United States 80Q-R-76-1 06
Environmental P'otection Agency
August 1976
All You Need
to Know About
Sewage Treatment
Construction Grants
Federal Funds Available
for Municipal
Water Pollution Control
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• Money, local governments, and water
pollution.
• A multi-billion dollar program for water
cleanup the U.S. Environmental Protection
Agency (EPA) hopes local governments cannot
refuse.
• And how local governments can get their fair
share of the Federal funds available to build
sewage treatment facilities.
That, in brief, is what this pamphlet is all
about.
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Some Background
The facts are simple. Municipal sewage is a
major source of water pollution. Inadequately
treated sewage from 107 million people still flows
into our waterways. Only 53 million people in
the United States are served by sewer systems
that provide secondary treatment, the minimum
requirement, or better.
To safeguard public health and welfare,
Congress enacted a law—the Federal Water
Pollution Control Act Amendments of 1972,
Public Law 92-500—that says local governments
must control this form of water pollution.
At the same time, Congress recognized that
many local governments could not afford to
build sewage treatment systems without help. So
Congress also voted to give local governments
$18 billion in Federal grants to help do the job.
As of October 1, 1976, EPA had made grants
totalling $12 billion.
That means $6 billion in Federal funds
remains to be obligated to local governments for
sewage treatment construction grants by
September 30, 1977.
How does a city, town, or county get a piece of
the $6 billion still available and put it to work for
cleaner water? How, in sum, does the
construction grants program work?
Some questions and answers will help explain
the basics of the program:
1. Who's eligible for a Federal grant?
Municipalities, intermunicipal agencies, or
interstate agencies. That includes cities, towns,
boroughs, counties, parishes, districts or other
bodies created by State law to take care of
sewage disposal. It also includes Indian tribal
organizations.
2. How large are the grants?
The Federal grant will pay 75 percent of the
total eligible cost of the sewage treatment
project. The local government and/or State must
provide the other 25 percent.
3. What will the Federal grant pay for?
The Federal grant will pay 75 percent of: The
cost of the preliminary (facility) planning, the
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design plans and specifications, and the actual
construction of the treatment facilities.
The municipality must pay for the costs of
preparing its application, which also includes a
simple plan of study outlining the nature of the
problem and the scope of the facility planning.
Projects eligible for grants include: New
treatment plants; expansion or improvement of
existing plants; interceptor and outfall sewer
lines; pumping, power and other equipment
needed to operate the system. Grants may also
be made for sewage collection systems to serve
development existing prior to October 18, 1972,
for projects to control pollution from combined
storm and sanitary sewers, and for land
treatment of wastewater.
4. How does a local government get a grant?
The first thing a local government has to do is
get its proposed project on the "priority list"
prepared by the State which is responsible for
planning a statewide approach to water
pollution control. That involves State and EPA
approval. (More on this process later.)
5. When is the Federal grant paid?
If a project is approved, Federal payments are
made to the local government as all or part of
three distinct steps are accomplished.
The first grant—a Step 1 grant—is made after
the local government does a simple plan of
study, meets State and Federal requirements, and
has its application approved by the State and by
EPA. Step 1 grant funds are then used to
prepare a facility plan for the works the local
government proposes to build.
When the facility plan is completed, the local
government submits the plan with its
application for a Step 2 grant. If the application
is approved by the State and by EPA, the local
government gets a Step 2 grant, which is used to
prepare detailed engineering plans and
specifications for works recommended in the
approved facility plan. When the detailed plans
and specs are completed, the local government
submits them with an application for a Step 3
grant. If the application is approved the local
government gets a Step 3 grant, which will be
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used to build the new treatment facilities.
Note that there is no guarantee that a local
government will automatically receive Step 2 and
Step 3 grants once it is awarded a Step 1 grant. A
variety of State and Federal legal requirements
must be met before each grant can be made.
Indeed, the purpose of this booklet is to help
local governments understand those
requirements and thus to help them move
through the three-step grant process as quickly
and smoothly as possible.
The grant for each step is not actual cash, but
merely an obligation of the Federal Government
to make its 75 percent of progress payments as
the actual work is accomplished. In other words
the grant is not an advance payment.
6. How long does this process take?
That depends on how complete that grant
application is, on how thoroughly the local
government has met all requirements, and on
other factors. In many cases, the
preconstruction period—from the time the
project is conceived to the start of construction—
has taken from twelve to thirty months. EPA is
now working to cut that time period to nine to
eighteen months. Construction may take one to
five years, depending on the size and nature of
the project.
So much for the basics of the program. Let's
turn now to the grant process itself.
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The Grant Process
Assume that a city—let's call it Existing Town,
U.S.A.—has decided to take action to remedy its
sewage pollution problem—that, for example, it
wants to upgrade its inadequate primary
treatment system to a secondary treatment
system. It wants a Federal grant to help pay for
the new facilities. What next?
