/JV
STATE WATER POLLUTION
CONTROL AGENCIES
EPA REGIONAL OFFICES
EPA HEADQUARTERS
HUPORT Of
TASK FORCE
December 1975
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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REPORT OF
THE DECENTRALIZATION
TASK FORCE
DECEMBER 1975
DANIEL L. PETKE, Chairman
Office of Water Plamrin* and Standards
WILLIAM ADAMS. JR.
Maine Department of Environmental Protection
BILL DENDY
California Water Resources Control Board
THOMAS FRANCOS
Wisconsin Department of Natural Resources
PATRICK (iODSIL
Water Division. Reftion Mil
RICHARD HAGER
Office of Regional
and Intergovernmental Operations
PATRICK HARVEY
Retfion II
PATRICIA O'CONNELL
Office of Water Enforcement
TRUMAN PRICE
Office of Planning and Evaluation
EDWARD RICHARDS
Office of Water Planninji and Standards
RALPH SULLIVAN
Office of Water Program Operation!)
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Preface
During the past several years, significant progress has been made
toward achievement of the goals and objectives of the Federal Water
Pollution Control Act (Public Law 92-500) as a result of the collective
efforts of the States and EPA. Not only have many specific water
quality problems been solved, but much has been accomplished toward
building an effective joint Federal/State program to deal with the
difficult and complex challenges which lie ahead.
In establishing the Decentralization Task Force, the Assistant
Administrator for Water and Hazardous Materials emphasized the increas-
ingly crucial role which States will play in future years and recognized
the potential need for changes in the basic EPA/State relationship as
the States incrementally assume the major operational role in carrying
out the provisions of P.L. 92-500. To promote the continuing evolution
toward increased State participation in the joint EPA/State program,
the Task Force was charged with the responsibility for conducting an
in-depth evaluation of EPA/State relations and for developing specific
recommendations.
Because our mandate was limited, the Task Force deliberately
restricted its efforts to evaluation of the EPA/State relationships in
the water pollution control program. Much of what we learned and have
to recommend, however, may well apply to other environmental programs
and to relationships between other levels of government.
More than 130 interview sessions were conducted with officials in
20 States, 7 EPA Regional Offices and EPA Headquarters as the Task
Force gathered the information and insight which provide the basis for
the findings and recommendations contained in this report. We were
encouraged by the enthusiastic reception of those we interviewed and
wish to express our sincere appreciation for the many comments and
constructive suggestions which we received.
While the Task Force found evidence of significant progress toward
increased State participation in the joint EPA/State water program, we
also detected some loss of momentum and relative lack of commitment to
further progress on the par-t of both EPA and the States. Clearly, the
full potential of program decentralization has not yet been achieved.
And because many additional opportunities exist to build upon past
accomplishments, EPA and the States must not allow themselves to become
complacent and be satisfied with what has been accomplished thus far.
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As might be expected, given the rapid shifts in responsibility
which have occurred during the past several years and the dynamic
nature of the program which P.L. 92-500 outlines for future years,
a need was found for several changes in the ways in which EPA and
the States relate to each other. Effecting these necessary changes
will continue as a major challenge for each of the participants in
the water program. Failure to meet this challenge will result in an
unfortunate institutionalization of the remaining inefficiencies in
the EPA/State relationship.
Implementation of the Task Force's recommendations will not
result in immediate resolution of the problems which impede a more
effective Federal/State program. But our proposals, if implemented,
will give new impetus to the continuing effort to build more produc-
tive relationships which, in turn, will lead to greater results in
our combined efforts to protect and enhance our Nation's waters.
Uo^Jl L.
Daniel L. Petke
Chairman
Decentralization Task Force
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Contents
Section Page
Executive Summary 1
I. Introduction . , ... 8
II. The Concept of Decentralization ...., 11
III. Policy Evolution and Progress Toward Decentralization.. 17
IV. Attitudes Toward Decentralization 23
i
V. Constraints and Opportunities ... 30
VI. The Need for Organized Follow-up > 42
VII. Recommendations 43
Appendices ,
A - Recommended Administrator's Statement and Action Plan
on Decentralization 49
B - Memorandum of August 4, 1975, Establishing the
Decentralization Task Force .,... 53
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Executive Summary
Last August, the Assistant Administrator for Water and Hazardous
Materials established the Decentralization Task Force, composed of
several senior State environmental protection agency officials and
representatives of the EPA Regional Offices and Headquarters. In
doing so, he stressed the continuing need for increased State partici-
pation in the joint EPA/State water pollution control program and
recognized the necessity for finding additional means to build State
capacity to incrementally assume the major operational role in
carrying out the provisions of Public Law 92-500. He specifically
charged the Task Force to "conduct an in-depth evaluation of existing
EPA/State relations in the water program" and to "develop specific
recommendations."
In carrying out these responsibilities, the Task Force visited
20 States, 7 Regional Offices, and most Headquarters Offices and
conducted more than 130 interview sessions. Based on the information
obtained during these interviews, the Task Force has formulated the
findings, conclusions and recommendations which are summarized below.
Major Findings
Progress Toward Decentralization.
1. A great majority of the States have accepted the basic
program framework outlined in P.L. 92-500 and are
working cooperatively with EPA to achieve the goals of
the Act.
2. The administrative structure and management process
linking the States, the Regional Offices and EPA
Headquarters -- although in need of some improvement --
is in place and is functioning well in most instances.
3. Delegations of-program functions have been made to a
. large number of States, and these are working effectively
in a majority of cases.
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Obstacles to Further Decentralization.
4. Given the significant variability among State water
programs, there is no general agreement regarding speci-
fic future decentralization goals, and there is great
disparity in opinion concerning the ultimate division of
responsibility and labor between EPA and the States.
5. Progress toward decentralization in the form of formal
program delegations (e.g., NPDES) has reached a point
of diminishing returns, as there are few additional
States which have the staff capacity to assume this
type of large scale delegation.
6. State and Federal appropriations for support of State
water pollution control programs have leveled off and
the prospect for significant funding increases from
these sources through FY77 is minimal. Indeed, many
States are facing the prospect of funding cutbacks and
some States stated that any additional Federal funds
would be used to supplant State funds if not expressly
forbidden.
7. The lack of sufficient funds to increase State staff is
viewed by many States as the single most important
obstacle to a more effective division of responsibility
and labor between EPA and the States.
8. Some Regional Office staff have serious doubts regarding
the capacity of many State agencies to operate an effec-
tive program, and EPA Headquarters managers, while
advocating the need for further decentralization, have
not provided realistic, specific policy guidance to
achieve that end.
9. Many States view the "partnership" currently offerred to
them by EPA as an unequal one in which "the States do all
of the work and EPA retains all of the authority and
takes the credit."
10. EPA and the States, collectively, have failed to establish
the necessary program management systems to implement the
water program in a decentralized fashion. This failure is
the source of many of the attitudinal problems which exist
between EPA and the States.
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Opportunities for Further Progress.
11. Most State and EPA program managers support an incremental
shift of program authority and responsibility to State
agencies.
12. The State agencies are prepared, with some reservations,
to use additional funds, such as may become available
from congressional approval of the Cleveland-Wright concept,
to expand their staffs and to build capacity for further
decentralization.
13. There is considerable duplication of effort between the
Regions and States (e.g., State and EPA review of plans
and specifications, EPA review of draft State permits, etc.)
which could be greatly reduced, thereby freeing up scarce
resources for other tasks.
14. Many States have overlooked opportunities for supplementing
their scarce resources by involving other Federal, State
and local agencies more directly in their water quality
management programs and thus benefiting from the significant
technical expertise and forms of technical assistance
available to them.
15. With regard to supplementing scarce State resources, EPA
itself -- particularly the Regions -- could do much more
in terms of making available to the States its considerable
technical expertise through various technical assistance
mechanisms.
16. Most State officials -- and many EPA staff -- believe that
EPA could take better advantage of individual State capa-
bilities, authorities and procedures by modifying its
regulations, policies and guidelines to incorporate more
flexibility for the States.
Conclusions
1. Despite significant past progress and a general receptivity
to decentralization among State and EPA staff, some loss of
momentum and a relative lack of commitment to further
progress appears to be developing.
2. The States' view of lack of sufficient funds to increase
State capacity as being the major obstacle to further
progress toward decentralization is only partially valid.
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Many opportunities (see findings above) for building
additional State capacity to assume a more significant
role in the 'joint EPA/State program exist — even in
the absence of significant increases in funding.
3. The advantages associated with further decentralization of
the water program far outweigh the disadvantages, and the
potential benefits to both EPA and the States far outweigh
the costs associated with further efforts to realize the
full potential of program decentralization.
4. Given the developing loss of momentum toward further
decentralization, the significant opportunities for
further progress and the favorable benefit/cost
relationship, what is needed now is "a shot in the arm."
New impetus could be given to the continuing effort to
build more productive relationships by taking several
specific actions designed to overcome many of the
problems which impede a more effective Federal/State
program (see Task Force recommendations below.)
5. The problems which impede further progress toward
decentralization will not be resolved without the
cooperation of each of the participants in the water
program, nor will they be resolved overnight. It is
important, however, that a process be established to deal
with these problems and that specific mechanisms for
follow-up be built into the process.
Recommendations
1. The Administrator should issue a statement on
decentralization to the director of each State water
pollution control agency and to all EPA managers and staff
associated with the national water pollution control
program. The Administrator's statement (see recommended
statement in Appendix A) should enunciate clearly the
Agency's policy with regard to decentralization of the
water program and should include an Agency action program,
based on the recommendations of the Task Force which are
designed to resolve the problems which impede progress
toward further decentralization. The action program
should identify specific tasks to be accomplished and
should assign specific responsibilities for accomplishing
those tasks.
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2. A process, which includes State participation, should be
established to determine the Agency's policy regarding
the current.and future EPA overview role. The process
should result in Agency policy (and procedures if appro-
priate) on matters such as:
* State participation in the development of proposed
regulations and guidelines.
I
* State authority to make decisions and take actions
commensurate with their program responsibilities.
* Regional Office and State participation in the
definition of minimal, essential reporting
requirements.
* Mutual EPA/State accountability in program
evaluation.
* Reprogramming of EPA staff as States assume the major
major operational role.
The process should also result in periodic updating of the
Agency's action program for decentralization in order to
reflect new policies on decentralization and EPA/State
experience in dealing with the problems impeding
decentralization.
3. EPA should continue, on a high priority basis, to seek
additional funding for support of State programs. In doing
so, the Agency should emphasize in its relations with the
Office of Management and Budget and the Congress the
benefits which would accrue with further program decentrali-
zation. Primary attention should be focused on measures
such as passage of legislation which incorporates the
Cleveland-Wright concept, increased Section 106 State
program grant funding, and realistic funding under Section
208(f) to support State (and areawide) water quality
planning and management programs. In addition, serious
consideration, should be given to proposing legislative
amendments which would inhibit or preclude decreases in
State funding as Federal funding is increased.
