Clean Water
Federal Grants Lend a Hand


      Wastes discharged from municipal
      sewers are one of the major
      causes of water pollution. In
recent decades there was a tremendous
increase in the volume of these
discharges because of rapid population
growth and the enormous build-up of
urban and suburban areas.

  Communities, in general, could not
construct treatment facilities fast enough
to cope with the rising flow of wastes.
Lack of money was the chief reason. To
help our cities and towns catch up and
thus combat water pollution, Congress
in 1956 passed the Federal Water
Pollution Control Act. A major element
of the Act authorized the Federal
Government to award grants to
municipalities to help finance
construction of sewage treatment
facilities. The program was limited in

  Today, the construction grant effort,
authorized by amendments to the 1956
Act involves billions of dollars in Federal
funding annually and is currently the
largest public works program in the
Nation. It is providing tens of thousands
of jobs and other economic stimulus.
The program is administered by the U.S.
Environmental Protection Agency

  This booklet details the highlights of
today's construction grant program,
describes how it works, what it
accomplishes, and how it fits into the
Nation's overall environmental control
strategy. The economic effect of the
program will be considered. It has
particular relevance in a period of
unemployment and inflation.

 The Grant Program Grows Up

  Work on the first sanitary sewer in the
United States was begun in Chicago in
 1855, 12 years after the world's first
sanitary sewage system was completed in
Hamburg, Germany. The first sewage
treatment plants were built here in the
 1870's, and by 1948 the plants served
some 45 million Americans out of a total
population of  145 million.  The
facilities were far too few; most
of them did not do an adequate job of
cleaning up discharges. Water pollution
grew steadily worse as ever-increasing
loads of municipal and industrial wastes
were dumped into our waterways.

  In 1956, Congress tackled the
problem  of municipal waste disposal by
enacting the Federal Water Pollution
Control Act which established the

construction grant program. Congress
authorized a modest $50 million a year
in grant funds.

  The grants covered 30 percent of the
cost of a wastewater treatment project,
and the total amount for any one grant
was limited to $250,000.

More Money For Grants

  The program picked up steam with
enactment of the 1966 Water Pollution
Control Act Amendments which raised
the Federal share of a project's cost up to
50 and 55 percent under certain
conditions. The dollar ceiling on the
amount of individual grants was removed,
permitting cities of all sizes to participate
in the program. Appropriations for grant
money rose substantially in the late 60's
and reached $ 1 billion for fiscal year

  The 1966 law also included a
provision under which State and local
funds could be used to prefinance the
Federal share or any part of it. This
permitted initiation of a greater number
of projects with limited Federal funds.
Although a Federal funds "deficit" was
created  in a number of projects under
this provision,  no legal liability was
created for the Federal government to
reimburse States and localities for having
prefinanced some portion of the Federal
grant. The level of "deficit" in Federal
grants had risen to almost $2 billion
before the enactment of the 1972
Amendments to the Water Pollution
Control Act. The 1972 law included
funds for reimbursement of States and

  Between 1956 and enactment of the
current  law—the 1972 amendments—
some progress  toward cleaner water was
registered across the country. Almost
14.000 sewage treatment projects were
federally funded by grants totaling about
$5.2 billion for facilities costing $14
billion. In 1973, public sewage facilities
were estimated to serve  159 million
persons of a total population of 210
million. Many facilities, however, were
not achieving an effective degree of
A National Clean Water Program
Begins to Emerge

  After 1965, the clean water drive
began to take on direction and
coherence and to set the stage for the
comprehensive 1972 amendments.

  The establishment of water quality
standards for our rivers, lakes, and
estuaries was begun under the Water
Quality Act of 1965.
  There was a marked expansion of
State water pollution control programs.
More and more of the States inaugurated
construction grant programs of their
own. State and local governments
worked more closely together to
stimulate construction of waste treatment

  Local planning groups began to
participate increasingly in the review of
proposed sewage treatment plant
construction to ensure conformity with
community and regional needs.

  Generally, by the outset of the 70's,
Federal, State and local efforts were
beginning to mesh into a national
program for clean water.

  But it remained obvious that existing
government laws and regulations were
inadequate for the monumental clean-up
task ahead. And, further, there was a
growing realization that the clean-up
costs would be far higher than estimated
for both government and industry.

The  1972 Amendments and
Construction Grants

  The 1972 amendments encompassed
the most complete and extensive water
pollution control program in the world.

