UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
EPA Office of the Inspector General
EPA
350/
1993.2
c.2
SPECIAL REPORT
Special Review of Construction Grant No. C061092-210
Awarded to the City of San Diego
For Construction of the South Bay Land Outfall
San Diego, California
Audit Report No. E2AWT3-09-0082-3400037
March 29, 1993
Western End-South Bay Land Outfall
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Inspector General Division
Conducting the Review:
Region Covered:
Program Office Involved:
Cover Photograph:
Western Audit Division
San Francisco, California
Region 9
Water Management Division
Western End of the South Bay
Land Outfall (OIG Staff Photo)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL FOR AUDITS
WESTERN DIVISION
75 HAWTHORNE STREET
19TH FLOOR, MAIL CODE 1-1
SAN FRANCISCO, CA 94105-3901
J March 29, 1993
SUBJECT:
Special Review of
Construction Grant No. C061092-210
Awarded to the City of San Diego
For Construction of the South Bay Land Outfall
San Diego, California
Audit Report No. E2AWT3-09-0082-3400037
FROM: Truman R. Beeler XJM^*-*-}* //•
Divisional Inspector General for Audits
Western Division
TO: John Wise
Acting Regional Administrator
EPA, Region 9
San Francisco, California
The enclosed Early Warning report is transmitted for your use in
administering the subject construction grant. The EPA, Office of
the Inspector General has no objection to the release of this
report at the discretion of the responsible official, to the
authorized representatives of the grantee.
Our review disclosed that the nearly complete 2.3-mile long land
outfall will not be used by the City for the purpose intended by
the grant, nor will it be used in the foreseeable future. The
grant eligible flow through the land outfall was intended to come
from a future South Bay wastewater treatment plant to be built by
the City. In May 1992, the City cancelled its plans to construct
the South Bay plant. The requirement to build the South Bay
plant was included in a special grant condition. Accordingly, we
are recommending that the grant be annulled unless the City
agrees to build the South Bay plant.
It is requested that your office respond to the recommendations
included in this report within 90 days. If you are unable to
complete your actions in this time frame, please provide this
office with your plan for corrective action by the requested
date.
Please refer to the report number on all related correspondence.
If you have any questions regarding this audit report, please
contact Mi-v"Geary Pena at (916) 551-1076.
Enclosure vf'i 3> .;;--'
M'.i ?• 4
US EPA Headquarters Library
40lMSt.,SW (3404)
Washington, DC 2.0460
Printed on Recycled Paper
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TABLE OF CONTENTS
Page
PURPOSE, SCOPE, AND METHODOLOGY .... 1
BACKGROUND 2
SUMMARY OF REVIEW RESULTS .... 4
City Violates Special Grant Condition 5
Alternative Use For The Land Outfall 8
Future Project Segments Should Not Be Funded 9
Premature Grant Award 10
RECOMMENDATIONS 10
MANAGEMENT COMMENTS AND DIG EVALUATION 11
ATTACHMENT
City of San Diego's Response to OIG Position Paper .... 15
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF THE INSPECTOR GENERAL FOR AUDITS
WESTERN DIVISION
75 HAWTHORNE STREET
19TH FLOOR, MAIL CODE 1-1
SAN FRANCISCO, CA 94105-3901
March 29, 1993
SUBJECT
FROM:
TO:
Special Review of
Construction Grant No. C061092-210
Awarded to the City of San Diego
for the Construction of the South Bay Land Outfall
San Diego, California
Report No. E2AWT3-09-0082-3400037
Truman R. Beeler /&-***?&. v*~+~ ^i^
Divisional Inspector General for Audit
John C. Wise
Acting Regional Administrator
EPA, Region 9
PURPOSE. SCOPE. AND METHODOLOGY
We conducted a special review of construction grant no. C061092-
210 awarded to the City of San Diego (the City) to construct a
land outfall in the City's south bay area. This review was made
under the Office of the Inspector General (OIG) Early Warning
Program. Under this program, special reviews are performed to
identify potential problems before the project has been
completed. We are providing this report directly to you because
the implementation of the recommendations may reguire your
authorization.
