sufficient for larger grantees
having an adequate in-house financial management staff. Smaller grantees with
limited expertise may be unable to take full advantage of the planning options,
however, and may required specialized delivery mechanisms discussed under the
technical assistance option.
Other considerations include:
• The Promotion of Long-Term Federal Cost Reductions—Some options,
especially those related to planning assistance, have a high potential
to reduce federal costs over the long run. The concept is that by
spending a relatively small amount of money for prevention the need
for more costly remedial programs can be reduced.
• Relative Federal Cost--The types of assistance contemplated cost very
little when compared to the magnitude of the construction grants program.
Yet it is still possible to distinguish relative costs among the various
options. Some costs, however, may vary widely depending on the number
of grantees wishing to participate.
t Increased Administrative Workload—This includes only those options which
are likely to consume a fairly substantial amount of manhours in adminis-
tration. This increased workload will result whether the option is
administered by the Federal Government or is assigned to local, regional
or State authority.
• Grantee Participation—Because it is in the interest of the grantees to
respond to the identified areas of concern, most forms of assistance
proposed are described as optional. Compliance and self-sufficiency,
however, are two areas of critical concern to the national program.
Attaining both of these is the result of a number of complex factors,
many of which cannot be fully addressed through financial planning
assistance options alone. Oversight options are therefore required
to help ensure that financial planning efforts meet with eventual
success. If selected as a strategy element, early fiscal assessment
would also be required. Because it is aimed at the third area
of concern—reduced economic burden on users—it is well within the
capability of even small communities, and will cause no increase in
project completion times.
45
-------
A discussion of the various assistance options follows:
A. Require Early Fiscal Assessment:
Concept
An assessment of an applicant's financial condition is done by local
officials prior to the selection of a treatment system. It may take the form
of an inventory, using such indicators as the ratio of debt to potential revenues
and operating surplus to total expenditures. Each ratio indicates the relative
strength or weakness of a particular aspect of the local economy. The aggregate
of individual of individual figures suggests an overall picture of the
municipality's financial condition and may provide an early indication of
future problems.
Comment
• Serves as an early warning of existing or potential
problems.
0 Likely reduces the number of treatment system alternatives
to be considered in Step 1.
• Assessment is compatible with small community management
expertise.
• May indicate that further studies are needed to determine
if there is economic justification for reclassifying water
quality standards.
• Could be used in conjunction with the generic facility plan
screening process.
• Provides adequate lead time to seek additional aid and to
coordinate this aid with EPA construction grants.
• Entails minimal expense which would be grant eligible.
t Likely reduces the number of treatment system alternatives
to be considered in Step 1.
• Saves time spent in considering systems a community cannot
afford.
• Provides useful data for bond marketing.
46
-------
B. Fund Consolidated Service Area Feasibility Studies:.
Concept
This option studies the feasibility of consolidating under a single
authority the management functions which would otherwise be provided by
separate jurisdictions. The studies, conducted as part of facility planning,
would include the political feasibility of consolidation as well as any
economic and environmental benefits anticipated. One variation of this option
would fund studies related to consolidated procurement of construction material
and consultant services.
Comment
• Uses combined resources of an entire area.
• Promotes achievement of economies of scale.
• Facilitates areawide financial planning.
• Often resisted because of conflicting jurisdictional
priorities.
C. Require User Charge Review Before and After Implementation:
Concept
This alternative standardizes pre-implementation review procedures
at the national level. It establishes a centralized review process in each
Regional or State Office; conducts post-implementation reviews of a represen-
tative example of grantees. User charge reviews as currently practiced place
substantial emphasis on the proportional distribution of expenses among the
various classes of users. Under this option, proposed and actual charges would
also be reviewed to determine if sufficient funds were being collected to
operate and maintain the system without further outside aid.
Comment
• Assists in the achievement of POTW financial self-sufficiency by
identifying funds needed for current and long-term operation.
• Stresses consistency and thoroughness in review methodology.
• Improves accuracy and reliability of entire review process.
-------
• Helps ensure compliance by encouraging good management and
maintenance practices.
• Requires a fairly high level of federal involvement.
D. Make Available and Fund Compliance Diagnostics:
Concept
This alternative would provide grantees whose POTW's are not meeting
prescribed effluent levels with the option of engaging private sector firms to
evaluate the causes of permit violations. Whether or not the causes are found
to originate from financial management difficulties, POTW owners would be
required under enforcement actions to take steps to remedy the identified
problem areas. The diagnostics would be eligible for federal funding thus
offering grantees an alternative to paying for their own studies.
Comment
• "Hands on" approach designed to solve grantee-specific
problems.
• Relatively cost-effective: diagnosis costs incurred by
the Federal Government and correction costs incurred by
grantees are small in comparison to original planning,
design and construction costs, yet will lead to permit
compliance.
t Requires substantial increase in federal administrative
work load.
• Raises equity issue of second-round grants.