  Under the program, EPA is authorized
to make grants of $ 18 billion to the
States for construction of new municipal
treatment facilities.  The Federal funding
share for these projects is 75 percent.
The rest of the cost is divided among
State and local governments and
industrial users who hook up to a
municipal sewage system. Municipalities
are also elig ble for grants for
demonstration projects that utilize new
methods for treating sewage, for
developing joint systems for treatment of
municipal and industrial waste discharges
and for perfecting new water purification

  Up to $2.6 billion in additional funds
were authorized to reimburse State and
local agencies for treatment projects
started during the 1966-72 period when
adequate Federal funding had not been
available. Of this amount almost $ 1.9
billion was reimbursed through June 30,
   Of the $ 18 billion authorized for
construction grants beginning in fiscal
year 1973, more than $6 billion was
obligated by June 30, 1975. The $12
billion remaining is expected to be
obligated by September 30, 1977.
   More than 5,300 treatment projects
are now underway, with an estimated
cost in Federal and non-Federal funds
upon completion of about $ 15 billion.
Federal funding of the projects is
divided almost equally between the old
and the new law authorizations  with
more than 90 percent of the old law
projects far into the construction stage.
Under the new law, some 1,600 projects
are in the first stage of planning.
   The 1972 amendments not only
greatly modified and expanded the
construction grant program  but also
established a system of effluent
limitations and permits for both
municipal and industrial dischargers.
The effluent  limitation and permit system
is designed with clean-up target dates
for all dischargers. These targets must be
met or tough enforcement measures will

be taken by States or the Federal

   Far reaching goals also were set by the
new law. They are: by 1983, water that's
clean enough for swimming, boating, and
protection of fish,  shellfish and wildlife,
and by 1985, no more discharges of
pollutants into the Nation's waters.

   Today's construction grant program is
clearly tailored to  help municipalities
meet step-by-step  targets and the  1983
goals of the new law. And help is needed.

   About 1,500 municipal wastewater
facilities serving 3.2 million persons are
discharging untreated sewage. And some
2,700 plants provide only primary
treatment of wastes, a process which
removes about 30 percent of some

   Under the '72 amendments,
municipalities must provide secondary
treatment for their waste waters by July
1977, or 1978 in the case of plants that
are under construction. However, when
secondary treatment will not maintain
the water quality standards of the
receiving waters, a higher degree of
treatment must be provided.

   (Secondary treatment provides, in
general, for 85 percent removal of
biochemical oxygen demand (BOD)
and suspended solids. BOD is the
amount of free oxygen that can be
absorbed from water. If excessive
amounts of BOD demanding substances
are present in the water, the available
oxygen supply can be depleted to the
point where water biota will die. The
oxygen is critical because it is water's
chief self-cleansing and fish supporting

Who May Apply  For Construction

   Municipalities, intermunicipal
agencies,  States, or interstate agencies
may apply for grants. A municipality is
described in the law as a "a city, town,
borough,  county,  parish, district, or
other public body created by or
pursuant to State  law and having
jurisdiction over disposal of sewage,

industrial wastes, or other wastes, and an
Indian tribe or an authorized Indian
tribal organization." Grants also may go
to a designated and approved
management agency directing
coordinatec areawide water pollution
control planning under section 208 of
the 1972 amendments.

Projects Eligible for Grants

  In genercl, eligible projects include
construction of new treatment plants,
expansion cr improvement of existing
plants, construction of interceptor and
outfall sewer lines or provision of
pumping, power and other equipment
necessary to operate a sewage treatment
system. Under certain conditions,
sewage collection systems and projects
to control pollution from combined
sewers (storm and sanitary sewers)  may
also receive Federal assistance. Further,
the 1972 amendments urge that
consideration be given to grants for
application af wastes to land, a  generally
less expcnsi /e method of treatment
which already has met with some
  All projects, of course, must  be on a
State priority list. (See "The Role of the
States," page 7).

The Grant Process

   EPA is now authorized to pay the
Federal share (up to 75 percent) of costs
of separate s.tages in the development of
a project. In the past, the Agency
awarded a  s ngle grant for the Federal
part of the  overall project cost.  EPA
now pays the Federal share of the costs
   (1) preliminary plans and studies and
other eligibl; early preparatory work
   (2) design plans and specifications
   (3) construction of the waste
treatment facilities.
  Federal  payment to cover these three
steps in the process are made to the
applicant as all, or parts of each of these
elements, an; completed. The three
major stages in the process  are generally
accompanied by pre-application
requirements and post-construction
activities primarily associated with
operations and maintenance. (For fuller
details of the construction grant process
see Table.)

   There are questions that must be
answered in the grant process:

   Have alternative wastewater
management approaches been

   Is the design of the project cost

   Is the design environmentally, socially
and institutionally acceptable?