This special review was performed to ascertain the necessity and
eligibility of the City's South Bay land outfall project. During
a review of another City project, it came to our attention that
the land outfall would not be used.
The conclusions reached in our review were based on interviews
with various city, -state, and EPA personnel familiar with the
project. We also reviewed project files at EPA, Region 9 (the
Region) , the California State Water Resources Control Board (the
state), and the City. Our field work was performed between
January 4, 1993 and February 11, 1993. Due to its limited scope,
this review does not represent an audit made in accordance with
Government Auditing Standards issued by the Comptroller General
of the United States.
Printed on Recycled Paper
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BACKGROUND
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Grant Award
The Region awarded grant no.
C061092-210 for $21.5 million
(Federal share-$11.8 million) in
March 1989. The grant was
awarded to fund the City's
portion of a $40.5 million land
outfall. The grant requires the
City to construct a treatment
plant to connect to the land
outfall.
As shown on the adjacent map, the
outfall is located in the City's
south bay area, but does not
extend all the way to the Pacific
Ocean. Future phases of the
project include extending the
outfall to the ocean, and
constructing an ocean outfal1.
Shared Project
The land outfall project is a joint effort between the City and
the International Boundary and Water Commission (IBWC). The IBWC
is a Federal commission formed to solve boundary and water
problems between the United States and Mexico. These water
problems include border sewage flows. The outfall was the first
phase of a project to allow:
• The IBWC to stem the inflow of raw sewage from Tijuana,
Mexico to the United States.
• The City to upgrade its sewage treatment system to comply
with the secondary treatment requirements of the Clean Water
Act.
The outfall is a 2.3-mile long, 12-foot diameter pipeline capable
of transporting peak flows of up to 570 million gallons per day
(mgd) of treated sewage (effluent). The effluent was to come
from two future treatment plants: (i) a South Bay treatment
plant, to be built by the City with EPA grant assistance; and
(ii) an international treatment plant, to be built by the IBWC
under a special appropriation from Congress.
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The City's plant was to
provide secondary
treatment for peak flows
of 370 mgd, and average
flows of 195 mgd. The
IBWC plant was to treat
Tijuana's peak flows up
to 200 mgd and average
flows up to 100 mgd.
Construction of the land
outfall was essentially
complete at the time of
our review.
The IBWC originally
planned to build a 5.5-
foot diameter outfall to
transport Tijuana sewage.
However, in 1988, the
City elected to
participate in the
outfall project after
considering its own plans
for the South Bay
treatment plant, and the
need to qualify for
expiring EPA construction
grant funds. As a
result, the land outfall
was redesigned to handle
the City's projected
flows from the South Bay
treatment plant.
12-Foot Diameter Outfall
The City intended to build the South Bay treatment plant so that
it could comply with the requirements of the Clean Water Act (the
Act). The Act requires that sewage being discharged into the
ocean receive secondary treatment, which generally removes about
90 percent of solid materials. The City's only treatment plant,
at Point Loma, removes about 75 percent of solid materials. The
City signed a consent decree with EPA in January 1990, agreeing
to build the South Bay secondary treatment plant by 19991.
The IBWC's treatment plant was to treat the almost constant flow
of raw sewage that crosses the Mexican border from Tijuana. Some
of the sewage is currently collected and returned to Tijuana.
However, the balance enters the Tijuana River, and eventually the
The consent decree has not been approved by the Federal court, but it
is considered an enforceable contract by EPA.
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Pacific Ocean. This condition has contributed to the fact that
about three miles of beach have been closed since 1983.
The cost of constructing the outfall is to be shared according to
the peak flows of each treatment plant. Based on the City's peak
flow, $21.5 million of the $40.5 million cost of the land outfall
is being funded under the EPA construction grant. As shown in
the chart below, the Federal share of the grant is $11.8 million,
with the balance of grant funding coming from the City and state.
