United States
Environmental Protection
Agency
Office of
Inspector General
401 M Street, SW
Washington, DC 20460
EPA
Report of Internal and
Management Audit
REPORT OF AUDIT ON THE
MANAGEMENT OF THE CHESAPEAKE BAY PROGRAM
POINT SOURCE POLLUTION PROGRAM
AUDIT REPORT NUMBER E1H98-03-0208-9100467
SEPTEMBER 11, 1989
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%3- i"
(Wi
TABLE OF CONTESTS
OBJECTIVES, SCOPE AND METHODOLOGY.
SUMMARY OF FINDINGS
ACTION REQUIRED
BACKGROUND
FINDINGS AND RECOMMENDATIONS
1. IMPROVED ENFORCEMENT ACTIVITIES NEEDED TO
PROTECT THE BAY ,
2. WATER QUALITY STANDARDS AND TOXIC CONTROL
STRATEGIES DELAYED
APPENDIX A - REGION 3 RESPONSE TO DRAFT AUDIT REPORT.
APPENDIX B - DISTRIBUTION
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4
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HEADQUARTERS LIBRARY
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL
MID-ATLANTIC DIVISION
841 CHESTNUT BUILDING
PHILADELPHIA. PENNSYLVANIA 19107
September 11, 1989
MEMORANDUM
SUBJECT:
FROM:
TO:
Audit Report Number E1H98-03-0208-9100467
Report of Audit on the Management
of the Chesapeake Bay Program - Point
Source Pollution/Control Program
P. Ronald Gandolfo
Divisional Inspector
Edwin B. Erickson
Regional Administrator
'neral for Audit
OBJECTIVES. SCOPS AND METHODOLOGY
We performed an audit of the Chesapeake Bay Program
administered by Region 3 of the Environmental Protection Agency.
This audit is the third in a series we plan to perform of the
Chesapeake Bay Program. The purpose of this audit was to determine
if:
o Region 3 and the states actively and aggressively
enforced National Pollutant Discharge Elimination
System (NPDES) permits.
o Region 3 ensured that states adequately performed
their enforcement responsibility.
o Region 3 ensured the states implemented Clean
Water Act (CWA) requirements to reduce the amount
of toxics entering the Bay.
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We performed the audit in accordance with the Standards for
Audit of Governmental Organizations, Programs, Activities and
Functions issued by the Comptroller General of the United States as
they apply to economy and efficiency and program results audits.
Our review included tests of the program records and other auditing
procedures we considered necessary.
Although the Chesapeake Bay is surrounded by the States of
Delaware, Maryland, Pennsylvania, Virginia and West Virginia and
the District of Columbia, our review focused on Maryland,
Pennsylvania and Virginia because of the high concentration of
dischargers in these states that affect the Bay. We performed our
work primarily at EPA Region 3; the Maryland Department of the
Environment (MDE); the Pennsylvania Department of Environmental
Resources (PA DER); and the Virginia State Water Control Board
(VA SWCB).
During this audit we reviewed the Chesapeake Bay Agreements
entered into with the states and legislation authorizing the
cleanup of the Chesapeake Bay. We met with officials and staff
from the Region 3 Water Management Division and the state agencies.
To determine if Region 3 and the states actively and
aggressively enforced NPDES permits, we reviewed the CWA to
identify the requirements and responsibilities of the delegated
states and EPA. We also reviewed the memorandums of agreement
between EPA and the states to determine the responsibilities of
each.
Our work included a review of the actions taken by Region 3 to
ensure that the states complied with the requirements of the CWA
for controlling toxic substances. We obtained information
concerning the status of documents submitted by the states and
reviewed each to determine if the documents were consistent with
the CWA requirements.
To evaluate Region 3's and the states' enforcement programs,
we reviewed the quarterly noncompliance reports to determine the
number of Chesapeake Bay facilities in violation of their NPDES
permit. We then reviewed the permit files, maintained by Region 3
and the states, to determine the violations that occurred and the
enforcement actions taken to bring the violating facility into
compliance. These enforcement actions included administrative
orders, consent orders, consent order and agreements, and the
assessed fines. We also determined whether the dischargers adhered
to compliance schedules included in these orders. Enforcement
actions taken against municipal and industrial dischargers were
evaluated to determine if these actions complied with the CWA as
well as EPA regulations and procedures.
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Region 3 provided the total number of major and minor
dischargers to the Chesapeake Bay. Municipal facilities
discharging a flow of one million gallons or more per day are
classified as major. Industrial dischargers may be classified as
major depending on both the amount of toxic pollutants and the
volume of the discharge. Dischargers who do not meet these
criteria are classified as minors. Figures provided by Region 3
show that there are 4,294 dischargers into the Chesapeake Bay
permitted under the NPDES. Of this number, 329 are classified as
major dischargers and 3,965 as minor dischargers. As of March
1988, 88 or 27 percent of the 329 major dischargers were listed as
out of compliance on the quarterly noncompliance report.
CHESAREAKE BAY MAJOR DISCHARGERS
8 .,1
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DC
OP MAJOR DISCHARGERS
NUMBER OUT OF COM PLIANCE
MO PA
STATES
We randomly selected 11 of the 88 major dischargers reported as out
of compliance. Seven of these were municipalities and four were
industrial dischargers. The breakdown of these facilities by state
is as follows:
Maryland
Pennsylvania
Virginia
Mimi.ci.pali. ties
Frederick City
Freedom District
Pocomoke City
Athens-Sayre
Kelly Township
Wellsboro Authority
Waynesboro
Industries
Trans-Tech
Eastern Stainless Steel
L.A. Clarke & Son
U.S. Marine Corps, Quantico
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Our audit covered enforcement activities during the period
October 1, 1985 through June 30, 1988. Limited testing of
activities prior to October 1, 1985 was also performed where
warranted. Our study focused on major facilities since they have
the most significant environmental impact on the Bay.
This review disclosed several areas needing improvement which
are discussed in this report. Recommendations were provided to
assist Region 3 and the states to improve their enforcement
program. Our work included a review of EPA's internal controls for
monitoring the states' enforcement programs. We evaluated EPA
procedures to ensure the states were administering their
enforcement programs in accordance with the CWA and EPA
regulations. We examined EPA's mid-year and end-of-year reviews
of state programs to identify weaknesses and those actions taken or
planned to resolve them. In addition, we reviewed EPA's procedures
to ensure the states completed all the tasks required by the CWA
for controlling the discharge of toxic substances to the Bay.
The Permits Compliance System is the National data base for
the NPDES program. The total number of dischargers in the
Chesapeake Bay Basin was obtained from this system. We did not
review the general and application controls of the data base
because the main purpose of our review was to evaluate the
effectiveness of the NPDES enforcement program. No other issues
came to our attention which we believed were significant enough to
warrant expanding the scope of this audit.
Our survey for this review began on June 15, 1988 and was
completed on November 4, 1988. As a result of this survey, we
initiated an in-depth review on November 18, 1988. The fieldwork
for this audit was completed on February 28, 1989. The matters
contained in this report were discussed with responsible personnel
from Region 3 and the state agencies.
SUMMARY OF FINDINGS
The findings included in this report are summarized below.
The detailed findings, along with related recommendations for
corrective action, are provided in the "Findings and
Recommendations" section of this report.
1.
Region 3, as well as the States of Pennsylvania, Virginia and
Maryland, need to take more aggressive enforcement action against
polluters of the Chesapeake Bay. We found that Region 3 and the
three states in our review did not effectively perform their
responsibilities to enforce against dischargers who violated their
NPDES permit. Specifically our review disclosed:
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o Region 3 and the states have been slow in revising
outdated memorandums of agreement.
o Region 3 did not require the states to complete
Enforcement Management System (EMS) guides.
o States hesitated to take enforcement action
against municipalities.
o Region 3 did not take enforcement action when
the states failed to initiate appropriate enforcement.
o Region 3 oversight was inadequate to ensure proper
coordination of enforcement actions.
During the past several years, EPA and the states established
various goals and implemented numerous initiatives intended to
restore and protect the Bay. These initiatives such as research
projects, animal waste management systems, fertilizer management
and nutrient reduction, while costly, are reported to be
beneficial. In spite of these efforts, associated costs and the
expressed commitment to the Chesapeake Bay Agreements of 1983 and
1987, NPDES enforcement actions against violating facilities were
weak. As a result, polluters were allowed to discharge millions of
gallons of inadequately treated wastewater into the Chesapeake Bay
for many years. This pollution could diminish the benefits
achieved from other initiatives already implemented and possibly
hinder the achievement of numerous worthwhile goals and objectives
in the Chesapeake Bay Agreements.
2.
WATER QUALITY STANDARDS ASP TOXIC CONTROL STRATEGIBS DELATED
EPA needs to ensure that Maryland, Pennsylvania, and Virginia
take more expeditious and aggressive action to control toxic
pollutants. These states did not complete all of the tasks
required by the CWA for controlling toxic discharges. Completing
these tasks are vital to reduce toxic pollutants entering the Bay.
This is critical because a key objective of the 1987 Chesapeake Bay
Agreement is to work towards a toxic free Bay by eliminating the
discharge of toxic substances from all controllable sources.
*****
On June 19, 1989, a draft report was issued to the Regional
Administrator. Written comments to our draft report were provided
by the Regional Administrator on August 18, 1989. His response
included additional comments by personnel from the Virginia State
Water Control Board, and the Pennsylvania Department of
Environmental Resources. Subsequently, we received comments from
the Maryland Department of the Environment. Personnel from Region
3 requested that we include this response in our report.
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Consequently, we appended these comments to our report. Region 3's
response generally agreed with our recommendations, but did not
provide a plan for correcting the deficiencies discussed in our
report. After evaluating the comments provided by both Region 3
and the states our position remained unchanged.
On September 6, 1989 we held an exit conference with Region 3
personnel. During the conference we explained various details
concerning our report. Region 3 agreed with the findings and
stated that corrective action would be provided.
To provide a balanced understanding of the issues, we
summarized the Regional Administrator's comments after each
finding. Also included is our rebuttal to the response. We
also included the complete response in Appendix A.
The courtesies and cooperation extended by your staff during
this audit are appreciated.
ACTION REQUIRED
In accordance with EPA Directive 2750, the action official is
required to provide this office with a written response to the
audit report within 90 days of the audit report date.
BACKGROUND
In 1975, under Public Law 94-116, Congress directed EPA to
conduct a five year study of the Chesapeake Bay's water quality and
resources. Congress also directed EPA to develop management
strategies to preserve the Bay's quality. Consequently, in 1976
EPA established a research program to identify and study the major
environmental problems in the Chesapeake Bay. The research
program, which ended in 1981, indicated there was a historical
decline in water quality and living resources. This decline was
due primarily to nutrient enrichment, contamination by toxic
chemicals, and loss of much of the submerged aquatic vegetation.
Nutrients and toxic chemicals entered the Bay from point sources
such as sewage treatment plants and industrial facilities, and from
nonpoint sources such as urban, suburban and agricultural runoff.