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4. Current EPA policy and program guidance (and possibly some
regulations) should be reviewed and modified as necessary
to accommodate and promote further incremental delegation
of program responsibilities to the States. In doing so,
program managers in each water program area should consider
matters such as:
* Ways to take better advantage of individual
State capabilities, authorities and procedures
by providing additional flexibility to the
States for conduct of their programs.
* Definition of appropriate State and EPA roles
and responsibilities which can be tailored to
individual State capabilities (rather than
national program models).
* Increased use of program evaluation and spot
checking (in place of redundant EPA review of
State work) to reduce duplication of effort.
* Identification of improved output measures,
activity indicators and standards of performance
(for use in the Agency's MBO-FPRS system) to
better reflect the variability among States of
water quality problems and approaches for
solution of these problems.
5. Each Regional Office and State should be requested to
prepare annually a joint EPA/State action plan for
decentralization as part of the Regional workplans and
Section 106 State program submissions. These action
plans should identify joint decentralization objectives
and should include items such as:
* A description of how the Region intends to build
additional State capacity to take on additional
program responsibilities over time. Financial
assistance, improved training programs, EPA
technical assistance, and assignment of EPA staff
to State agencies through short-term details, IPA
assignments,-colocation, etc. should be considered.
* A description of how the Region and States intend
to further minimize duplication of effort and
determine the proper utilization of joint EPA/State
resources. The Regions and States should seek to
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establish a clear definition of their respective
roles and responsibilities in the conduct of the
FY77 water program and should include a listing of
the written agreements or memoranda of understanding
to be negotiated in each functional area.
* A description of what the Region and States plan to
accomplish in the way of improving their joint program
management and reporting systems in order to assure
that the water program is implemented effectively and
efficiently in future years. Development of perform-
ance standards for each functional area of the water
program, improved mechanisms for periodic program
evaluation, and development of reporting mechanisms
which are tailored to the individual procedures and
needs should be considered.
6. The Regional Administrators should report semi-annually to
the Deputy Administrator on progress achieved in implement-
ing the EPA Region/State decentralization action plans. The
Deputy Administrator, in turn, should present a summary of
these progress reports to the State/Federal Water Programs
Advisory Committee (commonly known as the "Committee of Ten")
for their consideration and recommendations.
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I. INTRODUCTION
The Decentralization Task Force was established by the
Assistant Administrator for Water and Hazardous Materials in August
of this year. The Task Force was asked to provide EPA with an assess-
ment of the current state of EPA/State relations in the water pollution
control program and to recommend to the managers of the Agency ways
to promote a further incremental shift of program authority and
responsibility from EPA to the State agencies (see Appendix B for
the memorandum establishing the Task Force).
In authorizing the Task Force, the Assistant Administrator
stressed the increasingly essential role which the States will play
in the control and abatement of water pollution under P. L. 92-500
and recognized the potential need for changes in the basic EPA/State
relationship as the States develop the capacity to assume the major
operational role in the program. He foresaw the need for EPA to
devolve itself of many of these operational responsibilities and to
adjust its policies to play an, as yet undefined, overview role.
The shift in responsibilities between EPA and the States has been
evolving over the past several years and has now reached a point where
basic decisions regarding the future development of the relationship
are required. It is important and appropriate that EPA and the States
now consider changes in the ways in which they relate to each other.
In order to bring together a group with a wide range of perspectives
and experience in management of the water pollution control program,
the directors of three State agencies and EPA staff from the'Regional
Offices and Headquarters were asked to participate as members of the
Task Force. The individuals who made up the group were:
Daniel L. Petke, Chairman
Chief, State Management Branch
Office of Water Planning and Standards
William Adams, Jr. Patrick Harvey
Commissioner Water Coordinator
Maine Department of Region II
Environmental Protection
Bill Dendy • Patricia n'Connell
Executive Officer Special Assistant to the
California Water Deputy Assistant Administrator
Resources Control Board Office of Water Enforcement
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Thomas Frangos Truman Price
Assistant Secretary Senior Program Analyst
Wisconsin Department of Office of Planning and Management
Natural Resources
Patrick Godsil Edward Richards
Chief, Planning Branch Chief, State Programs Section
Water Division Office of Water Planning and
Region VIII Standards
Richard Hager Ralph Sullivan
Office of Regional and Program Counselor
Intergovernmental Office of Water Program Operations
Operations
In addition to the efforts of the Task Force members, several other
people played important roles in developing the Task Force report.
Two State officials, Robert Krim from the Wisconsin Department of
Natural Resources and Edward Anton from the California Water Resources
Control Board, participated in the interview sessions and made valuable
contributions to the drafting of the report. Margaret Davis and
Bruce Rosinoff of the State Management Branch did much of the staff
work and research for the report. Towana Hill, also of the State
Management Branch, typed and proofread the manuscript.
To gather the information and insight required as the basis for
its assessment and recommendations, the Task Force was divided into
three teams which visited a total of 20 States, 7 of EPA's Regional
Offices and EPA Headquarters. More than 130 interview sessions
were conducted with State agency officials, State legislators and
budget office staff and with EPA officials at all levels.
In selecting the States to be visited, care was taken to
include agencies of different size and varying degrees of program
responsibility and sophistication. Particular attention was given
to inclusion of States which have harmonious relations with the
EPA Regional Office and those where significant difficulties
have been experienced. California was studied carefully, because
its recent assumption of responsibility for virtually all municipal
facilities functions qualifies it as a possible prototype for future
EPA/State relations, with important implications for other States.
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The States and EPA Regions visited by the Task Force were:
Massachusetts
Vermont
Connecticut
Tennessee
Georgia
Mississippi
Illinois
Michigan
Minnesota
Montana
Wyoming
Utah
Texas
Louisiana
Mew Mexico
Alaska
Idaho
Washington
Oregon
California
Region I - Boston Region VI - Dallas
Region IV - Atlanta Region VIII - Denver
Region V - Chicago Region IX - San Francisco
Region X - Seattle
The Task Force concentrated its assessment on those aspects of
EPA/State relations which seemed most pertinent to a determination of
the most effective division of responsibility and labor between EPA
and the State agencies. Because of time limitations, Task Force
attention was directed primarily toward the NPDES and municipal
facilities functions and less toward functions such as water quality
management planning and ambient monitoring, which are already highly
decentralized.
The extensive discussions of Task Force members with a wide
selection of State and EPA officials revealed a general concensus that
decentralization is essential to the success of the water pollution
control program under present conditions of severely limited resources.
There was agreement that changes are necessary in the way EPA and
the States do business with each other, if the decentralization effort
is to move into the additional functional areas and if the shift of
major program responsibility and authority is to continue.
The major portion of the report discusses the need for changes
in the EPA/State relationship and suggests possible avenues for
innovation and modification. The recommendations are a statement of
the Task Force's best judgement as to how to set in motion a process
which can in the next several months and years result in major improve-
ments in EPA/State relations, which in turn will facilitate the
transition to a more effective division of responsibilities between
EPA and the State agencies.
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II. THE CONCEPT OF DECENTRALIZATION
Early in the course of interviewing State and EPA officials, it
became apparent to the Task Force that the term, "decentralization,"
had many different meanings to different individuals. Specifically,
there was uncertainty and confusion regarding the objectives of and
methods to achieve decentralization. Consequently, the Task Force
felt compelled to develop and present its view as to what the term,
"decentralization," means and implies.
This section of the report states the Task Force's view of the
decentralization concept and its applicability to the national water
pollution control, program. The advantages and disadvantages of this
approach to managing the national program are then explored.
Background
One of the major challenges of P.L. 92-500 is the management task
of administering a State and Federal program to protect and enhance
water quality in a manner which is sufficiently consistent nationally
to satisfy the provisions of the Federal Act, and yet is flexible
enough to adapt to the conditions and programs in 56 different States
and territories. Implementation of the Act thus far has demonstrated
the difficulty of this task.
Perhaps one way of understanding some of. these problems is to
recognize that EPA is compelled by the Act to take certain actions --
the issuance of permits and the processing of Federal grants for the
construction of municipal waste treatment facilities, for example -- in
accordance with specified deadlines and procedures. Furthermore, EPA
is compelled by P.L. 92-500 and by resource constraints to carry out
many of the specific provisions of the Act by inducing State agencies
to assume a major operational role in the joint EPA/State program.
The States, on the other hand, have programs which predate
P.L. 92-500, which are governed by State law, and which are affected by
the physical, political and institutional circumstances of each State.
In this context, and in the eyes of individual States, EPA's priorities
may sometimes appear to be incorrect and its procedures may often seem
to be inappropriate.
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These two perspectives -- the State and the national -- inevitably
create tensions and disagreements between EPA and the States. However,
through the process of program decentralization, operationally effective
program policies can be determined and carried out by both EPA and the
States. As a result, friction can be minimized and the improved
cooperation can lead to a significant increase in productivity.
The Task Force View of Decentralization
To realize the benefits of program decentralization will require
the effective utilization of the staff resources of both EPA and the
States through additional dispersion of program functions and authority
to the States. Such an approach -- decentralization -- can be employed
effectively only in those situations where each unit of government:
* understands its responsibilities and its relationship
with other units;
* understands and accepts the goals or objectives of
P.L. 92-500;
* has the opportunity to determine the methods by which
common goals will be reached (i.e., participation in
the determination of needed legislation and drafting of
regulations and-guidelines);
* is willing and able to transfer and/or accept respon-
sibility and authority;
* has adequate resources to carry out its responsibilities;
* is mutually accountable to other involved governmental
units; and
* maintains a basic level of trust.
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In an attempt to- apply these principles to the current water
pollution control program, the Task Force devised the following
statement of the decentralization concept for the purpose of estab-
lishing a framework for the remaining portion of the Task Force report:
"Decentralization of administration of the national
water pollution control program to the States con-
sists of assigning responsibility and authority for
decision-making and circumstantial interpretation
of P.L. 92-500 and associated regulations to indi-
vidual States as rapidly as possible and to the
extent that each is reading, willing and able to
assume such responsibilities. The purpose of this
shift in authority and responsibility is to achieve
the most effective division of program functions
between EPA and the States. To accomplish this divi-
sion of functions, EPA recognizes the need to give
the States a greater role in determining policy, so
as to achieve greater equality and mutual account-
ability in the Federal/State partnership. Further,
EPA recognizes that various elements of the national
program can be administered in a non-uniform manner
and still accomplish the specific and general
objectives of P.L. 92-500. Achieving decentraliza-
tion will require a substantial reevaluation of
regulations, definitions, guidance, etc., which have
previously been issued by the Administrator."
This statement is designed to address State concerns that they
are doing more and more of the work, while EPA retains most of the
authority to make policy decisions. These State concerns, in general,
center on the State view that the current "partnership" is unequal,
particularly in the area of policy determination.