First comes the Preapplication Stage. As
noted in question 4 on page 2, the city seeks to
have its proposed project placed on the State's
"priority list." This is a State ranking of
proposed projects in order of their importance.
In evaluating requests for aid from its local
governments, the State considers several factors,
including:
Severity of the pollution problem, the existing
number of people affected, need to preserve
high-quality water bodies, national priorities,
and availability of Federal grant funds and the 25
percent non-Federal share. (Some States pay all
or part of the 25 percent; in other States, the
local government has to pay the 25 percent.)
Let's say the State determines that Existing
Town's project deserves high priority; it puts the
project on its list and submits the list to EPA for
approval. EPA approves the list.
Existing Town's next job is to prepare a
facility plan for the project. It selects a qualified
architect-engineering consultant. Some cities
have the professional know-how and do this
themselves, but others retain an expert outside
consultant who specializes in this field.
Choosing a qualified consultant is a critical
decision. The consulting firm's facility plan will
shape the ultimate cost-effectiveness,
environmental soundness, and public acceptance
of the project. (More on that later.) Thus,
New
Town
Project
Select
architectural
engineering
consultant
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choosing the best qualified consultant at the
outset is crucial for the city.
The city and its consultant then meet
informally, in a "preapplication conference,"
with officials from the State water pollution
control agency and the EPA Regional Office, to
review the requirements for submitting a grant
application and to discuss existing or potential
problems.
The city then prepares a plan of study
describing the nature of the pollution problems;
outlining the tasks required for preparing a
facility plan and the estimated costs of this work.
When this is done, the city submits an
application for a Step 1 grant to the State and to
EPA, using a form obtained from the EPA
Regional Office.
With the grant application goes a State
certification attesting the Step 1 project has
priority for funding over other eligible projects
and that it meets the requirements of State water
pollution control plans and discharge permits.
And at the same time, the city of Existing Town
must also meet several other requirements. For
instance, the city must:
Explain how it will raise 25 percent share of the
Step 1 cost.
• Name an "authorized representative." (This is
the specific person, identified by name and title—
such as the Mayor or County Executive or
someone designated to act on the elected
official's behalf—who is authorized to enter into
a construction grants contract with the Federal
Government.)
The State and EPA's Regional Office then
review the application. If both approve it, EPA
awards a Step 1 grant.
Pre-application
conference
Application
Grant
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With this grant, the city enters the Facility
Planning Stage. Using Step 1 grant funds, the
city and its consultant prepare a facility plan.
The facility plan comprises development and
evaluation (cost-effectiveness analysis) of
alternative ways of achieving the desired degree
of pollution control and the economic, social,
and environmental costs of the alternatives. It
also includes preliminary engineering design of
the chosen method. The city seeks public
involvement during this period. It may hold
formal and informal meetings and hearings to
solicit the public's reactions and views on
alternatives, on locations for new facilities, on the
cost to the taxpayers, and on the overall project.
A key objective of the facility plan is to make
sure that the most cost-effective and
environmentally-sound project is planned at the
outset. In the past, too many applicants for
construction grants have not always examined all
feasible alternatives, have not always conducted
comprehensive economic comparisons of
alternatives, and have ignored or slighted
primary and secondary environmental and social
impacts of proposed treatment projects.
To meet its objectives, the facility plan has to
provide answers to many questions, including
these:
• Has EPA or the State issued a discharge
permit and stated what effluent limits must be
met? (An effluent limit is simply the maximum
amount of a pollutant that may be discharged
into a water body.)
• Will the project be cost effective? That is, will it
achieve the needed degree of water pollution
control at the least cost in money, and in
Facility
Planning
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environmental impact and other non-monetary
costs? This requires a careful cost-effective
analysis of alternatives.
• Was recycling and land treatment of
wastewater considered to eliminate or reduce
pollutant discharge or other wastewater reuse
methods?
• What will the project's impact be on the
environment? This requires a thorough
environmental assessment prepared as an integral
part of the facility plan.
• Does the project call for reasonable or
excessive reserve capacity, and how will the
reserve capacity influence community growth?
• Will the best practicable treatment
technology be used?
• Is the sewer system adequate or does it need to
be repaired or replaced?
• How will sludge be disposed of? If by
incineration, will it meet air pollution control
regulations? If in a landfill, has it been approved
by the appropriate State agency?
• Will the project meet the requirements of river
basin and areawide planning agencies?
• Does the collection system have problems with
excessive infiltration and inflow?
• Will the required sewer-use ordinance be
enacted before the project is completed?
• And what plans have been made to assure
efficient operation and maintenance of the
system?
EPA is charged by law to make sure that
potential problems are identified early and that
the public has an opportunity to participate in
the resolution of those problems and in the
decision-making process. But beyond the legal
requirements, local governments will find that
involving the public early in the formulation of
the project is the most effective way of assuring
public support and acceptance of the new
facilities.