E. Make all Financial Planning Costs Grant Eligible:
Concept
The alternative funds all aspects of financial planning related to
the construction and operation, maintenance, and replacement (0,M&R) of
treatment systems. Many financial planning costs are already eligible under
current regulations and encouragement of such planning may result in wider
use. Funding additional costs, such as those incurred in marketing bonds,
would help ensure that grantees secure adequate construction financing at
the appropriate time and would help to reduce the total local share of the
project. Advocating the use of currently eligible financial planning studies
will result in identification of a project's full cost and the establishment
of a user charge system sufficient to cover 0, M & R costs. The timing and
magnitude of the required expenditures could then be integrated with the capital
improvements program, thereby contributing to the town's overall fiscal sound-
ness.
48
-------
Comment
• Promotes unified, realistic municipal planning.
• Identifies where adjustments or trade-offs in the capital
improvements program might have to be made.
• Improves programming for future capital budgeting.
t Requires, in many instances, the use of outside consultants;
small communities may lack the expertise to fully evaluate
and use such input.
F. Provide States and Grantees with Technical Assistance:
Concept
This option enables local governments to develop such major elements
of comprehensive financial management as grant management and user charge
systems. This can be accomplished either through delivery mechanisms which
provide assistance directly to the grantees, or through a two-tiered approach
in which Headquarters establishes national and regional programs to aid the
States. (See Task II — The 1990 Management Strategy.) Aside from financial
management assistance, the delivery options listed below can be adopted to
offer such technical assistance as that related to pretreatment, sludge manage-
ment and I/A technologies. The following methods of providing technical
assistance thus achieve a dual flexibility in that they can be targeted either
at States or municipalities, while responding to a wide variety of needs. The
sole exception is the circuit rider program which, although managed at the
State level, is designed primarily to serve small grantees directly. The
comments on the various delivery mechanisms are mainly in reference to the
impacts of the proposals on grantees, rather than States, because grantees are
the ultimate beneficiary of any particular approach.
1. Provide Financial Systems Guidance Document
Concept
This alternative focuses on the accounting, financial management
and management information system needs of grantees. It explains and illustrates
EPA compliance requirements and addresses the grantee's internal needs related
to treatment facility management.
49
-------
Comment
t Lowest federal cost of all delivery options.
0 Well suited to rapid distribution of information.
• Of less use to small communities with existing in-
house management deficiencies.
2. Fund a National Resource Center
Concept
The center serves as a national clearinghouse for financial
management and resource information. It issues information digests in
newsletters, offers generic financial management assistance and, where a
specific problem arises, directs the grantee to the appropriate source of
assistance. It could also be staffed with professional engineers and
planners, as well as financial managers, enabling them to address the full
range of grantee concerns, and to disseminate information regarding, innovative
management techniques. Resource center staff would also be responsible for
training Regional experts, preparing training packages, and advising and
assisting on projects as requested by the Regions. Regional personnel would,
in turn, provide similar assistance to the States, offering information on
program development, staff training, and evaluation of delegation performance.
(See Task II -- 1990 Management Strategy.)
This Center is somewhat similar to the Financial Management Resource
Center sponsored by the Department of Housing and Urban Development and operated
by the Municipal Finance Officers Association. The proposed resource center,
however, differs from the HUD model in that it would not sponsor workshops or
conferences. It is distinguished from the service center (below) because it
would cost less than the service center to staff and operate, and would be
national in scope.
Comment
• Requires low levels of federal administrative involvement
and financial commitment.
• Well suited to communities which confront problems in
obtaining basic information.
• Does not have "hands on" assistance capabilities; would
probably be less effective than service center for
communities with severe management deficiencies.
50
-------
3. Fund Regional Information Centers
Concept
The Centers serve as regional contact points for financial manage-
ment and planning issues related to POTW's. They sponsor workshops to improve
State and local capabilities. As States continue to assume greater responsibi-
lities for program management, they will have a corresponding need to develop
higher levels of expertise in these areas. The Regions will serve as the
second tier in the financial management and technical assistance strategy, helping
to ensure that delegation is not hampered by such constraints.
Comment
• Serves as an unbiased reference point against which
consultants' recommendations can be evaluated.
• Decreases reliance on the private sector which is
especially prevalent in small communities and is
sometimes responsible for expensive, inappropriate
systems.
• Lowers local financial management costs by supplying
these services only as needed.
t Possibly the most costly delivery option in the long-
term.
4. Fund a Circuit Rider Program
Concept
A number of grantees located in a reasonably serviceable geographic
area may apply for federal funds to establish a circuit rider program. The
circuit rider is expected tp visit each town at least monthly and to work with
grantees to ensure that financial management considerations do not result in
project delays, excessive user charges, continued dependence on outside funding
sources, or, ultimately, in permit violations.