During 1982 and 1983, EPA analyzed the research findings. The
Agency concluded that the reduction of nutrient loadings and toxic
contamination to the Bay from both point and nonpoint sources was
needed. In December 1983, the Governors of Pennsylvania, Maryland
and Virginia, the Mayor of the District of Columbia, and the
Administrator of EPA pledged to implement a coordinated plan to
restore and protect the waters and the living resources of the Bay.
This commitment, known as the Chesapeake Bay Agreement of 1983,
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pledged to address point and nonpoint sources of pollution
affecting the Bay. These parties reaffirmed their commitment by
signing the 1987 Chesapeake Bay Agreement.
Water quality improvement is the most critical element to the
restoration and protection of the Chesapeake Bay. To achieve this,
the parties of the Agreements pledged to: reduce nutrient loadings
by 40 percent; manage and control conventional pollutants; and
reduce toxic pollutants entering the Bay. Numerous objectives were
included in the Agreements to achieve the goals of reducing
nutrient loadings and toxic substances. Some of these are to:
o Provide timely construction of public and private
sewerage facilities to assure control of pollutant
discharge.
o Reduce the discharge of untreated or inadequately
treated sewage from such sources as combined sewer
overflows, leaking sewage systems, and failing
septic systems.
o Establish and enforce pollutant limitations to
ensure compliance with water quality laws.
o Identify and control toxic discharges to the
Bay system including metal and toxic organics
to protect water quality, aquatic resources and
human health through implementation of the
states NPDES permit programs and other programs.
o Reduce the discharge of metals and organics from
industrial sources.
o Reduce chlorine discharges in critical finfish
and shellfish areas.
Many of these objectives can be accomplished by ensuring compliance
with water quality laws. This compliance can be achieved by
aggressively enforcing NPDES permits.
The establishment of the NPDES under the CWA of 1972 mandated
that permits be issued to all point sources discharging directly
into navigable waters. NPDES also required effective compliance
monitoring and a strong enforcement program by EPA and the states.
The NPDES permit established the kind and quantity of treated
wastewater a permittee may discharge. It also contained specific
requirements for pretreatment, monitoring and reporting.
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The CWA enabled EPA to delegate the NPDES program to the
states. EPA delegated the program to all three states in our
review. The delegated states issue permits to both major and minor
dischargers, which self-monitor their discharges and submit
summaries of effluent data to the states. The states are
responsible for identifying instances of noncompliance and taking
timely and appropriate enforcement action which may include the
assessment of fines to deter noncompliance. These enforcement
actions are intended to bring the violating facility into
compliance as expeditiously as possible. The states are required
to escalate enforcement action when compliance is not achieved in
an expeditious manner.
EPA's function is to provide oversight to delegated states
through the review of state issued permits, program audits, and
analysis of states' enforcement and monitoring activities. The CWA
requires EPA to initiate its own enforcement action, which may
include the assessment of fines, when states fail to take timely
and appropriate enforcement action. Under 40 CFR 123.63, EPA can
withdraw the authority delegated to the state to administer the
NPDES Program if the state fails to carry out the program as
required.
The Clean Water Act also addressed the problem of toxic and
highly concentrated industrial waste being introduced into Publicly
Owned Treatment Works (POTW's) by requiring pretreatment programs.
Pretreatment programs require industries to remove excessive and
highly concentrated pollutants from their wastewater before
discharging into the municipal sewage treatment system. The POTW
regulates the discharge of toxic wastes or unusually strong
conventional wastes through control mechanisms such as individual
permits or sewer use ordinances. These mechanisms establish
enforceable limits, monitoring conditions, and reporting
requirements. EPA regulations require the POTW to initiate
enforcement action against an industry when violations occur.
These actions can include fines assessed by the POTW against the
industries. If the POTW does not take enforcement action, it may
be taken by EPA or the state.
In September 1985, Region 3 delegated responsibility for the
pretreatment program to the State of Maryland. As a result,
Maryland was responsible to ensure that POTW's operated their
pretreatment program in accordance with EPA requirements. Because
pretreatment responsibility was not delegated to Pennsylvania and
Virginia, Region 3 administered the pretreatment program for these
states.
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In 1987, the CWA was amended to provide an increased focus on
toxic contamination. To accomplish this the states are required to
identify and address waters that do not meet water quality criteria
for the 126 priority pollutants defined in Section 307(a) of the
CWA. Complex, man-made compounds such as dioxins and PCBs,
pesticides such as DDT and EDB, and metals such as mercury and lead
are just a few of the more troubling toxic substances recently
found in the environment. Many of these chemicals, when present in
sufficient quantities, are known to pose a variety of hazards to
the Bay ecosystem.
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FINDINGS AND RECOMMENDATIONS
! IMPROVED ENFORCEMENT ACTIVITIES NEEDED TO PROTECT THE BAY
Region 3, as well as the States of Pennsylvania, Virginia and
Maryland, need to take more aggressive enforcement action against
polluters of the Chesapeake Bay. We found that Region 3 and the
three states in our review did not effectively perform their
responsibilities to enforce against dischargers who violated their
NPDES permit. Specifically our review disclosed:
o Region 3 and the states have been slow in revising
outdated memorandums of agreement.
o Region 3 did not require the states to complete
Enforcement Management System (EMS) guides.
o States hesitated to take enforcement action
against municipalities.
o Region 3 did not take enforcement action when
the states failed to initiate appropriate enforcement.
o Region 3 oversight was inadequate to ensure proper
coordination of enforcement actions.
During the past several years, EPA and the states established
various goals and implemented numerous initiatives intended to
restore and protect the Bay. These initiatives such as research
projects, animal waste management systems, fertilizer management
and nutrient reduction, while costly, are reported to be
beneficial. In spite of these efforts, associated costs and the
expressed commitment to the Chesapeake Bay Agreements of 1983 and
1987, NPDES enforcement actions against violating facilities were
weak. As a result, polluters were allowed to discharge millions of
gallons of inadequately treated wastewater into the Chesapeake Bay
for many years. This pollution could diminish the benefits
achieved from other initiatives already implemented and possibly
hinder achievement of the numerous worthwhile goals and objectives
in the Chesapeake Bay Agreements.
OUTMODED PROCEDURES
Formal agreements between EPA and the states became outdated
and were not enforced. In addition, Region 3 failed to require the
states to develop written enforcement procedures as required by the
Agency.
EPA formally delegated the NPDES program to the states under
memorandums of agreement which established the basis for
cooperation and coordination between the Agency and the states.
These agreements defined the relationship between EPA and the state
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and indicated the responsibilities of each. In accordance with
EPA's NPDES State Program Guidance, dated July 29, 1986, modi-
fications to the agreements were expected to be made within a
reasonable time to assure consistency with new or revised Federal
regulations. EPA was responsible for initiating revisions to the
memorandums of agreement with the state agencies. Revising these
agreements was needed to ensure that the NPDES program is
administered in the most effective manner consistent with Federal
regulations.
The agreements between Region 3 and the States of Maryland,
Pennsylvania and Virginia were formalized over a decade ago. Since
that time, the statutes regulating the NPDES program were revised
twice. As a result, these memorandums of agreement are outdated
and do not reflect the extensive revisions to the NPDES program.
Region 3 has been negotiating revisions to all three agreements for
several years, but has been unable to resolve the numerous dis-
agreements that arose with the states on the content of the
agreements. More importantly, Region 3 did not require the states
to comply with the requirements of the existing agreements. For
example, the agreements called for timely and appropriate
enforcement. The Pennsylvania and Maryland agreements specifically
required enforcement action within 30 days of the permittee having
been notified of a violation. We found that none of the states we
reviewed adhered to these requirements and allowed NPDES violations
to persist for years. Region 3 should have proposed revisions to
the agreements to reflect the new laws in a more timely manner.
This would have strengthened the enforcement programs of the
states. Also, Region 3 should have ensured that the states
complied with existing memorandums of agreement.
The methods used by Region 3 to obtain enforcement management
system guides from the states is another example of lack of
forceful direction. The EMS guides were intended to be used as a
tool by the states to document and ensure the adequacy of their
enforcement procedures. The EMS defines the principles necessary
for the operation of an effective enforcement program and provides
the basis for evaluating the performance of administering agencies.
Region 3 did not require state agencies to complete their guides as
required by EPA's national EMS guide. As a result, the states do
not have written enforcement procedures consistent with EPA's EMS
guide or Federal regulations.
EPA Headquarters published the Agency's EMS guide in 1977 and
subsequently revised the guide on February 27, 1986. This national
guide required each state to have management procedures to track
the status of permit compliance, to surface violations, and to take
timely and appropriate enforcement action. In all, the national
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guide lists seven basic principles that should be included for the
states to have an effective EMS. These written procedures were to
be in place by October 1, 1986 and are subject to annual review.
The State of Maryland submitted a draft EMS guide to Region 3
in October 1987. A Region 3 review, dated December 3, 1987,
disclosed that the proposed EMS guide was incomplete. As of
February 1989, the State had not provided any additional infor-
mation to Region 3. As a result, two years after the October 1986
deadline, the EMS guide was still incomplete and Region 3 took no
action.
Pennsylvania submitted a proposed EMS guide to Region 3 for
approval during October 1987. Region 3 personnel believed the
guide was inadequate. We found that the guide was incomplete.
However, Region 3 accepted the incomplete guide because the effort
to obtain a completed EMS was not a high priority and the receipt
of any system from Pennsylvania was considered an accomplishment.
We could not find documentation to indicate Region 3 personnel
informed the State that the EMS was inadequate.
Virginia did not submit an EMS to Region 3. We could not find
documentation to indicate the Region required the State to submit
the EMS.
Region 3's approach to the three states was inconsistent.
Maryland submitted an incomplete draft EMS, and the completion of
the EMS was made a requirement of their Section 106 grant. Each
year EPA awards these grants to the states to provide funds for
activities such as establishing water quality standards,
permitting, enforcement and monitoring. The Region did not use
its ability to withhold grant payments to pressure the State.
Completing the EMS was not made a requirement of the Section 106
grants for the other two states. We believe Region 3 should have
actively pursued the completion of EMS's in all three states in
order to achieve consistent enforcement activities, not only for
those dischargers affecting the Bay, but for all dischargers.
FORCELESS ENFORCEMENT
In addition to the lack of aggressive action by Region 3 and
the states to update procedures, other aspects of their enforcement
programs intended to ensure the integrity of the Bay were defi-
cient. For example, even when the pollution was serious or
longstanding, the states were very patient with polluters. States
assessed only insignificant penalties after several years or did
not assess any penalties. Also, Region 3 was hesitant to take
action against violators when the states failed to take timely and
appropriate enforcement action. This became evident during our
review of dischargers to the Bay.
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Based on our review of 11 facilities, we found the following
were the only penalties collected for NPDES permit violations:
Facility
Athen s-Sayre, PA
Wellsboro, PA
Trans-Tech Inc., MD
TOTAL
Type of
Facility
Municipal
Municipal
Industrial
Penalty
Collected
$ 200
7,800
107.700
S115.700
The $200 paid by Athens-Sayre was for violating interim permit
limits contained in the 1986 consent order and agreement.