The statement also calls for decentralization which is as rapid
and extensive as State willingness and capacity permit. This inter-
pretation of decentralization implies an EPA commitment to full-scale
implementation and gives the States assurance that EPA will not change
policy direction at some future date.
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The reference to the "most effective division of program functions"
implies that there will not be a joint effort to eliminate unnecessary
duplication of effort. The point regarding non-uniform administration
alludes to the great variety of pollution problems, the varying
political and social conditions among the States, and the need to
administer pollution control programs in a flexible manner which takes
these variations into consideration.
The State role implied in this statement is entirely consistent
with Section 101(b) of the Act which says, "It is the policy of the
Congress to recognize, preserve, and protect the primary responsibili-
ties and rights of States to prevent, reduce, and eliminate pollution,
to plan the development and use including restoration, preservation,
and the enhancement of land and water resources, and to consult with
the Administrator in the exercise of his authority under this Act."
Advantages and Disadvantages
Because the purpose of the suggested policy toward decentralization
is to improve the effectiveness of the water pollution control program,
it is important to appreciate the advantages to be derived. Some of the
more important advantages are discussed below.
Improved, less arbitrary decisions. State personnel are in a
better position to take into consideration the economic, social,
environmental and institutional situations within their States when
developing solutions to water quality problems.
Increased State commitment. When State officials have more
authority and responsibility for the pollution control effort, they
will be more accountable to their citizens for the results of their
program. This should lead to greater public involvement and support for
the pollution control effort in each State.
Greater efficiency. Given the severe resource constraints in the
national program and the dim prospect for increased EPA staffing, it is
essential that inefficiencies be reduced to the maximum possible extent.
By eliminating unnecessary duplication of effort (e.g., Regional Office
review of State permits and -State-approved plans and specifications),
decentralization can result in greatly increased cost-effectiveness.
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Increased State cooperation. The transition to a more equal
partnership will increase State willingness to assume the respon-
sibility for additional program functions and will result in a
more effective division of responsibility and labor between EPA
and the States. '
Increased output. Expanded State authority, more active
involvement of State personnel in the "front line" decisions of
water quality management and minimal "second-guessing" by EPA will
result in improved morale of State staff which, in turn, will lead
to increased output.
These advantages, while not subject to quantitative measurement,
could make a major contribution to the overall success of the national
water pollution control program. However, a decentralized program
will require new administrative mechanisms for policy-making, more
effective lines of communication between the States, EPA's Regional
Offices and EPA Headquarters, and changed attitudes on the part of
EPA and State staff. If the policy suggested by the Task Force is
adopted and these necessary changes are not accomplished, serious
problems could arise. These are discussed below.
Reduction of management control. If a State receives responsibility
for program functions and does not have the right combination of suffi-
cient resources, a cooperative attitude and clear lines of authority to
EPA, the result could be an ineffective program which would be difficult
for EPA to improve or control.
Insufficient program information. A decentralized program, if not
carefully coordinated, could result in a variety of different management
information systems and inability on the part of EPA to obtain consis-
tent program statistics and information needed for reports to Congress
and the Executive Branch and for program planning.
Additional program coordination. Measures to increase the State
role in policy determination — for example, State participation in the
development of proposed regulations and guidelines -- will require
additional program coordination and an increased time period for policy
determination. The offsetting benefits, however, will be realized
through more realistic policies which are more acceptable to the State
agencies.
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In summary, the Task Force concluded that program decentralization
~ as defined in this section of the report — has much to offer as the
management approach for effective implementation of P.L. 92-500. The
basis for our conclusion is provided in subsequent sections of the report.
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III. POLICY EVOLUTION AND PROGRESS
TOWARD DECENTRALIZATION
For several years EPA has been pursuing a policy which calls for
the transfer of functions of the water pollution control program from
EPA to State agencies. However, this policy, which in this report is
termed "decentralization," has never been defined well by EPA nor has
progress toward implementing the policy been evaluated in an organized
manner. In this section the actions which, taken together, constitute
decentralization are discussed, and progress toward the goals of
decentralization is assessed.
The Current Policy
Progress toward decentralization of the water pollution control
program, as pursued by EPA since the passage of P.L. 92-500, has been
made because of many individual decisions and actions which have
resulted in the shift of program responsibilities from EPA to the States.
This progress was achieved in the absence of any comprehensive policy
statement which clearly established objectives and milestones. Rather,
it occurred as a pragmatic response to the requirements of the pollution
control effort outlined in P.L. 92-500 and was achieved under demanding
timing pressures caused by the deadlines contained in the Act.
Reponsibilities for some specific program functions (e.g., issuance
pf NPDES permits, review of plans and specifications of municipal waste
treatment facilities, etc.), which were initially carried out by EPA,
have been transferred to State agencies. These responsibilities
(mostly in the municipal facilities and NPDES programs) are now dis-
tributed unevenly between the States and EPA. Some State agencies are
carrying out a large majority of these operational functions, while EPA
continues to have the major responsibility for program activities in
other States.
Determinations regarding which program responsibilities to shift
to which State agencies have been determined, largely in an ad hoc
fashion, depending on such factors as State willingness and capacity.
Similarly, authority to decide which functions to decentralize and when
and how to transfer specific functions has been divided between several
program offices in Washington and EPA's ten Regional Offices. Conse-
quently, there is no central office in EPA Headquarters which determines
decentralization policies and oversees their execution. Coordination and
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general policy directives are provided in part by EPA's annual Operating
Guidance, and evaluation is made possible by information obtained peri-
odically through EPA's Formal Program Reporting System (FPRS).
Even though the Agency has not specifically defined the goals
and methods of decentralization, it has made a firm — although .
general -- commitment to such a policy. For example, the memorandum
transmitting the FY 76 Operating Guidance said, under the heading
"Partnership with State and Local Governments":
"We at EPA are committed to ensuring that the
State and local governments are able and will-
ing to accept a larger responsibility for
publication control problems, especially those
best handled by the governments closest to the
problems.
We are committed to providing financial and
technical asssistance to help in achieving this
objective. Our goal in FY 76 is to significantly
increase the role of the States in our regulatory
and construction grant programs. The Agency's
environmental objectives are not secondary to
this goal -- they are the results we seek from
the partnership."
Left unanswered as yet, however, are important questions concerning
the future extent of decentralization, EPA's willingness to transfer
authority along with responsibility, and the nature of EPA's overview
role in future years.
Progress to Date
Program decentralization to the States has occurred in a variety of
areas. And it is important to recognize that significant progress has
been made toward building the institutional foundations necessary for
program decentralization as well as to recognize the magnitude of
functions which have been transferred.
Institutional progress.. Since passage of P.L. 92-500, EPA has
expanded its water pollution control staff in its ten Regional Offices.
State agencies have also greatly increased their staffing. Policy is
determined primarily in EPA Headquarters and is transmitted in the form
of regulations and guidance to the Regional Offices and, through them,
to the States. Linkage between the States and the Regional Offices is
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established by the annual process of joint EPA/State program planning
and funding Section T06 grants to State agencies. In the course of
this process, funding 1s provided to the State agencies 1n return for
State commitments to carry out specific functions and to produce
specified outputs which are essential to the national water pollution
control program.
This administrative structure and the authorities and procedures
by which it operates are now functioning effectively. The combined
efforts of EPA and the States have accomplished the tasks required In
the implementation of PL 92-500. But new and heavier requirements are
now called for, particularly In the areas of'permit compliance and
enforcement, construction and maintenance of municipal facilities and
control of nonpoint source pollution.
To meet these requirements, all remaining Inefficiencies
(e.g., duplication of effort) In the EPA/State system must be elimi-
nated or drastically reduced, thereby making staff available to work
on other tasks. At the time, modifications must be made 1n EPA admin-
istrative authorities and procedures to provide the States authority
commensurate with their assumed operational responsibilities within the
limits of the Act. If these modifications are responsive to the State
concerns, then the continuing transfer of program functions to the
States will.be greatly facilitated. ' ,
Transfer of functions. Since the passage of P.L. 92-500, EPA has
sought to shift responsibility for discrete functions (e.g., operation
and maintenance manual review) or sets of functions (e.g., NPDES) to
State agencies through formal delegation agreements. This was an
effective way'of matching existing State staff capacity to program
functions in the municipal facilities and NPDES areas. In other areas,
such as planning and ambient monitoring, where States were given primary
responsibility in the Act and had relatively effective existing programs,
EPA deliberately refrained from developing a separate capacity and
concentrated instead on Improving State efforts through use of informal
agreements and coordinating actions.
The total number of formal delegations to date are listed 1n the
following table. These figures represent substantial progress toward
decentralization, particularly when the scope of the NPDES delegations
are considered. ••'.'•• \
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Total Number of Programs Delegated
Function Number of Delegations
SBA Loan Program 2
Change Order Review 29
Bid Tabulation Review 5
NPDES 27
Review of Operation
and Maintenance Manuals 35
Review of Plans
and Specifications 29
The Task Force found in the 20 States visited that virtually all
of the States with sufficient staff to assume the major functions,
identified by EPA as delegable, have already accepted most of these
responsibilities. The accompanying charts show the rate of delegation
from FY 74 to the present of the first three functions which EPA
sought to delegate. Although the planned targets for FY76 do not
indicate a dramatic slowdown in the rate of delegation, actual
accomplishments do appear to have slowed. Although it may be too early
to state conclusively that FY 76 will be the last year of rapid formal
delegation to the States, given the current resource situation, this
appears to be the case, If so, EPA can no longer continue to rely heavily
on this administrative mechanism for decentralization, until State
capacity expands significantly -- perhaps, as a result of new legislation
incorporating the Cleveland-Wright approach.
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PLANS AND SPECIFICATIONS REVIEW DELEGATIONS
30
I
o 20
I
«
i
FY 74 FY 75 FY 76
Fiscal Year
•As ol September 30. 1975
Planner! FY 76
OPERATIONS AND MAINTENANCE Dt LEGATIONS
9 25
1
a 20
FY 74
FY 75 FY 76
Fiscal Year
•As ot September 30. 1975
PlMinml FY 76
I '5
z
NPDES PROGRAM DELEGATIONS
FY 1973 FY 1976
FY 73 FY 74
•As of Oftober 28. 1975
- - . PUined FY 16
FY 75 FY 76
Fiscal Year
In addition to formal delegations, many Regional Offices and
States have agreed to informal or partial delegation. For example,
a number of 'agreements" have been reached whereby a State may draft
and certify permits, while EPA formally issues them. Or, a State
may conduct the technical review of plans and specifications, while
EPA assumes the responsibility for so-called "Federal" review
requirements.
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These informal or partial delegations constitute an important
aspect of the division of responsibility and labor between EPA and
the States. If they were extended to all functional areas and were
formalized in writing, they would serve as a basis for clearly
defining the respective EPA and State roles and responsibilities.
Increased emphasis on clear delineation of responsibilities, identifi-
cation of redundant functions between the States and the Regional
Offices, and elimination or reduction of such redundancy through spot-
checking and more effective program evaluation could lead to signifi-
cant reductions in staff which are performing redundant functions.