Circuit riders will be retained by the grantees and will be
directly responsible to local officials. The sole grant eligible function
of circuit riders is to provide assistance which relates exclusively to POTW
projects. Grants under this program will be for a very substantial amount
of the eligible costs for the first year and will be gradually reduced over
a three-year period. If all or some of the participating communities wish
to continue the program after the third year, they will be responsible for
funding it and may then use the program to respond to non-POTW concerns.
51
-------
Circuit rider programs could also be staffed with professional
engineers as community needs dictate. The service of both financial managers
and engineers would be grant eligible for towns involved in all construction
grants steps, as well as for those with operating plants who are either not
in compliance, or who wish to improve their current financial management or
operating techniques.
Comment
• Provides continuous access to expertise usually available
only in larger cities.
• Enhances local control of the program by reducing reliance
on independent consultants and contractors.
• Promotes short-term federal involvement.
• Programs similar to this have been used in other States;
an engineer will soon be hired as a circuit rider in
Region VII to help with the technical and financial
problems of POTW's in a group of small communities.
• Program has great potential to generate important spin-off
benefit: the permanent establishment of circuit rider
services to fill a wide variety of other local financial
management needs after POTW needs have been met.
The financial management assistance options are summarized in the matrix
(Figure IV.2) on the following page.
PROGRAM MANAGEMENT ROLES
While assistance programs can operate through a number of different
institutions such as 208 agencies and Regional or interstate authorities,
program management functions are the responsibility of either EPA or the
delegated States. Each management approach has its advantages as noted
below.
Programs Managed by States
EPA policy of delegating certain program management functions to the
States would be furthered by providing financial management assistance through
new or existing State programs, such as those used in Maryland and New
Hampshire. New State programs which address one or more of the national areas
of concern could also be made eligible for funding. The benefits of this
approach are as follows:
52
-------
Figure IV.2
FINANCIAL MANAGEMENT ASSISTANCE AND DELIVERY OPTIONS
GRANTEE PARTICIPATION
REQUIRED
REQUIRES INCREASE IN
ADMINISTRATIVE
WORKLOAD
RELATIVE FEDERAL
COST
PROMOTES LONG-TERM
FEDERAL COST
REDUCTION
PROVIDES OUTSIDE
ASSISTANCE TO
GRANTEE-SPECIFIC
PROBLEMS
j
t— t
ta
M
CO
z
B:
w
z
o
CJ
b.
O
CO
w
§
BOTH PHASES
PARTICULAR
PHASE
PROMOTES POTW
SELF-SUFFICIENCY
REDUCE ECONOMIC
BURDEN ON
USER
IMPACT ON
NONCOMPLIANCE
/
/
/
/
/
/
/
/
/
/
/
/
,f /
J\J f
^/ z
f&. f *•
f-^j / O
^v J *~*
/
X
X
o.
1 1
CO
X
lj
< CO
M §
b« £
CO
^ CO
B3 co
<; en
»
o
jj
X
X
X
X
CO
M
w ^
CJ H
M CO
pi ^-i
W H
CO M
O M
li
l-l W
o
z u
O B!
CJ <
3
^
X
X
X
X
u
O CO
Z M
M O
Z l-l
25 t-J
<: w
^H
M O
& W—v
Z MrH
b. cj^|
X
X
E
'H
•o
01
X
X
X
8
§
a:
u
B- l-<
[ij ^
CO U
X
E
*o
(U
X
c
O OJ
•H CO
« s:
^ P-.
o;
O.r-1
O CO
X
i] CJ
LJ l-l
*C C/3
j £
X O
2 <
O M
CJ O
en
cu
• H
CO
CO
01
•H
Jj
CO
X
en
cu
l-l
TO
X
X
X
X
u
>J CJ
< z
CJ <
M H
Z CO
S l-l
CJ CO
w co
H <
SNOIldO 30NV1SISSV
3
O
X
X
X
X
X
CJ
Z H
< z
H W
CO S
M 5
CO CJ
co O
< o
»
o
X
»
X
X
X
X
Pj
£
CJ
< u
S CJ
o B:
-i O
< CO
z u
X
§
'.-i
•o
0)
X
X
X
X
X
X
Lj
^
X
o
jj
5 Oi
3 H
g u
Bi CJ
E
3
• H
•o
01
S
X
X
X
X
X
X
_4
3 ee.
CJ U
03 O
M h-t
cj B:
SNOiicio AtiaAnsa
30NV1SISSV 1VDINH331
53
-------
• States have a number of different financial reporting, debt
ceiling and other requirements which should be recognized early
in the process and can serve as the framework around which
assistance programs are built.
t Because States are closer to the grantees and are more aware of
their individual needs, they could be in a better position to
devise alternative types of assistance.
t Delivering assistance through federal support of State programs
could also be made contingent on State matching funds. Although
it would be desirable for funds to be matched on a one-to-one
basis, program flexibility and State participation could be improved
by allowing States to contribute as much as they desired, or to
designate for matching funds only those options which they would
especially like to implement. Whichever form the State contribution
assumes, it will increase the impact of every federal dollar spent
and enable more grantees to receive assistance.