Wellsboro Municipal Authority paid $7,800 for numerous NPDES permit
violations that occurred since 1986. This amount included $3,200
for two incidents in which more than 1600 fish were killed because
of pH violations. Between February and December 1987, this plant
also violated the Biochemical Oxygen Demand (BOD) limit in the
consent decree that was issued by the State. For these violations
the State fined the Municipal Authority $1,000. We estimate the
penalty could have been at least $390,000 for these BOD violations.
Trans-Tech, Inc. is an industrial facility that paid two penalties.
The first was $100,000 for consistent NPDES permit violations as
far back as 1981. The second penalty for $7,700, was paid for
permit violations from November 1987 to May 1988. The files lacked
documentation to support the basis for these penalty calculations.
We believe the penalties collected are insignificant and did not
hinder noncompliance.
In all 11 facilities reviewed, enforcement actions did not
escalate when violators did not take corrective measures. EPA's
EMS guide requires that enforcement actions escalate when
compliance is not achieved expeditiously after taking the initial
action. An example is the wood preserving operation of L.A. Clarke
in Virginia that produced railroad ties, foundation pilings and
landscape lumber. This facility violated their NPDES permit for 13
years and not one penalty was assessed. Since 1976, five consent
decrees were issued. Three of these were for NPDES violations and
two were for violating state air regulations. In addition, a
special order and a board directive were issued because of NPDES
violations.
The violations at the L.A. Clarke facility were frequently
covered by local newspapers which sharply criticized EPA's
performance. These reported that:
Federal Officials say the ground, soil, groundwater
and lagoons in and around the 26 acre site are soaked
with contaminants from years of using creosote to
preserve wood.
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The SWCB charged in 1982 that the company had violated
water pollution standards 162 times since 1975.
The special order that was issued in April 1978 documented that
L.A. Clarke consistently violated its NPDES permit for phenolics
since 1975. The operation of this facility caused a number of
environmental problems such as surface and groundwater contamina-
tion. As a result, during June 1986 the site was listed on the
Superfund National Priorities List and the cost of the cleanup was
estimated at $23 million. In July 1988, the State finally revoked
the NPDES permit for this facility. More aggressive NPDES enforce-
ment might have forced the industry to act more responsibly and
mitigated the extent of the Superfund cleanup.
The wastewater treatment plant in Frederick, Maryland is
another illustration of enforcement that did not escalate. This
facility violated its NPDES permit for over 12 years. During this
time, the State issued one consent agreement, three consent orders,
one complaint and order, and two amended consent orders, but again
no penalties were assessed. In general, states did not take
aggressive enforcement action against municipalities, especially
when grant funds were needed to construct additional facilities.
However, EPA guidance provides that this is not a valid reason for
delaying enforcement. The irony is that many municipal wastewater
treatment plants received flow from significant industries.
Because municipalities received patient treatment from the states,
industries were in turn given a "free ride". Municipalities did
not aggressively enforce against industries or assess penalties,
even when industrial waste significantly contributed to municipal
NPDES violations. Consequently, these industries received an
economic advantage because pretreatment requirements were not
enforced. Both Region 3 and the State of Maryland were remiss in
not requiring municipalities to implement an effective pretreatment
program.
The pretreatment program in Frederick, Maryland is an example
where industries contributed to the violations at a POTW and
received an economic advantage. It also illustrated lax
enforcement by the State. On April 15, 1986, the State issued a
consent order that required industries to comply with the City's
pretreatment program. This requirement was not achieved. Subse-
quently, on January 29, 1987, another consent order was issued.
This order required a dairy, with a history of violations, to
construct a pretreatment facility designed to reduce BOD loadings.
A second dairy, that was also violating its pretreatment permit,
was to discharge to this new facility. Because of various delays
by the dairies, the City amended this order twice, allowing
construction of a $3 million treatment plant to be postponed for
several years. As a result, three years later the dairies were
still not pretreating their wastewater.
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Kelly Township in Pennsylvania illustrates that Region 3 had
similar enforcement problems. This Township did not comply with
the July 1983 deadline for submitting an approved pretreatment
program. In response, during April 1984, Region 3 issued an
administrative order. In spite of this, it was not until
September 1985 that the Township submitted a complete program
that was approved by Region 3. An inspection by Region 3 in May
1986 revealed that the Township had not issued the required permits
to industrial users and had not adequately inspected and sampled
industrial users. Region 3 performed another review of Kelly
Township in October 1987. This review found that the Township
still did not issue permits to their industries. According to EPA
guidelines, these permits should have been issued early in 1986.
Region 3 did not issue any additional enforcement documents or
assess any penalties when the Township failed to do this. Overall,
the pretreatment program was not followed even though an approved
program existed.
Kelly Township consistently violated their Total Suspended
Solids (TSS) permit limit for almost four years. During that time,
industries contributed 70 percent of the flow being processed at
the Township's plant. The Township's plant was originally designed
to accept the flow from these industries without pretreatment.
However, the treatment plant was in need of additional construction
to meet NPDES permit limits. Industries discharging to the
treatment plant benefited because no penalties were assessed,
construction was delayed and the treatment plant was allowed to
violate their NPDES permit for almost four years.
Frederick City and Kelly Township demonstrate that munici-
palities were often slow to establish pretreatment programs, and
once established, reluctant to take effective enforcement action.
More effective enforcement action against industries would greatly
reduce the amount of pollutants entering the Chesapeake Bay.
On January 30, 1984, EPA issued the National Municipal Policy
(NMP) which required treatment plants to achieve secondary
treatment by July 1, 1988, whether or not they received Federal
funding. There were numerous examples where the states did not
take enforcement action because POTW's were waiting for an EPA or
state grant in order to finance new facilities. This resulted in
years of violations occurring without aggressive enforcement action
taken against the facility.
For example, Athens-Sayre in Pennsylvania was ordered to
upgrade their facility as far back as 1969. This facility had
continuous BOD and TSS violations. In September 1986, a consent
order and agreement was issued ordering Athens-Sayre to upgrade its
facility. It was not until 20 years after the initial order that
construction of the new facility was completed. We were informed
that the reason for delay was that Athens-Sayre attempted numerous
times to obtain a Federal grant. In 1974, the State informed
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Athens-Sayre that they did not qualify for a grant, yet no action
was taken by the State until 1986 when the consent order was
issued. Consequently, Athens-Sayre was allowed to delay
construction for almost 20 years while waiting for a grant.
Pennsylvania officials indicated that the NMP was used as the tool
for finally taking enforcement action against this facility.
Another example of a treatment plant waiting for a grant was
Pocomoke City in Maryland. Since 1981, this facility had
continuous violations of the total chlorine residual limit in its
permit with no enforcement action taken. During discussions with
Maryland officials, we found that only $5,000 was needed for
dechlorination equipment to eliminate the violations. In April
1988, Maryland awarded Pocomoke City a grant to install
dechlorination. We believe that since such a minimal amount of
funds were needed to correct the situation, either a grant should
have been awarded earlier or the City required to correct the
problem with local funds. Also, Pocomoke has industrial users who
could have shared in these costs. Any of these remedies would have
eliminated the chlorine violations that occurred during the past
seven years.
INADEQUATE EPA OVERSIGHT
The weak enforcement by the states and Region 3 is not a
recent phenomenon. A fiscal year 1988 review by EPA Headquarters
documented shortcomings in this area. The following comments are
excerpts from this report:
o For the first two quarters in fiscal year 1988
Region 3's enforcement activity was low.
o Formal enforcement was taken against only 2 of 14
POTW's considered by the Region to be in reportable
noncompliance for failure to implement pretreatment.
o Only 3 of 16 POTW's either completed implementation
of all needed remedial pretreatment measures
communicated to them or were referred for
failure to complete such remedial measures.
o State penalties were often low compared to
Federally assessed penalties. The Region will
continue to encourage higher penalties, but
believes they have little leverage.
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o Pennsylvania should expedite enforcement and issue
unilateral orders. Pennsylvania was a problem with
24 of the 32 cases in Region 3 that were shown on the
Exceptions List because they violated their permits for
an inordinate amount of time.
The Headquarters review, as well as our audit, disclosed that
the states were not forceful regulators and that Region 3's over-
sight was lacking. In spite of this, the Region 3 reviews were not
critical of state enforcement programs. These reviews of state
enforcement programs were not used as an effective management tool.
For example, the Region 3 review of Maryland's water program grants
for fiscal year 1987 disclosed only that:
Another major shortfall in FY '87 involved the
State's failure to assess penalties for municipal
noncompliance. MD must begin imposing penalties
where appropriate; otherwise, EPA will consider
taking penalty action.
Contrary to the Headquarters review, Region 3's mid-year
review of Pennsylvania did not criticize them for not issuing
unilateral orders. Also, Pennsylvania was not criticized for not
escalating enforcement actions or for not assessing appropriate
fines. This review only provided the following general comment:
Our respective staffs continue to work toward
the reduction in the number of cases on the
Exceptions List. We would like to encourage
your staff to continue these efforts to reduce
the number of cases.
We were unable to evaluate the mid-year review of Virginia's
enforcement program. Region 3 personnel informed us that the
review results were provided verbally to the State. Based on our
review, it appears that the enforcement program of this State also
could have been more forceful.
Region 3 did not require the states to modify practices that
conflicted with EPA's policies. This was evidenced by Region 3's
disagreement with Maryland's policy of not assessing fines against
municipalities. State personnel attempted to achieve compliance
through cooperation. They believed compliance would be achieved
more quickly if they provided technical assistance to
municipalities rather than to initiate enforcement action.
Maryland's philosophy regarding municipal dischargers is to be a
partner rather than a regulator. We did find that the State was
tougher on industrial dischargers. In some cases, however, even
the fines assessed against the industrial violators were
inadequate.
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We disagree with Region 3 allowing the State to continue
this philosophy. The seriousness of Region 3's inaction was
evident in the case of Frederick. The State tried extremely hard
to assist this facility. They went as far as prescribing the type
of treatment process the City should design. Eventually the City
expanded their plant and the dairies started construction of their
pretreatment facility. However, it took years to complete the
City's plant and the dairies were still not pretreating. When the
new plant developed operational problems, the State did not take
enforcement action because they helped select the treatment
process. Normally the design engineer should have been responsible
to correct these problems. If not corrected in a timely manner,
the State should have initiated enforcement action.
Similar problems occurred with Freedom District also in
Maryland. This facility violated its NPDES permit for over three
years. The State attributed the violations to inadequate sludge
disposal, which resulted in sludge washing out of the plant at
least 45 times during 1986. These washouts which impaired water
quality were also a health hazard. Because the sludge washouts
continued, the State issued a consent order during September 1987
requiring the design and construction of a new facility. However,
the design and construction was not completed. A second order was
issued during March 1988 because the District was unable to meet
the Total Kjeldahl Nitrogen limit in their permit. This order
prescribed specific operational measures which the District
implemented, but the problem persisted. The result of the State's
lack of enforcement to date is: the District is still violating
their permit; the State is unsure of what other operational
techniques to try; the District started to design plant
improvements; no penalties were assessed; and Region 3 still did
not initiate any action.