Cosf Sharing
Based on Peak Rows
Ineligible City Coste
$5.0 million
IBWCCost
$14.0 million
City Share
$7.0 million
State Share
$2.7 million
EPA Share
$11.8 million
Grant:
$21.5
million
Total Project Cost-$40.5 million
SUMMARY OF REVIEW RESULTS
We found that the nearly completed 2.3-mile long land outfall
will not be used by the city for the intended purpose of the
grant, nor be used in the foreseeable future. The grant eligible
flow through the land outfall was intended to come from a future
South Bay secondary treatment plant to be built by the City. In
Hay 1992, the City cancelled its plans to construct the South Bay
plant. The requirement to build the South Bay plant was
included in a special grant condition. Accordingly, we recommend
that the $21.5 million grant be annulled unlessvthe City agrees
to build the South Bay plant.
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The City maintained that, although the South Bay plant may not be
built, the land outfall would be used for flows from other
projects in the future. These projects are not scheduled to be
built until 2025. Since these projects would not serve existing
flows and were not part of the approved project, they do not
represent grant eligible flows.
During our review, we also noted that there will likely be grant
funds remaining from the project. The City has proposed that any
additional Federal funds remaining after the construction of the
land outfall be used to assist in the construction of the
remaining portions of the project; namely the outfall extension
and the ocean outfall. We believe that such a proposal would be
inappropriate and it would be a further waste of grant funds to
construct additional portions of a project which will not be
used, or serve ineligible flows.
We concluded that the problems identified in our review of the
land outfall grant are attributable, in large part, to the fact
that award of the grant was premature. It appears that the grant
award was initiated by the City primarily to take advantage of
EPA construction grant funds which were expiring in 1988.
However, at the time of grant award, the City had not reached a
final decision on whether a South Bay treatment plant would be
built or the area it would serve.
City Violates Special Grant Condition
In May 1992, the City cancelled its plans to construct the South
Bay wastewater treatment plant, thereby rendering the City's
portion of the land outfall useless. The City has no need for
the land outfall if the South Bay plant is not built. The City's
decision effectively violated a special grant condition that
required the City to construct a secondary treatment plant to
connect to the land outfall. It also resulted in the City's
failure to comply with 40 CFR 35.2108 which requires that a
segmented, grant-funded project must be completed.
Special Grant Condition. A special condition in the grant at the
time of award provided that:
Regardless of the availability of Federal
funding, the City of San Diego agrees to
complete the Secondary Treatment Facilities
Plan (Grant Project No. C-06-1092-010) and
implement the recommended alternative.
In October 1991, the Region amended the special condition to add
the following highlighted language:
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Regardless of the availability of Federal
funding, the City of San Diego agrees to
complete the Secondary Treatment Facilities
Plan as related to the South BayFacilitiea
(Grant Project No. C-06-1092-010) and
implement the recommended alternative unless
secondary treatment is not required by law.
On May 26, 1992, the City Council adopted a resolution which
cancelled its plans to build the South Bay treatment plant. This
resolution, known as the Consumers' Alternative, was based on the
City's plan to modify and expand the existing Point Loma
treatment plant. Modification and expansion of the Point Loma
plant would not require use of the land outfall constructed under
the grant.
The City followed up its resolution in July 1992 by:
• Voting to indefinitely delay buying the land for the
South Bay treatment plant; and
* Directing the City Manager to redesign the balance of
the South Bay project (the land outfall extension and
the ocean outfall) to eliminate the capacity needed for
the South Bay treatment plant.
We believe that the City's actions in May and July 1992 resulted
in a violation of the special grant condition.