These staff could be redirected to other priority tasks. At the same
time, relations with the States would improve, as a result of resolu-
tion of existing areas of conflict and reduction of the "big brother"
review role of EPA.
A new dimension to the current program of formal and. informal
delegations is represented by the current effort to transfer respon-
sibility for virtually all municipal facilities functions to
California. This effort, if it succeeds, would place virtually all
operational program responsibility in the hands of a State.
Particularly if the Cleveland-Wright approach is enacted by the
Congress, the California experience should be extremely valuable
as a test case which illustrates the problems and opportunities
inherent in "full scale" decentralization. The careful development
of a new overview role for EPA, which recognizes the increased State
role and which develops new forms of program reporting and evaluation
will be an important aspect of this effort.
As the foregoing discussion indicates, EPA currently has the
opportunity to shift the emphasis of its decentralization effort from
formal delegations of entire functions to the development of a series
of written agreements which are tailored to the individual capabilities
of each State. At the same time, if additional funding becomes
available, "full scale" delegations can again become an important
additional avenue toward decentralization. On the other hand, if these
opportunities are not acted upon, the result will probably be an
institutionalization of the current inefficiencies in the EPA/State
relationship.
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IV. ATTITUDES TOWARD DECENTRALIZATION
The ability of EPA and the State agencies to carry out
effectively a joint program is strongly influenced—both positively
and negatively—by the attitudes of participants in the State
agencies, in EPA's Regional Offices and in EPA Headquarters. These
attitudes are particularly crucial to the success of decentralization,
and they must be recognized and appreciated in order to understand
many of the programmatic issues associated with decentralization.
For this reason, the Task Force's perception of the attitudes encoun-
tered in our interviews is described in this section.
The State Agencies
State officials almost invariably referred to the 1972-73 period
as the source of many negative attitudes toward EPA which are still
held today. The passage of P. L. 92-500 seemed to many to imply a
lack of recognition of and confidence in State efforts to control
water pollution. Many State officials who had worked most of their
careers in this field and who had developed programs which they felt
were tailored to the particular conditions of their States, found the
standardized, national program and the strong Federal role implied
by P. L. 92-500 to be offensive.
This impression of the Act was strongly reinforced by EPA's
initial method.of implementation. In the words of one person inter-
viewed, EPA proceeded "as if the States didn't exist." Previous
efforts and accomplishments of the States tended to be ignored,
while newcomers--many without previous experience in the field--
designed and imposed from Washington a national blueprint based on
the new Act.
This State perspective of the 1972-73 period still colors the
attitude of many of the State officials who were interviewed. How-
ever, there is general agreement that events of the past year or so
have resulted in a considerable change in attitudes. Virtually all
(18 of 20) of the State agencies visited appeared to have made the
decision to accept the provisions of P. L. 92-500 and to cooperate
(with varying degrees of.enthusiasm) with EPA in its implementation.
Two States expressed very limited willingness to operate a joint
program, exhibited considerable resentment or hostility toward EPA,
and appeared to want to remain as autonomous as possible.
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Specific programmatic issues have also influenced State
attitudes. Virtually all persons interviewed complained about the
excessive length, complexity and inflexibility of EPA regulations
and guidance. Concern was also expressed regarding the lack of
program stability, reflected by the constant issuance of new guidance
which often contradicted or modified previous guidance and required
new procedures and program directions. Remarks on this issue were
usually linked to a discussion of excessive requirements for paper
work and reporting, although there was general agreement that changes
in reporting requirements over the last year have made them more
palatable.
Of even more concern to State officials is the deeply felt
belief that the "joint State/EPA partnership," which is often cited
in EPA program documents, is little more than a slogan. The use of
the term, "partnership," by EPA is seen by many States to be somewhat
self-serving since EPA defines the terms of the partnership and
appears to reserve to itself the role of "senior partner." Several
State officials referred to program delegation as a system in which,
"the States do all the work and EPA retains the authority and takes
the credit." The implications of this attitude for future decentral-
ization efforts are obvious.
The Task Force encountered in several Regions a specific program
issue which illustrates the differences in attitude between EPA and
State officials and which, if not resolved, may exacerbate these
differences. The EPA enforcement philosophy as expressed by some
Regional Office staff is that an unknown, but significant, percentage
of industrial dischargers are not convinced that their permit
conditions will be enforced and must therefore be shown that EPA
"means business" if the program is to have credibility. The number
of formal enforcement actions, particularly court suits, were pointed
to with pride. State officials, on the other hand, had much more
confidence that industrial dischargers in their States intended to
comply with permit conditions. They advocated a cooperative approach,
which takes into consideration the particular difficulties which a
discharger might be having with equipment deliveries or other problems,
These State officials stated that the doctrinaire, "strict" EPA
approach, if continued, would be counter-productive, because it would
convince industry that EPA was being unreasonable and. had no real
desire to seek sensible solutions. In their view, the result would
be a concerted attempt by industry to modify and weaken environmental
legislation.
The foregoing description of the enforcement philosophy issue is
oversimplified for the sake of brevity; actually, the situation varies
considerably from Region to Region and State to State. The illustra-
tion is important, however, and leaving aside any judgement as to
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which of these two approaches is the most realistic, it is apparent
that the State's perception of EPA's enforcement policy could hinder
EPA cooperation with NPDES States and may tend to discourage NPDES
assumption by other States.
Several other programmatic conflicts were frequently cited as
adversely affecting State attitudes regarding cooperation with EPA.
For example, the management by objective (MBO) approach was generally
viewed as being potentially useful, if administered in a more
reasonable manner. However, State officials generally believe that
Headquarters pressure on the Regional Offices to produce numbers,
with little or no consideration of the meaning or effect of these
numbers, causes more problems than it solves. Of particular concern
is the inappropriateness of some output measures and how they are
used. Tracking the number of permits issued, enforcement actions
taken, or plans and specifications reviewed without regard to size
of the project or its environmental importance seems nonsensical to
many States. In effect, these officials are saying that if they take
considerable time and effort to issue a high quality permit or to
informally persuade a discharger to come into compliance or if they
review ten major projects rather than twenty small ones, they are
penalized or viewed unfavorably under the current MBO approach to
program evaluation. The net result is an unintended reflection on
the professional judgement and effectiveness of State program managers
Another area of State concern is the perception of EPA Head-
quarters. In general, the State staff interviewed tended to view
Headquarters' officials with a certain amount of distrust and suspicion.
These officials are viewed as having little or no experience at the
operating program level and appear aloof and out of touch with the
"real world." This concern regarding Headquarters officials is
compounded by the rapid turnover rate in many of the senior level
positions in Washington. Because of these perceptions, EPA's
capacity to effectively manage and administer the national water
program is called into question.
In contrast to this perception of Headquarters, attitudes toward
the Regional Offices were generally favorable. Although there are
frequent disagreements over specific program issues, these disputes
generally occur in the context of a genuine, joint effort to move
the program forward. On the whole, personal relations between State
and Regional Office staff appear good, and there was little State
criticism of counterparts in the Regional Offices.
One criticism was made on several occasions: Nowhere in the
Regional Office, short of the Regional Administrator, can the State
find an individual with authority who can address an issue which cuts
across functional program lines. For example, during the program
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planning period in February and March, issues such as division
of incentive grant funds, additional staffing needs and reporting
requirements cannot be resolved by the functional program managers
in the Regional Office. And the EPA State Programs staff, while
having the necessary information and perspective, usually do not
have the authority to do so. However, despite this and other
programmatic problems, State staff generally viewed the Regional
Offices as doing as effective job under difficult circumstances.
Balanced against the somewhat negative State attitudes described
above, the Task Force found several strong, positive attitudes which
tend to promote the viability of efforts to decentralize. There is
a strong sense of professional pride which, combined with a general
desire to "run the show" in each State, leads to a desire in almost
every State for minimal Federal presence and strong State management
of the abatement program. Where this tendency is combined with
State acceptance of P. L. 92-500 as the basic program framework, it
provides a powerful motivating force toward decentralization.
About half of the States interviewed said that they wanted to
assume full responsibility for the water program and cited lack of
resources as the only major barrier to such assumption. These States
also expressed optimisim regarding the future and said they believed
that the pollution control effort and relations with EPA had improved
significantly in the last eighteen months.
There was also a general desire to reduce or eliminate much of
the duplication of effort now present in such functions as the review
of plans and specifications and the processing of permits. This
attitude toward duplication of effort was indicative of a strong
desire on the part of the States to make the program work and to be
a part of a successful and cost-effective national water pollution
control program.
Thus, residual resentments and doubts regarding the EPA "partner"
are mingled with a growing State sense of accomplishment and profes-
sionalism. The Task Force found that on balance a large majority
of the State agencies have accepted the provisions of P. L. 92-500
and are prepared to work toward full program delegation.
The Regional Offices
Sentiment in the Regional Offices regarding decentralization was
mixed, both within a given Region and between Regions. However, there
was general agreement that some decentralization was necessary, given
that EPA does not have sufficient resources to manage the entire
program. Discussion of the feasibility and desirability of decen-
tralization centered around the question of State will and management
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capacity. Although it is difficult to generalize regarding remarks
concerning 20 State agencies, some general observations are possible
in those cases where lack of confidence in the States was expressed.
The vulnerability of State pollution control programs to
political pressure was advanced as an argument against reliance
on State agencies. State agencies are viewed as sometimes being
influenced either by the Governor or the State legislature regarding
its budget or regarding individual program actions such as issuance
of permits or the funding of treatment plants. Thus, the Federal
authority is viewed as necessary to back up the State agency. One
Water Division Director stated this viewpoint bluntly when he said,
"No State (in his Region) could produce an honest project priority
list without EPA pressure."
An Enforcement Division Director sounded.the same theme when
he said that he would be unwilling to relinquish enforcement authority
to the States in his Region until perhaps 1977, by which time EPA
would have made believers out of the Region's dischargers and the
States could then take over. Regional Office distrust of State
capacity was particularly strong with regard to those States which
give economic development a high priority and which, for that reason,
might be more susceptible to pressure from industry.
v -*
Regarding the issue of program quality in cases where functions
have been turned over to the States, a majority of Regional Office
staff said that State work was generally as good as that of EPA and
pointed out that State staff were usually as well qualified from a
technical standpoint as were those of EPA. In contrast to this
judgement was the statement of one Enforcement Division Director to
the effect that the States in his Region were performing inadequately
in the NPDES program and could not be entrusted with full program
responsibilities during the next several years—and only then when
they had acquired considerable additional staff.
Also related to the question of State program quality is the
issue of EPA sanctions. One Regional Office official pointed out
that in his Region the Regional Administrator would not invoke
sanctions in instances where States did not live up to the commitments
made by them in the annual program plan. He felt that such inaction
made a mockery of decentralization and would have a negative effect
on the quality of performance of other States in the Region, because
they too would feel that they could "get by" with ignoring commitments.