In order to improve oversight procedures, Region 3 should also
focus attention on how the states actually resolved noncompliance.
We found that violators were often given interim permit limits that
were less stringent than their original permit. The interim limits
often masked the violation. This allowed violators to be
considered as "resolved pending". However, the facility was
discharging the same amount of inadequately treated wastewater.
This occurred in five of the 11 cases included in our review. For
example, in September 1986 Kelly Township, Pennsylvania entered
into a consent order and agreement with the State to upgrade its
facility. The Township was given interim limits, which were in
effect from September 1986 until March 1988, that were 1.5 times
less stringent than the final limits.
During July 1987, Virginia did revise their enforcement
program. They implemented a computer system to compare discharge
monitoring report data with permit limits. Based on this analysis,
violations will be accumulated and the violator informed of
noncompliance problems. This system is essentially a warning
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device which identifies violations. If corrective action is not
taken, the enforcement section is notified so that appropriate
action can be taken. Personnel from the State contend that this
system will improve enforcement. However, the review period for
this audit preceded implementation of the system and therefore the
benefits from the new system are not known.
CONCLUSION
The reviews by EPA Headquarters, as well as our audit,
highlighted that the states were not forceful regulators and that
Region 3's oversight was lacking. We found that Region 3 did not
take action, as required by the CWA, when the states failed to
aggressively pursue violators. Improved oversight would require
the states to take stronger and more effective enforcement actions.
Stronger enforcement would reduce the number of violations and
protect the Bay. Moreover, enforcement is not the only area where
Region 3 should require more action by the states. The second
finding in this report discusses the need for more action by the
states to reduce toxics entering the Bay.
RECOMMENDATIONS
In order to achieve the goals intended to restore and protect
the Chesapeake Bay, we recommend that the Region 3 Administrator:
1. Update memorandums of agreement to ensure that
the NPDES program is administered consistent with
the current law and Federal regulations.
2. Ensure the states finalize EMS guides to
strengthen the adequacy of state enforcement
procedures.
3. Assure that aggressive enforcement action
is taken in a more timely manner and that
enforcement action escalates when compliance
is not achieved.
4. Require the states to assess penalties
against violators which are significant
enough to deter noncompliance.
5. Initiate direct Federal enforcement action when
states fail to pursue violators.
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6 . Require that reviews performed by Region 3
of the state programs are used as an effective
management tool. Deficiencies in state
enforcement programs should be disclosed fully
during these reviews, along with actions
required to correct the deficiencies.
7. Assure that POTW's implement pretreatment
programs in a timely manner. If the POTW's
fail to initiate action when violations occur,
Region 3 or the states should take enforcement
action against industrial users .
lion 3's Response to Recommendation Number 1
Region 3 agreed that the memorandums of agreement should be
updated and indicated they have been negotiating new agreements
over the last several years . These negotiations can be very time
consuming since they are not taken lightly by either EPA or the
states. Maryland's memorandum of agreement has just been signed by
the State and EPA, and is now official. Pennsylvania's agreement
is nearing completion. Further, the states routinely included
commitments in their annual work plans to ensure the relationships
between Region 3 and the states reflect current policy even though
the memorandums of agreement may not be completely updated.
Inspector General ' 8 Coronon't.8
The annual work plans submitted by the states are not a
substitute for the memorandums of agreement. The memorandums of
agreement define responsibilities, policies and procedures while
the work plan establishes the states ' activities and program
commitments for the year such as the number of compliance
monitoring inspections to be performed. In our opinion, these
documents have different purposes and updated memorandums of
agreement are essential.
Region 3's Response to Recommendation N"****' ">
Region 3 agreed with this recommendation and indicated that
draft EMS guides were received from the states and are currently in
the process of approving the guides. Although EMS guides were not
approved by the Region, all states have enforcement policies and
procedures which they follow.
Insector General ' s
As our report indicated, the guides from Maryland and
Pennsylvania were received by Region 3 in 1987 and the guides were
still not approved. The guide from Virginia was not submitted.
Moreover, we could find no documentation to indicate Region 3
pressured the states to submit complete EMS guides .
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We believe that Region 3 should have required the states to
complete these EMS guides as mandated by the Agency's national
policy. Moreover, the enforcement policies and procedures that the
states currently are using are not a substitute for an effective
EMS guide. These guides represent an opportunity for Region 3 and
the states to document organization assignments, procedures,
timeliness requirements and enforcement responses needed to ensure
an effective program. Region 3 and the states' performance
described in the audit indicates a high priority need for EMS
guides which will enable the states to meet the objectives of the
CWA.
Region 3 concurred and indicated they never hesitated to take
enforcement actions. Very often a decision not to act is made
based on the severity of the violation, the lack of available
Region 3 staff time, the states' assurance that action will be
taken or the fact that a Federal action, over and above a state
action may not result in quicker resolution to the problem. A
considerable amount of time is needed to take actions and impose
penalties. There are currently 47 active civil cases and seven
active administrative penalty actions being pursued by Region 3.
The Exceptions List for the Region has been reduced from nearly 50
cases to 19 cases in less than three years (See Attachment B of
Region 3's complete response). While we are not satisfied with the
present level, this does show progress and we will pursue further
reductions.
In addition to Region 3's response, the Virginia State Water
Control Board indicated that enforcement actions did escalate.
Inspector General'a Comments
The intent of this recommendation was that EPA should ensure
the states take enforcement action. The states were responsible
for identifying instances of noncompliance and taking timely and
appropriate enforcement action. These enforcement actions should
attempt to bring the violating facility into compliance as
expeditiously as possible. The states are required to escalate
enforcement action when compliance is not achieved in a expeditious
manner. The CWA requires EPA to initiate its own enforcement
action when states fail to take timely and appropriate enforcement
action. For this reason, we believe that Region 3 needs to ensure
that more aggressive enforcement is taken by the states.
We do not agree with the Virginia SWCB comments that
enforcement action escalated. For example, considering the
severity of L.A. Clarke's NPDES violations which persisted for 13
years and the fact that the state did not assess any penalties, we
cannot concur that there was an effective escalation of enforcement
action.
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Region 3'a Response to Recommendation Number 4
Region 3 agreed with this recommendation. The Region
considers penalties, as well as injunctive relief, as part of the
enforcement response to violations. States very often use other
punitive measures in lieu of fines. Several states restricted new
sewer connections until compliance was achieved. This action not
only restricts the income of the violators, but also acts as an
incentive to complete corrective measures as soon as possible.
Inspector General's Comments
The sample of cases reviewed during this audit did not provide
any examples where the states restricted sewer connections. We
did find that one state had a system for restricting the sewer
connections to facilities that violated their NPDES permit.
However, we found that the system was very rarely used to restrict
sewer connections. Furthermore, considering the length of time
that the facilities in our review violated their permits, it would
seem that injunctive relief should have been abandoned and more
stringent enforcement initiated.
Region 3's Response to Recommendation Number 5
Region 3 agreed with this recommendation and indicated they
initiated appropriate enforcement actions when the states have not.
The entire Regional NPDES enforcement caseload consists of actions
against dischargers in delegated states (except the District of
Columbia). This is done as part of our oversight responsibilities.
The size of our current caseload (i.e., 71 civil and administrative
cases) reflects our commitment to strong Federal oversight.
Inspector General's Comments
During our review we did note instances where Region 3
initiated enforcement actions when the states did not. However,
our review indicated that Region 3 needs to intensify their efforts
in this area. We did review the enforcement actions initiated by
Region 3 during FY 1988 and found that most actions were for cases
in Pennsylvania. We believe this was caused by Pennsylvania's
difficulty to issue unilateral orders. This is corroborated by
the Headquarters review of Region 3. Region 3 needs to initiate
enforcement actions not only in Pennsylvania but also needs to
increase their efforts in the other states.
Region 3's Response to Recommendation Number 6
Region 3 agreed with our recommendation and indicated that
quarterly enforcement meetings are conducted with each of the
delegated states. When deficiencies are uncovered, we work with
the states to correct them, and formalize any corrective action
plans as appropriate, including discussions and agreements between
22
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the Regional Administrator and State Secretaries and, if necessary,
the Governors. We believe that these meetings have been
instrumental in our success in achieving a 60% reduction in our
Exceptions List over the past three years.
Inspector General's Comments
We realize that these quarterly meetings serve a useful
purpose. However, the reviews of state programs are required by
EPA regulations and these regulations require that the results
should be documented. Since both our review and the past EPA
Headquarters reviews indicated there were problems with the states
enforcement programs, we believe the Region 3 reviews should have
documented these problems.
We were aware that the number of facilities on the Exception
List was reduced. However, as discussed in our report, the methods
used to prevent a facility from being shown on the Exceptions List
does not always result in less pollution. Very often facilities
were placed in the "Resolved Pending" category for several years
using interim limits that were less stringent than their original
limits.
Region 3 * B Response to Recommendation Number 7
The Region agrees with this recommendation, and sees it as a
crucial component of a successful pollution control program. It is
not surprising to see delays in initial enforcement action by the
POTW's since this is a relatively new experience for many POTW's.
Enforcement action continues to be taken against POTW's and
industrial users for failure to comply with pretreatment
regulations.
Inspector General * B CnmHif>iitB
The pretreatment program was delegated to the State of
Maryland four years ago and Region 3 administered the pretreatment
program for Pennsylvania and Virginia during this time. After four
years, we cannot agree that the newness of the program should cause
delays in taking enforcement action.
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2. WATER QUALITY STANDARDS AND TOXIC CONTROL STRATKaTKS r>KT.MYKn
EPA needs to ensure that Maryland, Pennsylvania, and Virginia
take more expeditious and aggressive action to control toxic
pollutants. These states did not complete all of the tasks
required by the CWA for controlling toxic discharges. Completing
these tasks are vital to reduce toxic pollutants entering the Bay.
This is critical because a key objective of the 1987 Chesapeake Bay
Agreement is to work towards a toxic free Bay by eliminating
contamination by toxic substances from all controllable sources .
The CWA includes a national commitment to control toxic
substances discharged by NPDES permitted sources. Subsequently,
the Water Quality Act (WQA) of 1987 amended the CWA requiring the
states to adopt water quality standards to control toxic
pollutants. These standards are the cornerstone of the process to
control pollutants, including toxic substances. To establish water
quality standards, states must designate uses for their waters.
Typical designated uses are for drinking water, public recreation,
protection and propagation of fish, agriculture and industrial
uses. Criteria are then adopted to ensure the water quality is
appropriate for its designated use. These criteria are later used
to formulate limits in NPDES permits. Revising water
quality standards for toxics was also a requirement of the fiscal
year 1987 and 1988 Section 106 grants awarded by Region 3 to these
states. If these grant requirements were not achieved, 40 CFR
30.900 provides specific actions to be taken by Region 3. These
include withholding grant payments or terminating the assistance
agreement .