   Has a wastewater discharge permit
been issued?

   If no  permit has been issued, have
applicable effluent limitations been
developed, and will the project attain
the required degree of treatment?

   What are the plans for disposing of
                          Typical Stages

   State places
   project on
   priority list.


   Applicant and
   have pre-
   with State
   and EPA.
Facilities planning

Application for Stet
1 grant submitted tc
State and EPA for
review and

Consultant prepares
facilities plan.

EPA and State
review and approve
facilities, plan.

EPA prepares
impact statement, if
necessary, or
declares none is

      Has satisfactory provision been made
   for the effective operation and
   maintenance of the facility?

      Does the project conform to the
   requirements of any applicable river
   basin plan?

      Has a user charge been worked out to
   assure that all recipients of the treatment
   plant services pay their respective
   proportional share of operation and
   maintenance costs? (Industrial users of
   new municipal treatment plant must now
   also pay a proportionate share of the
   construction cost of the plant.)

      The scope of the project will
   determine how detailed the answers to
   these questions would be.

   The Role of the States

      To be considered, a project must
   appear on a State priority list. This is to
          ensure that the most needed facilities
          will be constructed with the funds
          available. The priority lists are based on
          four required criteria and whatever
          additional criteria the States wish to
          impose. The required criteria are:
            •  Population affected
            •  Severity of pollution problems
            •  Need for the preservation of high-
               quality water
            •  National priorities (as well as total
               funds available).

            At present, EPA regional
          administrators are authorized to delegate
          to State agencies the technical and/or
          administrative review and certification of
          adequacy of an applicant's facility  plans,
          design plans and specifications,
          operation and maintenance manuals,
          and certain documents involved in the
          bid and contract process. By the end of
          1975, it is estimated that perhaps 40
          States will have been delegated
of Development in Municipal Waste Water Treatment Works Projects*
       Design stage

       Consultant generally
       prepares materials
       for Step 2 grant
       agreement; submits
       it to State and EPA
       for approval.

       Consultant prepares
       plans and

       EPA and State
       review and approve
       project plans and

Consultant generally
prepares materials
for Step 3 grant
agreement; submits
it to State and EPA
for approval.

Grantee advertises
for construction
bids, selects
responsive low
bidder, submits all
bids in tabular form
to State and EPA
for approval, and
upon approval
awards contract.

Project is

EPA and State
conduct final

EPA conducts final
audit and makes
final payment.
Operation and
Maintenance stage

Plant operated and
maintained for life
of project.

State and EPA make
O&M and permit

Municipality collects
user charges and
industrial cost
recovery payment.
*At the present time,  and for several years to come, many piojccts will enter the  program  for  grants at the design or
 construction stages
*Some cities do in-house design without consultant

responsibility to review and certify one
or more of these elements of the grant
process. However, EPA cannot delegate
responsibility for actual approval of

The Role of EPA Regional Offices

   The EPA regional offices are
responsible for conducting the grant
program within the policy and
procedural guidance received from EPA
headquarters;. They must integrate the
requirements of the program into
regional priorities and resource
constraints. They have authority to deal
directly and conclusively with grant
applicants and State agencies.  The
regional offices are authorized to:
   • Interpret Agency policy,  guidance,
and procedures to the States,
communities, and consultants  retained
by applicants.
   • Review submissions by applicants
for adequacy and conformance with
administrative requirements.
   • Conduct environmental reviews of
applicant's plans as necessary, prepare
environmental impact statements.
   • Make grant awards and payments.
   • Monitor and report on project
   • Conduc t final inspections and close
out the project after completion.
   • Determine the readiness  of State
agencies to assume delegated EPA

Construction Grants and the

   A major responsibility of EPA, its
regional offices, and the States is to
assure that construction of waste
facilities is not a threat to the
environment but does, in fact, enhance
the environment. The  land use impact of
new waste treatment facilities  and
connecting sewer lines is a case in point.

   Under the construction grant process
the possible environmental effects of a
project are analyzed when an applicant
submits a facilities plan (stage one of the
process) to EPA. The facilities plan
includes a discussion of possible
environmental effects  (primary and
secondary) of the proposed project and
the alternatives (structural and
nonstructural) that were considered
during project development.

   After reviewing the plan's
environmental evaluation of the project,
an EPA regional administrator or his
designee may clear the plan as is or
require that an Environmental Impact
Statement (EIS) be prepared, publicized
and approved. In the latter instance, a
public hearing is held to discuss the
environmental aspects of the proposed
project. EPA then prepares an EIS and
circulates it for review among the
appropriate governmental agencies and
interested groups and private citizens.
EPA revises the EIS in light of the
review comments and files the final
document with the Council on
Environmental Quality.