In effect, he believed that some States were accepting "paper" dele-
gations, but were not producing the volume and quality of product
which would be expected if EPA retained the responsibility for the
delegated functions.
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This concern regarding the EPA overview role was shared by
several of the Regional Office staff. The division of responsibility
and labor between EPA and the States ranges from the "California type"
delegation, through delegation of NPDES and the lesser municipal
facilities functions, to informal agreements. The Regional Office
concern is focused primarily on those situations where States have
formal, written delegations but fail by a substantial measure to
fulfill the commitments in the delegation agreements and/or in the
annual State program plan. The issue is a complex and difficult one
and involves the manner in which delegation agreements are written,
the monitoring of State performance and EPA use of sanctions in the
case of substantial nonperformance.
Some Regional Office staff felt that EPA must be prepared to
exercise the ultimate sanction and withdraw delegated authority from
States which fail to produce, if the circumstances warrant such
action. Others felt that it was unrealistic to expect EPA to with-
draw delegated authority and pointed out that in such a case there
would be a residue of resentment which would persist for years.
Without attempting to resolve these differences in this report, the
Task Force believes that this issue is a major one which should be
addressed in the near future, before the delegation process proceeds
much further.
EPA Headquarters
The most striking feature of the Headquarters interviews was
the enthusiasm expressed over the notion of decentralization. How-
ever, equally striking was the general lack of a specific conceptual
approach to achieving decentralization. It was also apparent that
few of the the program managers give program decentralization a high
priority among their activities, nor have they instilled in their
staffs any real sense of urgency in this regard.
Headquarters program managers appear to have fully recognized
that success in the water program requires greater reliance on the
States. But they have not thought through in detail how to shift
greater authority and responsibility to the States. For example, the
Task Force was told of no staff efforts to evaluate State performance
where delegation has occurred, as compared to States where EPA still
performs the major role. One Headquarters staffer brought up the
example of the draft FY76 Operating Guidance, in which the Regional
Offices were instructed in general terms to achieve more delegations.
The Regional Office replies stressed the lack of realism in the
guidance and pointed out that without a large increase in resources,
significant additional delegations could not be achieved. This
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example was pointed out as an illustration that Headquarters program
managers have not yet devised a realistic decentralization strategy
which addresses the key management issues which face EPA and the
States.
One such issue which arose was the question of consistency
versus flexibility in program operations. EPA has generally approached
this issue by devising a national model for program delegation
(e.g., the NPDES delegation agreement), which mandates consistency,
yet gives the Regional Offices authority to administer the delegations
with some flexibility. However, the Task Force found that Regional
Office staff, because they fear a loss of consistency from State
to State, have tended not to take advantage of the flexibility in
the decentralization process. The State agencies, of course, then
complain of a lack of flexibility in EPA's management.
Certainly, this is an issue which requires guidance from the
national level. However, with regard to this and other major issues,
the Task Force found a general lack of appreciation of the need for
guidance and direction on the part of the responsible program
managers.
Any successful effort to promote decentralization must address
the attitudinal issues described in this section. The actions which
are taken as part of this effort must attempt to address attitudinal
problems and to build on the positive attitudes which exist. 'The
recommendations of the Task Force are designed to accomplish these
ends.
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V. CONSTRAINTS AND OPPORTUNITIES
The Task Force recommendations to improve and expand decentra-
lization relate directly to either problems to be resolved or
opportunities to be realized. This section contains a discussion
of t.he problems, or constraints, and opportunities which the task
Force heard in its interviews with the State and EPA Officials
who deal daily with the issues of decentralization.
Constraints
Constraints have been grouped for purposes of discussion into
three categories: resources, attitudes, and authority and procedures.
Although these groupings overlap -- for example, EPA actions regarding
resources, authority arid procedures invariably affect State atti-
tudes -- they provide a convenient division for purposes of discussion,
Resources. The Task Force found that insufficient funding for
State agencies is the single most important obstacle to a more
effective division of responsibility and labor between EPA and the
States. In spite of the unprecedented increases in funding which
have occurred over the last several years, the current and projected
levels of funding are insufficient to permit large additional
transfers of functions to occur, even if all attitudinal and pro-
cedural constraints were eliminated. For example, in the case of the
recent delegation of virtually all municipal facilities functions in
California, a 92% (76 to 146) increase in the municipal facilities
staff was required. No current source of funding (fees, State
appropriations or Section 106 funds) can be expected to provide for
staff increases of this magnitude.
A brief examination of these funding sources indicates that
recent increases have, at least temporarily, leveled off and that
little or no growth can be anticipated for the next year or two
(see chart below). Looking first at State appropriations, these
rose from a FY72 level of $42.3 million to a FY75 total of $76.6
million. However, of the 20 States visited, 15 expected FY76
appropriations to decline or remain static and 5 expected increases.
This anticipation of a generally flat level of State appropriations
is supported by an examination of the FY76 State program plans which
have been received in Headquarters.
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FEDERAL AND STATE FUNDING
13O -
12O
110
100
9O
80
i/>
0 70
| 6O
= 50
4O
3O
20
10
O
X^x
/
/ Constant g
7O 71 72 73 74
Fiscal Year
75
76
The total expected State appropriations in the first 34 program
plans received was one percent below the State appropriations expected
in the same States in FY75. Thus, based on information gathered on
the 20 States visited, as well as on data from 34 State program plans,
it is realistice to expect approximately the same level of State
appropriations in FY76 as in FY75. Looking beyond FY76, several States
expressed the concern that their appropriations may be reduced more
than 10% from the FY75 level.
Additionally, the continuing effects of inflation in FY76 and
beyond will reduce the level of real resources, as measured in constant
dollars, which will be available in the next year or two (See chart
for impact of inflation).
The reasons for the leveling off of State appropriations, given
by the States during the Task Force interviews, were inflation and
recession. Inflation has caused an increase in the dollar cost of
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State goods and services, and recession has reduced revenues. State
agency officials, legislators and budget office staff who were inter-
viewed generally agreed that the fiscal crunch caused by inflation
and recession has led to freezes or reductions in State budget
expenditures in order, to maintain balanced budgets. It can be ex-
pected that these measures will be continued until substantial growth
in the economy, and consequently in State revenues, occurs. Such
growth is not anticipated in the near future.
One positive conclusion emerged from the interviews, however.
The unanimous judgment of the State officials was that spending
ceilings and cutbacks for State water pollution control agencies are
not the result of backlash against environmental programs. Rather,
they are the result of fiscal belt-tightening.
With regard to Section 106 funds, the President's budgets for
fiscal years 1974-1976 have contained an identical $40 million level
each year. The Congress has appropriated the following amounts:
FY74 - $50 million, FY75 - $45.6 million and FY76 - $50 million.
Discussions with the senior EPA Headquarters officials who are in-
volved in preparing budget requests indicate that the prospects for
increases in Section 106 funding for State programs remain dim --
unless the Congress acts to retain the FY76 $50 million level by
overriding the President.
Thus, the trend of both budget requests and appropriations for
Section 106 funds is realatively flat, and there is little reason
at present to anticipate future rises.
The future prospects for generating additional State revenues
through the use of State fees (excluding the so-called "California
fee") is also dim. EPA conducted a study of this question in 1974
and arrived at the conclusion that State agencies did not favor this
approach. The States felt that such an approach would be generally
unproductive and concluded that fees were an inappropriate revenue
device for a governmental function which benefits such a broad segment
of the population.
Given the bleak prospects for increases in current means of
funding, the Task Force explored two other promising revenue sources:
the "California fee" system and the Cleveland-Wright approach. The
"California fee" system, by which the State charges municipalities
a percentage of each grant for construction of waste treatment
facilities, has great potential as a revenue source in an unknown
number of States. California, which is the only State thus far to
use this mechanism, provides a good example of this potential. How-
ever, legislative changes to establish the fee mechanism are required
in each State, and in the States visited by the Task Force, there was
a general reluctance to take this step until the Congress' acts on the
Cleveland - Wright approach which is contained in Section 8 of H.R. 9560.
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This Amendment, which would allow EPA to grant up to two percent
of the total State construction grant allocation to State agencies
for administrative costs, has the potential to fund virtually all
foreseeable decentralization costs ($100 million out of the FY76
allocation of $5 billion). The bill is now in the House, where
hearings were completed in October. The outlook for passage is un-
clear at this time. However, it is apparent that the approach tr\en
in H.R. 9560 has great potential for decentralization.
The reaction of the States visited to the Cleveland-Wright
approach was generally quite favorable (9 were enthusiastic, 1 was
opposed and 10 were generally in favor, but with some reservations).
However, many State officials expressed the concern that if the
Amendment passes, their legislatures may subsequently reduce State
appropriations, thereby at least partially negating the benefits of
the Amendment. Most of these States advocate the addition of a
clause in H.R. 9560 and in other sections of P.L. 92-500 (such as
Section 106) which penalize States for reducing State funding and
thereby inhibit States from making such reductions.
Another aspect of the resource picture is the State staffing
situation. Low State salaries, among other factors, have resulted
in vacancy rates of 10% to 30% in perhaps half of all State programs.
Although the extent of the problem varies from State to State, it
was apparent to the Task Force that in the State agencies visited,
staffing difficulties represented a significant obstacle to building
more effective programs. Vacant positions are only one manifestation
of this problem. High turnover, particularly in key positions, also
can severely reduce effectiveness.
In summary, resource constraints are the single greatest barrier
to decentralization. Funding is the major constraining factor, but
staffing problems are also an important barrier.
Attitudes. The three sets of attitudes described in Section IV
have both positive and negative effects on the decentralization process.
In this section, the negative attitudes are summarized in an attempt
to show how they adversely affect the effort to shift more program
responsibility and authority to the State agencies.
The resource situation discussed earlier in this section and
the State perception of this situation has a powerful effect on State
willingness to accept more responsibility. The current fiscal cirsis
in the vast majority of States, and the accompanying hiring freezes
and budget reductions in some State agencies, have created an
atmosphere in which the State agencies are reluctant to assume
responsibility for major program functions.
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And the memory of the Malek-Train correspondence concerning Section 106
funds and current efforts by the Administration to hold down Federal
expenditures, when combined with the static level of Section 106
budget requests, are enough to convince the States that this source \
of funds will not increase.
As stated earlier, virtually all States are reluctant to move
to obtain legislative authority for implementing the "California fee"
concept until they see what happens to the Cleveland-Wright approach.
Several States pointed out that there are no future year authoriza-
tions for construction grant funds and that prospective administrative
funds for State agencies under H.R. 9560 depend on continuing con-
struction grant funding. However, if the authorizations are voted,
it is probable.that State reservations about Cleveland-Wright funding
will, in most cases, disappear.