Section 307 (a) of the CWA contains a list of 65 compounds
which are among the most persistent, prevalent and toxic chemicals
known to man. These 65 compounds have been translated into 126
priority pollutants. Section 304(1) of the CWA contains three
specific requirements relating to the NPDES program for controlling
toxic substances by permitted dischargers. First, the states were
required to list the waters not expected to meet water quality
criteria for the 126 priority pollutants defined in Section 307 (a)
of the CWA. Second, states must list the toxic pollutants of
concern and identify the dischargers causing the problem. Third,
states must issue an Individual Control Strategy (ICS) for each
discharger identified. EPA defined the ICS as a NPDES permit with
discharge limitations and a proposed compliance schedule to reduce
toxics to an acceptable level . The CWA mandated that the states
complete these tasks by February 1989. Region 3 is required to
approve or disapprove the lists and ICS's by June 1989. If the
states fail to submit, or Region 3 disapproves the submittal, then
Region 3 must develop the lists and ICS's by June 1990. Final
compliance with the toxic requirements of the CWA is required by
June 1992.
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As of March 1989, Maryland, Pennsylvania and Virginia did not
adopt water quality standards for toxic pollutants as required by
the CWA and none of the sanctions available to Region 3 were
imposed on the states. Maryland and Pennsylvania officials
indicated that these standards were not revised because of
insufficient staff. However, we found that the 106 grants
previously discussed in this report provided funds to complete
these tasks.
Virginia also did not adopt water quality standards to control
toxics. The State was awaiting EPA guidance for implementing this
provision of the Act. In spite of this, during April 1988, Region
3 approved standards without controls for toxics. At the same
time, Region 3 informed the State that, "we share concern over the
need to adopt additional water quality standards for toxic
pollutants as mandated by the recent revisions to the Clean Water
Act." Region 3 further suggested that EPA and State staff meet to
further discuss the matter. The State's fiscal year 1989 work plan
for the 106 grant indicates further delay is likely because the
standards for toxics will not be adopted until receipt of "final
nationwide guidance from EPA." This lack of guidance does not
appear to be a valid reason for delay. Final guidance was
available for numerous pollutants and draft guidance was available
for others. The failure to adopt these standards in a timely
manner hinders the NPDES permit program and delays the toxic
controls for the Bay.
Increased efforts are also needed to fulfill the requirements
of Section 304(1) of the Act. By February 1989, only Maryland
submitted all the required documents. The list of waters impaired
by toxics that was submitted by Pennsylvania was not complete.
Region 3 personnel indicated that the list submitted by Virginia
may also be incomplete. Moreover, neither state submitted the
required ICS's.
In 1981, Pennsylvania implemented its own Toxic Management
Strategy. The State intends to continue using this existing
strategy to satisfy the requirements of Section 304(1) of the 1987
WQA. However, this strategy does not provide enforceable permit
limits for controlling toxics. For example, when the limits for
toxics are exceeded the discharger must only perform a toxic
reduction evaluation. This evaluation determines what actions are
needed to achieve compliance with the NPDES permit. The discharger
is not subject to enforcement action for violating toxic limits
until the toxic reduction evaluation is completed and the results
included in a modified permit. Region 3 personnel indicated as
many as 60 dischargers were performing toxic reduction evaluations.
These dischargers were not included on the list of dischargers
requiring an ICS.
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Pennsylvania submitted a list of 78 dischargers that required
an ICS. However, the State listed only the NPDES dischargers with
permits expiring this year as needing an ICS. The 60 dischargers
requiring a toxic reduction evaluation were not included. The
State indicated that unexpired permits with toxic limits and
dischargers requiring a toxic reduction evaluation "need not be
identified or listed". As a result, the number of ICS's submitted
to Region 3 was understated and the list of toxic impaired waters
was incomplete.
In the case of Virginia the required lists were submitted but
not the ICS's. Their submittal indicated that 14 dischargers
needed an ICS. However, in March 1989, the State wrote EPA
indicating that they were "still unclear as to what constitutes an
ICS." Our discussions with Region 3 personnel during early April
1989, disclosed they were in the process of requesting
documentation from the State to determine the basis for requiring
only 14 ICS's. This indicated that Region 3 did not resolve the
confusion that existed and continued delays are possible before the
new and important provisions of the CWA are implemented.
Clearly much work is still required by the states to comply
with the requirements of the CWA. Region 3 is not planning to
prepare the absent ICS's as required by the CWA. They intend to
permit the states to complete the ICS's during the time designated
for Region 3 action (between February 1989 and June 1990). In
effect, Region 3 has granted an informal time extension to the
states. This cooperation risks the possibility of more delays and
is contrary to the CWA.
RECOMMENDATIONS
To fulfill the commitments of the Chesapeake Bay Agreement of
1987 and to comply with the CWA requirements for controlling
toxics, the Region 3 Administrator should ensure that:
1. Water quality standards for controlling toxics
are adopted by the states.
2. The lists of waters impaired by toxic pollutants
are completed.
3. Each state provides a complete list of
dischargers that require an ICS. Moreover,
an ICS must be completed for each discharger.
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4. Appropriate sanctions are initiated when the
states do not fulfill the CWA requirements for
controlling toxic pollutants in a timely manner.
Because these were a requirement of the 106
grants awarded to the states, consideration
should be given to withholding 106 grant funds
during the current fiscal year. Also EPA must be
prepared to complete, in a timely manner/ those
requirements not accomplished by the states.
Region 3'B Response to Recc
Region 3 agrees that water quality standards needed to be
upgraded to comply with the Water Quality Act. They indicated that
Pennsylvania has already adopted the necessary standards and is in
compliance. Virginia and Maryland are working to achieve com-
pliance with further standards to be adopted the later half of
1989.
Inspector General's Comments
Pennsylvania's compliance is noted. However, more action is
needed to ensure that Virginia and Maryland overcome historic
difficulties which delayed adoption of the necessary water quality
standards.
Region 3'a Response to Recommendatioi
Region 3 agrees with the recommendation and reported that all
states have submitted their lists and they were approved by the
June 4, 1989 deadline.
Inspector General's Comments
The response indicated compliance with this recommendation.
Region 3's Resonse to Recoyendation N^mher 3
Region 3 agrees with the recommendation. Each state submitted
a list of dischargers needing ICS's. In some cases, the Region
added discharges to the list, as part of the 304(1) approval
process. We are now working with the states to formalize
commitments to issue ICS's (in the form of NPDES permits) by the
statutory deadline.
Inspector General fs Comments
A more specific commitment is needed from the states. The
missing ICS's from the states are late. The Region is permitting
the states to use the time allowed in the statute for EPA action.
While this may be practical, the Region must provide more vigorous
27
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oversight to ensure the states comply with the Water Quality Act.
Region 3 must be prepared to act on those required ICS's which the
state fails to complete before the statutory deadline.
Response to Recommendation Knmha-r A
Region 3 agrees with this recommendation. As with all grant
conditions, the Region is prepared to take sanctions and other
actions as appropriate, if the states fail to meet their
requirements. The Region has the authority to complete the ICS's
but does not have the resources should there be a significant
inability of the states to fulfill this responsibility.
Inspector General's Comments
We agree with the response provided. However, Region 3 must
be prepared to exercise various sanctions such as, delegation
withdrawal or recovering grant funds when states are unwilling or
unable to meet their responsibilities under the Clean Water Act.
This is particularly important when the states are permitted to use
the statutory time allotted for EPA action.
28
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-appendix A
Page 1 of 27
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION III
841 Chestnut Building
Philadelphia, Pennsylvania 19107
Response to Draft Report of Audit on the
SUBJECT: Management of the CBP - Point Source DATE-
Pollution Program Audit Report Number E1H98-03-0208
FROM: Edwin B. Erickson ' ~ '-' . -
Regional Administrator (3RA00)
TO: p. Ronald Gandolfo
Divisional Inspector General for Audit (3AI00)
AUB 181989
Thank you for the opportunity to respond to the subject
draft audit and the cooperation shown to our staff in the
preparation of our response. The Region's response to the
specific findings and recommendations is attached. As you
know, Bob Mitkus provided Carl Jannetti with additional
comments concerning proposed changes to improve the tone and
context of the report. These changes should preclude
misinterpretation and provide a more accurate description of
the issues, findings and recommendations. We also added
responses received from the states of Virginia and Pennsylvania
If your staff needs further information or clarification,
please have them contact Bob Mitkus at 7-3420.
Attachments
29
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Appendix A
Page 2 of 27
Enforcement Action
Recommendation No.. 1: "The Region should update memorandums
of agreement to ensure that the NPDES program is administered
consistent with the current law and Federal regulations."
Response: The Region agrees with this recommendation.
Region III has been negotiating new MOA's over the last
several years. These negotiations can be very time consuming
since they are not taken lightly by either EPA or the States.
Maryland's MOA has just been signed by the State and EPA, and
is now official. Pennsylvania's MOA is nearing completion.
The States routinely include commitments in the annual workplans
to follow the current policy and laws. Thus, our relationships
with the States reflect current policy even though the MOA's
may not be completely updated.
Recommendation No. 2: "The Region should ensure the States
finalize EMS guides to strengthen the adequacy of State
enforcement procedures."
Response: The Region agrees with this recommendation.
Each State has management procedures in place to track the
status of permit compliance, to identify violations, and to
take enforcement action. As part of EPA's enforcement program
requirements all States are to prepare and submit for approval,
EMS Guides. We received Draft EMS Guides from the States and
are currently in the process of approving the Guides. Although
no EMSs have been approved by the Region, all States have
enforcement policies and procedures which they follow. Where
deficiencies exist, the Region uses every resource available
to get corrections, even to the point of disallowing program
delegations to States with inadequate statutory enforcement
authority.
Recommendation No. 3: "The Region should assure that aggressive
enforcement action is taken in a more timely manner and that
enforcement action escalates when compliance is not achieved."
Response: The Region agrees with this recommendation.
Region III has never hesitated to take enforcement actions. Very
often a decision not to act is made based on the severity of the
violation, the lack of available Region III staff time, the States'
assurance that action will be taken or the fact that a federal
action, over and above a State action, may not result in quicker
resolution to the problem.
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Appendix A
Page 3 of 27
The factors Region III considers in taking enforcement action
are: (1) what is needed to obtain compliance, and (2) the
availability of staff time to assess penalties or refer for
civil litigation. A considerable amount of time is needed to
take actions and impose penalties. There are currently 47
active civil cases and seven active administrative penalty
actions being pursued by the Regional Compliance Sections
(see attachment A).
To determine if enforcement actions are effective, all enforcement
actions taken over a period of time should be examined to determine
how successful or unsuccessful they have been. The trend chart
in attachment B shows that the Exceptions List for the Region has
been reduced from nearly 50 cases to 19 cases in less than three
years. While we are not satisfied with the present level, this does
show progress and we will pursue further reductions.