Programs Managed by EPA
Even though EPA continues to delegate more responsibility to the States,
it is, in the end, responsible for the success of the program. Questions
therefore arise as to which functions the States are better able to fulfill
and whether the assistance options contemplated are the proper objects of
delegation. The advantage of an EPA-managed program are summarized below:
• EPA already has the knowledge and experience required to address
complex problems and implement new initiatives. This capability
has generally not been developed on the State level because of
limited resources or because States are slow to react to demands
for this type of assistance.
• EPA is in a better position to inform grantees of new and existing
federal policies, concerns, and requirements, as well as to disseminate
new technical information.
• Federal support of State programs will result in duplication of
resources in each State. Due to the high levels of expertise required
to provide technical assistance, this duplication will be very
expensive.
RECOMMENDATIONS TO IMPROVE CONTINUING COMPLIANCE RATES
Unquestionably, the responsibility for maintaining POTWs in compliance
with NPDES permit requirements lies with local government. The roles of
54
-------
The strategy should be sensitive to the federal costs involved. In spite
of the fact that no strategy element is very expensive when compared with
other Program costs, the costs of the entire strategy should be proportionate
to the benefits derived.
Finally, in order to reinforce and refine the strategy over the next few
years, more data needs to be gathered regarding grantee financial capabilities
and financial management needs. The type of information of interest to the
construction grants program is outlined on page 26.
The recommendations presented below are listed according to their order of
importance in meeting these criteria.
NEAR-TERM RECOMMENDATIONS
Recommendation:
Fund the compliance diagnostic, thereby encouraging grantees to use it.
This recommendation directly responds to the most important area of concern:
achieving and maintaining compliance. Besides serving as a final phase checkpoint
for altering or refining the financial management and planning activities that
preceded it, the diagnostic is also the most comprehensive of the strategy elements,
Not only do financial management problems fall within its scope, but all others
related to planning, design, construction and operation of the plant. The
diagnostic also offers guidance which is tailored to individual local needs and
POTW-specific problems.
Recommendation:
Require that pre- and post-implementation user charge reviews give
particular attention to the adequacy of the charges in terms of
sustaining the plants' operating and maintenance expenses.
The restructuring of emphasis in user charge reviews and the addition of
post-implementation reviews is designed to contribute not only to the goal of
compliance, but also to the secondary objective of POTW self-sufficiency. These
reviews will ensure that grantees are aware of the full cost of their projects
so that adequate revenues can be generated to meet these expenses.
Recommendation:
Fund regional service center and circuit rider programs on a pilot
program basis.
55
-------
Federal and State Government are confined to regulatory activity and assis-
tance. The options presented in the previous section all deal with some form
of assistance -.- either through active assistance programs or information transfer.
Of the first four options, only Option 1 — the provision of operator training
assistance to the States -- represents any significant commitment of EPA resources.
In light of the continuing demand for senior operators, it is recommended that
this option to upgrade federal operator training assistance be implemented as
soon as possible. Effective State operator training programs depend on the
development of high quality instructional material and skilled trainers. These
resources can be most efficiently developed at the national level.
Option 2, which establishes a program to assist small POTWs through the
delegated States and through information transfer programs, requires only modest
resources which should yield significant benefits in improved compliance rates
at minor POTWs.
Options 3 and 4 are also recommended. They require that EPA, in its guidance
documents and other appropriate means, encourages the application of sound
management practices at POTWs.
Option 5 discusses methods of providing financial management assistance.
The rationale for the financial management assistance strategy is based on
each strategic element's ability to respond to criteria developed throughout
this paper. These criteria can be ranked according to their potential for creating
conditions which lead to compliance. The options, or strategy elements, can
then be ranked according to this potential for satisfying the criteria.
First of all, it is essential that any strategy element address at least
one of the three areas of concern. Achieving and maintaining compliance is
clearly the most important because it, alone of the three, represents a major
effort toward improved national water quality. Even though promoting POTW
self-sufficiency and reducing the economic burden on users are important objec-
tives, these other areas of concern are subordinate to the goal of constructing
and operating treatment plants which meet permit discharge requirements.
Yet the strategy as a whole should address these other areas, because the
potential for achieving the primary goal of compliance is enhanced by ensuring
that user charges are sufficient by themselves to cover O&M expenses, and are
developed as efficiently as possible in order to reduce costs.
Next, the strategy should contain at least one element which treats
grantee-specific problems. The wide range of grantee financial management
capabilities makes this essential.
The strategy should also be suited to both phases of a POTW's life cycle.
Again, this is necessary in order to assure compliance. The least costly
efforts toward this end can be made in the planning, design and construction
phase, while remedial efforts may be needed for some plants now in operation.
56
-------
Both programs address all three areas of concern, provide a much needed
individual level of assistance, and are suitable for both POTW phases. By
funding both programs on a pilot basis, the effectiveness and expense of each
program can be evaluated before a relatively substantial, nationwide commitment
is made.