The net effect of the future funding prospects on State attitudes
is to cause the State agencies, in virtually all cases, to be extremely.
cautious with regard to assumption of new responsibilities, particularly
those which require additional staff. Either the passage of H.R. 9560,
a reversal of State fiscal prospects, or both will be necessary before
State attitudes change sufficiently to permit a significant number of
additional large-scale delegations. Additional partial delegations
or informal delegations, however, will be possible at the present level.
of funding by elimination of duplication of effort between EPA and
the States.
Turning to the State attitudes described in Section IV, a fairly
strong residue of resentment of EPA continues. But in almost all of
the States visited by the Task Force, there was a counterbalancing view-
point. Most States felt that previous problems were water over the
dam, that .EPA was making a reasonable effort to change onerous proce-
dures and that relations have been improving. Thus, State attitudes
can be a major constraint to new EPA iniatives (e.g., 208 water quality
management and nonpoint source programs) if EPA proceeds unilaterally
or -.- .in the State view -- unreasonably, and the States are not fully
consulted or involved in the program planning phase. On the other hand,
State attitudes can be turned to an attribute in most cases where such
consultation and involvement does occur.
A judgment regarding the effect of Regional Office attitudes is
much more difficult to make. Regional Office staff have played a major
role in the progress toward decentralization which has occurred during
the past several years. It is the face-to-face contact between Regional
Office staff and State officials which has done much to dissipate ill-
feeling over past months. It was also in the Regional Offices that the
Task Force found much of the genuine enthusiasm for decentralization
in EPA.
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However, the Task Force was also told by Regional Office staff
that some division directors and branch chiefs did not favor further
decentralization -- partly because they did not wish to lose program
control and authority and partly because of a genuine belief that
the States could no't do as good a job as the Regional staff. This
was a very difficult area for the Task Force to explore, because an
accurate assessment requires insight into the subjective views of
the principal actors. However, the Task Force concluded that reluc-
tance on the part of program directors in the Regional Offices to
relinquish authority is at least a potential problem, but one which
is manageable if Regional Administrators are alert to the problem.
Another set of attitudes expressed by some Regional Office staff
is distrust of State capability and/or genuine intention to implement
the control program outlined in P.L. 92-500 and EPA regulations.
Although the Task Force found there was ample justification for these
attitudes in several cases, the Task Force concluded that State cap-
ability and willingness were greater than some Regional Office staff
believed in other cases. The danger in this type of situation is
that Regional Office attitudes will become self-fulfilling, as State
staff recognize the lack of trust and react by limiting their coopera-
tiveness.
It is difficult to explore these situations in any depth in the
course of one-day visits. But the contrast between State-Regional
Office relations which were close and based on trust, and other State-
Regional Office relations where these qualities were weak, enabled
the Task Force to make the judgment that some of these situations
where distrust exists could be attributed in large part to Regional
Office staff. Obviously, where these conditions exist, it is diff-
icult to negotiate the transfer of functions to the States involved.
Several Regional Office staff stated that where formal delegations
had occurred, Headquarters preferred to deal directly with the States
and bypass the Regional Office. These situations clearly act as a
disincentive for Regional Office staff to promote decentralization.
Since this type of problem is directly related to the issue of a
well-conceived EPA overview policy, it will be discussed as part of
the procedures topic below.
The Headquarters' attitudes, discussed in Section IV, also
constitute an impediment to further decentralization as defined in
this report. Although the-top-level program managers in Headquarters
expressed a clear commitment to the general concept of decentralization,
they -- perhaps unconsciously -- give little priority to this commitment
in their day-to-day activities and have not transmitted to their staffs
a sense of priority regarding decentralization.
Some significant progress has been made under Headquarters direc-
tion, however, through the establishment of the "Committee of Ten,"
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and through development of mechanisms to obtain State comment on
the Operating Guidance and State participation in the drafting of
regulations. Strong pressure has been brought to bear on the
Regional Offices to. make formal delegations. However, as will be
discussed later in the Task Force recommendations, stronger Head-
quarters leadership will be required if there is to be significant
additional progress in the decentralization process.
Authority and Procedures. This portion of the report discusses
the constraining influences on the decentralization process resulting
from regulations, guidance, operating procedures and the division of
authority between Headquarters, the Regional Offices and the States.
This is a difficult area to analyze because of its complexity and
because the judgments regarding questions -- for example, on the
appropriate degree of authority given to the Regional Offices on a
specific program issue or the number of outputs or activity indicators
to be reported by a State — are necessarily subjective ones which
vary from individual to individual.
However, the net result of the decisions made on authorities
and procedures, as well as the process by which the decisions are
made, are extremely important. For example, if acceptance of very
detailed and cumbersome procedural requirements is made a prerequisite
to State assumption of a particular program function, States may find
reasons to let EPA continue to bear that responsibility. Similarly,
if a State believes that policy decisions regarding major program
areas (e.g., municipal facilities) will continue to be made
unilaterally by EPA, even after the State has assumed the operational
responsibility, then it may be unwilling to give up its relative
antonomy to become emeshed in an administrative system which requires
the State to do the work, but gives it little or no voice in the
decisions governing how the work is to be performed.
Thus, EPA actions with regard fro procedures and authority have
a direct and major impact on State attitudes regarding assumption
of additional program responsibilities. They also affect the
effectiveness of coordination and cooperation of the current division
of functions in each program area.
One of the criticisms of EPA voiced most frequently by State
agency staff was that regulations and guidance were too lengthly,
too complex and too detailed. The characteristics criticized appear
to be due in large measure' to Headquarters concern that P.L. 92-500
be implemented rapidly and consistently and that regulations be
sufficiently detailed so that the Regional Offices would have little
doubt regarding what was to be done and how it was to be done.
The era in which that degree of detail may have been necessary
is past. The Task Force found, with few execeptions, that both the
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Regional Offices and the States are willing and capable of operating
in a manner which requires responsibility, initiative and imagi-
nation on their part. Consequently, the Task Force concluded that
Headquarters guidance which is concise, is flexible and emphasizes
objectives rather than procedures is more appropriate to current and
future operations of the water pollution control program. Although
exceptions to this general rule may be necessary in the case of
highly technical guidance, it is generally preferable to risk error
on the side of flexibility than on the side of rigidity and detail.
The basis for this conclusion lies in the Task Force's belief that
the States and Regional Offices are generally staffed with capable,
highly motivated professionals who can be relied upon to manage more
effectively without detailed guidance. Any discrepancies in per-
formance resulting from this mode of operation can be revealed and
subsequently corrected by appropriate program monitoring and eval-
uation.
Consistent with these findings regarding regulations and guidance
is the Task Force's judgment regarding use of the national program
model concept in delegation. The term national program model refers
to a discrete set of program functions (e.g., NPDES, plan and spec-
ification review, etc.) which EPA defines, along with accompanying
written agreements and/or checklists, and offers to a State as a
delegation package. Such delegation models are very useful in
achieving program consistency in cases where States have the ex-
isting staff capacity to assume the responsibility for an entire set
of program functions. However, at present and in the foreseeable
future (unless a bill such as H.R. 9560 passes or a similar source
of funding is found), there are few remaining States with such
capacity.
In the many cases where States have limited capacity, the national
program model approach may actually discourage a more rational division
of responsibility and labor because this approach implies that a
State must assume an entire set of functions. 'Lacking this capacity,
a State may feel comfortable in having EPA perform all or virtually
all functions in a given program area.
The Task Force concluded that a change of emphasis by EPA in
these circumstances may be productive in encouraging States to assume
additional responsibilities. By deemphasizing delegation of an en-
tire set of functions (i.e., a program model or package) and instead
stressing a division of functions tailored to each State's willing-
ness arid capabilities, EPA may help to create a climate which is
more conductive to cooperative sharing of program responsibility.
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In adopting this approach, both EPA and the States would
jointly determine how a set of program functions would be divided
between them. For example, a State could choose to perform the
technical review of plans and specifications, while EPA would con-
tinue to carry out the so called "Federal requirements" such as the
EEO and Davis-Bacon responsibilities. Regional Offices and States
would be encouraged to take the initiative in dividing responsibility
for as yet undelegated (except in the case of California) functions
such as Step I municipal facilities planning.
It would be appropriate for Headquarters to create a segmented
delegation package containing all potentially delegable functions
for those States having sufficient staff capacity to perform the
entire set of functions. Then, where State capacity is insufficient
to assume all of these functions, the States and Regional Offices
could negotiate a variety of different agreements which match each
State's capabilities.
It is important to point out that these kinds of arrangements
have already been negotiated in many cases in the form of "partial"
or informal delegations. A large number of these agreements are
written. However, the Task Force believes that the approach
represented by these agreements deserves much greater emphasis, and
that all such arrangements should be described 1n brief written
agreements which resolve all ambiguity concerning mutual obligations
and authorities.
One potential way to institutionalize this approach would be to
incorporate Into the Agency's MBO-FPRS system a means of recognizing
agreements, short of "delegations" as currently defined. This would
be more difficult than the present reporting of formal delegations,
since all written agreements would be recognized. One possible
method of dealing with this difficulty would be to classify agree-
ments as class one, two and three; with class one representing "full"
delegation of set of functions, class three representing State
assumption of something less than 50% of full responsibility and
class two indicating an intermediate assumption of responsibility.
Irregardless of the method employed, however, the concept of a
division of responsibility and labor, based on the current capability
of each State, should be recognized and stressed.
Another set of criticisms which were frequently expressed
by State officials relate to program reporting and evaluation. These
procedural concerns, 1n turn, are associated with concerns expressed
by Regional Office staff that EPA has no coherent, effective over-
view policy with regard to issues presented by the increasing State
assumption of responsibility.
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The term, "overview policy," is used here to include procedures
for reporting and evaluating State performance, as well as policies
for taking remedial actions where State performance falls substan-
tially short of mutually agreed goals. To take an extreme example,
what sanctions or leverage can and should EPA use if a new adminis-
tration comes into office in a State with formal NPDES and municipal
facilities delegations and deliberately discourages additional permit
issuance, or uses blatant political criteria for rankings in a State's
project priority list, or simply slows program activity to a virtual
standstill?
The concerns on the State side are with unnecessary and
overly frequent reporting and with evaluation which seems to imply
a superior/subordinate relationship and which seems more concerned
with numbers than with an accurate appraisal of the quality and
effectiveness of program performance. The Regional Office concerns
are related to the insuring of effective State performance, both now
and in the future when most of the operational responsibility passes
to the State agencies.
There is also considerable uncertainty in the Regional Offices
regarding the practical and legal limits of decentralization. At what
point in the shift of the division of functions with the States might
EPA lose management control of programs and find itself unable to
insure that national policies are carried out by State agencies?
And, as the recent experience with the delegation of municipal facil-
ities functions to California illustrates, can "full delegation" take
place under current provisions of P. L. 92-500 or are legislative
changes required?
Both .sets of concerns are deeply felt and directly affect
State and Regional Office willingness to proceed further with decen-
tralization. Failure to address these concerns will severely impede
any future effort to extend decentralization.
