a-1
           United States       Washington DC 20460     September 1979
           Environmental Protection
           Agency                   10OR79101
EPA
100/
1980.2
&EPA      A Progress Report:
           State Implementation
\           of EPA GuidSeines
J           on the Use of Population

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                             ERRATA SHEET
    A misprint was made in printing the cover of this report.
title of this report should read:
The
             A Progress Report:  State Implementation of
         EPA Guidelines on the Use of Population Proje'ctions
    This report was prepared by the Sierra Club, 530 Bush Street,
San Francisco, California  94108 financed in part by a grant from
the Environmental Protection Agency.  The contents do not
necessarily reflect the views and policies of the Environmental
Protection Agency.
    Should you have any questions concerning this report, please
contact Cathy O'Connell, Environmental Protection Specialist on
(202) 755-8056.

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    SIERRA  pia
        CLUB  VlSsli/     530 Bush Street San Francisco, California 94108 (415)981-8634
                September 15, 1979

                TO:   Environmental Leaders,  Activists on Population Projections,
                     and Others

                FROM:  Judith Kunofsky, Population  & Growth Policy Specialist
                            and Project Director
                      Donald Foruian, Project Associate
                One of  the most important, and often ignored, influences
                on environmental decision-making at  all  levels of govern-
                ment is the  population projection used.  Projections are
                used to prepare clean air and clean  water plans throughout
                the country,  to calculate the size of a  sewage treatment
                facility for  which federal funding is available, to assess
                the need for  and extent of highway expansions or mass
                transit, to  evaluate  costs and"benefits  of proposed
                water  diver's ion" plroj ects , to project  recreational
                needs  and  forecast  energy demand.


                Because the  use of population projections can in some
                ways be self-fulfilling,  they are important  tools for
                _those concerne'd ~'abou t  land "use "or growth  policy.

                The way projections are used can help solve  - or aggravate -
                environmental problems.   Construction of a sewage treatment
                facility can  foster the paving over  of prime agricultural
                land.   The ensuing sprawl development can create new and
                worse air pollution and water pollution, and increase energy
                use.   A water diversion project designed to  meet "projected
                needs"  can cause problems at the source of the water and
                in the  basin  to which the water is brought.  A highway
                built to fill projections of automobile  travel can take
                needed  funds  - and riders - away from mass  transit.

                Similarly, by shaping federal investment, the use of
                population projections can be a strong influence on the
                future  of America's cities and towns:  They  can assist in
                economic changes which would not otherwise have occurred.
                They can help fund development in parts  of an area which
                would otherwise have remained undeveloped or, conversely,
                help  promote  the revitalization of a city.
CO
CO
CO

era

CD                                       -1-

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The fifty states are now in the process of implementing
relatively new EPA guidelines on the use of population
projections in its programs.  The attached report is one
of the results of a small grant from the Environmental
Protection Agency to the Sierra Club to conduct a tele-
phone survey of the states and let you know how well
the process has been going.  We have paid particular
attention to how much and what kinds of public partici-
pation has been taking place.

Section 4.4 of the report describes opportunities for
your involvement in the next few months.

The EPA process is also important because it may serve
as a model for similar efforts in other federal agencies.
The Office of Management & Budget and Department of
Commerce are expected, this fall, to issue a. proposal
for the development and use of a consistent set of popu-
lation projections in all federal programs which use
projections in a funding formula.  This is likely to
involve not only EPA's pollution control programs, but
also various transportation, water policy, and urban
development programs  (and others) throughout the federal
government.

We are available to assist you in. learning sore about
EPA's use of population projections and what your state
has been doing.  As a result of our telephone conversations,
we have much more information about each state than we
have been able to include in this report.  We strongly
urge anyone interested in becoming involved at the state
level to contact us for assistance and additional ideas.

Finally5 the Sierra Club publishes Population Report, a
free newsletter that  focuses on federal policy on the use
of population projections and national trends in population
growth.  We would be  happy  to send it to you.
         \\ Judith Kunofsky    >          Donald Forman
Thanks to Annie Stine for the graphics and Marina Wadopian
for production assistance.
                            -7-

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                      TABLE OF CONTENTS
Cover Letter                                                       Pa§e   1

Chapter 1:   INTRODUCTION                                                  5

     1.1   Sierra Club Involvement in Population Projections
     1.2   History of the EPA Projections  Guidelines
     1.3   Objectives of the EPA Guidelines
     1.4   Project Procedures

Chapter 2:   THE EPA GUIDELINES ON THE USE  OF POPULATION PROJECTIONS      ^
     2.0   Flow  Chart for  the  EPA Projections  Guidelines
     2.1   A Two-Minute Version  of the Guidelines
     2.2   A Ten-Minute Version  of the Guidelines
     2.3   Further Questions
     2.4   Examples
     2.5   Text of the Guidelines  and Discussion in  the  Federal Register

Chapter 3:   SUMMARIES AND  CONCLUSIONS:   LEAD  AGENCIES &  EPA              41

     3.1   Special State Activities for  the Process
     3.2   General Attitudes
     3.3   Use of Available Time
     3.4   Locus  of Responsibility Within the States
     3.5   Methodologies and  Approaches
     3.6   Consistency of  Projections Within  the States
     3.7   State  Reactions to the  EPA Projections
     3.8   Variance Requests
     3.9   Communications  Problems
     3.10  Energy-Impact States
     3.11  Timing of the Requirements
     3.12  Vision

Chapter 4:   SUMMARIES AND  CONCLUSIONS:   INVOLVEMENT  WITHIN THE STATE     65

     4.1   Coordination Among State Agencies
     4.2   Involvement of  Substate Governments
     4'.3   Public Involvement
     4.4   What Remains to be Done
                          (continued)
                               -o-

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Chapter 5:  RECOMMENDATIONS                                     page  79

     5.1   State Activities to Involve the Public
     5.2   Public Meetings on Projections
     5.3   Communications Between EPA and the States
     5.4   Written Guidance for the States
     5.5   States Which Have Had Difficulties
     5.6   Involvement of Other State Agencies
     5.7   Revisions of the Projections and Integration with Other
           Federal Requirements
     5.8   Earlier Deadline for Variance Requests
     5.9   Urban Areas "ith Decreasing Populations or Low Growth Rates
     5.10  Proposed Federal-Wide Process
Aonendices
Appendix A:  ADDITIONAL COMMENTS OF THE STATES                 Pa§e  93

     A.I   General Supportive Comments
     A.2   General Negative Comments
     A.3   Miscellaneous Comments
     A. 4   Specific Suggestions or Problems
     A.5   Reactions to possible Federal-Wide System

Appendix 3:  INDIVIDUAL STATE REPORTS                                103

Appendix C:  GLOSSARY                                                l33

Appendix D:  EPA CONTACTS                                            137

Appendix E:  "Population Projections:  How They Are Made  ... And     139
     now They Make Themselves Come True", reprint from Sierra
                              -4-

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                         CHAPTER 1




                       INTRODUCTION







1.1 Sierra Club Involvement in Population Projections




1.2 History of the EPA Projections Guidelines




1.3 Objectives of the EPA Guidelines




1.4 Project Procedures
                          -S-

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    1.1 SIERRA CLUB INVOLVEMENT IN POPULATION PROJECTIONS


For several years the Sierra Club has been interested in
the use and abuse of population projections in federally-
funded programs.  The Sierra Club has sponsored a continuing
program of training its members and involving them in the
issue of population projections.
Projecting the numbers of people expected to live in a
region and the distribution of their homes and jobs
around the region is one of the important components
of developing air and water quality plans.  The numbers
and their distribution affect  transportation patterns
and automobile use; the amount of water used in lawns
and gardens; runoff problems associated with construction
activities; the number of dry-cleaners and attendant air
pollution; the amount of area cover?-d bv pavement and
therefore possible problems with drainage of stormwater,
etc.
In general, the higher the projection, i.e., the greater
the population, the more difficult it is to meet any
particular set of standards.  This is because there are
more people whose activities can produce pollution.
The distribution of population, though, is also very
significant.  For example, a population living in
suburbia and commuting with automobiles to jobs would
produce more air pollution per person and in total than
if they were living more compactly and used buses, or
if they commuted shorter distances by automobile.

In at least some cases in the past, communities used
different projections for different purposes.  This was
not only confusing and a possible waste of money and dupli-
cation of effort, but also was not a good way to meet
public needs:  Use of different projections might  direct
growth in different ways, thus cancelling the impact of
both the programs.  Or one program may be using projections
to calculate needs for certain public services, while
another program causes growth to occur elsewhere in the
community.  Thus, the first program's efforts are  not
only useless but expensive.
                            -7-

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 In September,  1978  the Environmental Protection Agency
 (EPA)  published guidelines that fundamentally changed the
 process by which population projections  are developed
 for use in EPA's water  quality and air quality programs.

 Essentially,  the change was as follows:   In the past,
 whatever projection a community or its consultant pre-
 pared  was accepted as reasonable.   This  "bottom-up"
 approach resulted in projections being used around the
 country which totalled  several tens of millions more than
 the projected U.S. population for  1990 even under the
 highest fertility assumptions.  Now,  however, the process
 is more a "cascading" or "top-down" one:   Each state has
 received a federally-prepared projection and all fifty
 sum to the Census Bureau's medium  projection for U.S.
 population growth.  The states have until October 1, 1979
 to submit to EPA allocations of that projection for parts
 of the state.  EPA funding for the construction of sewage
 treatement facilities and related planning efforts for air
 and water quality are then tied to those projections.
In spring, 1979 the Sierra Club wanted to inform its members
of the status of state implementation of the population
projections guidelines.   EPA at that time did not have
sufficient information on the states to enable this.  The
Environmental Protection Agency then agreed to give the
Sierra Club a small grant to conduct a telephone survey of
all fifty states to assess the status of the disaggregations
in each state and provide that information to our members.
It is our hope that this information will enable many more
people around the country to become involved in the process.
 In addition, the Sierra Club agreed to compile
 problems identified by the states in order to provide
 EPA with information which might further inprove the
 process in the future.

 This report is one of the results of that grant.
 This project has been financed in part with Federal
 funds from the Environmental Protection Agency under
 grant number T90101801i.  The contents 'lo not necessarily
 reflect the views and policies of the Environmental
 Protection Agency.
                            -3-

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This report has been prepared with a variety of audiences
in mind.  We are primarily addressing citizen activists
around the country, whom we hope will become more involved
in the development and use of population projections for
their communities.  We are also sending this report to each
of the individuals in state governments whom we contacted.
We hope that our compilation of suggestions for improving
the process will be of use to the Environmental Protection
Agency.  "Finally, in some ways the EPA guidelines are a
"pilot study" of how such a process of developing national
consistency in projections can work.  The Office of Manage-
ment and Budget and Department of Commerce will scon be
proposing a similar system to cover all federal programs
which use population projections in funding-allocation
formulas.  We hope that our observations and recommendations
will be of use in demonstrating the strengths and weaknesses
of EPA's approach and will therefore enable a federal-wide
system to be a more effective and useful one.
                            -9-

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      1.2  HISTORY OF THE EPA PROJECTIONS GUIDELINES
The Federal Water Pollution Control Act Amendments of
1972 stated that the size of any sewage treatment facility
built under the terms of the Act should

     "relate directly to the needs to be served by such
     works, including sufficient reserve capacity.  The
     amount of reserve capacity provided shall be approved
     by the Administrator (of EPA) on the basis of a
     comparison of the cost of constructing such reserves
     as a part of the works to be funded and the anticipated
     cost of providing expanded capacity at a date when
     such capacity will be required."  (section 204(a)(5) )

The Act also required EPA to publish cost-effectiveness
guidelines for conducting such an analysis, and to revise
them at least on an annual basis.  Guidelines were published,
and a proposed set of amendments to those, incorporating
many of the concepts currently being implemented, was
circulated in mid-1976.  Proposed amendments were then
published in the Federal Register on February 4, 1977.

In 1977, Congress debated and passed amendments  to
the Act, now called the Clean Water Act.  The House of
Representatives proposed no change in section 204 (a)(5).
The Senate, however, proposed that federal funding be
limited to facilities with reserve capacity for ten years
in the future; interceptor sewers and "associated appurtenances'
were to be funded 20 years into the future.

The Senate report stated that, "One purpose of this amendment
is to concentrate available funds on correction of existing
municipal problems" (emphasis added).  Senator Muskie
commented that the goal of the funds provided by  the Clean
Water Act "is not to finance the future growth needs of the
United States."  An Administration representative supported
the Senate proposal, known as the 10-20 formula, citing
the successful California experience in implementing such
limitations and acknowledged that "Overbuilding has been a
problem."
                         -10-

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The Conference Committee version,  which was integrated
into the Clean Water Act, amended Section 204 (a) (5) to
add the following to the section quoted above:

      ...  at  a date  when such  capacity  will be required

     "after  taking into  account,  in  accordance with  regu-
     lations  promulgated by  the  Administrator,  efforts  to
     reduce  total flow of sewage and unnecessary  water
     consumption.  The amount  of reserve  capacity eligible
     for  a grant  und«-->r this  title  shall be  determined by
     the  Administrator taking  into account  the projected
     population and  associated commercial and industrial
     establishments  within the jurisdiction of the appli-
     cant to  be served by such treatment  works as identified
     in an approved  facilities plan,  an areawide  plan under
     section  208,  or an  applicable municipal master  plan of
     development.  For the purpose of this  paragraph, section
     208,  and any such plan, projected  population shall  be
     determined on the basis of  the  latest  information
     available from  the  United States Department  of  Commerce
     or from  the  States  as the Administrator,  by  regulation,
     determines appropriate	"
 In compliance  with this  requirement,  and  following  the
 ideas  developed  in the earlier  published  draft,  EPA issued
 interim regulations implementing  the  Clean  Water Act of
 1977 on April  25,  1978.   These  included,  in Appendix A,
 cost-effectiveness guidelines with a  section on  population
 projections,  and went into  effect June  26 of that year.

 After  a comment  period,  a final set of  regulations  for  the
 Construction Grants Program was printed in  the Federal
 Register on September 27, 1978.   These  contained the
 guidelines on  population projections  which  are the  subject
 of this report.   A copy  of  the  guidelines and the Federal
 Register discussion of comments received  on the  earlier
 draft  is in section 2.5.
                         -11-

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           1.3 OBJECTIVES OF THE EPA GUIDELINES
These guidelines appear to have developed over a period
of years because of a variety of concerns:

A. Congressional testimony that the total projections
   being used around the country was substantially greater
   than any reasonable projection of U.S. population,
   and that as a result substantial overbuilding was
   taking place.

B. Concern in Congress and the Administration that the
   size and staging of municipal sewage treatment facilicies
   be cost-effective, i.e. produce the most improvement
   in water quality per dollar expended:

        To the extent that money is used for "reserve capacity"
        in one community, it is not available to solve current
        water pollution problems elsewhere.

        To the extent that a facility is built which is too
        big, the community must bear the burden of excessive
        operation and maintenance costs, as well as its
        share of the construction costs.

C. Concern that the wastewater treatment program could
   create new pollution problems by subsidizing sprawl
   and loss of agricultural land and ^jravating air and
   water pollution - unless the solution is in scale to
   the problem being addressed.

D. Concern reflected in the President's Urban Policy, of
   which these guidelines are a part, that federal programs
   help maintain the integrity of cities and towns.

E. Complaints from a variety of sources  that inconsistent
   projections are often used in a particular community
   among various EPA programs or among  the programs of
   different federal agencies.  In the  former case, plans
   to meet air quality and water quality standards might be
   inconsistent.  In the latter, federal programs might be
   using projections in such a way that  the programs  effects
   do not  reinforce  each other.
                            -12-

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               1.4 PROJECT PROCEDURES
Project staff consisted of Judith Kunofsky and Donald Forman
who were based in the national office of the Sierra Club in
San Francisco.  Additional volunteers were involved in other
states.

Staff first contacted each Regional Office of the Environmental
Protection Agency and spoke with the individuals  who are working
the most closely with the states in complying with the projec-
tions regulations.  We spoke with approximately 44 people in
SP-K.  We asked for their most recent information on the state's
progress in implementing the guidelines and for the name of
their contact in the state.

We then called each of the fifty states, beginning with the
person identified by the EPA staff.  In some states, this
person was the one with responsibility for implementing the
process.  In other states we were referred subsequently to
various people until we found a   person with responsibility
for the projections.

We informed each state that we were preparing a report for
our members on the implementation of the projections guidelines,
and that we were looking for suggestions for improving the
process.

We followed a prepared list of questions, adjusting them to
fit the situations in particular states- and omitting certain
low priority questions in the interest of time.  The state
calls lasted between twenty minutes and one hour.   Notes on
the discussions were almost always retyped within twenty-four
hours of the calls.

The project began on August 9.  Phone calls were made during
a six week period between July 16 and August 27.  We spoke
with approximately 70 people in the states.
                            -13-

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Disclaimers

We attempted to record our conversations with the states and
to summarize them as accurately as possible.  Because these
were phone interviews, and because the states did not have
an opportunity to review our summaries, it  is possible we have
misrepresented details of the situation in  some states.  Nonetheless,
we believe that the overall picture we-present in this report is
an accurate one, representing the situation in each of the states
as of the date of our discussions with them and as reported by  the
individuals we contacted.

 In some cases we found that different individuals in one state
 gave very different accounts of the general process of prepar-
 ing projections in the state and how the state was complying
 with EPA; therefore it is possible that for some states in
 which we spoke with only one person, the picture we received
 is not complete.

 Furthermore, our conversations were with individuals who at
 times were undoubtedly expressing their personal opinions
 rather than official views of the states.  Our discussion of
 suggestions for improving the process and  general attitudes
 reflects a compilation of these individual views and should
 not be interpreted to necessarily reflect  the official views
 of the states.

 In many states the process of complying with EPA guidelines
 was nowhere near completed at the time of  our discussions
 with them.  The situation in particular statrs, then, may be
 different at the time of publication  of this report than
 when our information was gathered.

 Finally, the report  includes stories  of  particular states
 and opinions of individuals with whom we spoke.  Those
 opinions, although sometimes placed  in quotation marks,
 are in some  cases paraphrases.  We attempted to retain  the
 intent of the  speaker while clarifying wording and grammar.
                           -14-

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                           CHAPTER 2

   THE  EPA GUIDELINES  ON  THE  USE  OF POPULATION  PROJECTIONS
The most "accurate" description of any set of regulations or
guidelines is, of course, the original text itself.  However
in this case, where the guidelines are in small type and
tersely written, a more leisurely explanation is certainly
warranted.  We here present,first, a two-minute version,
the Federal Register discussion of comments received in
response to an earlier draft, and then the text of the
guidelines themselves.
2.1  A Two-Minute Version of the Guidelines

2.2  A Ten-Minute Version of the Guidelines

2.3  Further Questions

2.4  Examples

2.5  Discussion in the Federal  Register and Text of  the Guidelines
                                  -15-

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1   S
                      u o n

                      2 « S.
                      O *-> a)
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                      ^ C. ft.
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                      ^ = "
                           -17-

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          2.1  A TWO-MINUTE VERSION OF THE GUIDELINES
In the past, population projactions were prepared by local
governments or by consulting engineers preparing to build
a particular sewage treatment facility  for the local
government.  The population projection for the area to be
served together with information and assumptions about per
capita water use and expected industrial water use are
used in a "cost-effectiveness analysis" which determines
how large a facility should be built initially to maximize
the benefit gained per dollar spent.

Under the Clean Water Act, a sewage treatment facility whose
size is determined by such an analysis is entitled to have 75%
of its construction costs paid for by the federal government.
If the facility uses innovative or alternative technologies,
the federal share of the cost can be 85%.  A community can
always build a larger facility as long as the additional
construction costs are paid for in some other way.

The population projections that were prepared in this way
totalled tens of millions of peorle rora than even the high
projection of U.S. population in the year 1990.  Furthermora,
they were often inconsistent with projections being used in
EPA or other federal programs in the same community.

EPA's process is now a "cascading" or "top-down" approach.
The Bureau of the Census prepares projections for the U.S. popu-
lation.  EPA contracted with the Bureau of Economic Analysis  (BEA)
to disaggregate, or allocate, the medium Census Bureau projeccion
to projections for each of the states.  Each state was sent  this
projection, and can either accept it or anneal.  Then each
state divides that projection into projections for so-called
"designated 208 agencies" and other parts of the state such
as counties.  (Under Section 208 of the Clean Water Act,  the
Governor of a state can choose - i.e., designate - certain
substate agencies to develop the clean water plans for their
area.  These agencies, which are sometimes regional planning
agencies or counties, are often called "designated 208 agencies"
or "208's".  Similarly, Section 201 of the Act sets up the
program of federal funding for construction of publicly  owned
sewage treatment facilities.  Those facilities are sometimes
called "201 facilities" and the areas they serve "facility
planning areas" or "201 areas." )

Subsequently, each 208 agency or county will prepare projections
for its cities, towns, and facility planning areas.  The
projections that come out of this process are the only ones
which will qualify for use  in determining how much federal
funding is available.


 Since the "reserve capacity" in a sewage treatment facility
 can be a major determinant of how much and when and where
 growth occurs in a community,  it is important for the public
 to be involved.               -18-

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        2.2  A TEN-MINUTE VERSION OF THE GUIDELINES
A.  The EPA Projections for the-States

In 1977, the Bureau of Economic Analysis in the Department
of Commerce prepared a population projection for each of the
states.  They began with a projection for U.S. population
prepared by the Bureau of the Census, also in the Department
of Commerce.  That projection, known as Series II, assumes
an average family size of 2.1 children per woman and 400,000
net migration to the United States.  That fertility rate is
higher than the current level and the migration rate is lower.
(See 2.3, Question K, for further discussion oJ the projection)
The projection for the year 2000 is 265,078,000, which is a
20^  increase over the 1979 population of about 220,000,000.