Consent Decree between EPA and the City. As discussed in the
Background section of this report, the City signed a consent
decree with EPA in January 1990, agreeing to build the South Bay
wastewater treatment plant by 1999. Although the consent decree
has not been approved by the Federal court, the court has taken a
subsequent action related to the consent decree. In June 1991,
it allowed the City to delay the design of the South Bay plant
until the court "has had an opportunity" to evaluate the results
of tests being performed on a different wastewater treatment
process at the Point Loma plant.2
The consent decree conditions, even as modified by the June 1991
court action, did not relieve the City from its responsibility
under the grant to build the South Bay plant. However, the
City's May 1992 action cancelling plans to construct the South
Bay plant ignored its grant responsibility. The City has argued
that it was not attempting to avoid its obligations under the
grant. To illustrate, a letter from the City Attorney, dated
June 3, 1992, to the U.S. Department of Justice said that the
2The court estimated it would evaluate the results in January 1993.
However, as of February 1993, no evaluation had taken place.
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City Council's resolution was only a request to modify the
consent decree. However, the Department of Justice, responding
to the City Attorney's letter on EPA's behalf, viewed the City's
actions as much more suspect by stating:
The City's only reason for seeking such a modification
of the consent decree is that the City does not want to
incur the cost of the necessary planning and design
work for these facilities [South Bay treatment plant
and water reclamation plants]...The Consumers'
Alternative is unacceptable...for many reasons, not the
least of which is that it does not achieve compliance
with the Clean Water Act.
...The 'city has...determined that it wishes to seek
relief from secondary treatment for nearly all the
flows of the system.
We concur with the conclusions of the Department of Justice. By
expanding Point Loma's capacity and eliminating the construction
of the South Bay secondary treatment plant and other facilities,
the City believes that it can save about a billion dollars in
capital costs.
Compliance With The Requirements Of 40 CFR 35.2108. The special
grant condition was included to help assure that an entire
construction grant project was completed, and that the land
outfall would be utilized to transport secondary treated effluent
from the South Bay plant. The provisions of 40 CFR 35.2108
allow grantees to segment or phase a project and states that:
Grant funding may be awarded for a phase or segment of
a treatment works... provided (a) the grant agreement
requires the recipient to make the treatment works of
which the phase or segment is a part .operational and
comply with...the [Clean Water] Act according to a
schedule specified in the grant agreement regardless of
whether grant funding is available for the remaining
phases and segments.
By canceling the proposed South Bay secondary treatment plant,
the City has also failed to comply with the requirements of 40
CFR 35.2108. In accordance with the CFR, a project segment, such
as the land outfall, can be specifically funded. However, the
CFR provides that, the full project must be completed. The
decision not to build the South Bay secondary plant has, in
effect, cancelled the city's project to construct an entire new
system, which included: (i) a secondary treatment facility in
the South Bay; (ii) a land outfall to transport the treated
effluent; (iii) a proposed land outfall extension; and (iv) an
ocean outfall.
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The award of the land outfall grant before the construction of
the secondary treatment plant was unique because it did nothing
in the short-term to address the sewage problems in the City's
South Bay. Instead, it resulted in a pipeline which could not be
used until:
• The City and IBWC plants were constructed and operational;
• A proposed 1.3-mile extension to the land outfall was
completed; and,
• A proposed 3 to 4-mile long ocean outfall was completed.
Alternative Use For The Land Outfall
In discussing possible uses for the land outfall if the South Bay
treatment plant was not built, the City indicated that some of
the outfall capacity would be used for future flows from
anticipated reclamation plants. These reclamation plants were
not part of the facilities plan for the grant. In addition, the
plants were not scheduled to be built until 2025. The provisions
of 40 CFR 35.2123 and 35.2214 preclude the use of grant funds for
these plants since: (i) they were not part of the approved
project at the time of grant award; and (ii) only existing needs
can be funded under the grant.
After the City decided to cancel its plans for the South Bay
secondary treatment plant, it reserved 58 mgd of the outfall's
peak capacity for flows from future reclamation plants. The 58
mgd represents about 19 percent of the City's original grant
eligible capacity of 300 mgd. According to the City's project
manager, the capacity was reserved "to maintain some level of
flexibility in determining the ultimate configuration of our
sewerage system upgrade."