Opportunities
Program constraints have been discussed in great detail because
of the belief that a thorough understanding of a problem can lead
to a more effective solution. The opportunities discussed in this
section, in most cases, relate to the identified constraints and
offer a way to overcome current difficulties. Because of this
relationship, opportunities are grouped in the same three categories
as are constraints.
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Resources
The first point to be made with regard to additional funding
is that there are opportunities to obtain new revenue sources. Both
the Cleveland-Wright approach and the so called "California fee"
approach have great potential.
These opportunities relate directly to the finding that State
agencies are generally willing to use additional funds to expand
their capacity to assume more program responsibility. This willing-
ness can be enhanced, if EPA will adopt the measures discussed under
procedures and authority and give the States a more equal partnership
role. The willingness discussed here is crucial to a further shift
of responsibility and authority to the States, because without it
additional funding may not result in much additional decentralization.
However, even without any additional resources, there are sig-
nificant opportunities to eliminate duplication of effort between
State and Regional Office staff. For example, in cases where the
plans and specifications review function has been delegated to States,
the Task Force found that some Regional Office staff were still
"double-checking" every set of plans and specifications reviewed by
the States. If an agreement could be reached whereby the Regional
Office reviewed perhaps 10% of the plans and specifications, or con-
ducted post audit reviews, significant staff could be made available
for other tasks.
•
As States assume more of the operational tasks, Regional Offices
have increasing opportunities to shift their staff from those tasks
(e.g.,- issuing permits) and to use them in a technical assistance
role to support and build the capacity for States to play a more
significant operational role. One Region has successfully employed
the approach of relying primarily on the State agencies for the
operational role, but of supplementing the State staff with EPA
personnel located in the State agency. This approach has worked
well and is clearly more cost-effective than the alternative approach
of dividing functions between two units of government.
Additionally, many States have overlooked opportunities to
supplement their scarce resources by involving other Federal, State
and local agencies more directly in their water quality management
programs. For example, areawide planning agencies have the potential
to do much of the planning regarding complex water quality problems,
if the State and areawide agencies effectively coordinate their
activities. Furthermore, as local and areawide water quality manage-
ment agencies are designated to implement the areawide "208 plans,"
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additional resources can be brought to bear on many of the problems
which the States have traditionally attempted to handle themselves.
Indeed, these forms of State/local decentralization of the water
program may well be. the solution to overcoming many of the State
resource problems in the future.
Attitudes
The overwhelming majority of State and EPA program managers
support an incremental shift of program authority and responsibility
to State agencies. If EPA makes the changes in policy and procedures
which are recommended in this report, it will be possible to build
on the existing positive attitudes toward decentralization and to
further shift authority and responsibility to the States.
Authority and Procedures
Most State officials and many EPA staff believe that EPA could
take better advantage of individual State capabilities, circumstances
and procedures. If EPA were to modify its policies and procedures
in order to better take advantage of each State's unique capabilities,
a more effective division of functions could be achieved and States
would be more willing to assume responsibility for that portion of
functions consistent with their staff capabilities.
Similarly, if EPA regulations and guidance were written in a
manner which places decision-making and authority in the hands of
State official's where they have the operational responsibility,
better decisions would be made. A significant additional benefit of
these actions would be to convince other States that the "partnership"
with EPA is a reasonable one and that decentralization has real
^benefits for them.
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VI. ' THE NEED FOR ORGANIZED FOLLOW-UP
Because the responsibility in EPA Headquarters for water program
decentralization is divided between three Assistant Administrators
and because there is no single staff office to develop policy for and
monitor progress toward decentralization, there is need to system-
atically follow up those Task Force recommendations which are
accepted. One means of periodically monitoring decentralization
actions is proposed as the last recommmendation of the Task Force.
•If this recommendation is accepted, the Regional Administrators will
report annually to the Deputy Administrator on the progress which has
been achieved toward implementation of Regional/State decentralization
action plans. The Deputy Administrator would then submit a summary
of these reports to the State/Federal Water Programs Advisory Commit-
tee (commonly known as the Committee of Ten). Such a procedure would
encourage top management discussion and evaluation of the decen-
tralization efforts of the States and Regional Offices at least twice
a year.
However, other actions proposed by the Task Force in its
recommendations, such as issuance of policy guidance and defining the
overview role of EPA, are primarily the responsibility of EPA Head-
quarters. After much discussion, the Task Force refrained from
identifying precisely who should be assigned responsibilty for
implementing and following up its recommendations on the grounds that
only top management of EPA could effectively address this issue.
Given the diffusion of responsibility for decentralization within
EPA and the competing program priorities which face Agency managers,
the Task Force is convinced, that there must be continuing or
periodic follow-up on the actions required by those recommendations
which are accepted. After all, one of the primary messages throughout
this report is that EPA has set the decentralization process in motion,
but has generally failed to follow up in an organized way. The time
to do so is now.
t
: Finally, it is important to recognize that the States must be
involved in the process of'follow-up. Through this mechanism, EPA will
receive the feedback it needs as the Agency proceeds to take additional
actions to promote and accommodate program decentralization.
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VII. RECOMMENDATIONS
Based on the findings and conclusions contained in the previous
sections of the report, the Task Force offers the following recom-
mendations which, if accepted and implemented, will initiate a
process of change and improvement in the EPA/State relationship:
1. The Administrator should issue a statement on decentral-
ization to the director of each State water pollution
control agency and to all EPA managers and staff associ-
ated with the national water pollution control program.
The Administrator's statement (see recommended statement
in Appendix A) should enunciate clearly the Agency's
policy with regard to decentralization of the water
program and should include an Agency action program,
based on the recommendations of the Task Force which are
designed to resolve the problems which impede progress
toward further decentralization. The action program
should identify specific tasks to be accomplished and
should assign specific responsibilities for accomplishing
those tasks.
Rationale. As is pointed out in the preceding sections of the
report, opinions differ within EPA and among the States as to the
objectives and methods of decentralization. The purpose of the
recommended Administrator's statement is to define the goals of decen-
tralization and to emphasize the importance of this process to the
success of the water pollution control program. A statement, such as
the one recommended, should resolve many of the ambiguities and
uncertainties in the minds of State and EPA officials. The statement
should result in a clear sense of direction for all concerned.
2. A process, which includes State participation, should be
established to determine the Agency's policy regarding
the current and future EPA overview role. The process
should result in Agency policy (and procedures if
appropriate) on matters such as:
* State participation in the development of proposed
regulations and guidelines.
* State authority to make decisions and take actions
commensurate with their program responsibilities.
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* Regional Office and State participation 1n the
definition of minimal, essential reporting
requirements. ;
* Mutual EPA/State accountability 1n program
evaluation.
* Reprogrammlng of EPA staff as States assume
the major operational role.
The process should also result 1n periodic updating of the
Agency's action program for decentralization 1n order to
reflect new policies on decentralization and EPA/State
experience in dealing with the problems Impeding
decentralization.
Rationale. As was pointed out, particularly 1n the section on
constraints and opportunities, the Increasing State assumption of
responsibilities has not been matched by Increased delegation of
decision-making authority to the States, additionally, States resent
aspects of the current relationship which Imply a superior/subordinate
relationship. This recommendation 1s designed to 1nt1tate a process
which will result 1n a rethinking and modification of the procedures
and authorities which constitute the EPA/State relationship. The
California/Region IX relationship, which 1s currently being modified,
may provide a new basis from which EPA can tailor Its relations with
all States.
3. EPA should continue, on a high priority basis, to seek
additional funding for support of State programs. In doing
so, the Agency should emphasize 1n Its relations with the
Office of Management and Budget and the Congress the
benefits which would accure with further program decentrali-
sation. Primary attention should be focused on measures
such as passage of legislation which Incorporates the .
Cleveland-Wright concept, increased Section 106 State
program grant funding, and realistic funding under Section
208(f) to support State (and areawide) water quality
•; planning and management programs. In addition, serious
consideration should be given to proposing legislative
amendments which would inhibit or preclude decreases 1n
State funding as Federal funding is Increased.
Rationale. The discussion in the section on constraints and
opportunities pointed out the limits of decentralization Imposed by
funding constraints and the resulting limitations on State staffing.
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Much can be done within those limits to reduce duplication of
effort and to develop more productive EPA/State relations.
However, a large scale transfer of additional functions to the
States depends on increased resources.
To meet the problems discussed in Section V concerning the
prospect that a significant number of States may decrease their
appropriations for water pollution control if given the opportunity,
it is important that EPA give serious consideration to legislative
amendments which would prevent States from using increases in
Federal funds to supplant State funds. Failure to do so, could
result in a net decrease -- rather than an increase -- in total
program resources.
4. Current EPA policy and program guidance (and possibly some
regulations) should be reviewed and modified as necessary
to accomodate and promote further incremental delegation of
program responsibilities to the States. In doing so,
program managers in each water program area should consider
matters such as:
* Ways to take better advantage of individual
State capabilities, authorities and procedures
by providing additional flexibility to the
States for conduct of their programs.
* Definition of appropriate State and EPA roles
and responsibilities which can be tailored to
individual State capabilities (rather than
national program models).
* Increased use of program evaluation and spot
checking (in place of redundant EPA review
of State work) to reduce duplication of effort.
* Identification of improved output measures,
activity indicators and standards of perform-
ance (for use in the Agency's MBO-FPRS system)
to better reflect the variability among States
of water quality problems and approaches for
solution of these problems.
Rationale. The thrust of this recommendation is to tailor
the division of program functions between EPA and each State in a
manner which recognizes and takes advantage of each State's unique
capabilities and weaknesses. EPA's management procedures, such as
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reporting systems and program evaluation, should be modified to
recognize and promote this altered way of conducting business
with the States.
5. Each Regional Office and State should be requested to
prepare annually a joint EPA/State action plan for
decentralization as part of the Regional workplans and
Section 106 State program submissions. These action
plans should identify joint decentralization objectives
and should include items such as:
* A description of how the Region intends to build
additional State capacity to take on additional
program responsibilities over time. Financial
assistance, improved training programs, EPA
technical assistance, and assignment of EPA staff
to State agencies through short-term details, IPA
assignments, colocation, etc. should be considered.
* A description of how Region and States intend to
further minimize duplication of effort and
determine the proper utlization of joint EPA/State
resources. The Regions and States should seek to
establish a clear definition of their respective
roles and responsibilities in the conduct of the
FY 77 water program and should include a listing of
the written agreements of memoranda of understanding
to be negotiated in each functional area.
* A description of what the Region and States plan to
accomplish in the way of improving their joint
program management and reporting systems in order
to assure that the water program is implemented
effectively and efficiently in future years. Develop-
ment of performance standards for each functional area
of the water program, improved mechanisms for periodic
program evaluation, and development of reporting
mechanisms which are tailored to the individual proce-
dures and needs should be considered.