A draft projection was send to each state for comment, but
many states did not respond.  Changes were made by 3EA in
response to the comments for many of the states.  The revised
projection was then sent to the states.

Although BEA will be releasing an updated set of projections
in 1979 as part of its "OBERS" series of projections, those
numbers do not replace the ones sent to the states for use
in the EPA guidelines at this time.

The number each state was sent can be found in Appendix B,
Individual State Reports.
B. State Review of the EPA Projection

Each state must review this projection and has several choices:

1. The state can use the BEA projection, which we refer to in
   this report at the "EPA projection."

2. The state can use a projection which the state had already
   prepared as of 6/26/78 instead of the EPA projection as long
   as the year 2000 population projected is not more than c:ia
   EPA projection plus 5% for the same year.  The June 26, I9?c
   date was when the interim regulations had taken effect.
   If a state wants to use a projection existing on 6/26/78
   but which is more than 5% greater than EPA's or prefers
   any projection prepared more recently than that, it
   must get EPA agreement to do so.  In the terms of the guide-
   lines, the state must "request a variance."

   Such a request, together with the justification, must be sent
   to the EPA Regional Administrator who will forward it to
   the EPA Administrator in Washington, D.C.  However, prior to


                             -19-

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   making such a request,  the state must issue a public
   notice of its intention to do so.  The Regional Administrator
   of EPA must then "solicit public comments and hold a public
   hearing if important issues are raised about ;;he State
   projection's validity."  EPA regulations require a 45 day
   notice for a public hearing, which can be reduced by EPA to no
   less than 30 days if the longer notice "is not needed to encourage
   public participation "  in that hearing.
C. Disaggregating the State Projection

After it has been decided  what projection the state will use,
the state must prepare a "disaggregation" of that projection
to parts of the state.  A disaggregation is a division of a.
projection into projections for smaller geographical areas.
It is sometimes called an "allocation".

The particular geographical areas in the state for which
a projection must be prepared are described in the guidelines
and depend on how the state is doing its water quality planning
under the Clean Water Act.

The state must determine a population projection for each of
the following substate areas:
     a) each designated 208 agency  (see section 2.1)
     b) outside designated 208 areas, for each SMSA  (Standard
        Metropolitan Statistical Area) and "all non-SMSA
        counties or other jurisdictions."  (see  definition  in 2.3H)
The sum of these projections must not exceed the state projection.
It can be lower if the state wishes.

The state must prepare its disaggregations in consultation with
air quality planning agencies, designated 208 agencies, and
other regional planning agencies.

We have found that in some states the agency in the "lead"
position is the one responsible for water quality planning;
in some it is the agency which prepares population projections
for the state; in others it is a more general policy or
planning agency  (see section 3.4).

The dissggregations must be submitted to EPA by October 1, 1979.
However before the state submits them, the state must hold a
public meeting on the subject.  Federal regulations for the
Clean Water Act require no less than a thirty day notice for
a public meeting.
                              -20-

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D. Comparing the Projections With Those of 208 Agencies

llany designated 208 agencies have already prepared projections.
Some have been submitted to EPA in the past and in some cases
approved.

The guidelines deal with the problem that the projection the
state prepares for the 208 agency's part of the state might
not be the same as that agency's own projection.  We should
note here that in some states the 208 agencies began with
state-produced projections.

The guidelines allow the projections to differ in certain
circumstances:  "Where a designated 208 area has, as of June 26,
1978, already prepared a population projection, it nay be used
if the year 2000 population does not exceed that of the
disaggregated projection by more than 10 percent.... If the
208 area population forecast exceeds the 10% allowance, the
208 agency must lower its projection within the allowance...."

Any such variances for these agencies are over and above the
projection being used by the state for this process (see
section 2.3 for further discussion).

This whole matter might, at first glance, seem superfluous.
If a designated 208 agency already has a projection, why
doesn't the state simply prepare its disaggregation to "give"
that area of the state the number it is already using?

There are several possible reasons a state might not want or
be able to do this:

     1. The projection of the 208 agency may be substantially
        greater than a projection already prepared by the state
        which the state intends to use.  This is not an uncommon
        occurrence.

     2.  The projections of all the 208 agencies taken
         together with the rest of the state may be sub-
         stantially greater than the projection which the
         state wants to use or that EPA permits the state
         to use.

     3. The state may want to project relatively larger populations
        for its non-designated areas (for whatever reasons) and
        may do so by preparing a disaggregation which gives the
        designated areas less than they have prepared.

These possibilities are discussed in greater detail in-
section 2.4 below.
                            -21-

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E. Submitting the Projections Co EPA

When the state's disaggregations are ready, the state aust
call a public meeting.  EPA regulations require no less than
thirty days notice for a public meeting.

Many states have combined these meetings with hearings on the
208 plans.  Other have scheduled separate meetings.  Still
others, which already had projections developed separately
from the 208 process believe they complied with the public
meeting requirement in their initial development of those
numbers (see section  4.3 for further comments and analysis).

The projections, revised if necessary, are then submitted
by the states to EPA "as an output of the statewide water
quality management process," i.e. the 208 process.  In some
states, those plans and the projections were submitted in
draft or final form many months ago.
F. Using the Projections

After the projections disaggregations have been
approved  by the EPA Regional Administrator, they are supposed
to be used in the following ways:
     1. for future 208 planning
     2. for future "needs surveys", conducted every two years
        by EPA
     3. for the cost-effectiveness analysis, and then the
        size of a particular sewage treatment facility whose
        facility plans are "prepared under step 1 grant assistance
        awarded later than 6 months after Agency approval of the
        State disaggregations."   (A step 1 grant is the first
        one awarded by EPA for developing the plans for a facility)
G. Projections for Facility Planning Areas

In some cases, the projections the state prepares will not be
down  to the level required for planning a particular facility.
Timetables for preparing those projections are discussed in
section 2.3H below.
H. Revising  the Projections

The guidelines say  that "State projections and disaggregations
may be updated periodically in accordance with Agency guidelines."
                            -22-

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                      2.3  FURTHER QUESTIONS
A. Do these guidelines prevent a community from building a larger
   sewage treatment facility or planning for more population
   growth than is in the projection that comes from this process?

No.  A community can build a larger facility if it pays for
the additional capacity itself.  Similarly, a community can
plan for larger population growth as long as those larger
projections are the ones used in its air quality and water quality
plans.  The guidelines are not restrictions on planning or
on community goals, only on the amount of federal money available.
B. Does this process affect how much money each state gets for
   the Construction Grants Program, which funds sewage treatment
   facilities throughout the state?

No.  The Clean Water Act Amendments of 1977 fix the amount of
money, or rather the percentage of the appropriation, which
is available to each state.  The final population projection
prepared under this process therefore does not affect the money
available.

The size of any particular facility, though, and therefore the
relative distribution of money around the state, may be affected.

Suppose, for example, that the state keeps the same priority
list it had before, i.e. cVes not change its ordering of what
projects it wants to build first.  And suppose that the effect
of the guidelines in that particular state is to reduce the
population projections being used by local governments or
planning bodies for this program.  Then the effect of the guide-
lines on actual construction is that the state, with its fixed
pool of federal money, can fund more facilities, each of w'nich
receives less federal funding.
                           -23-

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C. What if a state prepares its population projection by
   aggregating (i.e. summing or adding up) projections
   prepared initially for substate regions?

The state still must submit any request for a variance from
the state number first.

Quite a few states, including North Dakota, Nevada, New York,
Montana, and Utah, are preparing their projections this way
(see Appendix B).
D. Are the state disaggregations supposed to reflect "trends"
   or "goals"?

The guidelines do not specify either, although at least one
state mistakenly assumed that the disaggregations were required
to be "trend" or "baseline" projections.  In fact, S3»eral
states are explicitly including established state goals in
their disaggregations.*

One of the problems with population projections is that equally
qualified professionals could produce different population
projections for the same geographical area; there is therefore
always a policy decision to be made on whose projections are
to be used.
 E.  Who  decides  in  what circumstances  a designated  208 agency
    is allowed  to use  the  up-to-10% variance?

 That decision,  according  to EPA,  is made jointly by  the  state
 and the EPA Regional  Administrator
*See definitions and discussion in section 3.5.

                           -24-

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F. Do the 10% variances available Co designated 208 agencies
   have to be included in the 5% variance available to states?

No.  The guidelines specifically say they do not:  "Where a
designated 208 area has, as of June 26, 1978, already prepared
a population projection, it may be used if the year 2000
projection does not exceed that of the disaggregated projection
by more than 10 percent.  THE STATE MAY THEN INCREASE' ITS
POPULATION PROJECTION TO INCLUDE ALL SUCH VARIANCES RATHER
THAN LOWER THE POPULATION PROJECTION TOTALS FOR THE OTHER
AREAS."  (emphasis added)

This is the most widely ioisunderstood provision of the
guidelines (see section 2.4 below).
G. Can the state projection be more than 5% lower than EPA's?

Yes.  The state's projection can be as low as it likes.  The
guidelines talk about the need for a variance only when the
state's projection is higher than EPA's.

In fact, quite a few states have submitted or will be submitting
projections lower than EPA's.  See Appendix B for examples.
H. What must be done after October 1?

Paragraphs (4) and (5) in the guidelines describe what
additional disaggregations must be prepared after EPA approves
the ones submitted by October 1.

The specific reference to another deadline is in paragraph  (6)
which states that, "Facilities plans prepared under step 1
grant assistance awarded later than 6 months after Agency
approval of the State disaggregations shall follow population
forecasts developed in accordance with these guidelines."

Certain of the additional disaggregations are required  (within
designated 208 areas and within SMSA's which are outside 208Ts)
while others are optional (outside both SMSA's and 208's).
Projections in these latter areas need to be prepared only in
conjunction with a particular facility plan.

(An SMSA, or Standard Metropolitan Statistical Area,  is a metro-
politan area containing at least one city - or twin cities -
of 50,000 or more population, the county in which it is located,
and any adjacent counties that are both metropolitan in character
and socially and economically integrated with the central city.
A list of SMSA's is prepared fay the U.S. Office of Management
and Budget.

                           -25-

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I. How did the Bureau of Economic Analysis produce the
   state projections?

The Bureau of Economic Analysis (3EA) produces a set of
projections called OBERS, an acronym for the names of the
two agencies which originally had responsibility for the
program.  The 1972 OBERS projections were published in 1974
and included a consistent set of economic and population fore-
casts for economic areas, water resources regions and subareas,
states, Standard Metropolitan Statistical Areas (SMSA's) and
Non-SMSA portions of the areas.  The next complete set is
due in 1979.

For EPA, BEA updated its 1972 projections only at the state
level.  They used their economic model to project the state
analogue of gross national product and used state trends to
project per capita income.  By relating the two, they developed
a population projection for each state.

They did not do a demographic projection, i.e. one which looks
at fertility and migration trends for the states.  That is
type of projections are prepared by  the Bureau of the Census.
The most recent set of Census Bureau demographic projections
was  released in October, 1978.  Those projections are different
from the BEA projections and are not involved in the EPA
process,  bee also question K. below.
J. How does this process relate to the one which will be
   proposed by the Office of Management & Budget and Department
   of Commerce, which would apply to -U.1 federal programs which
   use projections in their funding decisions?

The EPA guidelines are a separate process.  The proposals by
O.M.B. and the Dept. of Commerce are not scheduled to appear
in draft form in the Federal Register until fall, 1979 and
the state projections in that process would not be available
until perhaps 1981.  If the OMB proposals are issued in final
form, EPA might then need to revise its own guidelines to
ensure consistency; however the EPA guidelines are in effect now
are will remain so even if the OMB proposals are not issued
in final form.

Of course, many people are looking at the EPA process as a
pilot program of how such a nationally consistent system might
work.
                              -26-

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K.  Is Che projection 3EA used the most recent projection for
    the United States.

Actually, it is not, but the differences are small.  The Bureau
of the Census medium  (Series II) projection for the year 2000,
issued in October, 1975, was 262,494,000.  They updated the
projection in July, 1977 and this most recent projection gives
260,378VOOO for the year 2000.

The BEA projections were released in early 1977 and began
with the earlier Census Bureau projection.  However BEA also
took account of the acknowledged undercount in 1970 of more
than four million people.  That explains why the BEA projection
for the year 2000 is several million people greater than the
Census Bureau's.

The projections above also include projections for the District
of Columbia, which is not discussed in this report.  The BEA
lists a 7/77 population for the District of 690,000 and a year
2000 projection of 661,000.
                              -27-

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                       2.4 EXAMPLES
EXAMPLE *,

Suppose a state has one designated 208 agency, called Metro COG
and exactly one other SMSA encompassing the rest of the state,
called Greater Bigtown.  Suppose that the projection the state
has to use is one million for the year 2000 and that the
existing Metro COG projection, bei:>g used in water quality
planning, is 600,000 for that year.

Possibility //I:  Give Metro COG exactly the projection it already
     has and ^ive Greater Bigtown a projection of 400,000 for
     the yearW2000.

However this may be unacceptable to Greater Bigtown, which
itself may have a larger projection or want a larger one.

Possibility #2:  Give MetroCOG 91% of its projection, namely
     546,000.  Then allow Metro COG to get a 10% variance.
     In other words, Metro COG can use a projection of 546,000
     + 54,600 which is 600,600; Metro COG can now continue to
     use theprojection it wanted.  The state now can give
     Greater Bigtown a projection of 1,000,000 minus 546,000
     or 454,000!

     The state winds up being able to use a projection of
     600,000 + 454,000, or 1,054,000.
                             -28-

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 EXAMPLE  B

 Suppose  a  state  is  working with a  projection  of  one million
 for  the  year  2000,  as  in  Example A.   But  suppose the  state
 now  has  two designated 208 agencies  called Metro COG  and
 Area COG and  that everything  else  in the  state is  part of
 Greater  Bigtown, an SMSA.  Suppose that Metro COG  and Area COG
 have been  using  projections of 500,000 each for  the year
 2000.

 Clearly, the  state  can't  produce a disaggregation  with
 500,000  each  for Metro  COG and Area  COG because  there would
 be nothing left  for  Greater Bigtown,  not  even the  current
 level of its  population.

 Possibility #1:  Suppose one  of the  designated 208 agencies
      has also prepared  a population  projection lower  than
      the one  they eventually  chose to use for the  208 process.
     Give  the 208 _that  projection  and see if enough is
     left  to  satisfy Greater  Bigtox-m.

 Possibility #2:  Give  both Metro COG  and Area COG  91% of
     their original  projections,  or  455,000 each.  As in
     Example A, "give"  each area its  10% variance, bringing
     them back to roughly 500,000  each.  The state now
     has left to allocate 1,000,000  - 455,000 -  455,000,  or
     90,000.   If this is acceptable  to Greater Bigtown,
     the state's problems are solved.

     If this  is not acceptable to  Greater Bigtown or  to the
     state, for whatever reasons,   the state has no choice
     but to     a)  give Metro COG  or Area TOG even lower  projections
                b)  request a variance of the state number from EPA.

Possibility #3:   Suppose the state already has a set of
     projections for regions or counties,  or perhaps  several
     sets.   If one  set jives a total projection of roughly
     one million, the state could allocate population according
     to that  projection.  Or,  if  the state has county pro-
     jections totalling, say,  1,200,000,  the state could  give
     each of  the three areas  under consideration 83% of the
     sum of their constituent counties'  projections.
                              -29-

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-30-

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  2.5  TEXT OF THE GUIDELINES AND DISCUSSION IN THE FEDERAL REGISTER
This section contains that portion of the Construction
Grants Regulations in the Federal Register of September 27,
1978 which dealt with population projections.

In order are:
     * cover page for the entire package of regulations
     * two pages of introductory discussion
     * three pages of discussion specifically on the public
       response to the earlier draft of the projections
       guidelines
     * text of the guidelines themselves.
                                -31-

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  WEDNESDAY, SEPTEMBER 27,
          1978
         PART III
  ENVIRONMENTAL
     PROTECTION
       AGENCY
           a
       MUNICIPAL
     WASTEWATER
   TREATMENT WORKS
   Construction Grants Program
-35-

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44022

[6560-01]

 Title 40—Protection of Erwirpnrnaai

   CHAPTER I—ENVIRONMENTAL
       PROTECTION AGENCY

             CFRL951-3]

    PART 35— STATS AND LOCAL
            ASSISTANCE

 Subparf £—Grantt For Construction
         of Traaimant Works

AGENCY:  Environmental Protection
Agency.
ACTION: Rule.
SUMMARY: This is a conformed ver-
sion  of regulations governing the'con-
struction grants  program for munici-
pal wastewater treatment works. The
substantial changes in the regulations
serve several purposes. The majority
of the   changes  implement  amend-
ments to the .Federal Water Pollution
Control  Act (FWPCA or the Act)  as
amended,  contained   in  the   Clean
Water Act of  1911 
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                                                                                 f
                                                                                   X rrV f
ulations, the final regulations included
both revisions to the technical amend-
ments and editorial chances.
  Altogether  the  Agency  circulated
more than  30,000  copies  of various
drafts of  the regulations- We received
invaluable assistance from the organi-
zations,  agencies, and  the public at
large. Commenters  raised a variety of
issues. The  major issues raised during
the official  comment  period are  dis-
cussed below  under  the appropriate
subject area.
  Various  related  regulations  have
been  or will be published soon. As re-
quired  by  statutory  deadline, EPA
published two short amendments to
the construction  grants program regu-
lations early this year. On January 10,
1978 (43 FR 1597), fiscal years 1973-81
authorizations were allotted. On June
29, 1978 (43  FR 28202), we published a
correction of  the section number for
the allotment regulation. It is 3 35.910-
3  in  this conformed  regulation.  On
February 23, 1978 (43 FR 7426), the re-
imbursement grant  regulations (subpt.
D) were revised  to extend eligibility
dates. On June 26, 1978 (43 FR 27736),
EPA published final pretreatment  reg-
ulations  as  40 CFR part  403. Those
regulations  establish  the responsibil-
ities of Government. Industry, and the
public to implement national pretreat-
ment standards  to  control pollutants
that pass through  or  interfere with
treatment processes in publicly-owned
treatment worics  or that may contami-
nate sewage sludge.
  On August 7, 1973, we published pro-
posed regulations on public participa-
tion in the  Frnnut RICISTSH (43  FR
34794). Those regulations  Implement
section  lOKe) of the  FWPCA which
requires  SPA  to  provide for, encour-
age, and assist public participation in
EPA programs. The regulations would
replace 40 CFR part  105 (Public Par-
ticipation in Water Pollution Control)
and 40 CFR part  249 (Public Participa-
tion in Solid Waste  Management) with
a new 40 CFR  part 25.
  References to pan 25 are inserted in
this regulation in anticipation of pub-
lication  at  final public participation
regulations.  In the  interim any  refer-
ence to part 25  in these regulations
should be interpreted as referencing
the current  part  105 regulations. The
new part 25 would establish overall
public participation requirements  for
programs  under the Clean  Water Act,
the Safe  Drinking Water Act, and  the
Resource  Conservation  and Recovery
Act.  The   regulations.  In  addition,
revise  public   participation  require-
ments in  40 CFR part  35  subpart 2,
specifically for the construction grants
program.  They focus the public's at-
tention on decisions made  during  the
planning of  the wastewater treatment
facilities. They also  provide the oppor-
     RUMS AND  REGULATIONS