Recommendation No. 4: "The Region should require the States to
assess penalties against violators which are significant enough
to deter noncompliance."
Response: The Region agrees with this recommendation.
The Region's first priority is to return facilities to compliance
with their permit requirements. But, the Region considers penalties,
as well as injunctive relief, as part of our enforcement response
to violations.
States very often use other punitive measures in lieu of fines.
Several States restrict new sewer connections until compliance
is achieved. This action not only restricts the income of the
violators, but also acts as an incentive to complete corrective
measures as soon as possible.
Recommendation No. 5: "The Region should initiate direct Federal
Enforcement action when States fail to pursue violators."
Response: The Region agrees with this recommendation.
Region III has initiated appropriate enforcement actions when
the States have not, and we will continue to do so. The entire
Regional NPDES enforcement caseload consists of actions against
dischargers in delegated States (except the District of Columbia).
This is done as part of our oversight responsibilities. We
believe that the size of our current caseload (i.e., 71 civil and
administrative cases) reflects our commitment to strong Federal
oversight.
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Appendix A
Page 4 Of 27
3
Recommendation No. 6: "The Region should require that reviews
performed by Region III of the State programs are used as an
effective management tool. Deficiencies in State enforcement
programs should be disclosed fully during these reviews, along
with actions required to correct the deficiencies."
Response: The Region agrees with this recommendation.
Region ill conducts quarterly enforcement meetings with each
of the delegated States. At these meetings we discuss potential
enforcement cases, as well as the States' enforcement programs
in general. When deficiencies are uncovered, we work with the
States to correct them, and formalize any corrective action plans
as appropriate, including discussions and agreements between the
Regional Administrator and State secretaries and, if necessary,
the governors. We believe that these meetings have been
instrumental in our success in achieving a 60% reduction in
our Exceptions List over the past three years (Refer to Attachment
B) .
Recommendation No. 7: "The Region should assure that POTW's
implement pretreatment programs in a timely manner. If the
POTW's fail to initiate action when violations occur, Region
III or the States should take enforcement action against industrial
users."
Response: The Region agrees with this recommendation,, and sees it
as a crucial component of a successful pollution control program.
With the responsibility for issuing permits and enforcing them
still a relatively new activity for POTWs under the pretreatment
program, it is not surprising to see delays in initial enforcement
by the POTWs. POTWs are requiring Industrial Users to install
treatment, and EPA is continuing to provide training in the area
of permitting and enforcement. EPA also continues to take
enforcement action against POTWs for failure to develop and
implement pretreatment programs, and against Industrial Users
for failure to comply with applicable standards and reporting
requirements.
Water Quality Standards and Toxic Control Strategies
Recommendation No. 1: "The Region should ensure that standards
for controlling toxics are adopted by the States."
Response: The Region agrees with this recommendation.
Pennsylvania adopted toxic water quality standards in March 1989
which are consistent with the Clean Water Act and its 1987
Amendments. Virginia and Maryland have adopted standards and
criteria for some toxic pollutants; both States are working
to achieve compliance with the Clean Water Act with further
water quality standards scheduled to be adopted in the later
half of 1989.
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Recommendation No. 2: "The Region should ensure that the list
of waters impaired by toxic pollutants are completed."
Response: The Region agrees with this recommendation.
All States submitted their 304(1) lists in accordance with the
Clean Water Act Amendments, and all lists were approved by the
Region by the June 4, 1989 statutory deadline.
Recommendation No. 3: "The Region should ensure that each State
provides a complete list of dischargers that require an ICS.
Moreover, an ICS must be completed for each discharger."
Response: The Region agrees with this recommendation.
Each State submitted a list of dischargers needing Individual
Control Strategies (ICSs), as required by the Clean Water Act
Amendments. In some cases, the Region added dischargers to
the list, as part of the 304(1) approval process. We are now
working with the States to formalize commitments to issue ICSs
(in the form of NPDES permits) by the statutory deadline. And,
while it is the Region's opinion that it would be more effective
and efficient for the States to maintain control of their permits
and issue them whenever possible, EPA has the authority to prepare
ICSs if it appears that the States will not meet the statutory
deadline. However, limited resources have been allocated to
perform this activity, and may limit EPA to exercising preemption
authority on only the highest priority permits.
Recommendation No. 4: "The Region should ensure that appropriate
sanctions are initiated when the States do not fulfill the CWA
requirements for controlling toxic parameters in a timely manner.
Because these were a requirement of the 106 grants awarded to the
State, consideration should be given to withholding 106 grant funds
during the current fiscal year. Also, EPA must be prepared to
complete, in a timely manner, those requirements not accomplished
by the States."
Response: The Region agrees with this recommendation.
As with all grant conditions, the Region is prepared to take
sanctions and other actions as appropriate, if the States fail
to meet their requirements. And, as stated earlier, the Region
has the authority to perform this activity, but does not have the
resources to assume these tasks should there be a significant
inability of the States to fulfill this responsibility.
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ATTACHMENT A
Judicial and Administrative
Enforcement Actions
The Region's current active NPDES caseload is:
Civil Judicial Actions 32
Civil Judicial Consent Decrees 15
Subtotal (Civil) 47
Administrative Penalty Actions 7
Administrative Compliance Orders 17
(not including those issued prior
to FY'89)
Subtotal (Administrative) 24
Total 71
in FY'89 the Region settled: (a) 3 initial judicial actions
for a total of $1,730,000 in penalties and requiring the
expenditure of about $2,750,000 in pollution control equipment;
(b) 2 contempt actions for violations of existing consent
decrees for $190,000; (c) stipulated penalties for consent
decree violations for $125,000; and (d) 3 administrative
penalty actions for $54,500.
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ATTACHMENT B
Trend Charts
Exceptions List and Significant Noncompliance Rate
Significant Noncompliance (SNC) is defined as follows:
Violation of any condition of a Judicial Decree.
Violations of compliance schedule milestones for
start construction, complete construction, or attain
final compliance by 90 days or more from the date of
the milestone specified in an enforcement order or
a permit.
Failure to provide a compliance schedule report or
a monitoring report within 30 days of the due date
specified in an enforcement order or a permit.
Violation of any monthly average effluent limitation
contained in a enforcement order.
Violation of monthly average effluent limitations
contained in a permit that meet the following criteria -
four violations in a six month period, or two violations
which exceed the Technical Review Criteria (TRC) in a
six month period. The TRC is 1.4 times the effluent
limitation for conventional pollutants, and 1.2 times
the effluent limitation for toxic pollutants.
The Exceptions List contains facilities which have been in
SNC for two consecutive quarters and have not been address by
an enforcement action.
The trend chart shows the Regional Exceptions List and SNC
rates for the third quarter FY'86 through the second quarter
FY'89. The Exceptions List is in numbers of facilities
(on the List), while SNC is the percentage of facilities in
significant noncompliance. The chart identifies SNC rates
for municipal and industrial dischargers, along with composite
SNC rates for the Region as a whole.
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Page 8 of 27
REGION EXCEPTIONS LIST AND SNC RATES
86 86 87 87 87 87 88 88 88 88 89 89
FISCAL QUARTER
REG EX LIST (NO.) °" REGSNC(%)
MUNICIPAL SNC » NON-MUNICIPAL
(%) SNC (%)
For the Regional Exceptions List the
improvements. Out of a total of 777
19 on the list.
statistics
facilities
show continued
there were only
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Appendix A
Page 9 of 27
The trend charts for the Chesapeake Bay States are presented
below.
MD EXCEPTIONS LIST AND SNC RATE
(Universe of 99 Facilities)
K ^
86 86 87 87 87 87 88 88 88 88 89 89
FISCAL QUARTER
- EX LIST (NO.) -O- SNC (%)
NOTE: The rise in SNC rates for Maryland in 1987 was largely due
to start-up problems and delayed construction for municipalities
not meeting secondary treatment levels under the National
Municipal Policy (NMP).
86 86
PA EXCEPTIONS LIST AND SNC RATE
(Universe of 399 Facilities)
87 87
87 87 88 88
FISCAL QUARTER
88
EX LIST (NO.)
SNC (%)
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VA EXCEPTIONS LIST AND SNC RATE
(Universe of 137 Facilities)
86 87
87
87 87 88 88
FISCAL QUARTER
88 88 89 89
- EX LIST (NO.) O- SNC (%)
NOTE: In 1987 Virginia experienced a dramatic increase in SNC
rates because of NMP enforcement.
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Page 11 of 27
f
£>-&
Richard N. Burton
Executive Director
Post Office Box 11143
Richmond, Virginia 23230-1143
(804) 367-0056
COMMONWEALTH o/ VIRQINIA
ST/!T£ WATER CONTROL BOARD
2111 Hamilton Street
Mr. Alvin R. Morris, Director
Water Management Division
US Environmental Protection Agency
Region III
841 Chestnut Building
Philadelphia, PA 19107
Dear Al:
Enclosed are Virginia's comments on the draft audit of Chesapeake
Bay activities by the Office of the Inspector General. I
apologize for the delay, but a number of my staff had to review
this document and make comments. I hope these comments can still
be forwarded to the Inspector General.
Sincerely,
BOARD MEMBERS
William T Clements
Henry O Hollimon. Jr.
Ronald M Plolkin
VelmaM Smith
Patrick L. Standing
W Bidgood Wall. Jr.
Robert C Wmmger
Richard )N. Burton
Executive Director
Virginia State Water Control Board
Enclosure
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.Appendix A
Page 12 of 27
VIRGINIA WATER CONTROL BOARD
8/4/89 COMMENTS ON:
DRAFT REPORT OF AUDIT ON THE
MANAGEMENT OF THE CHESAPEAKE BAY PROGRAM
POINT SOURCE POLLUTION PROGRAM
BY THE OFFICE OF INSPECTOR GENERAL
ENFORCEMENT
The Inspector General has used the QNCR for the quarter ending March
31, 1988, to illustrate noncompliance by Chesapeake Bay dischargers.
We think that the Inspector General is misusing the QNCR in trying to
demonstrate lack of enforcement for Bay dischargers. The chart in
the draft audit indicated that 20 major Virginia Bay facilities were
in noncompliance. In fact, 11 of these facilities were in a resolved
pending status meaning that Virginia had already taken appropriate
action for previous violations. The Inspector General should realize
that once an action has been taken against a facility, that facility
must remain on the QNCR until all requirements of the action have
been completed and the action has been closed out. The main
criterion relating the QNCR to the taking of appropriate enforcement
action is the Exceptions List, which is the list of facilities
appearing on the QNCR for two consecutive quarters for the same
violation where no appropriate action has been taken. The inspector
General failed to note that there were no Virginia Bay facilities on
the Exceptions List of the QNCR he Was using to attempt to show how
lax enforcement had been for the Bay area.
We agree that a formal Enforcement Management System (EMS) has not
been submitted to Region 3. However, we have been implementing all
of the requirements of an EMS for many years. Region 3 received our
Compliance Auditing System Manual in early 1988 which we believe
satisfies most of the requirements of an EMS.