Both the Region and the state determined that flows from the
reclamation plants represented future flows and not existing
flows. The City apparently agreed, and its project manager
stated, in a memorandum to the Region, that "...one can
assume...that the [58 mgd] designated for the South Bay Outfall
is future flow."
Moreover, the City's plan to use the outfall for future water
reclamation plants rather than for flows from the planned South
Bay treatment plant was inconsistent with the approved grant
agreement. The grant approved facilities plan, design drawings,
and specifications were all based on a land outfall project which
would transport 370 mgd of peak flows from the South Bay plant.
This included a 300 mgd of eligible flow and 70 mgd of ineligible
flow. The provisions of 40 CFR 35.2218 allow EPA to annul a
grant when it is not completed in accordance with the
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requirements of the facilities plan, design drawings, and
specifications. This action appears justified in view of the
City's failure to comply with the grant objectives.
Future Project Segments Should Not Be Funded
It appears that the cost of
the eligible portion of the
land outfall grant will not
utilize all of the grant
funds. The City wants to use
the Federal and state grant
funds remaining after
completion of the land outfall
to construct other segments of
the project namely, the land
outfall extension and the
ocean outfall. In our
opinion, the Region should not
agree to such a use of the EPA
grant funds.
A letter from the City to the
state, dated August 25, 1992,
conveyed the City's request
and stated that:
j j = Proposed Facilities
... It has been determined that the total grant funds
identified for the South Bay Land Outfall (SBLO) will
not be utilized for this project. It is our estimate
that approximately $4 million3 will be remaining in
the...grant...when the outfall project is completed.
As you are aware, the City has conveyed to...EPA,
...IBWC,...and (the) State...its desire to continue
participation in the South Bay Land Outfall Extension
and South Bay Ocean Outfall. We are now requesting
that the City be allowed to use the remaining SBLO
grant funds for continued participation in either of
the remaining two phases.
As previously explained, the City does not plan to construct the
South Bay plant. Thus, it will have no grant eligible flow for
the land outfall. Accordingly, we believe it would be a serious
misuse of any remaining grant funds to fund other segments of the
project.
We estimate that around $10 million of Federal and state funds will be
left in the grant if it is not annulled.
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Premature Grant Award
We concluded that the ineffectiveness of the EPA grant to
accomplish its intended purpose is due to the fact that the award
was premature. In an effort to obtain available EPA construction
grant funds which were to expire in FY 1988, the City decided to
participate in the IBWC's outfall project. In February 1988, the
City Manager reported to the City Council that the project would
have to be "fast-tracked" to obtain a grant. The report further
stated:
...if either the Federal or State share [grant] is not
approved, it is unlikely the City could proceed with
this [outfall] project...A major reason for
implementation of the Big Pipe [outfall] project now is
the ability to make use of the last available funds in
the State Clean Water Grant Program. After fiscal year
1988, no grant .funding will exist.
The "fast-track" process resulted in a project that was not
clearly thought out or the final objectives decided. The City
relied on a number of assumptions in order to qualify the land
outfall for funding. According to a January 1988 facilities
plan, the City assumed that a secondary treatment plant would be
built in the South Bay. However, when the $11.8-million Federal
grant was awarded in March 1989, the South Bay secondary
treatment plant was still in the conceptual stages. This is
evident from subsequent awards. For example:
• In May 1990, before award of the construction contract for
the outfall, the City obtained a consultant's report
recommending that the size of the South Bay plant be reduced
from a peak flow of 370 mgd to only 77 mgd ;
* In May 1992, the City cancelled its plans to build the
South Bay plant altogether, and decided to pursue a waiver
from the secondary treatment requirements of the Act.
RECOM3VIENDATIONS
We recommend that the Regional Administrator advise the City
that:
1. Grant no. C061092-210, for construction of the South Bay
land outfall, will be annulled unless the South Bay
secondary treatment plant is constructed in accordance with
the approved facility plan.
4Project Report for Modifications to the Metropolitan Sewerage System,
Executive Summary, May 1990.
10
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2. The City's plans to utilize the available land outfall
capacity to accommodate future flows from other projects
will not be eligible for grant funding, since they do not
represent existing flows.