tunity for  pubiic involvement in later
stages of project development.
  EPA published proposed reguiatlons
for  the water  quality  management
program in the FEDERAL REGISTER on
September  12,  1973 (43 FR  40742).
Those  regulations  replace  40  CFR
parts 130 and 131 and portions of part
35 with a new 40 CFR part 35, subpart
G. The regulations  govern the water
quality  management program  under
sections 106,  208, and  303(e)  of the
FWPCA and include changes made to
implement provisions of the 1977 Act.
The regulations require a State/EPA
agreement, which Is intended to ser/e
as the principal management tool for
the  water  quality management pro-
gram. The State/EPA agreement will
integrate the planning,  management,
and  implementation of ail  water qual-
ity  management programs  under the
Clean Water Act, P.CRA, and  SDWA
by fiscal year 1980. At a minimum, the
fiscal year  1979  agreement shall cover
programs authorized by sections  106,
2Q5(g), 208, 303, and 314 of the Clean
Water Act. The  State/EPA  agreement
is distinct from the construction grant
delegation agreements that may be ne-
gotiated under  section  205(g)  of the
FWPCA, as amended by the 1977 Act.
The   water   quality   management
(WQM) regulations coordinate  the  es-
tablishment  of  State  and  areawide
WQM agencies'  sewage  treatment pri-
orities  with  the construction  grants
priority system  and  lists. WQM plans
are to provide certain facility planning
related  information  such as planning
area delineations, waste  load  alloca-
tions, and population projection disag-
gregations. Construction grant  facility
plans will have to  be based  on this in-
formation.  Overall the WQM program
regulations lirUc  that program and the
construction  grants program together
much more closely.
  On September 20, 1978 (43 FR 42251)
we published in  the  FEDERAL REGISTER
final regulations on State management
assistance  grants (subpt.  F).  They
make funds available to States to man-
age  the construction grants program
and  to hire and train staff needed to
implement  delegated functions.
  Prom  time  to  time EPA issues  guid-
ance and technical information  to sup-
plement regulations and  to  assist
those participating and  interested in
EPA programs.  A listing of informa-
tion  and copies may b« obtained  from
the  General  Services  Administration
(SFSS),  Centralized Mailing Lists Ser-
vices, Building  41.  Denver  FederaJ
Center,   Denver,  Colo.  30225.  (See
§35.900e*Al «
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                                                                                    \
monitoring requirements. Still others
concurred  with the  requirements as
written. EPA  has  worded  the  regula-
tions  to allow  considerable flexibility
tn monitoring so that local conditions
can dictate the extent of the require-
ment  within limits designed to ensure
that minimum monitoring  to  protect
the health  of the community is  re-
quired.
  Concern  was expressed  that  best
practicable  waste  treatment  criteria
were  not  defined. These criteria are
defined in chapter II of  "Alternative
Waste Management  Techniques for
Best  Practicable Waste  Treatment,"
EPA-430/9-75-013, MCD-13, under al-
ternatives employing land application
techniques.
  EPA received recommendations that
nonprofit  organizations be deemed eli-
gible  for grants and  for management
of  on-site  systems.   The  Act allows
award of  grants  only   to   "public
bodies." Nonprofit organizations with
the capability  and authority  to  plan,
design, construct,  and  operate treat-
ment  works for public purposes would
be eligible to function Ln that capacity
under agreement with the public body.
If the nonprofit organization is consti-
tuted  a public body under State law, it
could  qualify  for consideration for a
grant  (e.g..   a citizen's  association
which Is  officially  constituted  as  a
sewer district).
  One comment  asked  what  Is  a
"number of Individual units," is there
a  maximum  number  of  individual
units, and if there is a dollar ceiling
for individual  systems. There is no ab-
solute dollar ceiling for individual sys-
tems:   the  law specifically  states  a
minimum  of "one or more  principal
residences or small commercial estab-
lishments." The maximum number of
units would be established through se-
lection of the appropriate alternative
oj unconventional technology for indi-
vidual residences or  clusters of resi-
dences. Under the definition elsewhere
in the regulation  <§ 35.915-l(e)>, this
technology would  be applied in  com-
munities of 3,500 population or less, or
highly dispersed  sections  of larger
communities.
  One comment referred to the state-
ment  that all individual systems quali-
fy as alternative systems, yet the cost-
effectiveness guidelines provision for
the 115 percent cost  preference for in-
novative and alternative systems does
not apply to individual systems. The
law specifically states privately owned
Individual systems must cost less than
the cost of providing a system of col-
lection and central treatment.
  Other comments recommended more
coordination  between EPA  and  the
Fanners'    Home     Administration
(FmHA).  Such coordination  has  al-
ready been initiated; FmHA's final de-
cision on projects is often made pend-
     RUL£S AND REGULATIONS

ing EPA approval of a grant. In addi-
tion,  coordination  between  the  two
agencies in areas such as joint applica-
tions, standardization of  definitions of
high-cost projects,  and other stream-
lining of administrative  procedures  is
proceeding under the aegis of a  White
House working  group  on rural  water
and sewer problems. This coordination
also will be extended to other Federal
agencies through this group.
  One comment recommended  exten-
sion  of grant eligibility  to bathroom
fixtures  and plumbing utilizing flow
reduction • technology.  Congressional
intent expressed in the legislative his-
tory is  quite clear  that  commodes or
associated  plumbing  are not eligible
for grant funding. If eligible, adminis-
trative difficulties and costs  would be
very large.
  EPA encourages the use of the facili-
ty plan to evaluate every  feasible al-
ternative for solution of the water pol-
lution problem whether or not such a
solution involves grant ineligible facili-
ties or methods. Assistance  in  grants
packaging,  construction  supervision,
planning and initial training for oper-
ations and maintenance  are all  gener-
ally grant eligible.
  There   were  several  requests  to
define terms and concepts  more spe-
cifically. This  will be done in separate
guidance to be issued at an early date.
  Regulatory changes relating to indi-
vidual systems are  found in  §§ 35 905-
23,  35.917-Kb).  35.917-2ta),  35.918,
35.918-1. 35.918-2, and 35 518-3.
                                                                                                           44031
    COST-EFFECTIVENESS
  GUIDELINES AND RESESVE
  Background.  On  February  4,  1977.
EPA published in the FEDERAL REGIS-
TER proposed guidelines to amend and
supplement  the   Cost-Effectiveness
Analysis Guidelines (Appendix A  to 40
CFR, Part 35,  Subpart E). That  pro-
posed revision was intended to provide
for cost-effective  sizes of  and  suffi-
cient  reserve capacity for wastewater
treatment  works  and. at  the  same
time,  to avoid overdesign.  Coverage in-
cluded guidance and alternative proce-
dures for  forecasting growth of popu-
lation.for  estimating   wastewater
flows,  for determining  cost-effective
construction  staging  periods,  and for
providing  extra capacity  beyond that
determined to be cost-effective.
  Most of the commenters on  the  pro-
posed revisions, while agreeing in prin-
ciple  with the  proposal,  raised ques-
tions  or suggested  modifications that
convinced the Agency several  changes
were warranted. Also,  additional guid-
ance  was  required  to Implement  sec-
tion 16 (Cost-Effectiveness) and  sec-
tion 21 (Reserve Capacity) of the 1977
Clean  Water  Act.  Accordingly,  the
EPA  revised  the  Cost-Effectiveness
Analysis  Guidelines  to   Incorporate
these changes,  and on April 25,  1973,
published them as part of a set of In-
terim  regulations to  implement the
Clean Water Act. These interim guide-
lines were effective as of June 26, 1978.
Commenters on the  interim guidelines
suggested revisions that convinced the
Agency  to  make   some  additional
changes.
  Innovative and alternative technol-
ogies. Section 16 of  the 1977 Act en-
courages the use of  innovative and al-
ternative  wastewater treatment  tech-
nologies by extending grant eligibility
to such projects if  the life cycle cost
does not exceed that of the most cost-
effective alternative by more than 15
percent.  The  Agency's interim  guide-
lines called for  using option 3 of the
following  options for calculating the
cost-effectiveness preference:
  1.  Use  the life cycle  cost  of the
entire   proposed  waste   treatment
system  as  a base for calculating the
cost difference;
  2. Apply the 15 percent increase to
innovative and alternative components
(and other differing portions) as com-
pared with corresponding  portions of
the least costly nonmnovative alterna-
tive; or
  Use,  as  a base, the entire proposed
waste  treatment system  where  the
system  primarily (more  '.han 50  per-
cent of its cost) involves innovative or
alternative technologies. Should  Inno-
vative or alternative components com-
prise 50 percent or less of the system
cost, the  calculation  base would be
that for option- 2.
  Some commenters  have expressed a
preference for option 2. The Agency
does not  concur because  option  2
would  be difficult to administer and
would  also  restrict  unnecessarily the
number of projects qualifying for the
15 percent preference. The Agency has
rewritten option 3 to state that all pro-
jects with  alternative and  innovative
components will qualify for the prefer-
ence, except for those in  which alter-
native  or Innovative  unit processes re-
place  conventional   processes   In  a
treatment  plant  and account for less
than 50 percent of the cost. This lan-
guage represents a slight liberalization
of option  3,  allowing some additional
projects to qualify for the  cost prefer-
ence. This revision  also clarifies and
simplifies the old language.
  Other commenters noted that collec-
tion systems common to both the con-
ventional  option  and alternative  tech-
nology system should not be included
tn the calculation base. The Agency
agrees  and has modified the guidelines
accordingly.
  Another  coramenter noted that the
15,percent cost-effectiveness  pfefer-
ence must be mandatory  rather  than
permissive.  Both the law  and these
regulations mandate a 15 percent mon-
etary cost-effectiveness preference for
all innovative or alternative projects
                           ROtRAl «0«THt. VOL 43, MO. 184—WEDNSSOAT, SEJTEMBfS 77, 1973
                                                       -36-

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44032

or components thereof that  meet the
Agency's  criterion  for such  projects.
However,  this aoes not mean that the
grantee must adopt an option  featur-
ing innovative or  alternative technol-
ogies  wherever  their  monetary  costs
are less than the 15 percent ceiling ce-
causs r.onmonetary factors  must be
taker, into account as -veil.
  Discount  'nie.  The  Agency  consid-
ered raising the discount rate for eval-
uating1 proposed wastewafr treatment
works from that used by the Acency
(currently 6V« percent; to 10 percent.
The former rate is used by the Water
Resources Council (WHO to evaluate
ths costs and benefits of 7. ater re-
sources projects. EPA. as a member
unrcy. adopted this -ate in 1973 when
it   published  '.he  Cost-Effectiveness
Analysis  Guidelines (appendix A of
Construction  Grant Regulations), al-
though  the  construction grants  pro-
gram LS  not covered  by the  WRC
"principles and standards" for evaluat-
ing water resource projects. The latter
rats (10 percent) is  cited in Office of
Management  and  Budget (OMB) cir-
cular A-9-! for use In agency programs
net covered  by the WRC "principles
anc! standards."
  The 10-percent rate is believed to ap-
proximate the opportunity cost of cap-
ital. The "Opportunity Cost of Capital
Concept"  nas the rr.cst theoretical eco-
nomic  justification  for cost-effective-
ROSS analysis.  This  concept suggests
the proper  discount rate to  use for
pubuc  investment projects should be
based on  the rate  of return to  private
sector  investment (before taxes  and
adjusted ior inflation). This is because
resources  used for public investment
have  alternative uses  in the produc-
tion of  private commodities which so-
ciety  foresees for  the sake  of  the
public investment.
  Use of  the  10-percent discount  rate
would  help  produce a more  economi-
cally efficient distribution of construc-
tion grant funds. The  expected result
is   th?.t  the  optimal   (cost-effective)
staging  period (the  number o: years
for which the treatment plant Ls de-
signed  to   handle   a  community's
growth   In  terras  of  sewerage  dis-
charge) will decrease frotr. about 10-20
years  to  about  9-16  years.  These
shorter staging periods  will  result in
slightly smaller treatment works  and
in smaller initial  treatment expendi-
tures  for  each  proposed treatment
system. This  should permit a.  some-
what greater number of treatment sys-
tems to be funded.
  Despite  these  considerations,  the
Agency  has decided against raising the
discount  rate to  10  percent.  The
higher discount rate would have the
effect of  lowering the  total present
worth cost of facilities with high oper-
ation  and maintenance costs in  com-
parison  with  the total present worth
     SULES AND  2EGUIATJCNS

cost of capital intensive facilities with
low  operation and maintenance costs
such as land treatment and energy re-
covery  facilities.  This  could  largely
offset the 15-percent cost-effectiveness
preference  given  to  such  measures
under  the 1977 Act and these guide-
lines. It would also run counter to the
President's  recent decision  to retain
the existing discount rate for water re-
sources projects.
  Many  commenters  representing  a
wide variety of Interests opposed  in-
creasing the discount  rate (only one
favored such action) primarily  because
such actions would tend to  disadvan-
tage capital  intensive land treatment
and  energy recovery  alternatives and
would  favor operation and  mainte-
nance cost intensive options.
  The  Agency  has decided  to retain
the WHC discount rate (currently S*'i
percent) because this  rate is consistent
with the President's  water  resources
policy  and the net programmatic ad-
vantages, if any, of increasing the rate
are not of overriding importance.
  Cost escalation.  Several commenters
advocated  use of  a salvage  value for
land   higher  than   the  prevailing
market price as required in  the inter-
im guidelines because of the  very rush
rate of land value appreciation. The
Agency has  analysed  farmland value
appreciation since 1960 and since 1970
and  has  compared  these rates with
cost escalation  rates  for construction,
energy and labor. The analysis showed
that land values over both the 17-year
and  7-year  periods   have  escalated
roughly 3 percent  faster than costs as-
sociated  with  construction  or  oper-
ation and maintenance of a treatment
works. On this basis,  the final guide-
lines will require. In the calculation of
land salvage value, a land appreciation
rate of 3 percent compounded  annual-
ly,   unless  the  grantee  Justifies  a
higher or lower percentage based upon
historical  differences  between  local
land cost escalation and construction
cost escalation. This  allowance repre-
sents the estimated difference  la rates
between land cost appreciation  and
the cost escalation of  goods and ser-
vices related to construction.
  Several commenters suggested esca-
lation  of  energy, chemical, and labor
costs in the cost-effectiveness analysis
to account for  anticipated  high  in-
creases  in these costs. It should  be
noted that the cost effectiveness anal-
ysis procedures call for use of constant
dollars  based on prevailing  marfeet
prices at the time of the analysis and a
low  discount rate which is  less than
the inflation-free rate based on the op-
portunity cost of capital concept. This
approach,  rather  than Implying  no
future Inflation, simply assumes that
the costs of all  resources involved in
treatment works construction  and op-
eration will increase at about the same
                                                                                                 \sc\jssion
rate on a long-term basis. The  results
of   the  cast-effectiveness  analysis
would be  distorted,  however,  if  the
prices  of  certain   resource   inputs
changed significantly over  the plan-
ning period in relation r.o the prices of
other resource.1). The Agency has ana-
lyzed historic data on  wastewater fa-
cility construction price indexes and
on  prices  ol various  operation and
maintenance  components,  including
labor, electricity,  chemicals, coal, .pe-
troleum  distillates,  and  natural gas.
We also reviewed projections of future
energy  use prepared  by the Depart-
ment of Energy. Only the historic and
projected  increase   in   natural  ?as
prices  were  found  to  significantly
exceed (by nearly 4 percent) those for
construction and the average of other
operation and  maintenance elements.
Thus, the  Agency   has revised  the
guidelines to require escalation of rela-
tive  natural  gas prices over the pi?..-1.-
nlng  period at a compound rate of  i
percent annually, unless the grantee
justifies a higher  or  lower  percentage
based  upon  regional differentials be-
tween historical natural jas price esca-
lation and  construction cost  escala-
tion.	                  —
} Xtsen-e cqjactTy] The  Clean  Water
'Ai'i i lit]ui»~es '1115' A-jency. in ae'.ermip-
ing the amount of reserve capacity eli-
gible  for a grant, to take into account
the projector! popuiat'qri presented in
a facility plan.  The  population must
be  baaed on the  latest information
available from the U S. Department of
Commerce or from the States as EPA
determines  appropriate.  The interim
guidelines  called for population  fore-
casts  in facility plans to be based upon
disaggregatlon   of  State  population
totals  already  developed by  the De-
partment of Commerce.  Several com-
menters,  principally  203  planning
agencies,  oppose  this  approach and
contend that population forecasting-is
a policy matter that should best be ad-
dressed by  local governmental   units.
Others,   principally   environmental
groups and  individuals, favor the dis-
aggregation approach as a means of
preventing excessive  capacity and re-
sultant secondary impacts.
  The Agency believes the disaggrega-
tion  approach should be retained be-
cause, to avoid providing excessive re-
serve  capacity, forecasts of  population
and economic activities for Individual
small areas such  as  facility planning
areas or designated 208  areas snould
be reasonably  consistent with  Stats
and   national  projections.  This  ap-
proach  is consonant with  the   Presi-
dent's urban policy intended to revital-
ize cities and discourage urban sprawl.
The   guidelines  permft  Inclusion of
extra capacity in a treatment wor'is at
the expense  sf the grantee to accom-
modate local growth policies. The final
guidelines allow reasonable departures
                           SCfSM JZGISTH, VOL «, NO. 13«—WEBNKOAY, SKTIM3W V', 1978
                                                          07-

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                                           8UIES AND  SEGUtATJONS
from  the Department  of Commerce
State projections and their disaggrega-
tions  to designated  208 areawide plan-
ning areas, where the State or desig-
nated 208 agency has already prepared
projections.   The   final   guidelines
permit  use  of  SUte  projections  aJ-
ready  prepared  by  the  State if  the
year  2000 State projection  does  not
exceed  that  of  the Department  of
Commerce projection by more than 5
percent.  The  Administrator may ap-
prove  State   population  projections
that exceed the Department of Com-
merce projections by more than 5 per-
cent if justified by the State. Where a
designated 208 agency has already pre-
pared  a  population  projection for  its
area.  It may be  used if the year 2000
population does  not exceed that of the
disaggregation, based on the Depart-
ment  of Commerce  projection,  by
more than 10 percent.
  One State suggested allowing a State
prepared  population   forecast   to
exceed the Bureau of Economic Analy-
sis forecast by 10 percent without jus-
tification. The Agency does not concur
because  the present 5-percent depar-
ture  is  substantial.  Also,  since  the
State may increase its total  after the
208 agencies  have received their var-
iances up to 10 percent, the total final
State departure from  the Bureau  of
Economic Analysis  projection may  al-
ready  approach  10  percent or  even
more  In some  cases.  Another State
commented that States already having
policies of disaggregating State totals
among counties,  even within designat-
ed 203 areas, should  be allowed to con-
tinue to  do so. The  Agency agrees and
has Included  such a provision in the
final guidelines.
  One commenter has suggested that
population projections In 201 and 208
plans should no longer be wedded to
existing zoning ordinances, which may
be exclusionary  and forbid  immigra-
tion  by lower income people. Instead
he suggested  that  future population
and the  resulting reserve capacity for
grant funded projects should rely  on
regional  population projections and. in
particular, regional allocations of low-
and moderate-income apartment units.
The  Agency cannot fully comply with
this suggestion because it believes that
zoning and land-use decisions  should
be left primarily  with  local govern-
mental units, and decisions on cost-ef-
fectiveness should  be  based on total
and not partial population projections
in an area. However, these regulations
require  the local population  projec-
tions  for 201  plans  to fall  within ceil-
ings  based on disaggregation of State
and regional population totals.
  Several  commenters   advocate   a
much  more flexible population  fore-
casting approach by permitting use of
population projections other than the
Bureau  of Economic  Analysis.  The
 Agency do«s not concur because use of.
 various projections would be inequita-
 ble and would lead in  many instances
 to funding excessive  reserve capacity
 to accommodate growth.
   One commenter stated that the pop-
 ulation disaggregation  approach is too
 simplistic for  interstate metropolitan
 areas whera factors influencing popu-
 lation change  go beyond State  bound-
 aries. The Agency concedes that such
 situations may pose difficult forecast-
 ing and disaggregation problems. Nev-
 ertheless, the  Agency  believes  the in-
 terstate  disaggregation problems  can
 be worked out through consultations
 among the concerned  States, designat-
 ed  208 agencies  and  other regional
 planning agencies.
   Some commenters pointed out  the
 need  for public involvement  in- the
 review of the  State population disag-
 gregations. The  Agency  agrees that
 the public should have an opportunity
 to review and comment on the disag-
 gregation before  Agency  review.  Ac-
 cordingly, the final guidelines now re-
 quire the State to hold a public meet-
 ing on its disaggregations before sub-
 mitting them for Agency review.
   The Agency believes  :hat the same
 population projections should be used
 for both air  and  water quality plan-
 ning.  Appendix A now requires, as an
 initial step toward implementing this
 objective, that States, when disaggre-
 gating total State population, consult
 with organizations of local officials re-
 sponsible for  water  quality and air
 quality planning.  In  many  instances
 the organizations certified by  Gover-
 nors pursuant to section 174(a)  of the
 Clean Air Act to  do air quality plan-
i ning are also 208 agencies.
   borne cooimenters nave oojected to
 the per capita How limitations of 60-80
 gallons per capita per day (the second
 method  of   estimating  wastewater
 flows) as being unrealisticaily low. The
 Agency believes that such dry weather
 base flow allowances are adequate for
 smaller communities where flow data
 are Lacking. These allowances exclude
 Infiltration  and  inflow.  Residential
 wastewater  flows nationwide average
 only  45  gallons  p«r  capita  per day.
 Other commenters  favor increasing
 future per  capita  flows over time.
 They  contend  that  increasing  per
 capita  flows  have  been   observed
 during the past 10 years and that with
 Increasing  affluence  this  trend  will
 continue. The Agency  agrees that per
 capita water  usage and wastewater
 flows have increased in the  past but
 believes  that  this trend is  reversing.
 This can be attributed to  the increase
 of personal  water conservation habits
 encouraged  by periodic water  short-
 ages or higher water supply and sewer-
 age costs even in normally water rich
 areas.  Moreover,  plumbing   codes.
 State laws  and ordinances are nxpidly
                              44033

being revised in many areas to requirs
installation of water-saving fixtures  in
new  dwellings, hotels,  moteis,  and
other buildings.
  Section  21  of the  1977 Act. requires
the Agency, in approving the amount
of  reserve capacity for a  treatment
worts, to  take  into account efforts  to
reduce the flow of sewage ana unnec-
essary water consumption. The Presi-
dent's water resource  policy  features
water conservation as  its cornerstor.s
and requires Federal agencies to '.01-
plement   appropriate   conservation
measures.
  The guidelines require a  cost-effec-
tiveness evaluation  of  flow-reduct.on
measures  such as plastic toilet dams
and low flow sr.owerheads: changes  :n
laws, ordinances, or plumbing cooes re-
quiring installation of water-savins,' de-
vices  in future habitations;  and water
pricing changes. The grantee must ae-
velop a recommended  now  reduction
program featuring a puuiic .informa-
tion program plus cost-effective meas-
ures for which the grantes has imple-
mentation authority or can  obtain co-
operation  from an entity with such au-
thority. Exempted from these require-
ments are those communities with a
population less than  10.000  or  with
average daily base Hows, excluding in-
filtration/Inflow and industrial flows.
for treatment  worss  design  of  less
than  70 gallons per  capita per day  or
with ongoing flow reduction pro^ra-T-s.
  Several  commenters  have su^ge-sied
that small communities should be en-
couraged  to conserve water  ar.d  thus
should not be  exempt from the now
reduction  requirements. The  Agsncy
concedes that some water conservation.
potential  exists for smaller  communi-
ties even  though such communities
tend to use and waste less water than
the larger, more affluent cities. Never-
theless, the Agency  believes that -he
limited  cost  savings   obtainable   in
small communities from  flow reduc-
tion programs may not  be comment-
rate with the  administrative  burden
Imposed.  Some  commenters   have
pointed out  that  the  70 gallons par
capita per day exemption criterion  13
too stringent and have  suggested a 100
gallons  per  capita  per  day  criterion.
The Agency  disagrees  because the 70
gallons  per  capita  per  day  figure,
which  reprssento   an   average   -iry
weather base How, is large enough  Co
exempt most  small  communities  ai;J
water-conserving larger cities.  Almost
all   communities,   including  larger
water users,  would  be exempt if tha
suggested  100  gallons  per capita per
day criterion were used.
  Two commenters  objected  to  the
flow reduction requirements as being
unreasonable for areas  with adequate
water supplies. The  Agency disagrees.
During  the  past 20 years,  persistent
drought   and   accompanying  water
                           FIDJRAt  *fr6«THa, VOL 43,  WO. 183—WTONiSOAY, S£rTtMB« 27, 197J
                                                      -58-