When the facility plan is completed, the city
submits it to the State for approval. If it's
approved, the State then certifies that the project
is ready for a Step 2 grant amendment.
In compliance with the National
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Environmental Policy Act of 1969,
environmental impact statements (E1S) must be
prepared on proposals for legislation and other
major Federal actions which will have a
significant adverse impact on the human
environment. The facility plan, which includes
an environmental assessment as an integral part
thereof, covers the primary and secondary
environmental impacts of the proposed facilities
and the alternatives. EPA reviews the facility
plan and determines whether or not an
environmental impact statement should be
prepared. Where possible, this determination is
made during preparation of the facility plan so
that the EIS preparation will proceed while the
facility plan is being completed, thus avoiding
unnecessary delays.
This is the Design Stage. First, the city's
consultant prepares an application for the Step 2
grant amendment and submits it to the State and
EPA. After it's approved by both, EPA awards
the Step 2 grant amendment, which is then used
to prepare detailed engineering plans and
specifications for the approved facility plan.
The city and its consultant sometimes hold
predesign conferences to consider such things as
sewer overflows, bypassing untreated wastes
during construction, operation and maintenance
plans, user charges, and industrial use of the
system.
The city must keep in mind that the law
requires it to establish a system of fees—or user
charges— to assure that every source putting
wastes into the system will pay a fair share of
operating and maintenance costs. The city must
also keep in mind that the law requires any
industry that will send its wastes to the
Design
Stage
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municipal system for treatment to pay its fair
share of construction costs.
When the plans and specs are completed, the
city submits them to the State and EPA, who
review them to be sure all environmental,
technical, and administrative requirements have
been met. If the plans and specs are approved,
the project goes on the State's priority list for
construction.
The city is then ready to start the Construction
Stage. It applies for a Step 3 grant amendment,
which will be used to build the project. If the
application is approved, EPA prepares and
mails the city a formal grant agreement. That
agreement says that EPA will pay 75 percent of
the eligible cost of the project provided the city
complies with all requirements.
The city signs and returns the grant agreement
to EPA, which then sends copies of the project
plans and specs to the city's engineering firm via
the State agency. Some minor corrections may be
made in the plans and specs at this time.
Then the city advertises for bids on the
construction work, in accord with the
requirements of local and State laws and in
accord with EPA regulations. At the close of the
bidding period, the sealed bids are publicly
opened and read aloud. The city then analyzes
the bids and selects the lowest responsive and
responsible bidder. The city gives EPA a
tabulation of all bids, a copy of the lowest
responsive and responsible bid, proof that it
advertised for bids, and a request for approval of
the contract award to the successful construction
bidder.
EPA reviews all this material. It reviews the
successful bidder's equal employment
Construction
Stage
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opportunity program to determine if the
contractor has a reasonable affirmative action
program. A pre-award conference may be held.
Then, if all's well, EPA approves the
construction award.
With this approval, the city is ready to break
ground and begin work on the project. But EPA
continues to be involved, for it is required by law
to make sure that the billions of taxpayers'
dollars invested in water pollution cleanup are
properly spent. EPA staffers make interim field
inspections, process change orders, and conduct
interim audits. And while construction
continues, a manual for the operation and
maintenance of the treatment system must be
prepared and approved by both the State and
EPA.
When construction is completed, the State and
EPA conduct final pre-operation inspections.
And EPA conducts a final audit and makes final
payment.
Then comes the operation and maintenance
stage. The new treatment system goes into
operation. To assure proper operation and
maintenance—and compliance with State and
/or EPA permit conditions—the State and
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EPA conduct periodic inspections throughout
the life of the project. Periodic audits may also be
made to check on the implementation of user fees
and industrial cost recovery systems.
Why this "after the fact" concern and
involvement by the State water pollution
control agency and EPA? Routine inspections of
treatment plants built with the help of Federal
grants have shown that too many of the plants
are not being operated to achieve the pollution
cleanup they were designed to achieve. That
means the Nation's taxpayers are not getting
their money's worth. And that also means those
plants are not reducing their contributions to the
pollution of our waterways to the degree
necessary to properly safeguard public health
and welfare.
Thus EPA and the State water pollution
control agency continue to keep an eye on
sewage treatment systems throughout their life—
whether built with Federal funds or not, for the
construction grant program is only part of a
comprehensive nationwide campaign to prevent,
reduce, and eliminate water pollution.
A brief outline of that nationwide campaign
follows.
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Toward Cleaner Water
The 1972 amendments to the Federal Water
Pollution Control Act did much more than
provide $18 billion for grants to communities to
build sewage treatment facilities.