3. The remaining project segments, namely the South Bay land
outfall extension and ocean outfall, are ineligible for
grant funding, since they exceed the existing needs of the
City.
MANAGEMENT COMMENTS AND PIG EVALUATION
Summary
On March 1, 1993, we issued a position paper, summarizing the
results of our special review, to both the Region and the City
for comment. The Region and the City disagreed with our
conclusion that the South Bay treatment plant would not be built.
They said the court may order such construction if it affirms the
consent decree. While we acknowledge these comments, it should
be pointed out that the City's actions to date have not shown an
intent to abide by the consent decree, although it agreed to its
terms over three years ago. Rather, within the last year, it has
formally adopted a resolution to cancel construction of the South
Bay secondary treatment plant and, thus, will have no use for the
outfall consistent with the approved grant project. It remains
our position that the grant should be annulled if the South Bay
plant is not constructed.
The City's complete comments are included as an attachment to
this report. A recap of the City's and the Region's comments are
presented below, along with our evaluation of their comments.
The City disagreed with our conclusions and indicated that we did
not recognize the complexity of the project or the "very
important" commitments made by the parties involved. It claimed
that the project was needed to solve long-standing border
sanitation problems and, without the City, the project could not
move forward. The City explained that the project was unique
because of the number of agencies involved and the severity of
the water quality problems in the Tijuana River Valley. In
response to our specific concerns, the City commented that:
• . . .The City does not agree that it has
violated the grant condition requiring the
construction of the South Bay secondary
treatment facility; it is simply too early to
say. A final decision cannot be made until
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the 19 month stay...for the consent decree is
exhausted.
• ...The outfall...may not be used until
2025...This is subject to change through the
consent decree process. The City's planning
does allow for different time frames...There
is the possibility that the outfall could be
carrying existing flows much earlier.
• ...The state and EPA knew, since the City's
planning study had not yet been completed,
that the outfall as designed could be
oversized for San Diego flows. However, they
recommended that the joint project proceed
due to the need to provide a solution to the
longstanding border sanitation problem and
the economical and environmental advantages
of constructing a single outfall versus
constructing two separate outfalls at
different times.
• ...On July 19, 1989, the City, EPA and State
met to discuss changes in the City's
flow...As a result of this meeting it was
determined that even if the original flow
assumptions were not realized that grant
participation in this project was still
reasonable. This was based on a comparison
which showed the grant eligible cost for the
joint EPA/City outfall versus the cost of a
City only outfall to be the same. If the
City were to construct an outfall for the
then existing 1987 South Bay flows, the
minimum size would be 66-inches with a
capacity of 41 mgd, average dry weather
flow...Thus, the actual minimum flow to
maintain the current grant eligibility should
be 41 mgd average dry weather flow, not the
...average dry weather flow stated in the
Position Paper.
Region's Comments
The Region disagreed with our conclusion that San Diego has
abandoned its plans to build a South Bay treatment plant for the
following reasons:
The court has ordered the City to comply with the
consent decree...while the court considers whether to
finally approve the decree...The City has only obtained
a one year delay in its obligations to construct
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facilities not provided for in the Consumer's
Alternative. The Department of Justice, at the request
of EPA, is currently pursuing an action in the Ninth
Circuit Court to compel the City to honor its
commitments in the consent decree...unless San Diego
can propose [a]...plan that fully complies with the
Clean Water Act.
The Region did not believe that the grant should be annulled at
this time because "...many issues still must be resolved before
we can make a final decision on grant eligibility.
Therefore...it would be premature to make any modifications to
the grant." The Region concluded that any recommendations should
be delayed until the final audit of the project is made.
Regarding outfall capacity the Region said that it:
...Decided that it was appropriate to award a grant
that would fund enough City capacity in the Big Pipe
[land outfall] to cover flow requirements of any of the
treatment alternatives being considered.
QIG Evaluation
We acknowledge the comments provided by the City and the Region.