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                                                   RUl£S AND  REGULATIONS
                                                                               4408'
 volvement In any contract dispute will
 not make EPA a party to any contract
 entered  Into  by  the   grantee.  (See
 §35.938-8.)
  (d) Delegation to States. The author-
 ity  to  provide  technical and  legal  as-
 sistance  In the  administration of con-
 tract matters described in this section
 may be  delegated to  a State agency
 under  Subpart  ?  of this part if the
 State agency can demonstrate that it
 has the appropriate  legal authority  to
 undertake such 'unctions.
   COST-cmcrrvcfESS ANALYSIS GUIDELINES
  1.  Purpose.  These  ijuidelines  represent
Agency policies and procedures for deter-
mining the most cost-effective waste  treat-
ment  management  system  or component
part.
  2.  Authority.  These  juideltnes  are  pro-
vided  under sections 212<2)(C) ana 217  of
the Clean Water Act.
  2.  Applicability. These guidelines, except
as otherwise  noted,  apply to all  facilities
planning  under step  1  frant  assistance
awarded  after  September 30,  1978.  The
guidelines  also apply to" State or locally  fi-
nanced facilities planning on which subse-
quent  step 2 or step 3 Federal grant assist-
ance Is based.
  4.  Dfjinitionj. Terms used in these guide-
lines ire defined is follows:
  a.  Waite  treat-Kent  management system-
Used synonymously with  "complete waste
treatment  system"  is defined in 5 35.905  of
this subpart.
  b.  Cost-effectiveness anzlvsu. An analysis
performed to determine which waste treat-
ment  management  system or  component
par*, will  result In the  minimum  total re-
sources costs over '.Ime  to meet  Federal,
State,  or local requirements.
  c. Pia.nm.ny period. The period over which
a waste  treatment management system  is
evaluated for cost-effectiveness.  The  plan-
ning period begins with  the system's Initial
operation.
  d.  Useful life.  The  estimated period  of
time during  which  a treatment worts  or a
component  of a waste treatment  manage-
ment system will be operated.
  e. Disayartya.t-.on. The process or  result  of
breaking down a sum total o(  population  or
economic activity for i State or other Juris-
diction (I.e.. designated 203 area or SMSA)
into  smaller oreaj or jurisdictions.
  5.  Identification,  selection, and screening
of alternatives, a. Identification c/ atterna.-
tivet. All feasible alternative waste  manage-
ment  systems  shall b«  Initially  Identified.
These  alternatives  should Include  systems
discharging to receiving waters, land appli-
cation  systems,  on-site  and other  non-cen-
tralized systems. Including revenue  generat-
ing applications, and systems employing the
reuse  of wastewater and  recycyling of pol-
lutants. In Identifying alternatives,  the ap-
plicant ihail consider  the possibility of no
action   and  staged  development  of  the
system.
  b.  Screening a/ aiieTiatrcei. The Identi-
fied  alternatives  shall  be  systematically
screened  to   determine  those  capable of
meeting  the  applicable Federal, State and
local criteria.
  c. Selection of aitamatives. The Identified
alternatives shall be initially analyzed to de-
termine which systems  have  cost-effective
 potential and which should be fully evaluat-
 ed according to the cost-effectiveness analy-
 sis procedures ustablishea in  the guideline!.
  d.  Extent oj ejfort.  The  extent  of  effort
 and  the level of sophistication used In the
 cost-effectiveness analysis should reflect the
 project's  slie rind  importance. Where  proc-
 esses or techniques are claimed  to  be  inno-
 vative technology  on  the basis of  '.he cost
 reduction criterion contained in paragraph
 6e(l) of appendix 2 to this subpart, *  suffi-
 ciently detailed cost analyse shall be includ-
 ed to substantiate  the claim :o the iatisfac-
 tlon of the Regional Administrator.
  6. Coit-effec.'.iyeness analysis procedures.
  a. .Vfetftod 01' analysis. The resources  costs
 shall  be determined by  evaluating opportu-
 nity costs.  For  resources that can be ex-
 pressed In monetary terms, the analysis will
 use the  interest (discount) rate  established
 in paragraph  Se.  Monetary  costs shall  be
 calculated In  terms of present worth values
 or equivalent annual  values over the  plan-
 ning period defined In section so. The  anal-
 ysis  shall descriptively  present  noarr.one-
 tary factors i e.g.. social  and environmental)
 in order to determine  their significance and
 impact. Nottmonetary  factors Include prima-
 ry and secondary environmental  effects, im-
 plementation,  capability,  operabihty.  per-
 formance  reliability  and   flexibility. Al-
 though such  factors is use and recovery of
 energy and scarce resources and recycling ot
 nutrients arc to be  Induced in the monetary
 eost  inalyst!i. the  non-monetary evaluation
 shall also Include them. The most cost-effec-
 tive alternative shall be the waste treatment
 management  system which the analysis de-
 termines  to  have the  lowest  present worth
 or equivalent annual value unless nonmone-
 tary costs ire overriding. The most cost-ef-
 fective alternative  must also meet the  mini-
 mum  requirements of  applicable  eff.uent
 limitations,    groundwater  protection,  or
 other   applicable   standards  estaoiished
 under the Act.
  b.  Planning period.  The  planning period
 for the cost;-effectiveness analysis shall  be
 20 yean.
  c. Elements of  monetary costs. The mone-
 tary costs to b« considered shall include the
 total  value  of the  resources  which are at-
 tributable t.o the waste treatment manage-
 ment system or to one of Its component
 parts. To dct< -mine these values, ill monies
 necessary for capital construction costs and
 operation iind maintenance costs  shall  be
 Identified.
  (1)  Capital  construction  costs used  in  a
 cost-effective analysis  shall tnckide all con-
 tractors'  costs  of  construction  including
 overhead and  profit, costs  of land, reloca-
 tion, and right-of-way and easement acquisi-
 tion: costs of design engineering, field explo-
 ration  and engineering services during con-
 struction: costs of  administrative and  legal
services including costs of bond sales:  star-
tup costs such as operator training; ana in-
 terest during construction. Capital construc-
 tion  cosu shall  also  Include contingency
 allowance-s  consistent   with  the  cost  esti-
 mate's level of precision and detail.
  (2) Thii  cost-effectiveness  analysis   shall
Include  annual  costs  for  operation  and
mamtana-nce (including routine replacement
of equipment and  equipment parts). These
costs shaJl be adequate  to ensure  effective
and dependable  operation during  me sys-
tem's planning period.  Annual costs shall be
divided between fixed annual costs and costs
which would depend on the  annual quantity
of  wastthe total capita! expenditures.
 l = the  Interest rate  (discount rate m section
    6e>.
  (2) Where expenditures  will not be  uni-
 form, or when the  construction period will
 be greater than 4 years, interest durins con-
 struction  ohail be calculated  on  i  year-by-
 year basis.
  1.  Useful  life. (!) The treatment  works'
 useful  Ufa for a cost-effectiveness  analysis
shall be as follows:
 Land—permanent.
 Wiste   water  conveyance  structures  (in-
    cludes collection systems, outfall  pipes.
    Interceptors.   force   mains,   tunnels.
    etc.)—50 years.
Other  structures (includes  plant building,
   concrete process tankage. oa.iins, lift sta-
   tions structures, etc j—30-50 years.
Process equipment—15-20 /ears.
Auxiliary equipment—10-15 yeirs.
  (2) Other useful i.fe periods will be accept-
able when  sufficient  justification con  be
provided.  Where a system or a component is
 for  interim  service, the  anticipated  useful
life  shall be reduced to the period for inter-
im service.
  h.  Salvage  value.  (I: Land purchased  for
treatment  works,  including  land  ised  is
part of the  treatment process or for ulti-
mate disposal of  residues, may be assumed
                               FJDEJUkl ZEGISTia, VOL  43, NO.  13«—WJDNE50AY,  StPTJMBES 27, 197J
                                                          -39-

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44088

to hnvi-  » iJihAvc \nlue al lh« end  of  the
Ulanrtmn  period s lf«t co.ua! tu its prrva.il-
In* market value 1  the uiTie of (.n* analysis
In calculating the s\Saee value o( land,  the
land  \alu<* shall Oe apttrr-ciaK-d ai a com-
pound rate of  3  pcrr* nl annually over  the
piAnning  period, unlr s the  Regional  Ad-
ministrator deterrru'H's ihs.t the grantee  has
justified the o« oi  ^ grt -.tor or lr-,;scr per-
centage  based upon hist-, noal oifferences
between local land cost ^vilatlon and con-
struction  cost esciiatic/n. TK land rost -esca-
lation rate may  Se  updated ix-nodicaMy in
accordance  with Agcnc? guidelines.  Right-
of-way  easements  shall  be considered  to
h»ve  a salvage value not >rreater than  the
prevailing martet ^alue it  the time  of  the
analysts.
  (2)  Structures  v\l\ be assumed to hive  a
salvage \»lu* It were us ». use for them it
the end of the pUr.r.lns Period In this cane,
salvage  v*lue  shall  be  estimated   using
s'.ralght line depreciation during the  useful
Hie of the treatment works.
  (3)  The method used in paragraph  Sh<2)
may be used  lo estimal^ saK&ge value at  the
end of the planning period for phased nddl-
tlona  of  process equipment and auxiliary
equipment.
  <«>  When the anticipated useful  life of  a
facility Is less than 20 years (for analysis of
Interim  facilities),  salvage  value  can  &«
claimed for  equipment If it can be clearly
demonstrated  that  a  specific market  or
reuse opportunity will exist.
  7. Innovative and alls-main**
treatment proc«jfs and
  i. Beginning October V,  1973, the capital
COSH  of  publicly owned treatment  »ork.s
which use processes  and techniques meeting
the criteria  of appendix E to  this subpaj-t
and which have only & viator pollution con-
trol function, rray be eligible if the presT.l
worth cost  of  Uie  treatment works  is  r.ot
more  than IIS  percent of the present wor.h
cost of the mo»t cost-effectue pollution con-
trol system,  exclusivp of collection severs
and Interceptors common  to the two sys-
tems  being  eompp.red,  by  115  percent,
except for the following situation.
  b. Where  Innovative  or  alternative unit
processes  would sorve in lieu of  conventional
unit processes in a conventional »asle »ater
treatment plant,  and  the  present  vkorth
costs  of the nonconvcniK/rtal unit processes
are less   than  50 percent,  of  the present
worth costs of the treatment plant, multiply
the present worth coils of the replaced con-
ventional  processes by 115 percent, and idd
the cost of nonreplaced unit processes.
  c. The eligibility of multipurpose projects
which combine a water 'pollution control
function with another .'unction, and  uhlch
use processes and techniques  meeting  the
criteria of appendix  S to this subpart. shall
be determined  In accord-vice with guidance
issued by the Administrator.
 M. The above provisions exclude Individual
systems under 5 35.918. The regional Admin-
istrator may  ailo* a grantee to apply the  15-
percent preference authorized  by this sec-
tion to facility  plans prepared  under step  1
grant assistance a»irc!ed before October 1.
1918.
      RULES AND  REGULATIONS
  4.  Co-s t ~tffec Ci ve  sidling  and sizing 57
tr?4i7Tlft?li t£0fJCt.
  a. ^"opuicUion pro^-cftoru (1) The  disas-
grexatlon  of Stair urujertioiis  of population
shall be the  bas:* for the population (ore-
casts presented in individual  facility  plans,
except as  noted.  The«;e  Stale  projections,
shall be  those developed In  1977 by  the
 Bureau  of  Economic  AiiaiyMs (BEA),  De-
 partment nf Commerce,  uril^vi.  a.s  of June
 2S.  1978. the  SiaU-  has nireAdy prepared
 projections  Thv" -State projections may b«
 used instead of the BHLA pro;c< lions If  the
 year 2000 State population ao<:s P.ot exceed
 that of the  BEA projection by more than 5
 percent.  If  the  difference  exceeds  this
 amount, the  Slau*  must  cither  justify  or
 lower its projection. Justification must  be
 based on the historical  und current trends
 (e g..  energy  and  industrial development.
 military base openings) not taken  into ac-
 count in the BEA  projections.  The  State
 must submit for approval to the Administra-
 tor  the request and justification  for use of
 State projections higher than the 3SA pro-
 jections. By that tune, the State shall issue
 a  public notice of  the  request. Before  the
 Administrator's approval of the SUt* pro-
 jection, the  Regional Administrator 'shall 10-
 llcit  public  corruT.ents  and  hold » public
 hearing If Important issues ire raised about
 the  State projection'! validity, Sute pro)**-
 DOCU and dlsaggregaUons may be updated
 periodically  In  accordance  with  Agency
 ruldejlnes.
  (2) Each State, working  alth  designated
 203  planning agencies- organizations  certi-
 fied by the Governor under section 174(a> of
 the  Clean Air Act, as amended, and other
 reftonal planning  agencies  In  the Stale's
 nondeslgnated are**, shall disaggregate the
 State population projection among tu desig-
 nated 208 areas, other  standard metropoli-
 tan  statistic*! ireas (SMSA's) not Included
 In the 208 area, and non-SMSA counties or
 other appropriate Jurisdictions. States that
 had enacted laws, &i of June 28. 1973, man-
 dating disassrevraiion of Sute population
 totals to each county for areawide 203 plan-
 ning may  retain this  requirement. When
 disaggregating  the  Stale population  total.
 the  State snail lake  into account Hie  pro-
 jected population  and  economic activities
 identified in  facility  plans,  ireawlde 208
 plans and municipal master plans. The sum
 of the dlsascregateci projections  shall not
 etcced the State projection. Where  i deaif-
 naied  208 area has,  as of June 26, 1978, al-
 ready prepared a population projection. It
 may  be  used if  the  year 2000 population
 does not exceed  that of  the  disaggregated
 projection by more thaa  10  percent. The
 S'.ate may Ihcn Increase its population pro-
 jection to include all such variances rather
 than lower the rxjpulatlon projection totals
 for the other areas.  If the 208 area  popula-
 tion  forecast   exceeds   the  10   percent
 allowance, the 208 agency must  lower Its
 projection within the allowance and submit
 the  revised  projection for approval to the
 SUle and the Regional Administrator.
  (3) The Stale  projection totals and the
 dtsangregations  will  be  submitted  as  an
 output of the statewide *Mcr quality man-
 agement process. The suornission shall  In-
clude  a  list  of designated  208 are&s,  »U
 SMSA's,  and counties or other units outside
 the  208 areas.  For  each unit the disaggre-
 gated  population shall b«?  shown for the
 years 1930. 1990. and 20M.  Kach State will
submit its projection totals  and disaggresa-
tions for the  Regional  Administrator's sp-
 provil before October 1. 1979 Before thks
submission,  the State shall  hold a public
 meeting  on  the  dlsaegregations ind  shall
 provide public notice of thr meeting  consist-
 ent  flth part  25  of  this  chapter.  (See
 535 917CCU
  (4) When  the State projection totals and
               arc approved  they shall be
 used thereafter  for art-iwtde  water quality
 management plannmit is well  « for facility
 planning and the n*edi surveys under sec-
 tion 51G(b) of the Act. Within areawlde 208
 piannmx ireas. the designated agencies,  in
 consultation with the States, shall disaggre-
 gate  the 203 area  projections  among the
 SMSA and non-SMSA areas and then disag-
 gregate these SMSA and non-SMSA projec-
 uons among ihe facility planning areas and
 the remaining ireas.  For those SMSA'j not
 included  within  designated 208  planning
 areas, each State, with assistance from ap-
 propriate regional planning agencies,  shall
 disaggregate '.he  SMSA projection among
 the facilily ^planning  areas and the remain-
 ing areas within the SMSA. The State shall
 check the facility planning area forecasts  to
 ensure  reasonableness and consistency with
 the SMSA projections.
  (5) ?or non-5MSA facility planning  areas
 not Included In  designated areawlde 208
 areas, the State may disaggregate popula-
 tion  projections  for  non-SMSA   counties
 imong  facility planning areas ind remain-
 Ing areas. Otherwise,  '.he grantee is to fore-
 cast future population growth  for the facili-
 ty planning area by linear extrapolation at
 the recent past (1940 to present) population
 trends (or the planning  area, use of correla-
 tions of planning are* jrowth with popula-
 tion growth for the  township, county  or
 other larger parent irea population, or in-
 other  appropriate  method,  A  population
 forecast may be raised above that Indicated
 by the extiruion of past trends where Ukely
 impacts (e.g.. sigroncar.t new energy devel-
 opments, large  r-ew Industries, Federal In-
 stallations,  or  institutions) justify  the dif-
 ference. The facilities plan tnust document
 the Justification. These population forecasts
 should  be based on estimates of  new em-
 plos-ment to be generated. The State  shall
 checi   Individual  population  forecasts  lo
 Insure consistency  wld. overall projections
 for non-SMSA counties ind Justification for
 any difference from  p*st trends.
  (8) Facilities plans prepared  under step 1
 grant  assistance  awarded  later   than   S
 months a/Ur Azency  approval of the State
 cSbagST??ai'.on5 shall follow population  fore-
 casts developed  in  iccorrfaaoe with  these
f* .i/JoHr
        li.
  b,  PfcLste ex.-
                               n-wmu wcrsr?*. VOL «s, MO. i«— WTOKSSOAT, s»riM»st 27, i-m
                                                             -40-

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                          CHAPTER 3

      SUMMARIES AND CONCLUSIONS :   LEAD AGENCIES & EPA
3.1   Special State Activities for the Process
3.2   General Attitudes
3.3   Use of Available Time
3.4   Locus of Responsibility Within the States
3.5   Methodologies and Approaches
3.6   Consistency of Projections Within the States
3.7   State Reactions to the EPA Projections
3.8   Variance Requests
3,9   Communications Problems
3.10  Energy-Impact States
3.11  Timing of the Requirements
3.12  Vision
                           -41-

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        3.1  SPECIAL STATE ACTIVITIES FOR THE PROCESS
Of the fifty states, approximately twenty have sufficiently
refined, consistent, and updated processes of preparing and
using projections that little new was needed to comply with
EPA requirements for the October 1 submission except possibly
for the public meeting:

Hawaii, for example, developed a complete set of projections
which were released in March, 1978.  Those projections were
automatically used in water quality planning.

Arizona developed a complete set of projections which were
adopted in 1977.  A state Executive Order requires these
projections, down to the association-of-governcients, or
regional, level, to be used in all state planning.  All but
one of the designated 208 agencies had projections for their
areas no greater than the state-prepared ceilings.  The one
whose projections exceeded the state disaggregation is now
revising its projection downward.

Maryland has preexisting projections prepared by their
"Department of Planning and used for county water and sewer
plans.  They are submitting these figures, meeting the public
meeting requirement in the 208 hearings going on this summer.
The characteristics of states in this category seem to be:

     1) having prepared population projections for the state
in the recent past or good enough to still be useful and

     2) having prepared projections for substate regions which
were used in water quality planning or having a'lready  compared
the state's own disaggregations with the projections of designated
208 agencies and begun to reconcile them.
For  those  states which  have had  to  perform new  tasks  in
compliance with  the EPA guidelines,  the  tasks included:

      a) Preparing a state  projection which did  not  already
exist or deciding to use the  EPA projection.  West  Virginia,
for  example, had no preexisting  projection.  They decided to
use  EPA's  projection for the  state,  prepared disaggregations
to the county  level, and will hold  a public meeting.
                               -43-

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     b) Comparing a stace-produced number with the EPA pro-
jection and, in some cases, requesting a variance and preparing
the justification.  Montana, for example, has a set of projections
prepared initially at the county level and summed to produce
a projection for the state.  Montana's projection is much higher
than EPA's and they will be requesting a variance.

     c) Comparing state-produced disaggregacions with the
projections prepared by designated 208 agencies.   Mew York,
for example, has made such comparisons and indicated which
designated 208 agencies will receive variances and can use
their current projections in the interim, and which must
immediately uodify theirs.  In future water quality planning,
designated 208 agencies will have to use the state's projections.
By comparison, California is using a preexisting state projection,
but not the associated disaggregation.  Instead,  the state will
prepare a disaggregation in such a way that, with the 10% variances
allowed for 208's, each designated area gets the projection
it wants.

     d) Preparing a disaggregation <-.C whatever projection
for the state was available.  For example, Alabama had a
preexisting disaggregation but decided to prepare another
because intrastate trends have changed.  Perhaps  seven  to nine
states appear not to have had disaggregations for their
own state projection,

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                    3.2  GENERAL ATTITUDES
Some states found the process helpful:

     It's a good idea to tie down projections.  It simplified
     things.