Recommendation:
Fund a national resource center.
While providing less intensive levels of assistance than the service center
or circuit rider programs, the resource center meets all three areas of concern and
does so at substantially less cost. It also is suited to all POTW phases and
serves to complement the other strategy elements by supplying information about
them.
Recommendation:
Prepare and distribute a financial systems guidance document.
Addressing all areas of concern and suited to both POTW phases, the
guidance document will supply financial systems information which is adaptable
to a wide variety of communities. The cost and time involved in producing and
distributing this assistance are relatively small , yet many grantees may derive
considerable benefit from this guidance.
Recommendation:
Require that an early fiscal assessment be conducted by grantees during
facility planning.
Aimed primarily at reducing the economic burden on users by examining
fiscal capability early in facility planning, the costs and time required to
conduct this assessment are minimal. And, by requiring local officials themselves
to evaluate their municipality's financial condition, this strategy element
drives home the importance of financial considerations in POTW projects.
LONG-TERM RECOMMENDATIONS
Each strategy element should be periodically evaluated to insure that any
necessary adjustments and refinements are made and that program objectives
continue to be met.
The service center and cricuit rider programs should be expanded, if justified
by the demand for such services, the success of the program in meeting grantee needs,
and the reasonableness of the projected costs.
57
-------
The recommended plan excludes two options discussed earlier; concolidated
service area feasibility studies and grant eligibility for all financial planning
costs. The latter is not included because very few costs are not now eligible
under the Step 1 grants process and the emphasis placed on making full use of
existing eligibilities will soon be provided by the issuance of a new Program
Operations Memorandum (POM). Consolidated service area feasibility studies were
excluded because the costs involved are so minimal as not to discourage local
jurisdictions from initiating these studies on their own.
PROGRAM MANAGEMENT RECOMMENDATIONS
As noted primarily, State and federal approaches to program management
each have their own benefits. Because any given strategy element might be more
suitably managed by one level of authority rather than another, it is necessary
to evluate each element individually to determine the best manager of that
particular program.
Programs Managed By States
The list below outlined those programs that will produce the greatest benefits
if delegated to the States.
1 . Early Fiscal Assessment. Because some States already have the
authority to approve facility plans and because this assessment would be part
of the facility planning process, it is logical that the States assume this
function along with approval of other Step 1 processes. State management of
this process would also help produce realistic assessments which take into
account State financial reporting, debt ceiling and other requirements.
2. User Charge Reviews. Many States have already been delegated this
function. They are familiar with the existing review procedures and consequently
would have little difficulty in applying the new reviews which stress the
adequacy of the proposed and actual charges.
3. Compliance Diagnostic. Those States that have been delegated NPDES
permit enforcement would also manage the diagnostic. These federally funded
evaluations provide an additional incentive which complements the deterrent of
State enforcement actions.
4. Circuit Rider Programs. While the program described in this paper
envisions a contract between grantees and the circuit rider, States could
assume a greater degree of control by hiring the circuit rider themselves and
making his services available to groups of grantees.
58
-------
Programs Managed By EPA
The benefits of federally managed programs, described in the last section,
center on EPA's knowledge and experience derived from program management over
the past eight years and from a national and regional management infrastructure.
The following programs can be implemented to best advantage if they are managed
at the federal level.
1. Financial Systems Guidance Document. This publication is issued and
compiled by EPA Headquarters and will contain the most reliable financial
management information available nationally. Such a document is beyond the
scope of most State agencies.
2. National Resource Center. Because of its national coverage, the
resource center will provide even the most geographically isolated grantees
throughout the country with a first line of direct, reliable financial
management information.
3. Regional Service Center. The regional approach to providing
financial management assistance combines the best features of the federal
management role (expertise and regional infrastructure) with individual
attention to grantee-specific problems. The regional approach also eliminates
the need to duplicate such programs in every State, thereby reducing costs.
An action plan to implement this strategy will be presented in the final
draft of this paper.
SUMMARY OF THE RECOMMENDATIONS TO PROVIDE FINANCIAL GUIDANCE
A. Near-Term Recommendations
1. Fund Compliance Diagnostic Studies
2. Fund and Require Pre- and Post-Implementation User Charge Reviews
3. Fund Pilot Programs for Regional Service Centers and Circuit Riders
4. Fund a National Resource Center
5. Prepare and Distribute Financial Systems Guidance Document
6. Fund and Require Early Fiscal Assessments
B. Long-Term Recommendations
1. Periodically Evaluate Near-Term Recommendations
59
-------
2. Expand Pilot Programs for Regional Service Centers and Circuit
Riders, if justified
C. Program Management Roles
1 . Programs Managed by States
o Early Fiscal Assessments
o User Charge Reviews
o Compliance Diagnostics
o Circuit Rider Programs
2. Programs Managed by EPA
o Financial Systems Guidance Documents
o National Resource Center
o Regional Service Center
OPTIONS TO IMPROVE COMPLIANCE RATES AT EXISTING POTWs
As more POTWs are constructed with the aid of the grants program, it
is increasingly obvious that EPA must formulate a strategy to address those
POTWs which have completed construction but are not achieving the effluent
quality required by their NPDES permits. Although the quality of available
data is not fully satisfactory, there can be no question that remedial action
is required at many POTWs on final NPDES standards.