The Inspector General stated that escalation of enforcement actions
had not occurred for the 11 Bay facilities chosen for review (for
Virginia - Waynesboro, L.A. Clarke, and USMC, Quantico). Following
are the escalations that actually occurred:
L.A. Clarke:
Board Directive November 1976
No Disch. system implemented December 1978
Facility closed, still testing 1979
Operations resumed 1980
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Page 13 of 27
L.A. Clarke (continued)
Referred to Attorney General December 1981
Referral affirmed by Board March 1982
Bill of Complaint filed April 1982
Consent Decree entered June 1982
Filed for bankruptcy March 1983
2nd Consent Decree(lst still eff.) July 1983
Contempt petition to Court March 1985
Contempt order entered by Court May 1985
Referral to Attorney General February 1988
Superfund RI/FS March 1988
Discharge Permit revoked July 1988
Waynesboro:
Referral to Attorney General October 1985
NMP Consent Decree December 1985
Referral to Attorney General December 1987
New, more stringent Cons, decree April 1988
USMC, Quantico
VA0028363, Mainside
Consent Order June 1986
New Consent Order December 1987
Amendment to Consent Order January 1989
VA0002151, Industrial Plant
Consent Order January 1989
NOTE: Federal Law provides that federal facilities are liable
for only those state civil penalties imposed by the
State Court to enforce an order or the process of such
court.
As a matter of interest, the City of Fredericksburg, which is
also a Bay facility, after being issued Consent Orders in 1985
and 1986, was assessed $25,000 in civil penalties in a 1987
Consent Decree.
TOXICS
The State Water Control Board has undertaken an aggressive
program to deal with toxic discharges in Virginia for the past
several years. As recent as a year ago, the State Water Control
Board adopted one of the first Toxics Regulation in the nation to
provide a consistent and systematic approach to regulating toxic
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J^pendix A
Page 14 of 21
discharges. We believe that this is not only consistent with the
requirements of the Clean Water Act (CWA), but has gone beyond
such requirements. We have, as a result, incorporated Toxics
Management Programs into over 200 permits, to identify and
ultimately reduce and/or eliminate toxics discharges throughout
the State. The State Water Control Board has also undertaken
recently to convert all Water Quality Criteria for the protection
of aquatic life to Water Quality Standards as required by the CWA
and prompted by Region III. It is projected, that barring any
major complications or law suits, these changes to the Water
Quality Standards would become effective later this year.
While Section 304(1) of the CWA requires specific requirements
relating to the NPDES Permit Program for controlling toxic
substances, we believe that Virginia has met the intent of the
CWA and in fact has somewhat exceeded the requirements based on
the implementation of the Board's Toxic Regulation. We have
provided EPA with a list of waters not expected to meet water
quality criteria for the 126 priority pollutants and have
provided EPA with a list of those dischargers that we believe
have toxic discharges and are regulated under the requirements of
304(1). It is the Water Control Board's position that upon
completion of EPA's public notice in October of this year, in
compliance with the 304(1) regulation, we will move immediately
to modify those permits that have been agreed upon to incorporate
Individual Control Strategies (ICS). EPA had the benefit of
passing final judgement on the State's permit lists based on a
final 304(1) regulation whereas the States were having to operate
under a proposed regulation which has since changed. Again, it
is Virginia's intent to comply with the mandate of the CWA to
incorporate ICSs in permittees' permits by February of 1990. The
ICS as required by the CWA will require compliance by June of
1992.
WATER QUALITY STANDARDS
I must respectfully and strongly disagree with the Inspector
General's assertion that the failure to adopt Water Quality
Standards to deal with toxics in a timely manner hinders the
permit program and delays toxic controls for the Bay. This is
definitly not the case since Virginia has been in the forefront
for years in dealing with toxic discharges and, as stated before
is one of only a few states that has a Toxics Regulation to
specifically and consistently deal with toxic pollutants. This
Regulation, that was endorsed by EPA at the time of its adoption,
goes beyond the CWA's requirement of having Water Quality
Standards to control pollutants by requiring all discharges to be
neither acutely nor chronically toxic. As a matter of fact, this
document has been presented by EPA as a model for other States to
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Appendix A
Page 15 of 27
use in developing toxics management strategies. If just the CWA
strategy were followed, toxicity might not be prevented due to
the additive effects of multiple compounds which are not taken
into account by the CWA.
SUMMARY
We do not believe that this document is representative of
Virginia's progress in enforcement, regulating toxic discharges,
nor adopting Water Quality Standards. There is almost a
pervasive attitude that the only way to secure compliance is
through punishment and the assessing of massive penalties. We
believe that Virginia has taken a very adequate approach to
combining enforcement actions with less punitive measures. While
EPA and the State Water Control Board may not agree on the
approach to toxics control and standards adoption, Virginia has
not ignored the situation and is in fact ahead of most states in
dealing with its toxics discharges. We will continue to
implement the Toxics Regulation through our permits and where
toxicity is found, remove or eliminate the toxic impact that is
seen on State waters.
-------
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF ENVIRONMENTAL RESOURCES
Post Office Box 2063
Harrisburg, Pennsylvania 17120
July 20, 1989
717-787-5027
Alvin R. Morris, Director (3WMOO)
Water Management Division
U.S. Environmental Protection Agency
Region 3
841 Chestnut Building
Philadelphia, PA 19107
Res Draft Report of Audit in Management
of the Chesapeake Bay Program Point
Source/Pollution Program
Dear Dr^$orrist
Thank you for the opportunity to review the subject draft audit report. Regarding
enforcement, we acknowledge it occasionally takes longer to resolve cases than we would prefer.
However, our enforcement program has become more active in recent years. Our implementation
of the NMP Program has resulted in a substantial number of effective compliance actions against
municipalities. Most of those NMP municipalities are in compliance with their NPDES Permit
limits and many of the remaining cases are under some enforcement schedule. While we agree
that our program can be improved, we do not agree that it is nearly as poor as implied by the
report.
We do not agree that the issuance of more unilateral orders is the solution to the
perceived lack of enforcement. We have found that, in the long run, our Consent Order and
Agreements are more effective in gaining compliance where a substantial commitment is required
by the violator. The negotiation of a Consent Order and Agreement is often more time intensive
than issuing an order, but the violator waives his right to appeal which may save considerable time
later. In addition, penalties (both upfront and stipulated) are associated with the Consent Order
and Agreements, while no penalties are directly imposed by orders.
We agree the issuance of orders can substantially reduce the time required to address
emergency or short-term compliance problems. To improve our ability to respond quickly to resolve
or prevent pollution incidents, the Bureau of Water Quality Management is currently preparing to
give our inspectors the authority to issue orders in the field. We anticipate this program becoming
effective in the fall of 1989. In addition, the Bureau has recently finalized a new guidance related
to the calculation of penalties for effluent violations. This methodology will significantly increase
the amount of penalties over what has previously been assessed.
The Department has developed a good working relationship with the EPA Region in
enforcement staff. We have taken a number of joint actions in the past and continue to cooperate
with ongoing cases. The Region III staff has been very responsive to our requests for assistance on
specific enforcement actions and we look forward to continuing the teamwork approach in meeting
the goals and commitments of both our agencies.
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Appendix A
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Alvin R. Morris, Director (3WMOO)
- 2-
July 20, 1989
Page 21 of the draft report indicates "3. Pennsylvania did not adopt water quality
standards for toxic pollutants as required by CWA". The Pennsylvania Environmental Quality
Board approved water quality standards, which include toxics provisions, on November 15,1988.
These standards were published final in the Pennsylvania Bulletin on March 11,1989, and are in
effect.
Also on Page 21, the report states that Pennsylvania has not submitted a complete
304(1) list. A revised list was submitted to EPA Region III on May 5,1989. The list was approved
by a June 2, 1989, letter from the EPA Region III Administrator. This list does include the
60 dischargers with Toxic Reduction Evaluation requirements. The discussion of Pennsylvania's
Toxics Management Strategy is misleading. The strategy does provide for enforceable permit
limits for toxics. Only where technology does not exist to meet calculated water quality based
limits is the provision allowed for a time extension to meet these limits. Under this provision, the
discharger is required to report annually on the status of technology and application of appropriate
technology to comply with the calculated limits.
Thank you for the opportunity to comment on this draft audit report. If you have any
questions regarding these comments, please contact Cedric Karper of my staff at 717-787-8184.
Sincerely,
Cichard M. Boar dm an
Director
Office of Environmental Management
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Page 18 of 27
DEPARTMENT OF THE ENVIRONMENT
2500 Broening Highway, Baltimore, Maryland 21224
Area Code 301 631-3567
William Donald Schaefer
Governor
August 21, 1989
Martin W. Walsh, Jr.
Secretary
Mr. P. Ronald Gandolfo
Divisional Inspector General
Office of Inspector General
401 M Street, SW
Washington, DC 20460
Dear Mr. Gandolfo:
Thank you for the opportunity to comment on the Draft Audit Report on
the Chesapeake Bay Point Source Pollution Program. The Maryland Department
of the Environment (MDE) has a more positive view of sewage treatment plant
compliance than that which is presented in the audit report.
We are disappointed in that it seems to focus only on problems. It
represents a single point of time, and generalizes compliance based upon
the results of one quarter, rather than reflecting the progress Maryland
has made in increasing compliance over the past several years. It also
tends to simplify the difficulty of coordinating enforcement activities
between two agencies located in different cities, and is apparently
oblivious to the circumstances which hinder effective wastewater treatment
and aggressive enforcement.
Maryland's compliance rate has improved steadily since 1985, from 50%
that year to 58% in 1986, 68% in 1987, and 77% in 1988. Based upon ongoing
plant upgrades, our anticipated compliance rate for 1989 is 83%. These
numbers illustrate the progress toward complete compliance in Maryland.
This improvement is all the more remarkable given the increasingly
stringent permit limits (primarily for nitrogen and phosphorus) and
increased sewage flows.
Several of the problems recognized in the audit have since been
resolved. A new Memorandum of Agreement between MDE and EPA was finalized
on May 18, 1989. Similarly an Enforcement Management Strategy has been
drafted and revised, and MDE hopes to get EPA approval of the strategy this
fiscal year.
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Mr. P. Ronald Gandolfo
Page 2
If noncompliance rates in the region remain constant during the second
calendar quarter of 1989, Maryland's projected significant noncompliance
rate of 6.5% will be the lowest in the region except for that of Virginia.
With EPA's statistical analyses lagging one quarter, these results will not
show up until the first quarter of 1990,
MDE remains confident in the results of its enforcement program, and
hopes that the final Audit Report on the Chesapeake Bay Point Source
Pollution Program will reflect overall compliance, rather than a point in
time. More specific comments are attached. If you have any questions,
please call me at (301) 631-3567, or Merrylin Zaw-Mon, Deputy Director, at
(301) 631-3574.