     This is definitely needed in order to avoid ^ver- and
     under-design.

     The disaggregations make it easier to deal with population
     and allow us to spend time on other issues.

     Since 1966 we've required county water and sewer plans
     that say where and when service will be.... I was happy
     to see the EPA guidelines; it gives us more impetus.
Several states thought the process was an annoyance:

     The whole thing is a lot of monkey business, an exercise
     in futility, an annoyance.

     I would like a more "flexible" system, although preserving
     integrity and objectivity.

     I'm sure we're not the only state that these guidelines
     are going to cause trouble.


In some states the projections were sufficiently consistent
or noncontroversial as to have produced little interest on
the state's part in the guidelines.
The remainder seemed to regard it as another federal requirement
with which they were obliged and willing to comply.
Many states and especially many of those which seemed clearest
in their understanding of the regulations and most experienced
in dealing with projections expressed strong support for the
"cascading" structure of the guidelines.  Some particularly were
pleased with EPA for having involved the states rather than
going directly to substate governments.  One urged EPA to
continue to regard the states as the "first line of contact"
in resolving intrastate conflicts over projections.
                             -45-

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This result of our survey may perhaps be surprising, since there
may be an impression in some quarters that states are having
great difficulty with these guidelines.   It is certainly
possible that the people with whom we spoke were not being
totally honest with us or were in fact not the ones with the
strong negative opinions.  We regard this as unlikely, though,
given the frankness with which they answered many of our
questions and the fact that we spoke with many dozens of
people.

Two states which had opposed the general structure when the
draft guidelines were open for public cotoaent did not do so
in our conversations with them.  It should be noted that
the state projections in both those cases were within 5% of
the EPA projection.  We do not speculate on how those states
might have reacted had there been significant differences in
these numbers.

Mc-st of the problems mentioned with the guidelines were over
the BEA model, specific state projections, the process of
consultation  with the states over those projections, the
timing of these requirements, and the amount of "flexibility"
available, or were based on misinterpretations of the
guidelines.   These problems are discussed in later sections
of this report.

On the basis  of our telephone discussions we suspect that as
states become clearer in understanding the guidelines and as
the relevant  state agencies gain experience with projections,
this process  will come to work well in most states, including
those which had trouble with it this time.

Appendix A contains a selection of supportive and critical
comments made fay state representatives on the entire process.
                               -46-

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                  3.3  USE Ot'  AVAILABLE TIME
Among the states which had substantial work  to accomplish
to meet EPA's deadline,  there was great variation in  the
utilization of the available time.  At one extreme, there
are five states which admitted or implied to us  that  they
would not meet the deadline.  There are five others that
we believe are likely not to meet it.  And there are
additional states that will meet the deadline only if
their last-minute variance requests are approved and without
a public hearing.  Some  states will meet the deadline only
as a result of providing minimal notice of their public
meetings.  Some of these states had hardly or just begun
the process when we spoke with them, even though it was
less than three months before the deadline.

Reasons for lateness typically include communications problems
with EPA, under staffing, too many other things to do, or
problems of jurisdiction within the state.

Other states,  however, got off to early starts and used the
time available with great effectiveness.  Florida held its
public meetings in January, revised its projections in
response to those meetings, and submitted its disaggregations
to EPA April 3. , Nevada  submitted its variance request in
April.   Ohio disaggregated the EPA total to  the county level
and submitted these projections to designated agencies and
river basin advisory councils.   All but two of the regional
councils submitted revisions that fell outside the allowed
range.   The ensuing process of thorough local review to
achieve acceptable totals for most counties  took nine months,
and the state is now negotiating disaggregations for facility
planning areas outside the designated areas.  All this was
achieved before some other states had even prepared a work
plan for the process.

Since a draft of the guidelines was in the Federal Register
in early 1977 and since  states saw EPA's projection for them
in early 1978, it is difficult to understand why some states
waited until summer 1979 to begin the work.
                               -47-

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      3.4 LOCUS OF RESPONSIBILITY WITHIN THE STATES
All but seven states seem to have basically one agency
which prepares projections for the state, according to our
telephone interviews.  We will be referring to these as
the "projections agencies'.'  Of the seven states which do not,
six have no such agency and one has two of them, one of
which prepares projections for federal programs and the other
for instate use.

In the 43 states with projections agencies, the projections for
compliance with EPA. requirements were prepared by or through
that agency in 37 cases.  In the six states remaining ( CA,
KA, ME, NJ, OR, WV), in which the projections agency was
not utilized in this process, the reasons were among the
following:

    *  The state projections agency does only trend projections
and its work does not represent the administration's policies
on the use of projections in state or federal programs.

    *  The state is using the process in order to implement a
state growth policy, a function not appropriate in that state
to the agency which prepares the projections.

    * The projections agency was in the process of preparing
projections, but those would not be ready on time.

    * The water quality people wanted to use the projections
prepared by designated 208 agencies rather than atate-prepared
projections.
In 7-8   states we had difficulty identifying a person who could
be said to be responsible for the state complying with EPA.
In  four    states where we eventually found such an individual,
it took us many calls to locate the person.  In some cases where
we were able to locate the right person, other individuals in
those states who attempted to do so on their own had great
difficulty and sometimes never succeeded.  See section 4.3,
Public Involvement.
                                -48-

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In several states, the person we identified as probably the
one responsible for implementing the guidelines knew little
or nothing about them.  In some cases this might have been
because that person supervised someone who knew the process
well; however in other cases there appeared to be no one in
the state who was well acquainted with what the guidelines said.

Several states themselves identified problems with implementing
the guidelines as related to the lack of clarity within state
government over who was responsible.  In those states where
the projections agency had refused to participate, an environ-
mental agency sometimes was left holding the ball despite its
feeling it did not have the expertise to do a good job.  In
one state three agencies already had projections; one of the
two didn't want the responsibility in this case but the other
two both did.  In one state, as of the date of our contact
the Governor had not yet designated a lead agency.

Several states commented that the agency signing the work
agreement with EPA was not the agency with responsibility for
producing the projections.  It was therefore difficult to
hold the latter to requirements or deadlines.  Furthermore,
since the projections agency is not usually the one which
deals with EPA, there are not good working relationships,
messages can get garbled, and the point of the guidelines can
easily be missed.

In one state an Executive Order prohibits state  agencies
from using any projections but those currently being prepared
by a particular agency, but allow others to use preexisting
projections in the interim.  The agency trying to comply with
EPA does not know to what degree it can amend its existing
basin plan projections.

Despite all this, all the states appear to be producing some
set of projections and disaggregations for EPA.  But the
confusion in some has the effect of slowing down the process,
making it probably less useful to the state, and making public
involvement all but impossible.

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              3.5  METHODOLOGIES AND APPROACHES
Methodologies used by states to prepare their projections
and disaggregations varied widely.

Although most states prepare state projections first, quite
a few prepare projections for substate areas, typically counties
or multicounty economic regions,and then sum those projections
to produce a state projection.  Examples of these include:
Utah, Montana, Nevada, New York, South Dakota, and Wyoming.

The methodologies used range from pure demographic projections,
pure econometric ones, with some states using combined
methodologies (see Glossary, Appendix C, for definitions).
Disaggregations include those techniques as well as a variety
of trend and ratio methods.

Although in some cases it was not clear to us what sorts of
methodologies were used at the state level, it seems that
the following states are examples of ones which use certain
techniques to produce state projections:
     pure demographic:



     pure economic:

     combined:
California, Maryland, Massachusetts,
New Hampshire, South Carolina, Vermont,
and others

Colorado

Arizona, Connecticut, Hawaii.
Similarly, states prepared the disaggregations using
different techniques, as mentioned a'bove, and using different
philosophies.  They ranged from pure "trend" or "baseline"
projections to more  or less inclusion of policy considerations.
See further in this section for definitions.  New Jersey's
disaggregations, for example, are prepared as a reflection of
clearly articulated growth policy goals within the state  (see
Appendix B).
                             -SO-

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Of the states whose disaggragations were "baseline", some
used elaborate demographic or econometric models, while others
did not.  One state, for example, comy/ored with 1970 census
results with the 1977 estimates and simply extrapolated the
growth trends from that period.  When asked if they really
expected the areas to grow at the same rate for the rest of
the century, the state replied that that's the best they
have.

One state commented that since "there are no well-documented
disaggregation methodologies except for land-based ones
which are complex and require massive data,... we fall back on
a quasi-technical and quasi-political process, which may be
OK but which many planners don't like because it doesn't
produce a pure projection."

We believe that two states are likely to present EPA with
projections which include mere arithmetic manipulation of the
numbers, reflecting neither technical rationales nor state
growth policies.
                               -SI-

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"Trend" and "Policy" Projections

Although in some cases these two sorts of approaches to
a projection cannot be precisely distinguished, we use the
terms in the following ways:  A projection which relies only
on past or current trends in job creation, migration, fertility,
land use, etc. or includes only future events out of the control
of public policy (or decisions already made) is a "trend"
or "baseline" projection.  A baseline projection is sometines
also defined as "a projection based on a defined set of
economic and/or demographic assumptions and which attempt to
capture and reflect the essence of historical growth patterns.
They do not attempt to take into account changes in intervention
strategies by any level of government or by the private sector."
This perhaps does not clear up the definition, since we are
not here defining"intervention strategy"!

We are using   "policy" projection to refer to situations
where a state government has articulated goals for the amount
or distribution of growth in the state.  In some cases these
involve protection of agricultural land, prevention of sprawl,
revitalization of cities, or others.  These policies may be
being implemented in other state programs or the state may be
using the EPA process, and its effect on directing federal
money within the state, as a_ or the tool to implement the
state's goals.
                               -52-

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States whose projections reflect policies

Hawaii has an ongoing State Commission on Population and Hawaii's
Future, composed of seven public members, a representative of
state government, and one from the U.S. Department of Defense.
The Commission is very involved in the development of the
projections, and the latter reflect a number of growth policy
considerations involving distribution of population among the
islands and the overall economic assumptions used in preparing
the state projection.

Conneccicut's upcoming set of projections will reflect a State
Plan of Conservation and Development approved by the legislature.

New Jersey's projections are being specifically designed to
reflect certain goals of the administration:  preservation and
enhancement of existing urban areas, substantial reduction in
growth in currently undeveloped areas, and maintenance of moderate
rates of growth in suburbs.  These projections will be presented
to 208 advisory committees and others for their response.

California's projections reflect the administration's commitment
to an urban strategy, one of whore components is having state
agencies use projections which have been prepared by councils
of government.

Massachusetts' projections were initially developed by a
state agency but were the subject of extensive discussions
throughout the state as part of the Massachusetts Growth Policy
Report.  Local Growth Policy Committees existed in 330 of the
state's 351 communities and meetings and discussions were held
over a 20 month period.  The question of how and where
Massachusetts' communities should change was widely debated and
projections were adjusted to form a mutually consistent and
acceptable set which will now be used in all state and local
planning.
                              -b3-

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        3.6  CONSISTENCY OF PROJECTIONS WITHIN THE STATES
At least sixteen and possibly as nany as twenty-six states
already have a formal or informal policy of consistency
among the projections used by state agencies - although in
a few cases this is not strictly enforced.  Almost half the states
are already   planning to use the  disaggregations prepared
for EPA for other purposes.

Two states, however, specifically do not want these numbers
used by other state agencies.  In one case it was because
of disagreement with the population estimate on which
the projection was based, leading to inconparability of
the projections with others used in the state (see section
3.7).  In the other case it was because of differences between
the EPA projection and the state's CXTU, without any problem
with the estimate.  A third state expressed reservations
about further use of the disaggregations produced for EPA
because of the "crudeness of their methodology."

Many of the states commented that their efforts to develop
intra-state consistency are hampered by the varying require-
ments of federal programs.  One state referred to state
agencies dealing with the Dept. of Commerce; Dept. of Labor;
Health, Education & Welfare; and EPA, whose needs and
requirements differ, while other states mentioned HUD programs
and DPT.  These states were supportive of federal efforts to
develop consistent requirements since that would serve state
needs as well.

                               -54-

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In some states, though, problems within the state hamper the
development of such consistency.  Some are discussed in other
sections of this report (see, for example, section 3.4).  In
one state, all planning is done with the same statewide popu-
lation projections, but different programs use different
disaggregations.  In another state, one agency prepares county-
level "trend" projections while several others use the regional
planning agency projections because the latter are tied into
air quality and water quality planning and reflect more closely
local land use constraints and decisions.   One state has four
sets of operating projections:  two for HUD programs, one done
by a consultant for health planning, and an environmental
set.  Only the latter, according to our state contact,  has  had
strong local input.

Two states complained that consultants and/or municipalities
"can't be forced to use the same projections,"  despite the
state being the source of the program's money.  In one of
those cases, the state had attempted to ensure that the
consultant work regularly with the regional planning body;
however that proved impossible to enforce  and is now causing
substantial problems.   Despite these states'  experience,
others have no similar problems ensuring the  use of state-
produced projections by substate governments.
                              -55-

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         3.7  STATE REACTIONS TO THE EPA PROJECTIONS
By far the most comments from the states on ways to improve
the implementation of the EPA guidelines were on the EPA
state projections.  Several states claimed to have not heard
anything about the model or the purpose until they received
the EPA projections "in the mail;"  we did not check whether
they meant the original set sent out in early 1977 for their
review or the final set.

The states want more involvement in the process of developing
the assumptions used in preparing the projections.  There
were many complaints about BEA's data base and assumptions
being not detailed enough, outdated, or too general.  Some
states claimed to have no idea what methods BEA had used to
produce the projections for EPA.

Roughly 25% of the states had either questions about or
disagreements with the BEA model, the final numbers, or the
process of consultation with the states.

Respite these disagreements, virtually none of the states expressed
objection to EPA's having prepared a set of state proiections.
l-7e must admit, however, that we did not ask a direct question
on this subject.  Nevertheless the states were being quite
frank with us in general and one might suppose that if they
felt strongly about this issue they would have mentioned it.
We guess that the situation would have been very different
had the 5% "automatic" variance and the procedure for requesting
even greater variances not been available.
Sample comments of state representatives follow:
Communication

Several states complained that communication with BEA about
their model is very difficult or impossible.  "To talk with
BEA you need to know the details of their model and that's
almost impossible."  BEA is far away and it's "not easy to
complain to them."  Furthermore, since "there is no formal
mechanism for EPA and the state to discuss the projections"
of BEA, the state has no effective way to consider or challenge
the BEA methodology.
                               -56-

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BEA's Model

Some states use or prefer demographic to econometric models
(see Glossary).  Since BEA used the latter, it was difficult
for those states to compare their own projections with EPA's
and evaluate the differences.

One state did not like any federal agency coming up with
numbers for the states at all, but added that EPA is "taking
the heat" only because they instituted this process first.
(It should be noted here that we did not find as much heat
as several states thought we would)

"BEA didn't take into account energy development:  uranium,
coal, oil, and gas."

One state complained that several of BEA's assumptions are
unrealistic in general and particularly bad for that state:
     * 4^ unemployment
     * no cyclic fluctuations in the economy
     * people moving primarily in response to jobs and income,
       rather than "quality of life" considerations."
Trend Projections

Two states in the northeast objected to EPA having used
"current trends" in preparing projections for the states.
This, they said, was inconsistent with the President's Urban
Policy, particularly if funding is in any way tied to the
numbers.  They felt that federal policies should be used to
prepare projections, giving more weight to already-developed
communities in the northeast.
Estimates

3   states  disagreed with the estimates of past and present
population used by BEA as inputs for projecting as being
incompatible with the state's own assumptions and with those
used in other programs.  One mentioned specifically BEA's
state-by-state allocation of the 1970 census undercount;
this factor is not accounted for in the state's own projections
nor, they said, in Bureau of the Census estimates.  As a
result, one state commented, EPA ensured that the projections
developed in compliance with EPA requirements will not be
used for any other purposes within the state.

 'Another state mentioned that the BEA estimates and projections
do not include the military population or ship's crews, while
the state's own do.  However in this case the state's projections
is still less than BEA's; since the state uses its own fore-
casts in planning, it really doesn't matter.


A third state mentioned that the undercount of illegal aliens
is significant in that state and needs to be dealt with.
                               -57-

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                  3.8  VARIANCE REQUESTS
Although a few states had great disagreements with the EPA
projections for their area, from a nationwide perspective
there was general satisfaction with those projections.

According to our telephone interviews, we believe that
three states requested variances of more than 5% by August 15:
Colorado, Indiana, and Nevada.  We believe that possibly six
to eleven additional states are likely to make such requests
by October 1.  These include Montana, Utah, Wyoming, Washington,
New Mexico, and Oklahoma, as well as others who have not yet
decided what they will do.

The largest percentage increase we expect to be submitted
will be approximately 35% (Utah), with the   largest numerical
increase possibly being almost a million and a half from one
eastern state.

Although controversy over the state numbers is restricted to
a relatively small number of states, the differences can
imply major and potentially serious impacts within those
states.

Several states were unclear about what kind of supporting
information EPA would want to accompany a request for a
variance.

Four states definitely are planning to use the provision
o- the guidelines allowing up to 107' variances e.o~ desr'-^ru-.ter1.
208 agencies with preexisting projections:  California,
Colorado, Georgia, and New York.  Approximately half the
states have decided not to take advantage of that provision;
this includes several states in which designated agencies
have projections larger than those which the state has or
will produce.  The remainder of the states either have not
yet compared their numbers with the 208's projections, have
not yet prepared their own disaggregations, or did not
indicate to us what they intended to do.
                              -58-

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                   3.9  COMMUNICATIONS PROBLEMS
Many states evidence substantial confusion over what was
required of them, even on questions clearly dealt with
in the guidelines.  This may have been because they did
not read the guidelines carefully enough (or, in some cases,
at all), because the guidelines were perhaps too tersely
written, or because of insufficient or confusing communi-
cations with EPA staff.

We point out the following to identify the typical problems:

A.  Some states were unaware that anything needed to be done
    at all.  In some cases these were states whose projections
    processes were sufficiently consistent and complete that
    little, in fact, needed to be done.  In others,  the states
    needed to hold a public meeting or sometimes undertake
    substantial amounts of work.  One state observed that it
    relies on ZPA to highlight for it what needs to be done;
    that they do not have sufficient staff to pore through
    new regulations.

B.  There was much confusion over what needs to be submitted
    to EPA by October 1, although the guidelines are clear on
    this point.  Several states, believing that projections
    were needed doxra to the facility planning level by October,
    mistakenly thought' they would be "unable to satisfy EPA's
    requirements.

C.  Several states mistakenly believed that the 10% variances
    available to designated 208 areas must fit within the
    original state total,

D.  Some states mistakenly thought that the EPA process is
    connected with the upcoming OMB/Commerce proposals
    (see cover letter, and sections 4.4,  Appendix A.5, and
    elsewhere), and one state delayed its disaggregations
    waiting for word about the OMB/Commerce process.

E.  Some states did not know that a public meeting was
    required.   This was true not only in  states where a
    "projections" agency was carrying out the requirements
    but also in a few cases where an "environmental"  agency
    was in charge.
                           -59-

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          3.10  ENERGY-HIPACT STATES
Much of Che dissatisfaction with the EPA process, and with
the EPA stats, projections in particular, came from energy-
impact states:  Alaska, Colorado, Utah, Wyoming, Montana,
New Mexico.  Wyoming, for example, updates its projections
every six months and was concerned that if frequent revisions
to the projections used by EPA are not permitted, planning
will be done and facilities sized based on patently outdated
projections.

States with "boom towns" were particularly concerned that
"locking" a town into a previously-prepared county projection
is not productive.

Furthermore, states appear to be using different philosophies
in determining what energy-related facilities should be
assumed in preparing the projections, even under a "baseline"
or "trend" series.  One claims not to include any project
unless it  is under construction or the environmental impact
statement has been approved.  Another may perhaps be including
all projects proposed in the President's energy message  ,
regardless of the likelihood of their being carried out.

One state expressed frustration with having to prepare and
submit only one projection, since they believe the state
population in the future will to a great extent be determined
by national decisions which have not yet been made.  That
state suggested that states be allowed  to submit an "alternative"
projection which would come into use if a particular scenario
does materialize.  The concerns expressed in  this suggestion
might, in our opinion, be  easily alleviated if appropriate
arrangements are made for  quick revision of a state's pro-
jection should conditions  change quickly.

In quite a few cases we asked for ideas on how EPA might
best deal with the problem of energy-impact states or  towns.
Ideas included allowing frequent revisions of the state's package
of projections, allowing updates of projections  for a particular
substate region if that area  has grown more  than a pre-
established amount,  having a certain "pool" of  population which
is not allocated  to  any state which would then be available  to
energy-impact areas  if needed.
                              -60-

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            3.11  TIMING OF THE REQUIREMENTS
 Many states  expressed concern about the timing of the
 requirement  for  the disaggregations in relation to the
 timing of  other  processes in which states are also involved.
 Some of the  problems relate to timetables imposed by federal
.requirements while others involve internal state timetables.
 Other Federal Requirements

 How do these guidelines  affect projections used in 208 plans
 already submitted and approved?  New York has explicitly
 discussed with designated 208  agencies  which projections must
 be updated and under what timetables.  However we do not
 know if other states, in which plans of 208 agencies must be
 revised,  have thought this through clearly.