A recent EPA-funded study (1) of POTW performance found that 53% of the
1,167 major municipal treatment plants (those with actual average flows greater
than 1 MGD) on secondary or more stringent treatment limits, were in significant
or serious violation of their NPDES permit conditions during the spring quarter
of 1977. When all effluent quality violations were included, the noncompliance
rate rose to 77%. This latter figure is somewhat misleading, since it includes
minor transient violations which have little water quality significance.
Noncompliance at existing POTWs is discussed in greater detail in an issue
paper produced earlier. This paper will limit discussion of the subject to a
brief summary of the problem, followed by a listing of options to improve the
compliance rate of existing POTWs under consideration by EPA. Causes of non-
compliance can be placed in three general categories:
• Inf1uent--These include industrial wastes, I/I, and
failure to limit system hookup to plant capacity.
60
-------
• Facility—These include design and equipment deficiencies,
obsolescence and construction related problems.
• O&M--These include all problems related to the management,
financing, operation, and maintenance of POTWs.
These categories are not independent of each other. Often, adjustments
in O&M procedures can counteract the negative effectiveness of design or
influent problems. A study (2) sponsored by EPA's Office of Research and
Development (ORD) found that 70% of the noncompliers analyzed could be brought
into compliance with operations-oriented corrections.
Many plants exhibit multiple problems which prevent compliance. EPA's
Municipal Environmental Research Laboratory has funded two studies (2,3) which
together comprise the National Operational Maintenance Cause and Effect Survey.
One of the MERL-funded studies developed a systematic approach to the correction
of problems causing POTWs to violate effluent standards. This procedure, called
the Composite Correction Program (CCP) consists of a detailed diagnostic evalua-
tion of a POTW, in which all factors contributing to violation of NPDES permit
conditions are identified. Next, a plan of action—the CCP--addressing each
of these problems is formulated. Finally, the CCP is implemented to bring the
plant into compliance. The CCP addresses administrative as well as technical
problems, and requires the continuing involvement of a team of experts over a
significant period of time to insure that the improvements called for in the
CCP are fully implemented and achieve the intended results. This process generally
requires a minimum of several months and longer, if extensive physical modification
are required. The CCP has been successfully demonstrated at several POTWs. MERL
has issued a contract for the development of a detailed protocol for the CCP.
This work will be completed in 1981.
Based on experience gained through several EPA funded studies, along with
information and comments offered by EPA's regional offices and several State
environmental protection agencies, the following options have been developed
to address effluent quality noncompliance in existing POTWs.
Option 1
Utilize diagnostic evaluations of noncomplying POTWs to prepare Composite
Correction Programs (CCPs), which are used as the basis of enforcement action
by the States or EPA.
A growing number of firms are developing the capability to perform diagnostic
evaluations of POTWs. These firms have the ability to prepare composite correction
programs which address all of the factors contributing to effluent quality non-
compliance, including adminstrative, financial and managerial problems as well
as the technical O&M problems which are often the result of more basic problems
in the financing or management of a POTW.
61
-------
Because of the limited resources available for enforcement against POTWs
which have completed construction but fail to meet NPDES permit requirements,
this option provides for the payment, through a Step 1 grant, of 75% of the cost
of a diagnostic evaluation by a firm qualified in the operation and management
of POTWs. This would substitute a corrective action for the present punative
enforcement measures, which are both expensive and time consuming to implement.
Funds for these "enforcement diagnostics" would be provided from 201 monies in
accordance with a priority system based on severity of violation. As with
any activity, the utility of the enforcement dianostic, which would provide
a plan for achieving compliance, would be directly dependent on the qualifications
of those performing the work. Firms providing this service would be required
to demonstrate competence in the management of POTWs, including process control,
preventive maintenance management, personnel management, budget analysis and
other aspects of POTW management.
An alternative procedure would have the State or EPA issue on administra-
tive order requiring a POTW, in violation of NPDES permit effluent quality require-
ments, to engage a qualified firm to perform an enforcement diagnostic without
grant assistance. As in the original option, the CCP would be utilized as the
basis of a remedial program. A compliance schedule for implementation of the
CCP would be set, and the POTW would be required to adhere to that schedule.
Another variation of option 1 would have those States which choose to do
so develop the capability to conduct their own enforcement diagnostics or
contract directly wit firms which would perform the diagnostics evaluation.