Sincerely,
J. L. Hearn, Director
Water Management Administration
JLH:dsw
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Page 20 of 27
Response to Draft Audit Report
The Office of the Inspector General's draft audit report on the
Chesapeake Bay Point Source Pollution Program evaluated the progress of EPA
Region 3 and the states in enforcing the National Pollutant Discharge
Elimination System permits and reducing toxics entering the Bay. The audit
reviewed the agreements between EPA and the states for enforcing the Clean
Water Act, the commitments made by the states in their internal management
strategies, and the compliance records of treatment plants in the region.
The efficacy of the enforcement programs was evaluated through a detailed
study of a random group of noncomplying sewage treatment plants.
While the audit identifies some program weaknesses that are being
addressed, it sometimes simplifies the difficulty of coordinating
enforcement activities between two agencies located in different cities and
is oblivious to the circumstances which hinder effective wastewater
treatment and aggressive enforcement.
The Memorandum of Agreement between the EPA and the Maryland
Department of the Environment (MOE) was originally completed in 1974 when
the NPDES program was delegated to the State of Maryland. This agreement
reflected the Clean Water Act requirements in effect at the time it was
written. EPA and MDE began revising the agreement in 1987, and worked out
the details through written correspondence and telephone communications.
The memorandum was a lesser priority than was maximizing NPDES compliance.
Many technical and programmatic conflicts were resolved before the new
agreement was finalized on May 18, 1989. (Recommendation #1 of audit
report)
Similarly, the EPA asked MDE to develop an Enforcement Management
Strategy (EMS) in 1987. A draft was sent to EPA Region 3 in March of that
year, and EPA made comments and requested a revision. The EMS was
rewritten in the fall of 1988, and again in the summer of 1989, and the MDE
hopes to get EPA approval of the strategy this fiscal year. (Recommendation
12 of audit report)
The lack of formal agreements and written strategies does not signify
a lack of communication between the EPA and the states. Rather, such
communication takes place on a weekly basis, with personal meetings every
quarter. In a context where communication between EPA and MDE was limited,
the lack of written agreements would be a serious problem, but with the
regular contact, there was no loss in accountability. The quarterly
meetings between EPA and MDE include detailed discussions of each facility
in noncompliance.
The audit compares the tasks accomplished by MDE with those
established as 106 grant commitments. While MDE has continued to expand
program activities in response to federal regulations, grants have not
increased. The toxics program has been primarily state funded, and
Maryland is now developing toxic regulations based upon a schedule agreed
upon with EPA.
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The history of enforcement at randomly selected facilities which were
out of compliance in March 1988 was studied as part of the audit.
Facilities chosen in Maryland were Frederick City, Freedom District, and
Pocomoke City. The analyses of these problems did not fully consider the
circumstances causing the permit noncompliances.
The old Frederick City treatment plant was hydraulically and
organically overloaded. The City of Frederick had developed a facilities
plan, held public meetings, and revised the facilities plan before
January 30, 1984 when the National Municipal Policy (NMP) went into effect.
Since Frederick was already in the grants process when the NMP was adapted,
it would not have been fair to impose the NMP requirement of enforcement
regardless of availability of funding upon the City of Frederick.
Pretreatment was identified as a problem at Frederick City in the
auditor's report. Although one dairy was discharging high-strength high
volume wastewater, the domestic loading alone in Frederick City was enough
to overload the old treatment plant. The pollutants discharged by this
dairy and the other much smaller food processors, however, are compatible
with biological secondary treatment, and the new plant (completed in 1988)
was able to treat these wastes even without industrial pretreatment and
still meet permit limits. In May 1989, the one major dairy came on-line
with a $3,000,000 pretreatment facility and is now discharging domestic
strength wastes to the sanitary sewer. Attachment #1 shows industrial
loadings for biochemical oxygen demand (BOD) before and after pretreatment
compared to the design loading of the new plant. As is evident, industrial
loadings contribute only a small percentage of the total incoming BOD to
the City's new plant.
The Pocomoke City treatment plant did not meet its permit limit for
chlorine. The chlorine limit in effect in Maryland is the result of a 1981
state law and is not a national standard. The permit was not written for a
water quality limited discharge. Thus Pocomoke City was not in violation
of the National Municipal Policy. Industrial users were suggested as a
source of funding, but the contribution of industrial waste to the facility
had no effect upon the dechlorination requirement. The facility was
awarded a dechlorination grant in 1988 and is now in compliance with all
effluent limits.
The Freedom District treatment plant did not meet all the applicable
permit limits due to limitations of the treatment plant. Consent Orders in
1987 and 1988 recognized operational modifications which could improve
plant performance. These improvements were pursued but did not bring the
plant into compliance until mid 1989. State funding was requested in
fiscal years 1986 and 1987 to finance the plant upgrade, but funding was
not made available by the legislature. State funding was approved in
fiscal year 1989, and the upgrade is now under design.
The audit report notes that the use of interim limits does not
actually reduce the quantity of pollutants discharged. The purpose of
interim limits is to ensure that the facility is operated to produce the
best possible effluent quality pending an upgrade. This is a realistic
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appendix A
Page 22 of 27
approach to the problem of noncompliance at publicly owned sewage treatment
plants.
Noncompliances at publicly owned treatment plants are not caused by
disregard for the Clean Water Act, but by a lack of funding for treatment
plant upgrades. Public utilities must compete with many other services in
local budgets and upgrades often present a serious financial hardship to
small towns. The imposition of fines only serves to increase the already
severe budgeting problem. Closing down a municipal wastewater facility is
not an option. MDE has intensified its assistance to communities
previously granted state and federal funding to ensure that the needed
facilities are built within established schedules. Communities are
encourage to complete upgrades in a timely manner to maximize the value of
available grant funding and minimize economic impact upon the users.
MDE does use progressive enforcement measures to bring facilities into
compliance with their discharge permits. (Recommendation #3 of audit
report) Fines are not considered until several initial actions have been
taken to bring the facility into compliance. The following steps may be
taken in order, or in cases of severe violations, some steps may be
skipped.
1. Notice of Violation
2. Administrative Directive
3. Consent Order
4. Complaint, Order and Penalty Assessment
5. Judicial Order
Many municipal facilities are strongly influenced by the possibility of
limitations on hook-ups. Each municipal treatment plant is evaluated
annually to determine whether or not it can adequately treat higher flows.
Limits on growth are called moratoria, and are imposed as administrative
directives. They offer a financial incentive to compliance by threatening
to limit future tax revenue.
Administrative and Judicial Consent and Unilateral Orders continue to
be finalized at a rate of about twenty-two per year. Stipulated penalties
have been included in all municipal orders written since October, 1988.
The inclusion of stipulated penalties encourages facilities to develop
reasonable compliance schedules and make every effort to meet those
schedules. Fines are recognized as a potential deterrent and are used
against municipalities as a last resort, such as in the case of the
Baltimore City Back River Treatment Plant which has been assessed a fine of
$88,000. (Recommendation #4 of audit report)
The escalating enforcement described above is aggressive, and improved
tracking of plant data and monthly tracking of outstanding orders will make
enforcement actions more timely. Recent computerization of our tracking
system have made the data more accessible to MDE and EPA personnel.
MDE continues to enforce pretreatment requirements. While we prefer
to assist local utilities in enforcement and issue joint enforcement
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j^ppendix A
Page 23 of 27
actions with the utilities when our involvement is requested, we will take
action against treatment plants not enforcing their own pretreatment
programs. The pretreatment program must allow facilities a reasonable
amount of time to establish local pretreatment programs, and will become
increasing active in enforcing pretreatment limits where municipalities
fail to enforce these limits (Recommendation #7 of audit report).
More Maryland treatment plants were in compliance in 1988 than in any
of the previous years (Attachment #2). Compliance rates were 50% in 1985,
58% in 1986, 68% in 1987, and 77% in 1988. The projected compliance rate
for 1989 based upon construction schedules and current discharge monitoring
reports is 83%. Non-compliant facilities are under a compliance schedule,
established by MDE in an administrative or judicial order.
Maryland has pursued compliance at minor treatment plants as well as
majors. Our rate for compliance at minor treatment plants is approximately
equal to that for major treatment plants. EPA's emphasis on majors has
caused many states to stress compliance at majors at the expense of minor
plants.
The total pounds of pollutants discharged as measured by biochemical
oxygen demand, total suspended solids, total nitrogen, and total phosphorus
have decreased steadily even with the increase of wastewater flow
associated with an increased population in the Chesapeake Bay Region. The
lower amounts of pollutants discharged are a result of MDE's imposition of
increasingly stringent permit requirements. Attachment #3 shows that flows
have increased from 356 to 389 million gallons per day while organic matter
has decreased from 83,000 to 71,000 pounds per day and phosphorus has
decreased from 8800 to 5700 pounds per day. Thirty two plants currently
have permitted phosphorus limits and three have nitrogen limits. More
nutrient limits are being phased in each year. The Chesapeake Bay
Foundation's report of July 1988 also reports a reduction in pollutants
discharged, with a 10% decrease in solids discharged and a 7% decrease in
organic material accompanying a 4% increase in flow from 1986 to 1987.
Another stringent limitation imposed by MDE but not required
nationwide is the chlorine limit of <0.1 mg/1.
Maryland has just reviewed the major facility list and expanded it to
include 46 facilities with design flows of 1 MGD or greater. Thus,
Maryland's municipal noncompliance rate was actually 13% in March 1989 and
will drop to 6.5% (3 of 46) in July 1989 as the Salisbury treatment plant
is now in compliance, Baltimore City has signed a consent order for the
Back River treatment plant, and Hurlock has been referred to the Attorney
General's office for judicial action. Since the beginning of 1989,
Hagerstown, La Plata, and Piney Point have also come into compliance with
permit limits.
If noncompliance rates in the region remain constant during the second
calendar quarter of 1989, Maryland's projected significant noncompliance
rate of 6.5% will be the lowest in the region except for Virginia.
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Appendix A
Page 24 of 27
Of the three facilities still not in compliance, MDE has finalized a
Consent Order with Baltimore City for the Patapsco treatment plant and
referred Aberdeen Proving Grounds to the Attorney General's office for
enforcement. We expect the Aberdeen Proving Grounds situation to be
resolved before October 1, 1989. This leaves only Cambridge out of
compliance, which is constructing dechlorination facilities and is due to
complete the project by late September.
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Appendix A
Page 25 of 27
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.Appendix A
Page 26 of 27
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Page 27 of 27
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APPENDIX B
REPORT DISTRIBUTION
Recipient
Office of Inspector General
Inspector General (A-109)
Region 3
Regional Administrator (3RAOO)
Director, Water Management Division (3WMOO)
Audit Followup Coordinator (3PM60)
Office of Public Affairs (3PAOO)
Headquarters Offices
Comptroller (PM-225)
Agency Followup Official (PM-225), Attn: Director, Resource
Management Division
Associate Administrator for Regional Operations (A-101)
Office of Congressional Liaison (A-103)
Office of Public Affairs (A-107)
30
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