 What is the relationship with  HUD "701" plans?  Under an
 interagency agreement between  EPA and Che Dept. of Housing &
 Urban Development,  projections used in  the latter's "701" plans
 must be the same as those used in EPA's 208 plans.  Who
 follows whose lead?

 How will  the process be  affected by the release of a new set
 of BEA projections  in 1979?   by proposals of OMB/Commerce?
 See 2.2A, I, and J.

 State Timetables

 In some states,  an  update of the state's own projections is
 almost, but not  quite, ready.   Those states, which include
 Mains and  Connecticut do  not  believe that what they submit by
 October 1 will be very useful  and some  expect to resubrait disaggre-
 gations soon thereafter.  However there is no way that c.ny
 fixed timetable  for submitting projections would satisfy all the
 states,  Illinois,  Indiana,  and Kansas  are also about to
 release updated  projections.

 Other states, particularly those growing very rapidly, were
 concerned about  the June 1978   date mentioned in the guidelines
 as the date by which a set of  projections must have been in
 existence in order  for it to be submitted to EPA without a
 variance  request.  They, as  well as several other states,
                              -61-

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believe they are growing very rapidly - generally in response
Co decisions made by the federal governmenc - and chaC special
consideration should be given to frequenc updaces or
perhaps even interim adjustments in projections for parts
of the state (see section 3.10).

Some states had prepared their projections before the guidelines
were issued, either for their own use or in specific response
to Clean Water Act requirements, but did not prepare disaggre-
gations to the now required geographical detail.

Approximately seven states mentioned their lack of enthusiasm
about preparing projections when the 1980 census is almost
here.
                             -62-

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                      3.12  VISION
Although most states will have complied with the letter of
the guidelines,  in only a few states were the individuals
responsible aware of or planning to use the opportunities
made available by the guidelines (see section 3.5).
These opportunities include:
     * using the process to further the state's own goal
of consistency among projections used by state agencies
     * trying to develop consistency among the projections
used for federal programs
     * articulating a growth policy via the projections
     * conducting productive negotiations with substate
governments which might otherwise not have taken place.

It is our belief that a state seeing the guidelines as
something other than a-dull federal requirement was, in
part, dependent on prior experience in the agency or state
with making or using projections, one individual with a
particular interest in the "philosophy" of the use of
projections, or prior state formulation of or interest in
growth management or growth policy.

A major hurdle was that, as many states mentioned spontaneously,
they thought of this as simply another regulation and "don't
really understand what EPA wants" or what problems EPA was
trying to solve in promulgating the guidelines.

Quite a few states already have or are working towards a
policy of consistent projections among all state agencies
(see section 3.6); in most of those, the states attempted
to use the opportunity of complying with EPA to foster that
policy.  Some of them mentioned that this was not always
easy because of the conflicting requirements of other federal
or state agencies.

We are not trying to imply that had the option of not simply
preparing "trend" projections been mentioned to the states,
that  large numbers would have taken advantage of it.  In
some states the question of growth policy is too controversial;
in others it is being debated but no policies have been
developed.  One state volunteered that even had they
realized the projections need not be "baseline" projections,
they would have prepared such anyway "because that's what
we've had experience with."

Although most states did not seem to realize it, it is
a political choice to use "trend" projections.  It was the
lack of such awareness that, in our opinion, caused the
poor attention to public involvement by most states (see
section 4.3).
                          -63-

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                                  CHAPTER 4


       SUMMARIES AND CONCLUSIONS:  INVOLVEMENT WITHIN THE STATE
4.1   Coordination Among Scats Agencies
4.2   Involvement of Substate Governments
4.3   Public Involvement
4.4   What Remains to be Done
                                   -65-

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             4.1  COORDINATION AMONG STATE AGENCIES
The present EPA process appears at first glancs to involve
only water-quality planning,  but it has important ramifications
well beyond water.  Therefore it is vital to its success that
a variety of the branches of  state government be involved.

First of all, in many states  water quality functions are
divided among more than one agency.  In some states the3e
were all involved, but in others one agency would handle
the process and the other would continue in blissful ignorance.
In some extreme cases the 208 office would be handling
disaggregations and the 201,  or construction grants, office
within the same agency wouldn't know about it.

Second, the process is in actuality as much tied to air quality
as to water quality.  The guidelines specifically mention
required consultation with agencies doing air quality planning.
Furthermore, future revisions of state implementation plans
for meeting the Clean Air Act requirements must use the same
projections as those used in the 208 plans.

In our telephone interviews we did not specifically ask about
air agency contacts, but from the fact that only three or four
states volunteered any mention of such contacts, we must con-
clude that they were not high in the consciousness of those
implementing this process.  Such consultations  (or lack there-
of, may not even be meeting the letter of the guidelines).

Furthermore, we do not know to what extent state air quality
agencies (as opposed to the substate ones mentioned in the
guidelines) were involved.  In many cases these agencies were
in the same department as the one handling water quality;
however, as we found was the case among water people, mere
co-presence within a department does not ensure communication.
                               -67-

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A third interagsncy ramification of this process is that
it is intrinsically related to land use and tharefore relates
to the work of whatever land use or planning agencies a
state has.  This kind of contact was frequently realized
because in many of the states the initial disaggregations
were prepared by a state planning agency which then gave
them to the water agency, which often modified them and
handled public and local government participation.

Unfortunately, however, it is not clear that the "planning"
people were always informed of the accual impacts of use
of the projections; often they seemed to be simple technicians
preparing numbers.  For other interagency problems, see
section 3.6.

The reader may have noticed a certain pessimism on our
part regarding effectiveness of coordination among state
agencies.  But we must note that there were six states which
gave indications of efforts to achieve this.  For example:

     * Quite a number of other state agencies attended
Florida's Tallahassee projections meeting, including the
Division of Forestry, Dept. of Transportation,  Dept. of
Health Planning & Development, and the Dept. of State Planning.

     * The state projections in Delaware ara prepared by
the Population Consortium, which includes representation from
the Dept. of Transportation; Office of Management, Budget,
and Planning; Dept. of Development and Housing; and the
Dept. of Health and Social Services.

     * California has an interagency group on population
projections which has met occasionally over the past few
years and more recently has discussed California's compliance
with the EPA guidelines.  The air quality and water quality
agencies have both been particularly involved.
                            -68-

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            4.2  INVOLVEMENT OF SUBSTATE GOVERNMENTS
In producing population disaggregations there is no substitute
for interactions among the various levels of government.  The
federal government has to deal with states who have to deal
with counties and COG's and 208's, who have to deal with
municipalities.

     "It's a negotiating process.  You don't jam a population
     figure down a throat."

This kind of negotiation is necessary to get accurate base
data or desirable trends; it is also needed to get the
adherence of local governments to the projections once produced.

Fortunately, this kind of intergovernmental contact is also
highly desirable for reasons that go far beyond projections.
It is the keystone to effective regional planning of all
kinds, and to effective implementation of almost any state
program.

So we see it as a bonus that states with effective projections
mechanisms in the course of them achieved considerable contact
with different layers of government.

Ohio was exceptional in its efforts in this direction:

     "We're kind of proud of what we've done.  Local communities
     realized that this will determine the size of their
     facilities and so they took it seriously....  We submitted
     (our county projections) to designated agencies and advisory
     councils for each river basin.  We let the regional councils
     revise them as long as they maintained a regional control
     total.  All but two of them fell outside the allowed
     range, so we forced them to revise downward.

     The Dayton metro area requested a 200,000 decrease.  They
     documented it well, so we granted it.... If a city or
     county could document for us a change from our projection;
     we accepted it.

     This process took us nine months, but we agreed on county
     totals except for three or four counties which we're still
     working on.  We had very thorough local review and local
     input.  I travelled all over the state.
                              -69-

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     (Ohio, continued)
     We've held public hearings on the county level and
     small area projections:  fourteen hearings in July and
     August.  Then we'll go back and work one by one with
     the communities that don't like their projections....
     When we make a change, we go back to the local advisory
     committee to get their approval again since it involves
     changes for the whole region."

     It's time consuming, especially of staff time, but it's
     worth it.  People may not like what we come up with,
     but they are generally agreed to accept it until the
     1980 census.

Texas is another state that seems to have achieved considerable
cooperation and interaction between the state and local
governments:

     "It was good that the federal government left intrastate
     disaggregacions to the state, and the state left this
     to smaller units.  Noone felt anybody was forcing anything
     on anyone.  Each county did their own disaggregation, and
     with one exception they've all been reconciled.

     "There's been discussion, but not much controversy.  There
     weren't many discrepancies because the local areas had
     been working with the governor's office for years on
     projections.  There were discrepancies in a few local
     areas, but there were handled within the counties."

Maryland is a state with considerable experience in projections
and it wants to move towards more interaction:

     "In the future we anticipate a more open and cooperative
     method for all planning areas — an advisory group of
     state agencies and counties, lots of chance for local
     input."

Unfortunately, not all states were equally successful in
achieving local involvement.  Some states told us:

     "'No local government involvement until now."

     "Local governments have been involved only by having
     received the notice.  They won't be involved much until
     the facilities planning process (201)."

     "I used to consult with local governments and the public
     but their information usually isn't good.  I don't do
     that any more.  I do better projections by myself."
                             -70-

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Further, many states reported individual procedures which
were especially effective in generating local involvement.
Since these were by and large the same procedures used to
general public participation, we refer the reader to
section 4.3.

A frequently mentioned problem in many states was the one
or two designated areas that requested exhorbitant pro-
jections.  It is difficult for us to find any overall pattern
in how these were handled, i.e. in what cases the state
changed its projections or granted a variance and in what
cases the designated 208 agency is revising its.  But,
in most cases, these problems led to serious discussion
between the state and that agency.  And since these were
parts of the state where growth is a particularly significant
issue, we regard it as useful in itself that this process
has led to discussions between levels of government.
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                            -71-

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               4.3  PUBLIC INVOLVEMENT
In this section we discuss involvement of the non-governmental
public in preparing, considering, or evaluating the projections
used for the EPA requirements.  It was disappointing to us
that,in many states, our questions about public involvement
were answered exclusively by reference to the involvement
of local governments and it was sometimes difficult for us
to make clear that we were particularly interested in the
direct involvement of the non-governmental public.

It is hard to give an overall assessment of public
involvement throughout the country.  In some cases, there
were pre-existing projections which were used widely throughout
the state.  Some of the projections in these states incorporated
clearly articulated policy goals  (see section 3.5).  ''any
were pure "trend" or "baseline" projections (see definitions
in seccion 3.5); of those, some were prepared with the
involvement of advisory committees that included university
representatives  (Arizona, for example) or business representatives
(Delaware, for example),  'jthers were prepared purely by
technical professionals.

Some of these states, which in most cases had little to do
to conrolv with the t»iHH«»l;J.r>es, are now scheduling public
meetings as the guidelines require (examples:  Illinois, Michigan,Minnesota)
Others believe they have already  satisfied those requirements
either through public involvement in the projections process
or as a result of hearings on the 208 plans
Most states which prepared projections for the 208 program
reported having included consideration of those projections
in the 208 hearings.  In some of  those, projections were
singled out as a separate item of discussion - but no state
in this category could recall any of the discussion.  In others,
projections were among the subjects on which public comments
could have been made, but generally were not.
                               -72-

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Some states claimed to have discussed projections with their
208 advisory committees.  In at least one state, though,
the topic never caine up.

One projections agency described its work as "intentionally
a bit ivory-towerish.  Environmentalists are not involved."

In some states citizens were actively involved in debates
over population projections at the designated 208 level -
e:oimples are the Atlanta Regional Commission, Southeast
Michigan Council of Governments, Association of  (San Francisco)
Bay Area Governments.  However our telephone survey was of
state governments and we did not ask about involvement at
this level.

We believe it is fair to say that except for a handful of
states in which the projections are reflective of or used
as growth prdicy, or those states in which all the decisions
were made at the designated 208 level, there has been
virtually no involvement of the non-governmental public in
the process of deciding how projections should be prepared
or considering the process as it developed.
                             -73-

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Inadequacies

In quite a. few cases, scate staff with whom we spoke were
unaware of the requirement for a public meeting before the
disaggregations are submitted to EPA.  To be fair, in some
cases we were speaking with staff of the "projections agency','
who defer to the environmental agency on such matters.  On
the other hand, it is quite likely that in some of those
cases the environmental "person" regarded their responsibilities
as being simply to forward the projections to EPA.  Further-
more, in a few cases even the latter individuals admitted
to not knowing about the requirement for a public meeting.

In some states we believe the state meetings will be
virtually a farce for a. number of possible reasons:

     * The state is giving insufficient notice or not
announcing the meeting widely enough.

     * Even after the state has given notice of a request
for a variance, no information will be available for citizens
to look at until a few days before the meeting itself.

     * The meeting (in fact the entire process) is scheduled
so closely before the deadline that the chance of public
involvement making a difference, is virtually nil.  But Florida
shows how a state, by starting early, can stimulate considerable
statewide involvement.
     * The state does not want public involvement, sees it
as a nuisance which cannot contribute to their work.

One state in fact described its own public meetings as
"being done almost as an afterthought, without serious interest
in getting public involvement."  Another state official said
he used to work with local governments and the public but
doesn't do that any more because he can produce better
projections than they can.

Furthermore, not only did some states hold these beliefs,
but they expressed them to a.caller  from  the  Sierra  Club, whom
they might have presumed would have a great commitment to
public participation.
                            -74-

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Analysis

It is our belief Chat there are several reasons why state
officials have not seen much value in public involvement:

     * They are preparing "trend" projections and see the
public as not being able to provide useful data about what
is happening or professional reflection on the technical
methods they are using.  These states do not acknowledge
that choosing to use "trend" projections is in. itself a
political decision, nor that there are different views on
what is a "trend."
     * They have seen no public interest and cannot believe
there would be any.  However even in some states where citizens
have tried to become involved, they have in several cases been
unable to find out what the state was doing.  See, for example,
the individual state reports for Mew Jersey and Pennsylvania.
When we ourselves called Delaware, we were explicitly and
incorrectly told by one official that no one in the state
was working on the process, and we suspect that a caller less
persistent than ourselves would probably never have located
a more knowledgeable official.  Furthermore, citizens are
not likely to become involved in something which is presented
as a purely technical phenomenon that supposedly neither
influences nor can be influenced by public policy decisions.

     * The state may be negative about the EPA process as a
whole and wants to devote as little energy to it as possible.

     * The state regards discussions in the context of 208
plans as sufficient.  However in too many cases the public
(as well as state officials themselves) has a mistaken notion
of the "accuracy" or non-controversial nature, supposedly,
of population projections.  There would therefore in many
cases be no reason for a 208 advisory committee or others to
spontaneously pay attention to the choices made in producing
projections.

     * Although the state's water quality agency is familiar
with and perhaps even sympathetic to public involvement, the
projections are prepared by a "projections agency" which has
no familiarity with how or why to involve the non-governmental
public, may in fact be actively hostile to anything but
professionally prepared "trend" projections, and regards its
task as simply to produce good sets of numbers.

All these reasons are self-reinforcing, for a state which
has failed until now to involve the public is unlikely even
to jsee signs of public interest which might encourage further
such  efforts on the state's part.  As in so many other domains,
the nurturance of public involvement with projections requires
careful attention from the state over the years through many
rounds of updates.
                           -75-

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Successful Activities Towards Public Involvement

Despite the preceding fairly bleak account of public
involvement throughout the country, quite a number of the
states did engage in activities which we believe are appropriate
for stimulating participation.  We believe that if such
activities are incorporated into projections procedures
through the years, they will encourage the development of a
public following which will be able in the future to make
significant contributions.  And an additional and immediate
benefit is that most of these activities have been highly
successful in generating the involvement of local government:

     * Massachusetts had an extensive growth policy process.

     * Florida held seven meetings around the state solely on
population.

     * New York will publish a detailed handbook on projections
for local contractors.

     * New Jersey is using the process as a forum for articulating
growth policy, one which will then will be widely discussed.

     * Arizona has university planners and demographers on its
technical advisory committee.

     * Hawaii has an ongoing Commission on Population and
Hawaii's Future.
     * Ohio spent nine months negotiating over the county
level projections, has held fourteen public meetings, and is
now negotiating over projections for facilities planning areas.
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                            -76-

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                 4.4  WHAT REMAINS TO 3E DONE
Although many states will have completed the process of
submitting projections by the October 1 deadline, others will
not.  These latter states will still be making decisions on
how to submit their projections.

Many important opportunities for public involvement still
remain:

     * When variance requests are submitted, the EPA Regional
Administrator is required to solicit public comment and, if
there is controversy, hold a public hearing.  Since quite a
few states are submitting last-minute requests for such
variances, chere is still a chance for public review of the
request and for a hearing to be requested.

     * Because public  hearings require a 45 day notice, reducible
to no less than 30 days, those states in which hearings will be
held still have time for public participation in that hearing.

     * If the variance requests are rejected, in whole or in
part, states will have to prepare new projections.

     * Several states seem to be violating even the letter of
the guidelines on the requirement for a public meeting, and EPA
might ask them to go back and hold one or otherwise improve
public participation.

     * The Office of Management & Budget and Dept.  of Commerce
are scheduled to propose a similar system for all federal
programs which use projections in their funding r'oraulas.  These
proposals are scheduled to appear in the Federal Register this
fall, with several months for public comment and public hearings
around the country.  The Sierra Club's newsletter,  Population
Report, which is available free on request, will keep readers
up to date on these proposals.

     * Several states indicated they will resubmit projections
in the near future, when their state updates are available.
These include Connecticut, Kansas, and Maine.

     * All states will have continuing updates of their clean
water and clean air plans, and projections  for these will be
periodically updated.
                              -77-

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     * Many scales have not yet prepared the  projections
to the facility planning level, which will soon be required
for areas submitting step 1 grant applications.  These
projections need considerable local involvement.

     * EPA is developing regulations to tie together in a
consistent way the projections used in clean air planning
and the impact of the construction of sewage treatment facilities,
Public involvement is needed in commenting on the proposals
for this effort, which is   iiiplementation of Section 316 of
the Clean Air Act, and in implementation at the local level.

     * Many states are involved in trying to establish
statewide consistency in their use of projections.

     * Many states have regular projections processes, and
these involve more or less frequent revisions of projections
for the state and substate levels.

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                            CHAPTER  3




                        RECOMMENDATIONS









5.1   State Activities  to Involve the Public




5.2   Public Meetings on Projections




5.3   Communications Between EPA and the States




5.4   Written Guidance for  the States




5,5   States Which Have Had Difficulties




5.6   Involvement of Other  State Agencies




5.7   Revisions of the Projections and Integration '-rich Other




      Federal Requirements




5.8   Earlier Deadline for Variance Requests




5.9   Urban Areas With Decreasing Populations or Low Growth Rates




5.10  Proposed Federal-Wide Process
                             -79-

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            5.1  STATE ACTIVITIES TO  INVOLVE THE PUBLIC

                          (see Chapter 4)
Unfortunately, it is not easy  to spark overnight  interest
in a subject like population projections  that has  long  been
relegated  to the private chambers of  state demographers
and water  quality planners.  Whether  or not  they  have done
so in  the  past, all states will now be required to prepare
regular updates of their projections, and the task of en-
couraging  public involvement must be  seen as a year  to  year
process to be built up gradually, not as  something to be
attempted  once and abandoned if not greeted  with  immediate
and spectacular outpourings.

Federal agencies overseeing state projections processes must
give careful attention to formulating guidelines  for insuring
state  processes that genuinely attempt to involve  the public,
aid are not pro forma displays.

These  guidelines might include itenizations  of procedures
for states to follow, but they should also contain the
flexibility co encourage state experimentation.   In  Section
4.3, Public Involvement, we listed some of the innovative
procedures used by various states to  involve the  public.
It might be noted that most of these  procedures are  also
highly effective in involving  local governments and, in some
cases  (e.g. Florida), state agencies  that are not  otherwise
involved.

We offer the following recommendations to states  to  facilitate
public involvement:
A. Written Materials on  the  State's Projections  Effort

It would be extremely useful  to  the public,  local  government,  and
others  for states  to produce  a brochure on  the results  of  the
state's projections work, describing not only the  numbers  and
the methodology, but also:
      *  wh° was  involved  in developing  the assumptions
      *  how local governments  and  the public  participated
      *  whether  any state policies  were included
      *  which federal or  state agencies will  be using  the projections
        and for  what purposes.

The handbook being prepared  by Mew York state is a beginning along
these lines.
                               -81-

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B. Briefing of 208 Advisory  Committees

Many states have statewide and/or regional citizens advisory
committees for their water quality programs.  In at least one
case we know that such a committee never discussed projections,
and we suspect the situation to be widespread.  We urge states to
specifically inform these committees about projections.  This
is important even in states that have essentially completed
the projections process, because these committees need to under-
stand the role of projections in order to help integrate them
into the overall continuing planning process for clean water.
C. Regularly Involving the Public in Projections

We recommend that states regularly involve the public - the non-
governmental public in particular - in their ongoing work of
developing and using population projections, whether tied to
an environmental planning program or not.