The law proclaimed two general goals: First,
wherever possible by July 1, 1983, water shall
be clean enough for swimming and other
recreational uses, and clean enough for the
protection and propagation of fish, shellfish, and
wildlife. Second, there shall be no discharges of
pollutants into the Nation's waters by 1985.
To move toward achievement of those goals,
the law set out a series of actions that must be
taken by Federal, State, and local governments,
and by industries. The law also established a
system of national effluent limitations for both
municipal and industrial polluters.
The law also established new planning
requirements for State and local governments. It
established a new permit system; under this
permit system, no discharge from any point
source is allowed without a permit from EPA or
from a State with an EPA-approved permit
program. Publicly-owned sewage treatment
plants and municipally-controlled discharge
points—as well as industrial dischargers—must
obtain permits. If a polluter cannot meet the
permit requirements immediately, a compliance
schedule sets out a timetable for taking specific
steps toward compliance.
The law established an initial minimum
requirement of secondary treatment for all
publicly owned sewage systems and a tougher
requirement of "best practicable" treatment by
July 1, 1983. (Secondary treatment generally
removes 85 percent of suspended solids and
organic matter that depletes the oxygen in
water.) Best practicable treatment may be
additional chemical or biological treatment of the
effluent from a secondary treatment plant, or
land treatment of the effluent as an alternative
treatment process.
In total, the 1972 law created formidable new
tools "to restore and maintain the chemical,
physical, and biological integrity of the Nation's
waters."
In essence, the 1972 law said that nobody—no
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city or town, no industry, no government agency,
no individual—has a right to pollute our water.
What was acceptable in the past—the free use of
our waterways as a dumping ground for our
wastes—is no longer permitted. From now on,
under the 1972 law, we must safeguard our
waterways even if it means fundamental and
costly changes in the way we manufacture
products, produce farm crops, and carry on the
economic life of our communities.
With the cooperation and hard work of State
and local governments, and of industry, progress
has been made toward cleaning up our rivers,
streams, lakes, and harbors. Industries and
governments at all levels have already invested
considerable amounts of money to reduce and
eliminate water pollution. But much still remains
to be done if we are to have water that is safe
and healthful for use in our homes, for use by
industry and agriculture, for swimming and
boating, and for fish and wildlife.
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Some Closing Words
EPA is determined to obligate the remainder
of the $18 billion in sewage treatment
construction grants to local governments as
expeditiously as possible. EPA is determined to
cut red tape and speed up its review and
approval of grant applications. To that end, EPA
recently boosted its program staff and improved
the administration of the program.
But EPA needs the help of local and State
governments, and of the architects, engineers,
and contractors who design and build treatment
systems. For no matter how well EPA
streamlines its operation and no matter how
many people EPA assigns to the grant program,
the hard fact is this: EPA cannot award grants
unless it gets grant applications, and EPA
cannot approve inadequate or incomplete grant
applications.
State and EPA personnel can help local
governments and their consultants. But how well
the local government completes the grant
application and takes other necessary actions
before and during the grant process will largely
determine if and how fast EPA can issue the
grant.
So, if you are a local government official, or an
architect or engineer serving as a consultant to a
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local government, please keep in mind that EPA
cannot approve a treatment plant construction
grant unless the applicant demonstrates that:
• The project is environmentally, socially, and
institutionally acceptable.
• The secondary and indirect impacts of the
project have been fully considered and evaluated.
• All feasible alternatives to the proposed project
have been fully considered and evaluated.
• The proposed project is cost effective.
• Provisions have been made to assure fiscal
integrity.
• Sludge will be disposed of properly.
• All users of the project will pay their fair and
proportional share of the cost.
• The project will be operated and maintained
effectively.
• And the public will have an opportunity to
participate in the formulation of the proposed
project.
Other requirements must also be met, of
course, as noted earlier. But failure by grant
applications to properly consider these points
has generally caused the most delay in review and
approval of construction grant applications.
EPA listens
to the people
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For Further Information
No pamphlet can cover all the requirements
that must be met to obtain a Federal grant to
build sewage treatment facilities. The purpose of
this brief publication is to acquaint readers with
the basics of the program, to outline the grant
process, and to highlight some of the major issues
that must be considered.
Additional information on the grant program
is available from State water pollution control
agencies and EPA. Especially useful to local
governments planning to apply for a grant, and
their consultants, are:
"Manual of References"—Contains regulations
published in the Federal Register to implement
the program, EPA program guidance memos,
and EPA guidelines. Updated periodically.
Handbook for local government officials and
consultants.
"Handbook of Procedures - Construction
Grants Program"—Handbook for consulting
engineers.
"How to Obtain Federal Grants to Build
Municipal Wastewater Treatment Works"—
Handbook for local government officials.
The above publications may be ordered from:
Director
General Services Administration (8FSS)
Centralized Mailing List Services
Building 41, Denver Federal Center
Denver, Colorado 80225
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