However, it remains our position that the City has, by its
actions, abandoned its plans to build the South Bay secondary
treatment plant. It has demonstrated little interest in
complying with either the special grant condition or the consent
decree. As such, the land outfall will not be used for the
purposes intended by the grant. Accordingly, we continue to
recommend that the grant be annulled, unless the City initiates
action to construct the South Bay treatment plant in accordance
with the approved facility plan.
The City commented that the project was complex and involved
"very important" commitments made by the parties to the project.
While we acknowledge the City's comments, the binding commitments
between EPA, the state, and the City are spelled out in the grant
agreement. By signing this agreement and accepting the grant,
the City agreed to build a South Bay secondary treatment plant
with an average flow of 195 mgd. As detailed in this report, the
City has clearly documented its intent not to build the plant.
We are fully aware that the court must eventually rule on the
consent decree and its modifications. However, the consent
decree was "agreed to" by the City over three years ago, and the
City has not abided by its terms, nor has the court required it
to. In fact, the City has declared its intent not to follow the
consent decree.
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Regarding the City's comments relating to the outfall capacity,
the outfall was designed for average City flows of i95 mgd, not
41 mgd. The grant agreement was awarded on the basis of an
average flow of 195 mgd. According to 40 CFR 35.2214, the
recipient is required to complete the project according to the
facilities plan, design drawings, and specifications.
The City stated that it was more cost effective to construct a
joint land outfall, rather than the City constructing its own
outfall. Our review never discussed the cost effectiveness
issue, and we have no disagreements that a joint outfall would be
more economical. However, our concern is with the fact that -the
EPA portion of the joint (land outfall) would never be utilized.
This would not be an effective use of Federal funds.
The Region requested that we delay our recommendations until
final audit. We cannot accept the Region's request. To wait
until the City submits its final claim could merely postpone
regional action on the problems identified in our review. We
believe that the City must be put on timely notice that the
construction grant for the land outfall will be annulled if the
grant objectives are not fulfilled.
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CLEAN WATER PROGRAM
for Greater San Diego
Flret Interstate Plaza • 401 "B" Street, Suite 710 • San Diego. CA 92101-4230
Phone (619) 533-4200 • Rax: (619) 5334267
i
March 12, 1993
ATTACHMENT
In reply, please refer to
Chronological Number:
CWP-
108550
Geary H. Pena
United States Environmental Protection Agency
Office of the Inspector General for Audits
801 I Street, Room 407
Sacramento, CA 95814
SUBJECT: South Bay Land Outfall Project, EPA Construction Grant 1092-210
Response to Position Paper
REF: Your letter of March 1, 1993, Summarizing the Results of the Early Warning
Review of the City of San Diego's South Bay Ocean Outfall
Dear Mr. Pena;
The Clean Water Program is in receipt of the above referenced letter. As per your request, this
correspondence responds to the findings listed in the position paper for the City of San Diego,
South Bay Land Outfall Construction Grant No. C061092-210.
RESPONSE #1 This response addresses the issues raised regarding the May 1992 vote by the
City Council and your interpretation that the City has abandoned its plans to construct the South
Bay secondary treatment facility. This interpretation is incorrect. A final decision regarding
the outcome of the City's overall sewage treatment program cannot be made until the 19 month
stay that extends the milestones for the consent decree is exhausted. Therefore, at this time, the
City does not agree that it has violated the grant condition requiring the construction of the South
Bay secondary treatment facility; it is simply too early to say.
RESPONSE #2 As stated in your findings, the planned use for the outfall, given the current
situation, means the outfall may not be used until 2025. As we have stated, this is subject to
change through the consent decree process. The City's planning does allow for different time
frames that can impact the 2025 schedule; there is the possibility that the outfall could be
carrying existing flows much earlier.