In section 5.10 below we recommend that states establish
formal advisory committees specifically on the issue of population
projections, with mandatory membership of a certain number of
non-governmental individuals with varied backgrounds and interests.
D. Involvement of "Population People" in Environmental Planning

State agencies managing federal or state environmental planning
programs should establish contacts with demographers, population
organizations such as Zero Population Growth, and other individuals
and groups who might be particularly interested in population.
This is especially important in states where projections are
prepared by water agencies who might otherwise lack demographic
expertise and knowledge of who in the state is  interested in
population per se.  These people and organizations might be
added to mailing lists on projections-related issues but also,
being few in number in some states, where appropriate might be
contacted personally as well.
                              -82-

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E.  Consideration of the Impact of the Projections

Statewide discussion should be fostered of the impact of
the projections used.  As cr.e state official commented, people
understand what the projections mean only as they consider
the impact of the numbers and distribution on water quality,
housing, land use, open space, jobs, air quality, etc.
It is no wonder that much of the public is not interested
in projections abstractly:  divorced from considerations of
impact, the numbers are much more difficult to grasp.

One state official commented to us that his agency was
obligated to prepare the projections, but that he hoped some
other state agency would consider the impacts, some of which
he thought were adverse.
                             -83-

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           5.2  PUBLIC MEETINGS ON PROJECTIONS

                      (see section 4,3)


In many states, the public meetings on the disaggregations
were combined with meetings on the water quality plans.
Although this has the benefit of focusing attention on the
impacts of growth rather than on the numbers themselves,  in
most cases the projections were never the subject of
comment.

EPA should suggest to the states that, when holding meetings
on a number of subject,  population projections be specifically
given a special place on the agency and their importance
highlighted for those attending.

Furthermore,  EPA should strictly enforce the following:

     * holding of a meeting when required

     * adequate public notice

     * calculating the time of issuance of public notice only
       from the date materials are available to be reviewed
       by public, not merely when a notice is published

     * scheduling meetings in accessible locations at times
       during which the public can attend without difficulty

     * scheduling meetings sufficiently before submissions
       deadlines to allow public concerns to be evaluated
       and incorporated into the state's proposals.
                                 -84-

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            5.3  COMMUNICATIONS BETWEEN EPA AND THE STATES

                     (see sections 3.3 & 3.9)
Various problems of communication between EPA and  the
states were common, and described in detail in sections 3.3
and 3.9.  EPA should be careful to highlight those  portions
of regulations which require something new of the  states,
particularly (as in this case) when a process  is likely to
involve extentive negotiations with substate agencies.
Such discussions should occur well before any deadlines  in
order to make it possible for states to finish on  time.
            5.*  WRITTEN GUIDANCE FOR THE STATES

                      (see chapters 3 & 4)
EPA should produce written, explanatory materials for the
states on what is being asked of them, why the guidelines were
developed, and how they can be implemented in various ways.

Availability of such material would , we hope, eliminate many
of the misunderstandings which occurred this time around and
also provide states with more of an understanding of EPA's
reasons for promulgating these guidelines.  Otherwise, states
often regard them simply as another bureaucratic requirement.
It should be remember that in many states the agencies pro-
ducing the projections have no direct contact with EPA or
familiarity with the impact of use of the projections in
various programs.

Furthermore, most states did not avail themselves of the
opportunities made possible by the flexibility written into
the guidelines.  In many cases their staff was overworked and
unlikely to notice anything but the mere requirements of
the guidelines; in other cases states or the programs respon-
sible were sufficiently unfamiliar with the use of population
projections, that other possibilities did not occur to them.

Guidance from EPA might well include case studies and examples
of how the guidelines might be applied in various circumstances,
                                 -85-

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           5.5  STATES WHICH HAVE HAD DIFFICULTIES
EPA should work particularly closely with those few states
which appear to have had or be having difficulty complying
with the guidelines, serious misunderstandings about them,
or problems developing a locus of responsibility within
the state.

We expect that if this is done, such problems will be sub-
stantially reduced, if not eliminated, by the time of the
next revision.
           5.6  INVOLVEMENT OF OTHER STATE AGENCIES

                    (see section 4.1)
EPA should strictly enforce requirements for involvement of
state agencies and local governments.  In particular, when
guidelines such as these require specific consultation with,
for example, air quality planning agencies, EPA should
notify those state agencies directly to ensure they are aware
that their participation is needed.

This is particularly important for those states where the
projections are being prepared not by an environmental agency
but by a projections agency which might not appreciate the
desirability of involving others in state government.
                              -86-

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            5.7  REVISIONS OF THE PROJECTIONS AND

         INTEGRATION WITH OTHER FEDERAL REQUIREMENTS

                 (see sections 3.6 & 3.11)
EPA should make clearer determinations of how revisions to
the state projections and the disaggregations can be
integrated into ongoing environmental planning efforts.

EPA should also resolve with the Dept. of Housing & Urban
Development the relationship between projections prepared for
EPA's 208 program, new in some ways constrained by these
guidelines, and projections used for HUD's "701" plans.
            5.8  EARLIER DEADLINE FOR VARIANCE REQUESTS
Several states are delaying the submission of variance
requests until close to October 1 and submitting them together
with disaggregations.  This has the result that if the variances
are denied, these states will not have submitted adequate
disaggregations.

Furthermore, such late submissions make it difficult for
public reaction to the variance request to be adequately
considered and incorporated.

These situations could be avoided if the deadline for requesting
a variance of the state number were considerably earlier than
that for submitting disaggregations.
                               -87-

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           5.9  URBAN AREAS WITH DECREASING POPULATIONS

                   OR LOW GROWTH RATES

                   (see section 3.7)
A major weakness in Che guidelines is that while they
rnay prove to be effective in preventing overbuilding, they
are not very effective in those areas which, from a variety
of criteria, should experience more rapid growth.

If one takes the trends in, for example, many urban areas,
one sees substantial decreases in the center city population.
This problem could be resolved if the states were to realize
that they need not use "trends" in producing the projection;
they could instead, as New Jersey is doing, establish goals
for population in urban areas and have the projections reflect
those goals.  We have addressed this more general problem
elsewhere in the report.

Nevertheless the problem remains when we look at the state
projections; they have been prepared according to "trends" for
the states, and the process does not appear to allow this
to change.  The only opportunity would seem to be for a state
itself to produce a higher overall projection and convince
EPA that such is the "real" trend.

Since these regulations are considered to be part of the
President's Urban Policies, effects on our established cities
should be carefully considered.

We recommend that a thorough analysis be done of how population
projections are used in making funding decisions throughout
the federal government and, in particular, how this affects
urban areas.
                              -88-

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               5.10  PROPOSED FEDERAL-WIDE PROCESS
The EPA projections guidelines are in many ways a pilot
study for how such a process might operate at a federal-
wide level.  As we mentioned in the cover letter to this
report, a proposal for development of consistent projections
which must be used in those federal programs x^hich use
projections in a funding formula is expected to be proposed
by OMB & the Department of Commerce this fall.

Much of the analysis and many of the recommendations in this report will,
we hope, !;e of use to those developing this proposal.

We offer the following specific recommendations:
A.  Most states would find federal-wide consistency a substantial
    step forward.  Several complained to us that different
    requirements in EPA, HUD, DOT, and HEW programs cause them
    to need to produce several sets of projections.

B.  Although most states were satisfied with the EPA numbers,
    this was because of their similarity to the states' own
    projections and the provision in the guidelines allowing
    them to use the latter if differences were minor.  In order
    to maintain smooth working relationships with states, to
    increase the possibility of this process being useful to
    the states in their own, non-federally-required work,
    and to avoid duplication of efforts by states, we feel
    strongly that variances such as the 5% one allowed by EPA
    should be maintained.

C.  Our recommendation for written guidance to the states (see
    section 5.4) is even more important if the projections are
    to be used more widely.  This guidance should not simply
    be a rephrasing of guidelines, but should include examples,
    and answers to common questions in easily readable format.
    We believe the materials should be written at a level
    understandable to the potentially-interested public.
                               -89-

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D.   Because the process has thus far been tied only to
    certain environmental planning requirements, the agencies
    overseeing Che process have been either environmental ones
    or what we have been calling "projections agencies."  If.
    the process were implemented to cover many more federal
    programs, presumably the latter agencies would get
    greater responsibilities and the former less.

    However it is precisely the "projections" agencies which
    in many states have no interest in or knowledge of public
    participation.  We believe that requirements for public
    involvement must be carefully and tightly written and
    enforced, because t'.ie risk of lack of public involvement
    is greater.

    We recommend serious consideration of states establishing
    state advisory committees on projections with mandatory
    membership of a certain number of non-governmental
    individuals including varied backgrounds in all the relevant
    program areas:  water, air, solid waste, housing, education,
    transportation, etc., as well as population.

    Leaving such options open to the states is likely to be
    productive only in those states which have thus far displayed
    public participation in implementing the EPA guidelines.
    Several states complained that they were not sufficiently
    consulted when the 3EA/EPA projections were developed.  In
    two cases the estimates used were not comparable to those
    used by the states.  Such problems should be taken seriously,
    and opportunity for state involvement should be created.
    The various federal planning requirements should be spelled
    out on a timetable and the relationship of development of
    the projections to that timetable should be made clear to
    the states.  Otherwise there may well be rampant confusion
    about which update of the projections is required to be
    used by whom, when.  The particular cases of states whose
     cwn projections timetables are incompatible with required
    state updates for federal purposes should be dealt with
    in advance.
                                 -90-

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APPENDICES
     -91-

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                          APPENDIX A

               ADDITIONAL COMMENTS OF THE STATES
In. our telephone interviews we offered states the opportunity
to make whatever comments they wished on the EPA projections
guidelines.  In Chapter 3, Summaries and Conclusions, we
have quoted or mentioned many of those comments.

In this section we present additional comments which did
not fit anywhere else or are more general.
A.I  General Supportive Comments

A.2  General Negative Comments

A.3  Miscellaneous Comments

A.4  Specific Suggestions or Problems

A.5  Reactions to Possible Federal-Wide System
                              -93-

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-94-

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                     A.I  GENERAL SUPPORTIVE COMMENTS
It's good to force states to look at projections because
it makes them think about the impact of the growth.  It
will stop local governments from manipulating projections
high or low to get what they want.

Despite the fact that we are participating reluctantly, I
think the process provided good liaison opportunities with
substate agencies.

This makes good sense if done at the beginning of 208 planning
and it will make good sense in 1985 when the new census data
".re available.

We're proud of what we've done.  Local communities realized
that this will determine the size of their facilities and so
they took it seriously.

This is definitely needed in order to avoid over- and under-
dusign.  It is particularly important for the 208's but not
in rural areas and the SMSA's which are (in that state) mostly
quite small and not showing much growth.

We're already using the interim figures.  We're being fairly
stringent kbout them.  We're telling local governments that
consultants will no longer be preparing projections.  We'll be
handing the projections to them.

Disaggregating to facility planning areas is a good thing.  I've
seena'lot of abuse (this person said).  A jurisdiction would come
and project the bulk of the growth in one end of the county, and
then a couple of years later they'd come back and project all
their growth in the other end.

No doubt about it.  We need standardized population projections
that are acceptable to everyone involved.

I now know more after going through this process.

States should develop their own disaggregations, resolving their
own needs and what EPA will accept.  Many states are like us and
haven't had the foresight or resources to develop disaggregations
previously.

The process wasn't very tedious or complicated.  For one thing
because we've been here before.
                                -95-

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The process will probably result in benefits, particularly if
people work out good compromises.

We try hard to keep projects from getting out of hand.

Consistent projections (which we've had in the state) have
been a good experience.

I concur in EPA's approach of getting everybody involved.

EPA should extent this approach to its other programs, MPDES
permits and non-point source programs in particular.  Population
is clearly an important factor in estimating future waste
quantities, but the regulations now address the use of projections
in these programs only indirectly.

Don't ruin £0od things going on in the states right now with too
many regulations.  The current level of detail in the projections
guidelines is good now.

If EPA will support a state when it has a strong program, things
will work well.  They've built flexibility (the 5 and 10% pro-
visions) into it.  If EPA is willing to take the heat, it will
be OK.

The process we used was time-consuming, particularly of staff
time.  But because of the local consultation, people are
generally agreed to accept the results, at least until the 1980
census.

EPA  should look  to  the states as  the "first  line of  contact"
for  resolving  conflicts with  local governments.
                                 -96-

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                    A.2 GENERAL NEGATIVE COMMENTS
The requirements are difficult to read.

EPA has said that if there's some reason for deviating from
these projections they'll be flexible but most people (in our
local governments) are afraid that EPA won't allow any change
in the projections.  We're afraid they'll put these in concrete.

We're under some awfully rigid requirements that could cause
problems for a specific county, say one where the figures don't
reflect what we (now) know or expect.  The tools of the trade
don't allow us to project in a rapidly expanding county.

The EPA should ask states for projections.  They'd get more
state input.  The regulations seemed not to realize that lots
of people across the country are wrestling or dealing with the
same thing.

They (EPA) made no effort to get input the way the states are
required to get it.  The state projection just showed up in
the mail one day.  (comment of two states)

The system set up now is workable.  But it's probably too hard
to deal with.  It's so structured there's no way to deal with
anything out of the ordinary.

The whole thing is a lot of monkey business, an exercise in
futility, an annoyance.  It should be done case by case; the
total of the parts might well exceed the whole.  If we're looking
at a town that looks like it's going to grow, we give it
funding for growth.

We didn't get enough money for planning in the non-designated
parts of the state and as a result our projections aren't very
good there.  We're telling our contractors that the local numbers
shouldn't be treated as gospel for 201 planning.

Doing disaggregations to the county level is worthwhile, but
doing them in rural areas to facility planning areas is not.
The regs. seem more appropriate for denser populated urban states.

We shouldn't have  to do  this as part; of the statewide 208 program.
It's more related  to Cr-n^tructi'-m Grants  in 205g or someone  else.

These guidelines are constructed  to produce a  "convenient" pro-
jection.  But really you should be going  to the level of govern-
ment which  has the most  information, which  is  some cases will
be a local  government not  the state or  the  feds.
                                -97-

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We shouldn't have to do disaggregations at all since our
state's growth is totally a function of federal decision.

We would prefer to submit two projections not one.  In many
parts of the state, the economy is dependent on one industry
or one company and it is difficult to pick a particular future.
Having additional projections ready and approved means one
can  svitch to using that projection as soon as a decision is
made.  This is particularly important when situations are
changing rapidly.
                                -98-

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               A.3 MISCELLANEOUS COMMENTS
This is an unplanned planning program.  Agencies that work
with HUD are more used to this.

The process is easy for states that are well-prepared but
very hard for others.

The feds want to ignore the energy boom.  I'll have to eat
my words if I?A accepts our request for a variance.

Vie have a problem with asking our Governor  to accept projections
prepared outside the state.  We feel  our projections are as
good as EPA's.

The methodology should be reviewed stringently but  there should
be some leeway in the actual numbers  produced.

EPA needs to be "flexible", particularly at  the  facilities planning
level  (a comment of quite a few states).
                                 -99-

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           A.4 SPECIFIC SUGGESTIONS OR PROBLEMS

This section covers ideas not included in earlier chapters
or in the State Reoorts.
One state felt the 5% and 10% variances were "arbitrary" and
that if such variances are allowed at the state and 208 level
they should also be allowed at the facilities planning level.

Two states commented that treating the designated and non-
designated areas differently (as far as possible variances)
polarizes them and is unfair to the nondesignated areas.

One state commented that because the 10% variances allowed
to the designated areas do not take population away from other
parts of the state, it is politically impossible for the
Governor to refuse to grant one.  (?n the other hand, several
states in which there are significant differences between the
208 and the state projections are not going to grant the
variances and have no problems with that)

One state accepted a 5% variance even though it really wanted
a somewhat larger one because the process was easier.

One state has several problem counties which contain large
military bases.  They have to rely on the army's figures for
those but there may be closing of bases in  other states which
would mean more people in their state.

Five states mentioned having communities with large seasonal
populations of tourists and retired people and not knowing
how EPA wanted them to handle this in their projections.

One state commented that since most of the step 1 grants in
that area have already been awarded the guidelines should
perhaps also cover step 2 grants.  Related to this is the
following:

In one state the current set of projections is now significantly
different in parts of the state from the former set.  One la?ge
project is now completing its planning phase  (step 1 grant) and
it appears that the projection which was used is very much inflated
compared with the more recent projection.  One person in the state
government stated a preference for having the most recent projection
used even if it is developed at the end of a lengthy and expensive
planning process.  That state had attempted to get the  contractors
to consult regularly with local government planners but this
apparently was difficult to implement.
                               -100-

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        A.5 REACTIONS TO POSSIBLE FEDERAL-WIDE SYSTEM


In our telephone interviews, quite a few of the state people
were aware that the federal government is considering developing
a process to ensure consistent use of population projections by
all federal programs which use projections in funding formulas.

States generally expressed support for the idea of consistent
projections to be used by state and federal programs, with
some commenting on the technical or political hurdles to be over-
come.

Some states were acquainted with the details of the proposals
being developed by the Office of Management & Budget and Department
of Commerce along these lines.  In some discussions, the nature
of the conversation led us to tell states about these proposals;
in others the issue never arose.

General Supportive Comments

Sounds rather progressive.

I wish them luck.

The idea has merit but will take time.

All federal agencies should use the same numbers.

There's some practical value to the OMB plan, but also headaches.

There are now (in our state) no official numbers at any level.  The
feds should use the same numbers; every program in DHEW uses a
different projection.

A very strong, good move as long as there is substantial state
involvement in reviewing the state projections.
                              -101-

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General Negative Comments

It's sensible to use different methodologies for different
purposes.  The Federal DOT projections have been useful to us
and in the short term they have come out very close.  I caution
against using one set of numbers for all purposes.

There will be a similar problem with the OMB plan to the one
the states now have with the locals.  The states are likely to
say that there's not enough state involvement.

Projections are not appropriate for allocating money.

Joint BEA/Census projections (to be proposed by OMB and Commerce)
might not be better.  One small state commented that it was
difficult for them to luve influence.  A larger state suggested
outside review in developing the projections.

We are "headed for a big battle with OMB."  States know the
trends better than the feds.  The OMB proposals don't take into
account federal policy objectives such as Carter's urban policy.
If we look at the long-term situation, for example, the northeast
has plenty of x^ater and will get more growth.

If done wrong, this could reinforce current population shifts
around the country  (which is bad).
Other Comments

You nead to look at the implications of using different projections.
Overbuilding of hospitals, for example, causes higher rates to
its patients but overbuilding of highways brings no complaints
because it wasn't built with local money.

All calculations of need should be done straight, with a safety
factor added explicitly at the end.  The way it's done now, they
add a safety factor in each calculation, and the final number is
wildly inflated.

In non-EPA programs, one has to get the analogue of per capita
use and the design period.  One fact that also needs to be considered
is the risk.  For example, in the case of hospital needs, coming
up short is a real problem.
                               -102-

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                       APPENDIX B

               INDIVIDUAL STATE REPORTS
 Each state raport that follows is the summary of
 one or more telephone interviews  lasting'between
 twenty and sixty minutes each.  Because of
 limitations of space we had to omit much of the
 information we learned in those calls;  we would
 be happy to provide additional details  on
 request on particular states.

 "Date of contact" refers to the date of our most
 recent telephone conversation with a state representative.
 Material in the summaries is therefore  no more recent
 than that date; because some states were at the time
 in the midst of deciding how to handle  the projections,
 the situation at the time you are reading this may
 be very different.

"7/77 estimate" refers to the estimate of population in
 July, 1977 used by the Bureau of  Economic Analysis
 in preparing in preparing their projections for EPA.

 "EFA projection" is the projection for  the year 2000
 for the state prepared by BEA for EPA.

 "State projection" is the state's official, or usual,
 or only available projection prepared by the state's
 projection agency.  It may be several years old, or
 very recent.

 "Projection submitted" is the projection for the state
 which has been or will be submitted to  EPA.  Except
 where indicated, it does not include 10% variances which
 may be granted to designated 208  agencies.

 The section entitled, "State Projections" describes
 the state's usual process of developing projections,
 independent of EPA requirements.   The next section,
 "Special activities for EPA" includes projections
 developed as part of EPA planning processes (sach as
 208) or specifically to comply with these guidelines
 In some cases it was difficult for us to tell in
 which of these two categories some activity has fallen.

 In the "Other Comments" section we present, for some
 states,  a brief analysis of strengths and weaknesses
 in a state's approach to the EPA  guidelines.
                       -103-

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-104-

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                                            -131-

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                           APPENDIX C

                            GLOSSARY
In this section we try to define or describe some of the
more technical terms used in the report.
Types of Population Projections

We generally describe the projections used as being demographic,
econometric (or economic),  a combined approach or a ratio or
trend^ projection (see section 3.5 and the State Reports).  A
demographic projection makes separate assumptions about fertility,
mortality, and migration and calculates a future population.
It is also called a "cohort-surviva1." or "cohort-component"
projection.

An econometric projection begins with a forecast of jobs.
Then, by making assumptions about the labor-force participation
rate and the unemployment level, translates that   iito a
projection of population.

A combined approach uses both demographic and econometric elements,
and can be of various types.  A common one b*.ses the migration
assumptions in the demographic model on that part of the pro-
jected labor force which cannot be met by locally-born individuals.