Selecting the best method of funding diagnostic evaluations is particularly
difficult. Those opposed to partial federal funding of diagnostics contend
that local government is responsible for compliance and must pay for all
corrective action required to achieve compliance. Those favoring grant eligibility
state that the cost of a diagnostic evaluation as compared to the federal invest-
ment in the POTW is a very small price to pay for a CCP which can be used as a
plan for remedial action to achieve compliance. Furthermore, federal funding
of the diagnostic should minimize the time required to obtain the CCP, since
enforcement actions are frequently subject to delays.
Option 2
Establish a "fast track" grant procedure to fund limited remedial capital
construction (including eligible collection system improvements) necessary
to correct influent and facility problems preventing POTW compliance.
Remedial grants would be available only to POTWs that are unable to
achieve compliance after constructing new facilities or upgrading existing
facilities. Remedial grants would be used solely for correcting mistakes
and oversights. Second grants would not be available for correcting noncompliance
caused by deficient operations, new industrial flows, or capacity expansions.
62
-------
These grants would not change the scope of the original POTW construction
grant, but would be limited to those measures necessary to achieve compliance
with NPDES permit requirements. The grant would encompass both design and
construction costs, and would be exempted from many of the usual restrictions
and requirements of the existing construction grants program, since it is
intended only to meet the objectives of the originally approved project.
Priorities would be determined by severity of violation and water quality impact.
Grant eligibility would be determined by the same criteria now employed by the
construction grants program.
These grants would provide a rapid means of attacking facility and influent
problems identified in the "enforcement diagnostic" discussed in option 1 of
this section. The use of the fast track grant, to correct facility deficiencies
at a POTW which was constructed with grant funds, may be regarded as a "bail
out" of incompetent designers, suppliers of substandard equipment and local
goverment agencies which have not initiated timely corrective action.
However, under present federal and State laws and regulations governing
the complex process of planning, designing, constructing and operating a
POTW with the assistance of the construction grants program, it is virtually
impossible to identify a party who is accountable to the extent of financial
responsibility for corrective action. In any event, the fast track
grant to correct POTW deficiencies in no way prevents legal action against
a negligent designer, contractor or vendor. Where EPA or the State feels
that negligence on the part of a consultant or contractor is the cause
of noncompliance, the grant can be made on the condition that the grantee
files suit against the negligent party, returning damages recovered to the
grants fund.
Option 3
Develop and implement more effective enforcement mechanisms to improve
compliance at POTWs.
Present EPA enforcement activities are primarily directed at the
construction of new grant-assisted POTWs. However, without a meaningful
enforcement program focusing on the performance of existing facilities,
many POTWs will not devote the resources necessary to assure compliance.
Some of the options discussed above are, in effect, enforcement activities.
Under the provisions of the 1977 amendments to the Clean Water Act, EPA
is currently in the process of delegating much of the responsibility for
the construction grants program and the NPDES permit program to the States.
During this period of transition, it is important that close coordination
be maintained between the grants program and the enforcement program
at the State and federal levels.
63
-------
At present, many POTWs in serious violation of NPDES effluent
quality requirements are not under any meaningful enforcement action which
is likely to result in some effective stimulus to achieve compliance. In
most cases, it is more costly to operate a POTW in compliance than to
violate effluent standards. Since resources at the local level are
generally scarce, expenditures necessary to properly operate and maintain
a treatment system are often deferred, or funds are diverted to other uses.
EPA must increase its efforts to implement more effective enforcement
methods in cooperation with the States. Once POTWs are convinced they are
better off if they maintain effluent quality in compliance with NPDES
requirements, they will redirect resources to this purpose.
Sanctions:
EPA and States administering the NPDES program are responsible
for enforcing national pollution control requirements. Currently,
the Clean Water Act mandates all municipalities discharging into the
nation's waterways must, at a minimum, meet secondary treatment discharge
limitations as defined by EPA by 1983. The Clean Water Act authorizes
waivers from secondary treatment requirements only for approved marine
discharges. All other municipalities must construct necessary treatment
facilities, regardless of whether federal funds are available or not.
The Clean Water Act's secondary treatment requirement is mandatory.
Enforcement discretion is not authorized, nor are waivers available to
municipalities that are unable to secure funds through the construction
grants program. The only funding-based waiver in the legislation
applies to industries committed to using POTWs which have not yet received
funding. Industries, however, are not entitled to federal construction
grant funds.
EPA's current enforcement program for municipal dischargers is
construction oriented. Most agency resources are devoted to negotiations
with municipalities. Construction scheduling, grant commitments, and
eventual satisfaction of secondary treatment requirements are stressed.
These activities produce enforceable schedules which may not be realistic
but will technically satisfy the Clean Water Act's 1983 completion deadline.
Among those municipalities which are not entitled to federal construction
grant funds, few have decided to locally finance necessary treatment system
improvements. Municipalities have not felt threatened by agency enforcement
proceedings or compelled to meet the statutory deadline. Where enforcement
has been initiated, the courts have been reluctant to impose rigid penalaties,
especially in cases where the treatment system was in need of major capital
improvements which were considered eligible for federal grant funding.