15
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108S50
Geary H. Pena
United States Environmental Protection Agency
Response to Position Paper
March 12, 1993
Page 2 of 3
RESPONSE #3 The third issue that we would like to respond to is your interpretation of the
amount of sewage to be transported in the outfall. At the time that the State was reviewing grant
eligibility for this project, the City was in the process of studying alternatives for the upgrade
of our sewage treatment system to secondary treatment standards. In determining the grant
eligibility, the State assumed a worst case flow scenario in that all Metro sewage flows would
have to be processed in the South Bay while the Point Loma plant was converted. The reason
for this was to provide capacity to cover all possible waste water management alternatives. The
State and EPA knew, since the City's planning study had not yet been completed, that the outfall
as designed could be oversized for San Diego flows. However, they recommended that the joint
project proceed due to the need to provide a solution to the longstanding border sanitation
problem and the economical and environmental advantages of constructing a single outfall versus
constructing two separate outfalls at different times. Also, without the City, the SBLO would
not have been constructed as it would have exceeded OMB's budget for Tijuana flows.
On July 19, 1989, the City, EPA and State met to discuss changes in the City's flow. The
City's draft framework plan had been, by that time, released and the City's planned maximum
flows in the South Bay were greatly reduced. There was considerable discussion on the issue
of downsizing the SBLO and the effect that this would have on the grant funding and other cost
sharing proposals.
As a result of this meeting it was determined that even if the original flow assumptions were not
realized that grant participation in this project was still reasonable. This was based on a
comparison which showed the grant eligible cost for the joint EPA/City outfall versus the cost
of a City only outfall to be the same. If the City were to construct an outfall for the then
existing 1987 South Bay flows, the minimum size would be 66-inches with a capacity of 41
mgd, average dry weather flow (see September 8, 1989 SWRCB memo to file). Thus, the
actual minimum flow to maintain the current grant eligibility should be 41 mgd average dry
weather flow, not the 195 mgd average dry weather flow stated in the Position Paper.
ADDITIONAL COMMENTS: As has been briefly mentioned, the SBLO project was a project
of considerable importance to the EPA, the State, the IBWC and the City. From the beginning,
the City's position has been to cooperate with all agencies involved to collectively respond to
the very serious problem of border water pollution. All parties acknowledged that, without the
City's participation, this project could not move forward. Therefore, the City decided to
purchase a pro-rata share in SBLO before our final wastewater plan was formalized.
As is indicated by the special grant allocability rules approved by EPA Headquarters for this
project (Headquarters deviation dated 2/21/92), the SBLO Step 3 grant is very unique, due to
the number of agencies involved, and the severity and history of the water quality problems to
be corrected in the Tijuana River Valley. The City is extremely concerned about EPA's
apparent desire to reverse a previous contractual commitment to fund the SBLO Step 3 grant.
In summary, we feel that the EPA's position paper does not take into account the complex
history of the project and the very important commitments by all parties involved. Therefore,
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108550
Geary H. Pena
United States Environmental Protection Agency
Response to Position Paper
March 12, 1993
Page 3 of 3
the City formally requests that these comments on your position paper be enclosed with your
final audit report should one be published. If for some reason you cannot honor our request,
please inform us in writing of the reasons and then provide a mailing list for the final audit
report so that we may transmit our comments directly to the recipients.
We appreciate the opportunity to review and comment on your office's position paper. Should
you have any questions please do not hesitate to contact me at (619) 533-4201; Ann Sasaki,
Senior Project Manager, at 533-4211; or Richard Enriquez, Grants Administrator, at 533-4273.
Sincerely,
KD. SCHLESINGER
Program Director
FDS:RJE:bm
Rje\bdb30302.1lr
cc: Ron Beeler, EPA, Region IX
John Ong, EPA, Region IX
Ann Sasaki
Richard Enriquez
L
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DISTRIBUTION
Headquarters Office
Inspector General (A-109)
Assistant Administrator for
Administration and Resources Management (PM-208)
Director, Resource Management Division (H-3304)
Director, Grants Administration Division (PM-216F)
Headquarters Library (PM-211A)
Region 9
Regional Administrator
Director, Water Management Division
Audit Followup Coordinator
California State Water Resources Control Board
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