Some states use various kinds of trends or extrapolations, and
continue an area's rate of growth into the future  (see Idaho)
or an area's proportion of the state's growth (see Alabama).
201 Facility/ 201 Plan/ 201 Projection/Construction Grants Program

Section 201 of the Clean Water Act establishes a program of
federal funding of 75% or 85% (in certain cases) of the
construction costs of publicly owned sewage treatment facilities.
The area which a particular facility is being designed to
serve is the "facility planning area."  The population projection
used to plan the facility is the "201 projection."  The plan is
the "201 plan."  Etc.

These facilities take care of "point sources" of po_lution, i.e.
those coming out of or from a pipe or similar area.

The program in EPA's Office of Water and Hazardous Materials
which makes the grants for these facilities is called the
Construction Grants Program.
                            -133-

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Population Projection/ Forecast/ Estimate/ Census

A census is an actual count of the number of people in
an area.  The next census will be taken in 1980.
An estimate is a guess of the number of people in an
area prepared between censuses; it is based on any of
a number of indicators of population change:  births,
deaths, construction permits, school enrollments, drivers'
licenses, estimates of jobs, etc.

A population projection is a guess, or scenario, of how
many people would live in a particular geographical area
at some time in the future.  It consists of base data
(census or estimates, current and past fertility, migration,
mortality, etc.), a model  (demographic, economic, straight-
line trand, etc.), and assumptions  ('That will the fertility
be in  twenty years?  How may jobs will there be in this
area?).

A projection is not necessarily a prediction; the latter
is used when the person preparing a projection  thinks that
a particular projection is the most likely  to happen.
However one can prepare any number of projections, including
those  which one thinks involve assumptions  unlikely  to
materialize.

A forecast is a projection which someone thinks is reasonably
likely to come true.  That is,  the  term involves more of
a commitment of reasonableness  than a projection.

A prediction is a best guess.  As far as we can tell, no
state  agencies ever uo population predictions.

A baseline projection is one which  is used  by official
agencies and is regarded as  the  standard projection  to be used,
or one thought of as reasonably  likely to occur if "current
trends" continue.
Disaggregation

A disaggregation  of a projection  is a division of one  projection
into  projections  for smaller geographical areas.  So,  for
example,  a  state  may prepare a  population projection for  the
state and then disaggregate  (or divide or allocate) to
projections for counties.
                             -134-

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2Q8 Plan/ 208 Agency/ 208's/ 208 Level

Section 208 of the Clean Water Act requires states to develop
plans to meet clean water standards.  Sources of water pollution
come from point sources and non-point sources.  Examples of the
latter are agricultural runoff and runoff from urban construction
sites.

The p.?.ans, whether for entire states or parts of them, are called
208 plans.

The Governor of a state may choose- - or designate  -  captain
substate agencies to prepare the water quality plans for their
geographical areas.  Those agencies are called 208 agencies or
208's.  Their geographical area is sometimes called the 208 level.

Although these designated 208 agencies in some cases are counties,
more often they are multi-county planning agencies, which in
different states have different legal statuses, sources of funding,
roles, and responsibilities.  They are known as:
     * councils of government   (COG's)
     * areawide planning agencies
     * metropolitan planning agencies or organizations
     * associations of government
     * area planning and development commissions (APDC's)

However not all agencies with the above names have been
designated for 208 planning'.
Needs Survey

EPA conducts Needs Surveys every two years to determine what
is still needed in each state to comply with various portions
of the Clean Water Act.  The cost of complying is also
estimated.  Population projections are, of course, used in
determining and estimating the needs.

Surveys were conducted in 1973, 1974, 1976, and 1978.
Step 1 Grants

Under the Construction Grants Program (see above), EPA makes
grants in three steps for the construction of a sewage treatment
facility.  Step 1, the first, is a planning grant.  Step 2 is
for design of the facility and step 3 is for actual construction.
The EPA projections guidelines refer to a. deadline after which
all Step 1 grants must use projections consistent with the
guidelines.
                              -135-

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-136-

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                           APPENDIX 0

                          EPA CONTACTS
Listed below are individuals in EPA headquarters  and regional
offices who can provide you with additional  information  about
the EPA requireemnts and particular states.


EPA Headquarters
     Cathy O'Connell, 202/755-8253 or 202/426-9404 (leave  message)
     Facility Requirements Division (WH  595)
     Office of Water Program Operations,  OWWM
     EPA
     401 M Street,  S.W.
     Washington, O.C.  20460

Region I (CT, MA, ME, NH, RI,  VT)  - Boston
     Roger Duwart,  617/223-5130
     Water Quality  Branch

Region II (NJ, NY)  - New York  City
     Beverly Reith, 212/264-1840
     EIS Preparation Branch, Water Division

Region III (DE, MO, PA, VA, WV, & DC) -  Philadelphia
     Gene Mattis, 215/597-3423
     Uater Quality  Management  Coordinator

     DE, MO, DC:  Larry Merrill, 215/597-9966
     PA:  Rich Setzer, 215/595-9151
     VA, WV:  Hank  Zygmunt, 215/597-8168

Region IV (AL, FL,  GA, KY, MS, NC, SC, TN)  - Atlanta
     James Kutzman, 404/881-4989
     Chief, Applied Technology Section
     Water Division

Region V (IL, IN, MI, MM, OH,  WI)  - Chicago
     Mary Lou Lageman, 312/353-2000
     Regional Economist, Planning & Evaluation Branch

     IL, IN:  (Mr.) Noel Kohl, 312/353-2163
     MI:  Jim Filippini, 312/353-2160
     MN, WI:  (Mr.) Dale Luecht, 312/353-2168
     OH:  Ed Matters, 312/353-2172
                            -137-

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Region VI  (AR, LA, MM, OK, IX) - Dallas
     Thomas Lara, 214/767-2624

Region VII (IA, KA, MO, NB) - Kansas City
     IA:  Vic Zieglar, 816/374-5429
     KA:  Larry Sheridan, 816/374-5429
     MO:  (Mr.) Lee Duvall, 816/374-5429
     NB:  John Houlihan, 816/374-5429

Region VIII  (CO, Ml, ND, SD, UT, WY)- Denver
     CO:  Bruce Zander, 303/837-4963
     Ml:  Robert Fox, 406/449-5486  (note area code)
     ND, SD:  Roger Dean, 303/837-2721
     UT:  Paul Arell, Doug Johnson, 303/837-4963
     WY:  Mike Strieby, 303/837-4963

Region IX (A2, CA, HI, NV) - San Francisco
     AZ:  Mark Brucker, 415/556-3793
     CA:  Loretta Barsamian, 415/556-2833
     HI:  Kitt Armstrong, 415/556-8085
     NV:  Rick Hoffman, 415/556-3039

Region X  (AK, ID, OR, WA)- Seattle
     Mike Gearheard,  206/767-1237

     AK:  Stan Brust, 907/271-5083  (note area code)
     ID:  Eldon Edinundson, 208/384-1450  (note area  code)
     OR:  Cecil Ouellette, 503/221-3250  (note area  code)
     WA:  Al Ewing, 206/455-7218
                                -138-

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           How They Are Made...  And  How
       They Make Themselves Come True
                                            JUDITH KUNOFSKY
     | OK  \IMOSI  liltecn years,  ihc Sierra Club has acknowl-
      edged ih.ii population growth is a cause ol all environmen-
      tal problems  The environmental effects of the almost 220
 iiulhuii Americans .ire compounded by .in annual  increase ot
 almost 2 million: the Census Bureau's "medium level" forecast
 foresees a total population of 296 million in 2025—only 4.7
 ve.irs away  A growing population intensifies pressure on fragile
 land, contributes  to pollution of air and water,  provides the
 impetus for the uiham/uiion of  agricultural land and the con-
 struction of an ever-increasing number of power plants. While
 giowth rates have  declined both in this country  and in  many
 other parts of the world, overall  population  continues to
 increase.
  The way we evaluate how fast the population si/.e is chang-
 ing, what programs might help reduce the growth rate, how bad
 (or  good) the situation might be in the future is through the use of
 population projections  Moreover, for many  programs  with
 significant environmental impact—sewage treatment facilities.
 major water diversion  projects,  massive regional energy
 development—the population  projection for the appropriate re-
 gion is used to justify the project.  Ironically, in many cases,
 using a projection this way actually helps bring about the growth
 iliat was foreseen. In other words, sometimes the projection
 causes the growth1
  A population projection tor a given geographical area states
 what  the population size and  growth rate would  be at certain
 dates in the future  It differs from a population estimate, which
 is usually a statement about the past or current  population of an
 area. Projections are prepared for the world, lor nations, states,
 counties, cities and smaller geographical areas, and can be pre-
 pared with u variety ol detail and sophistication. Some proj-
 ections uive only the total number of people; others describe
 distribution by age, sex and sometimes race, religion or other
 group identification. Population projections are prepared using
 different models, or mathematical tormulations, that express
 different theories  about  why and  how  population size and
 growth rates  change. For example, one  might assume that  a
 community's overall population will continue to increase at 1% a
 year. Or one might make  separate assumptions about family
 si/.e, mortality, lertility timing and migration,  and apply those
 assumptions to a detailed breakdown of the current population
 by  age and sex. Alternatively,  one might relate population
change to a projection ol regional job availability.
  A projection is not a prediction: even in theory, a projection
 need not tell us what is most likely to happen. A projection
 reflects the consequences of a continuation of "current trends"
 and the extent to which the model chosen accurately mirrors the
 real world. The difference between them is that current trends
 always change, and they change, at least in part, as a result of
 our evaluation of and reaction to those trends. For example,
 approximately one out of rive births in the U.S.  is to a teenager.
 One might prepare a population projection based on this situa-
 tion  However, one might feel that as a society we will adopt
 programs to change the trend, and therefore project a reduction
 in teenage parenting.
   Population projections are based on much accumulated expe-
 rience and are almost always prepared to reflect what are be-
 lieved to be current trends. Of course, it is difficult to distinguish
 between a current trend and a short-term aberration in behavior,
 in tertility or migration.  It is important to realize that it is not a
 question of an adequately prepared projection being  right or
 wrong, but simply that the world is much too complicated for
 there to be a correct guess of the future.
   Demographer Peter Morrison has written that, "Forecasting
 is least effective when it is conducted as an exclusively mechan-
 ical process. It is tempting to adopt an approved method, plug in
 some  numbers, and crank out some more numbers that tell
 people what to do  ... It should be possible, however, to im-
 prove the odds on making right decisions not only by laboring to
 improve the models, but also by sharpening our ability to evalu-
 ate and assess the products of forecasting models. . .  . Those
 who use demographic forecasts must exercise at least as much
judgment as those who make them."
   Population projections are used in three ways. Projections are
 used to give us an idea of population size and growth rates in the
 future. We can evaluate  whether the U.S. has reached or will
reach zero population growth, how fast our numbers might be
 increasing in the year 2000, what the contribution of immigra-
tion at various levels is to the U.S. population, the significance
of the heavy migration to the Sun Belt, how  fast Monterey,
California, is gaining people or how fast another region is losing
people  From these projections we can then evaluate the need for
corrective or supportive actions, the wisdom of adopting various
population policies to change or reinforce trends.
  Projections also are used in determining the allocation of
federal funding, the decision to go ahead with or to reject vari-
ous federal, local and state  projects. All major  government
investments—such as roads, dams, sewage treatment plants, and
U  JANUAKY/H.HIUIAK'r

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                                             /.Y it fair for a community
                                       that consciously or unconsciously
                                         submits an inflated projection
                                 to receive a bigger chunk of the tax dollars?
 sewers—ullcmpt to solve current problems (such as water pollu-
 tion), or may provide for additional capacity to continue to abate
 a problem or to anticipate a future problem. A  new reservoir
 may, lor example, provide for the anticipated water needs of a
 community that does not now have a water shortage.
   In order to determine the.se future needs, the agency propos-
 ing  a project prepares a projection of the quantities involved,
 whether they're quantities of water, untreated sewage or vehi-
 cles expected. In each case,  an essential component of the de-
 mand projection is a projection of the number of people who will
 he living in the .nea  in question or who will be  served by the
 lability. The  population projection is then  used to determine
 whether a project IN needed, where it should bo located, how
 large it should be, (he cost-effectiveness ol the  proposal and,
 finally, the amount of money  to be made available by the appro-
 priate  level of government. Population  projections, therefore,
 are crucial and indispensable factors in the evaluation of needs
 by communities and  by government agencies  with  funding
 authority.
   Population projections are also used in devising computer
 models that involve both population and economic projections.
 These models are used to esiimate the effectiveness of proposed
 environmental controls.  For  example, a model may postulate
 various types ol air pollutants emitted  by different sources, fac-
 tor in topography and weather conditions, then evaluate various
 strategies  for meeting federal air-quality standards. Modeling
 can  also be used to gauge the effect on population of proposed
 energy development, a new  industrial facility  or water devel-
 opment. But population projections are much more than a  rather
 academic, statistical exercise. The projections themselves can
 have a tremendous effect on growth. This is because construc-
 tion projects olten loster (he population  and economic changes
 that were  projected. In other words,  if  a community provides
 sewer hookups lor j doubled population, people ma^y move to
 that community—because there are sewer hookups.
   This situation poses certain problems:
 •  Is it fair for a community that consciously or unconsciously
 submits an inflated projection to receive a bigger chunk of the
 ta.x dollars'?
 • The growth thai is induced  by an inflated population projec-
 tion  may reflect (lie desires of only certain special interests in a
 community.
 • One federal program may undermine the goals of another, as
 when the federal government  funds a sewage treatment plant to
 solve current water pollution problems, and the reserve capacity
of that plant facilitates growth in an area that depends heavily on
 ihe automobile.  As  a result, auto commuting increases, and air
quality gets worse.
   Another example would be if a city  with decreasing popula-
 tion  were forced lo use a projection reflecting only the "current
 trends," thereby aiding  and  accelerating the  population de-
crease. This direction might he contrary to an established federal
 or state or local policy of rebuilding the city's  population and
 industrial base.
   Different government  agencies have  experienced different
 problems  connected  with  population projections.  In the
 abstract, these problems may seem almost impossibly abstruse,
 but ca.se studies shed some light.

   Water Development and a Wilderness Study Area:
         The Forest Service and  Medicine Bow
               National Forest, Wyoming
    THH  U.S. Forest Service, within the Department of Agricul-
    ture, has been developing a management plan for the Huston
 Park  Unit of the Medicine Bow National Forest in Wyoming
 The unit i.s near  the city of Cheyenne,  and the key point of
 contention has been the extent to which the Forest Service will
 accede  to the Cheyenne Water Board's request that land be re-
 served  for further development  of  the city's  water  supplies.
 Some of the  remaining areas within tht:  unit were to be made
 available for study for potential inclusion in the National Wil-
 derness Preservation System.'The rive options presented ranged
 from reserving one  third  of the acreage requested tor potential
 water development  to  reserving all  the acreage requested. In
 urea, the acreage requested for wilderness study ranged from
 none  to 43,010 acres. The original choice made by '.he  Forest
 Service was to reserve all the acreage requested for water devel-
 opment and to allocate 29,770 acres for wilderness study.
   Substantial controversy arose, however, after publication of
 the Draft  Environmental Impact Statement in  late 1976.  The
 Cheyenne Water  Board had used a  projection  of 113,490 for
 Cheyenne for the year 2000, compared  with 43,813 in 1973
 However the Economic Research Unit of the Office of the State
 Planning Coordinator had projected a year-2000 population of
 73,400  for the entire Laramic  County,  in which Cheyenne is
 located, of which  about 60,000  would  be  in the  city of
 Cheyenne. This discrepancy was noted not only by The Wilder-
 ness Society and the Wyoming Outdoor Council, but also by the
 Office of Industrial Siting Administration of the state and by the
 governor. Governor Ed Herschler wrote that, "The draft state-
 ment  . . . fails to adequately address several important matters.
 .  . The discussion  of  the population  projections and  the in-
 creased  demand for  water resulting from  the projected popula-
 tion should be more  specific and definitive."
   Objections were sufficiently  compelling that  in the final re-
 port, dated September 1977, the Forest Service had changed its
 recommended management plan to one allocating about half the
 requested acreage for potential  water development and 36,840
 acres for wilderness study. The city immediately appealed to the
 director of the  Forest  Service, and the matter is still  being
 negotiated.

    Water Development and Hydroelectric Power:
        The Army  Corps of Engineers in Alaska
   THE Army Corps of Engineers has proposed building  a dam
   on the wild Susitna River in Alaska. If built, this would be
the most expensive hydroelectric dam project in the Corps' his-
tory, with costs estimated between SI.5 billion  and 56 billion,
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                                      '{'hi' sum total of all Mate projections
                                           used .  . . should he equal to
                                              or reasonably related to
                                        a projection of U.S. population.
Corps  analysts have admitted thai, "by  making assumptions
about  lulure  populations  and  economic  growth  and  then
providing energy sulfieic-ni U> sustain such  growth,  the initial
projections  may  become s'elf-fullillinjj  prophecy." But  the
project's environmental  impact  statement  lakes  a  different,
more simplistic.- view, it claims that the population and indus-
tnal growth will occur whether or not the dam i.s built and that
ihe increased availability ol power will nut stimulate* industrial
development.
   The  Corps did point  out, though, that "by  presuming that
energy needs must be met. Ihe opportunity to u.se the provision
ul power as a tool  lo direct growth  toward socially desirable
goals i.s I'oregone In the absence, however,  of any such gener-
ally accepted growth goals, it  seems highly presumptuous to do
otherwise than plan as to satisfy the energy needs required to
sustain thai  level ol tuiure development deemed most likely"
 1 lie statement is  somewhat  circular, but  it does  point  out
clearly that unless we as a country begin to develop and  articu-
late more clearly our national, regional and local  population
and development goals,  ihe tie /ncto  growth policy will con-
tinue to  relied past trends—or the wishes  of the most vocal
and opinionated special interests.
   II we are lo use population  projections intelligently and
correctly- -as  planning  tools rather  than as pronouncements
ol  unalterable preconditions—a  lew principles  should be
followed
   The  lederal  government should  continue to produce  pro-
jections lor  the country  as a whole thai include a range of in-
terpretations ol cut rent  trends  in  U S  population growth.
Moreover the  lederal government  should  seriously consider
producing  alternative projections,  that present  a  more goal-
oriented attitude  towards U  S. population  growth, i.e., that
exhibit  alternative population paths including fertility and  mi-
gration  assumptions  that are not  now  regarded  as  current
tiends.
   There is nothing wrong with the lederal government continu-
ing to  produce a consistent  se!  of population  and  economic
projections for regions and communities, according  to current
trends (as does the Bureau of  Economic Analysis for the Water
Resources Council). However, population projections that are
developed for use by the government in  I muting must  satisfy
the (ollowing conditions:

•  Projections must he prepared using demographic-ally accept-
able techniques anil must be  periodically updated. This point
should be no surprise.
• The sum total ol all  slate projections used - -or all projections
lor smaller geographical units— should  be equal  to  or rea-
sonably related to a projection ol U.S. population. The  sum ol
the parts must approximate the whole.
» Projections must lake  into account  the  relevance of goals as
well as trends
• There must be opportunities for input by slate  and  local gov-
ernments as well as the public.
• All  federal agencies  should use ihe  same projections in a
community or slate
  Communities must be encouraged to prepare and  use pro-
jections that reflect goals, not simply trends 'This is particularly
true for population distribution within a community but should
also be true for population si/e itself  Implementation of  the
Clean Air Act, Clean Water Act and other national legislation
has, m some communities, led to this type of innovative think-
ing, but this needs to be encouraged Far more than it has been.
  As  the federal government improves its ability to articulate
national policies lor urban development, protection ot agricul-
tural land, water policy, housing, population growth und so on.
these  policies should be rcikaed in its population projections
There is good news about the federal government's use of popu-
lation  projections.  The hnvironmental Protection  Agency
(HPA) has developed a new and environmentally sound process,
one that follows the principles outlined above
  The EPA's process begins with the Census Bureau's "Series
II" projection for the United States. This is the medium projec-
tion, the one most often quoted and used.  It is the projection that
gives  a U.S  population in the year 2000 of 260 million—and
one in  which U.S.  population never  stojis increasing   Thr
Bureau  ol  Heonomie Analysis (Bt.A)  ol  the Department ol
Commerce periodically prepares a consistent set of population
and economic projections tor more  than 600 geographical re-
gions in the country, including each stale. At hPA's inquest, the
BKA divided the Census Bureau's single projection into 5U .state
projections. Each state would then divide its projection into a
number of smaller projections for regions  (such as those with
water quality planning agencies—"2(M" agencies)  Each re-
gion would  further break down the projections tor constituent
counties,  cities  and sewage-facility planning areas ("201"
areas). The available tederal funding would be limited to 75^ or
X.V/}- oi the cost ot a facility whose sue would be determined by
the HPA's population  projection  Communities that wish to con-
struct  larger facilities  could do  so  at  their own  additional
expense.
  The EPA procedure also includes provisions for reasonable
exceptions and variations within strict limits. Environmentalists
have praised the proposed FiPA procedure because it involves a
national overview ol population  projections,  because states
have an important role to play; and because communities can
determine where and how they want growth to occur.  Implemen-
tation of these regulations would go a long way toward remedy-
ing the problems involved in the use of population projections.
But much would  still need  to be done:  state governments and
communities still have their own policies on how  population
projections are prepared and used.  More importantly, the devel-
opment of a community consensus on the most environmentally
sound and socially beneficial projections tor their area is a task
that remains to be accomplished  virtually everywhere in  the
country, n
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    JANUARY-'H'BUUARY

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