64
-------
Municipalities that have already completed construction, or need no
construction to satisfy enforceable requirements of the Clean Water Act, also
feel little risk for violating NPDES effluent quality standards. These
municipalities can save substantial operating costs (energy, chemicals,
and operations salaries) by minimizing POTW performance. If an enforcement
action is initiated, most municipalities can continue to operate their
POTW in a noncompliance mode until a court approved settlement is reached.
In most cases, fines that are imposed are small compared to the savings
in operational costs.
Although EPA and State pollution control agencies are beginning to
direct some enforcement activity toward continuous compliance, program
managers are faced with the task of developing remedies which are acceptable
to the courts while also acting as a deterrent to non-target POTWs.
The courts are reluctant to impose significant fines on municipalities,
and significant, punitive penalities have been awarded only in the
most egregious cases where intent to violate the law could be clearly
established. Moreover, even before fines for egregious violations
can be secured, significant violations must be detected through the
self-reporting compliance tracking system, causal factors established,
and responsibility assigned.
The major element missing from the national continuous compliance
program is risk. Given the existing focus of enforcement -- construction
and initial compliance — municipalities recognize continuous compliance
is often ignored by federal and State officials. Continuous compliance
monitoring is often a low priority within the States. Priority for
continuous monitoring could be established at the national level, and
State specific objectives negotiated through State management assistance
grants awarded to delegated States. Such an objective oriented approach
could be tied to grant awards under Section 205(g) and would be
compatible with the environmental manager mode under review in the 1990
management task.
Compliance monitoring and quality assurance also could be developed
at the State or jurisdictional level through Section 208 of the Clean
Water Act. Although generally regarded as a planning provision, Section
208 could be modified to provide funding to State or areawide "utility
commissions." These commissions, particularly if established with Statewide
authority, could monitor compliance, administer operator certification
and continuing training programs, review and approve user charge rate
increases, oversee expansion and preventive maintenance scheduling and
review and approve sewer use ordinances, industrial use agreements and
sludge disposal programs. The utility commission could regulate POTW
operations along the same lines as electric utilities, which are
also providing basic public services.
65
-------
Regardless of whether "utility commissions" to regulate POTWs are
established or not, use of existing enforcement tools could be improved
to encourage compliance in specific instances while serving as a
deterrent nationally.
An initial step in deterring noncompliance would be to remove
uncertainty concerning enforcement risk. Currently, enforcement under
the Water Act is not clearly mandatory. Mandatory enforcement responses
for noncompliance would encourage POTW compliance. This same "mandatory"
approach could be applied to monetary or other penalities, such as connection
bases or appointment of special POTW managers that are responsible only to
the courts but paid by local agencies.
Continuous compliance tools, such as connections bans or fines, are
punitive. They are fair, however, if universally applied. They would
not be effective in all cases. For example, a connection ban would not
encourage compliance at a POTW serving a no-growth area. It would be
effective where residential or industrial growth is expected and sewage
treatment alone is the limiting influence.
Other tools also are available for assuring continuous and initial
compliance, but their usefulness is limited to new, EPA funded grantees.
For example, in new construction EPA could avoid increasing grants to
municipalities that have delayed construction, fallen off schedule, and
incurred substantial inflationary costs. This policy would encourage
grantees to tightly manage construction activity, but it would be difficult
in some instances to assign responsibility for delay. It would be unfair
to punish a grantee for delays caused by State or federal reviewers.
Once federally funded systems are constructed, EPA could reward
compliance by subsidizing local debt payments. Such a program would
initially reward sound operators, but over time would become a small
compliance incentive as real operations costs rise but debt payments, due
to inflated tax receipts, become less of a burden locally.
RECOMMENDATIONS TO IMPROVE COMPLIANCE AT EXISTING POTWs
Aggressive enforcement programs at the State and federal level are
the key to the reduction of the high incidence of effluent quality
noncompliance in POTWs. Greater emphasis on the performance of facilities
which have completed construction and are not meeting NPDES permit limits
is a central feature of the compliance strategy. However, to be effective,
the strategy must incorporate reasonable programs which demonstrate a cooperative
approach on the part of regulatory agencies.
66
-------
The following measures are recommended to reduce effluent quality
violations at POTWs which have completed construction:
• Utilize diagnostic evaluations as a basis of enforcement action.
Diagnostics should be grant eligible.
• Require violating POTWs to implement the recommendations of the
diagnostic on a firm schedule.
• Establish a fast track procedure to fund remedial capital
construction which is strictly limited to the correction of
deficiencies in the original project and which do not represent
changes in the basic scope of the original project.
• Require and assist recipients of these remedial construction
grants to take appropriate legal action to recover funds where
EPA or the States identify negligence on the part of construction
contractors, engineers or equipment suppliers.
•U.S. QOVQMHEHT PBIKTIHO OFFICE: 1981-O-72O-016/5981
67
------- |