Rationale. This recommendation is closely related to
recommendations #2 and #4. It provides for a process by which EPA
and the States annually determine to what extent and how decentral-
ization can take place in each State during that fiscal year. In
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the opinion of the-Task Force, this recommendation may well be
the one which results in the most specific accomplishment
because it is the one recommendation which impacts the States
directly. ,
The development of Regional/State decentralization action
plans is envisioned to take place during the annual Section 106
program planning cycle and, as such, should be accomplished without
undue effort or new procedures on the part of either the States or
Regional Offices. The Task Force (with the unanimous support of
its State and Regional Office representatives) is convinced that the
potential benefits to be realized more than justify the effort
involved and that the concept be built into the program planning
process now -- even in the absence of significantly increased funding
for the States. Furthermore, the Task Force believes that the process
must be established before new funds become available (e.g., as a
result of congressional action on the Cleveland-Wright concept or
on increased Section 106 or 208(f) appropriations) so that EPA
and the States will be in a position to act quickly and effectively
toward further decentralization in the event new funds are provided.
6. The Regional Administrators should report semi-annually
to the Deputy Administrator on progress achieved in
implementing the EPA/State decentralization action plans.
The Deputy Administrator, in turn, should present a
summary of these progress reports to the State/Federal
Water Programs Advisory Committee (commonly known as the
"Committee of Ten") for their consideration and
recommendations.
Rationale. The need to evaluate progress toward decentralization
and to take follow up actions as required was discussed in Section
VI. This recommendation would establish one of the primary
mechanisms for follow up and would provide a key role for the States in
that process.
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APPENDIX A
The recommended statement which follows 'was designed to be
included in a letter from the Administrator to the directors of
State water pollution control agencies and to all EPA managers and
staff concerned with the national water pollution control program.
The specific language of the statement should be modified before its
issuance to reflect the personal views of the Administrator and
comments received from the States, the Regional Administrators and
the Assistant Administrators of EPA. In addition, the action program
portion of the statement should incorporate those portions of the
Task Force recommendations (Numbers 2 through 6) which are accepted
by the Agency and should be made more specific to incorporate the
Administrator's assignment of specific implementing responsibilities.
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Recommended Administrator's Statement
and Action Program Regarding"
Decentralization of the Water Pollution
Control Program
Passage of the Federal Water Pollution Control Act Amendments
of 1972 signaled a sharp redirection in the Nation's efforts to clean
up its waters and to restore and preserve their usefulness for all
its citizens. The Environmental Protection Agency was given a
mandate to lead and coordinate existing State programs in implementing
the Act, while the States retained their primary responsibility for
specific pollution control programs. The Act introduced a compre-
hensive, nationally-consistent permit system for industrial and .
municipal waste dischargers, authorized substantial sums for the
construction of municipal waste water treatment facilities, and
established other aspects of a balanced program, including water
quality management planning, ambient and pollutant source monitoring,
and training. An ambitious timetable for implementation was specified.
All of us who have participated in the execution of these far-
reaching responsibilities should be proud of the accomplishments thus
far. During the past several years, the combined efforts of EPA and
the States have laid the foundation for a successful long-term.program.
Over 97% of all waste dischargers are either now in compliance with
pollution control standards or on definite water clean-up schedules.
More than 4,000 individual construction projects which were funded
under P. L. 92-500 are now underway. The administrative framework
for a comprehensive Federal/State effort has been put in place.
However, these very real gains were accomplished at a breakneck
pace, as we sought to initiate new and greatly expanded programs in
time to meet the deadlines set.in the Act. In the process, regulations,
grants and permits were issued rapidly under pressing time constraints.
There was too little time and opportunity to consider carefully the
institutional implications of our programs and crash effort. Unfor-
tunately, in spite of sincere attempts to develop a well-coordinated
Federal/State partnership, strains did occur in that relationship.
Our successful efforts to lay the foundations of a comprehensive,
enduring water pollution control program provide us now with time to
reflect and to rethink our essential relationship with the States.
Recognizing this, the Agency invited the directors of three State
agencies to join with EPA Regional and Headquarters staff in an attempt
to identify problems in EPA/State relations, to review objectives and
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•to develop recommendations leading to a more fruitful partnership.
•The EPA/State group, which was designated the Decentralization Task
Force, visited 20 States, 7 EPA Regional Offices and EPA Headquarters
to gather information and suggestions from State and EPA staff at
iall levels.
The Task Force found many positive aspects in EPA/State relations.
:There is general recognition of the mutual dependence between EPA
;and the States, and Regional Office/State ties are in most cases
.strong. Experience of the past several years has resulted in many
close personal working relationships, and there is a firm, mutual
sense of professionalism and common purpose shared by State and EPA
staff.
On the other hand, there are many additional opportunities for
building upon these past accomplishments in order to achieve a more
effective division of responsibility and labor between EPA and the
States, which is essential to the achievement of the goals of
P. L. 92-500 at a time when resources are particularly scarce.
There exists a need to clarify the nature of EPA's overview role
to be assumed in those situations where States have assumed virtually
all major functions in the NPDES and municipal facilities programs.
Second, new sources of funds must be developed to augment traditional
funding of State programs, so that necessary additional State staff
may be hired to permit expansion of the State role. Third, duplication
of effort must be greatly reduced or eliminated, and mutual account-
ability in program evaluation must be expanded. Fourth, changes in
program guidance, reporting and management procedures must be made
which will foster an attitude of genuine equality between EPA and the
State agencies.
In order to bring about these and other improvements toward a
more decentralized mode of management, the Task Force has provided me
with specific recommendations. I have reviewed these suggestions,
along with the comments provided by the appropriate Assistant Adminis-
trators, Regional Administrators and State officials, and have
incorporated them into an "Action Program for Decentralization."
I am assigning to the Deputy Administrator the overall management
responsibility for implementing the action program and have requested
him to periodically report progress to me as we move forward in carrying
out the program. "
The background and rationale for the individual items in the
action program are contained in the "Report of the Decentralization
Task Force," which has been distributed to all States and Regional
Offices. I urge all EPA staff concerned with the water pollution
control program to read and discuss with your colleagues the findings
and recommendations of the report. Many of the issues raised cannot'be
resolved by new program guidance or additional resources, but can be
dealt with only by day-to-day actions which we all take in our joint
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efforts with the States. These actions, and the spirit and attitudes
with which they are carried out, can take us a lonq way down the
road toward significant improvement in our relations with the States.
I think it is particularly important to emphasize the general qoal
of decentralization: to shift the operational programs and the corres-
ponding authority and responsibility to the States as rapidly as
State capacity and willingness permit. At present, this goal is
defined in rather vague terms. But the purpose of the specific items
in the action program is to initiate a process which will lead to
decisions and policy determinations necessary to clarify and give
concrete substance to the general goal. Thus, I expect that in the
next three to six months the action responsibilities will be assigned
and implementation will be underway.
The "Action Program for Decentralization" of the Environmental
Protection Agency is as follows:
Those portions of the Task Force recommendations
(Numbers 2 through 6) which are accepted by the
Agency, in addition to other items which might
be added to reflect the personal views of the
Administrator and the comments received from
others, are to be incorporated here along with
the Administrator's assignment of implementing
responsibilities.
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APPENDIX B
Memorandum of August 4, 1975
Establishing the Decentralization Task Force
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
SUBJECT:
FROM:
Establishment of a Task Force on Decentralization DATE: AUG 4
of Water ProgramlFun^tfons to,the^>tates
/^jZpt+e**' *•*
nntStrator for Wat
Assistant Admil
Water and Hazardous Materials (WH-556)
TO:
Assistant Administrator for Planning and Management (PM-208)
Acting Assistant Administrator for Enforcement (EG-329)
Director, Office of Regional and Intergovernmental Operations (A-101)
Deputy Assistant Administrator for Water Program Operations (WH-446)
Deputy Assistant Administrator for Water Planning and Standards (WH-451)
All Regional Administrators
Since the passage of PL92-500, we have intensified our efforts
to create a genuine Federal/State partnership in the water program.
Utilizing the Section 106 State program grants mechanism and
frequent direct contact with State counterparts, the Regional offices
have built effective working relationships with the State agencies.
Although there remains considerable room for improvement, much has
been accomplished—including a functioning annual program cycle,
establishment of MBO, and incentive funding of priority program
areas. The States have gradually accepted increased responsibility
for NPDES permits and for delegated functions in the municipal
facilities program, although until now EPA has carried the primary
burden in these two major programs.
However, as we look ahead over the next two to five years, it
is apparent that our success or failure depends in large measure on
the performance of the States. In program areas such as compliance
assurance, enforcement, processing of construction grants, and
management of nonpoint source programs, the States will have to
assume the major role, if the goals of the Act are to be achieved.
To enable the States to play this role, at least two changes
will have to occur. First, substantial additional State resources
will be required. We will continue to seek additional State finan-
cial support and to advocate new State program revenue sources as
may be appropriate. In addition, we have recently initiated
efforts to assist the States in assessing their manpower needs and
in upgrading their salary structures to-at least partially alleviate
the serious staffing problem which now exists in many States. The
second change must occur in the basic EPA/State relationship, as
the States incrementally take on most of the operational and
administrative tasks while EPA concentrates on an overview role of
establishing policy and ensuring that the State programs are carried
out effectively.
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In order to accelerate the evolution toward this altered
EPA/State relationship, I am establishing a task force to
conduct an in-depth evaluation of existing EPA/State relations
in the water program and to develop specific recommendations
to be incorporated in the FY77 Operating Guidance. A general
timetable for the group's activities and a list of some of the
basic questions to be answered are attached to this memorandum.
I am appointing Dan Petke of the Water Planning Division
as chairman of the Decentralization Task Force and request that
you make available the following individuals to serve as members
of the task force: Patricia O'Connell (OE), Dick Hager (ORIO),
Bruce Engelbert (PM), Ralph Sullivan (Municipal Construction),
Ed Richards (State Programs), Pat Godsil (Region VIII),
Tom Frangos, (Wisconsin), and Bill Adams (Maine). The appoint-
ment of an additional Regional task force member is planned.
An initial meeting in Washington, D.C. has been scheduled for
August 13. The primary purpose of this meeting will be to
decide on a work plan which includes a detailed timetable and
a systematic methodology to obtain the information required
to answer the attached questions.
It is essential that the general focus of the task force's
activities be on the EPA/State relationship in the broadest
sense, and that examination of individual program areas be
conducted in this context. I expect the task force to include in
their final report a summary of the State perspective on the issues
which are raised in the course of the task force's activities.
In order to achieve its objectives, I expect the task force
to visit representative Regions and State agencies. Regional Office
cooperation in making appropriate staff available for interviews
with members of the task force and Regional Office assistance with
arranging interviews with appropriate State agency staff will be
necessary and appreciated.
I have asked Mr. Petke to report to me periodically on the
progress of the group, and I look forward to the group's final
report which I expect wil.l provide us with policy recommendations
which will lead to substantial improvements in EPA/State relations
in the water program.
Attachments
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