   EPA is emphasizing that
environmental evaluation should occur
at the earliest possible point in the
processing of each project. This
procedure could eliminate months of
delay in the construction of waste
facilities. In many cases, the
preparation period of a project—from
conception to beginning of construction
is running from a year to about 21/2
years. EPA's goal is to cut the
preparation period to 9 months
to ll/2 years.

   EPA is preparing definitive manuals
to assist communities in the
environmental assessment process and
thus help avoid delays in the grant

Construction Grants and the

   One key reason for EPA's push to
reduce preparation time for new plant
projects is because Step 3 of the grant
process, the actual construction phase,
has such a powerfully beneficial effect
on the economy, particularly on the
currently hard-hit construction industry.
Step 3 provides the bulk of employment
and economic activity such as equipment
purchases and does  so over a substantial
period of time—one to five years. Step 1
and Step 2, of course, create reasonable
immediate  employment for professiojial
" -•',' ^';.. >.',.  ',nv-\,L tTO'tcCtiOu  A?_'— iftij

consultants, primarily architectural and
engineering consultants, and others who
provide planning and associated services.

   Based on data provided by the Bureau
of Labor Statistics, it was estimated that
early in 1975 more than 40,000 people
were employed in building treatment
facilities for municipalities. For every
$1 billion in construction outlays, it is
estimated that  20,000 to 25,000 on-site
workers will be employed. Thus during
FY 1977 approximately 180,000
workers will be employed in direct
construction of treatment facilities. This
rise in on-site employment will be
reflected, of course, in a proportionate
increase in off-site employment in the
raw material industries, manufacturing,
and so forth.

   Of the $4.2  million it would take to
build a typical  sewage treatment plant
serving 100,000 persons, 11.6 percent of
the cost would go for metal products; 26
percent for machinery and equipment;
12.6 percent for stone, clay and glass;
3.1 percent for lumber and other
materials; 28.9 percent for labor, and
17.8 percent for overhead and profit.

   Further, the construction grant
program translates into more and larger
treatment plants across the country, and
this means new jobs for operators,
technicians and maintenance personnel.

   The Joint Economic  Committee of
Congress has concluded, after hearings,
that environmental expenditures,
including construction grants, are not
feeding inflation and that because of
their stimulative effect are beneficial to
the economy.

Progress is Being Made

   The rate of obligation of construction
grant funds authorized in the 1972
amendments is accelerating rapidly. In
fiscal year 1974, EPA obligated $1.4
billion for new treatment projects.  In
fiscal 1975, the comparable total was
more than $3.5 billion.  And the level of
grant awards in fiscal 1976 will be  much
   The grant program is having a striking
effect on America's quest for clean
water. New and improved municipal
waste treatment facilities are reducing
effectively the pollutant load. For
example, in the last few years levels of
coliform bacteria and biochemical
oxygen demand have decreased in many

  The spread of polluted water across
the country is being halted, and, in fact,
dramatic improvement in water quality
is being registered in some areas.

  In February 1975, EPA
Administrator Russell E. Train reported
on restoration of good water quality and
announced a list of 25 major rivers and
bays, plus the Great Lakes, where
improvement has been measured.

  EPA  officials estimate that there will
be marked enhancement of water quality
in many parts of the country by 1977.
The reader is free to quote or reproduce any part
of  this  publication  without  further  permission.
             August 1975
          For sale by the Superintendent of Documents, U.S. Government Printing Office
                            Washington, D.C. 20402

       Areas of Marked
      Water Quality
      Androscoggin Uiver (Maine)
      Aroostook River (Maine)
      Belfast Bay (M line)
      Boise River (Idaho)
      Snake River (Idaho)
      Calumet River (Illinois)
      Cuyahoga River (Ohio)
      Detroit River (Michigan)
      Coeur d'AIene River (Idaho)
      Delaware River (Delaware)
      Escambia Bay (Florida)
      Great Lakes
      Hudson River (New York)
      Kennebec River (Maine)
      Little River (Massachusetts)
      Maurnee River (Indiana)
      Mississippi River (Minnesota)
      Missouri River (Iowa)
      North Platte River (Minnesota,
        North Dakota)
      Portland Harbor (Maine)
      Providence River and
        Narragansett Bay (Rhode
      Raritan River and Bay
        (New Jersey)
      Salt Pond (Maine)
      Spokane River (Washington)
      St. Paul Harbor (Alaska)
      Willamette Rivi;r (Oregon)