United States
Environmental Protection
Agency
Office of Water Planning
and Standards
Washington, DC 20460
                       September 1979
Water
Supplemental Water Quality
Management Program
Guidance for FY 80




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        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON. D.C.  20460

                                                         Office of Water
                           n -i  _                     Planning and Standards
                           2 1  SEP  7979
TO:  Participants in the Water Quality Management (WQM) Program


The Supplemental Water Quality Management (WQM) Program Guidance, attached,
is a compilation of EPA's guidance for the overall  WQM program under sections
106, 208, and 303(e) of the Clean Water Act.   This  guidance supplements the
EPA Agency Guidance, issued in April 1979.  Its purpose is to provide parti-
cipants in the WQM program with an up-to-date program overview, recommended
management procedures, and detailed policy memoranda.  Although the potential
audience for the guidance is quite broad, it is primarily for the use of
State and areawide participants in the WQM program  and the EPA Regional
Office project officers.

This guidance is an output of the annual policy development process the
Water Planning Division has initiated.  The annual  process also includes a
problem assessment, five year strategy, and work plan.  This guidance is
being issued later than desired, since the ideal time for annual guidance
to be published would be April of the preceding year.  The Division wil1
issue the supplemental FY 81 guidance in April, 1980.

This transmittal augments the final WQM regulations  (40 CFR Part 35 Subpart G)
which the Administrator signed on May 16, 1979.  All WQM regulatory cita-
tions in this package refer to the new regulations.  This guidance package
supercedes the WQM program guidance memos (SAMs) which EPA has published
since February 1976.  Those SAMs which are still current become part of
this guidance, but they are renumbered and reorganized around subject areas.
Two policy memos, FY 80 Funding (A-2) and State Role in Responding to Envi-
ronmental Emergencies (B-5), are reserved.  Explanations can be found in
Section VI.

Water Planning Division is currently developing several additional policy
memoranda which cover the following topics:  WQM plan update policy, the
connection between WQM plan implementation and continuing 208 funding,
recreation and open space requirements, and water quality/quantity/conser-
vation issues.  Upon completion, we will forward these guidance memos,
along with additional guidance and corrections developed in the upcoming
year, for inclusion in your WQM guidance notebook.

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                                  -2-
As always, we welcome your comments  and  suggestions  on  the  content,  format,
and approach of the guidance  package.  Please  address your  comments  to
Peter L.  Wise, Chief, Policy  And  Evaluation  Branch,  Water Planning Division
(WH-554), 401 M St., S.W., Washington, D.C.,  20460.
Sincerely yours,
                ^^A^n^r^ f
Deputy Assistant Administrator
for Water Planning and Standards
Attachment

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SUPPLEMENTAL  WQM  PROGRAM  GUIDANCE
           FOR  FY 80
 OFFICE OF WATER PLANNING AND STANDARDS
         WATER PLANNING DIVISION
             SEPTEMBER, 1979

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                           TABLE OF CONTENTS
 I.     INTRODUCTION                                                     1

 II.    GOALS, PRIORITIES, AND OBJECTIVES FOR WATER                      3
       QUALITY MANAGEMENT

 III.   WATER QUALITY MANAGEMENT PHILOSOPHY                              5

 IV.    SUMMARY OF THE PROBLEM-SOLVING PROCESS                           7

       A.  Defining the Problem
       B.  Developing the Solutions
       C.  Implementing the Solutions
       D.  Evaluating Success

 V.     STATE AND AREAWIDE MANAGEMENT OF THE WQM PROCESS                17

       A.  Assessing Problems
       B.  Developing the Five-Year State Strategy
       C.  Developing the WQM Portion of the Draft
           State/EPA Agreement
       D.  Developing State and Areawide WQM Work Programs
       E.  Developing the WQM Portion of the Final
           State/EPA Agreement
       F.  Implementing the Work Program and the State/EPA
           Agreement
       G.  Evaluating Progress

VI.    WQM POLICY MEMORANDA (see list next page)

APPENDIX  -- Reference List

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                SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                          VI. WQM POLICY MEMORANDA


Section A -- Funding

A-l    Interim Guidance, Minimum Standards for Procurement under Section 208
       (Orignially SAM-14)

A-2    FY 80 Funding Policies for 106 and 208 Grants [RESERVED]


Section B -- Program Requirements and Criteria

B-l    EPA Policy Regarding  Interstate Commissions (Originally SAM-24)

B-2    Regulatory Programs for Nonpoint Source Control (Originally SAM-31)

B-3    Developing and  Implementing Best Management Practices (Originally
       SAM-32)

8-4    NEPA Compliance in the State and Areawide Water Quality Management
       Program (Originally SAM-34)

B-5    State Role in Responding to Environmental Emergencies [RESERVED]

B-6    Pretreatment and the Water Quality Management Program (Originally
       SAM-36)

B-7    Using 208 Funds to do Water Quality and Municipal  Facilities Evalu-
       ations for Treatment More Stringent than Secondary (Originally SAM-37)

B-8    Funding of Waste Load Allocations and Water Quality Analyses for
       POTW Decisions  (Originally SAM-38)


Section C -- Coordination

C-l    Interagency Coordination (Originally SAM-11)

C-2    Rural Clean Water Program Relationship to a 208 Plan (Originally
       SAM-33)

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                   SUPPLEMENTAL WQM GUIDANCE  FOR  FY  80
                             I.  INTRODUCTION
A.  Purpose
     The purpose of this supplemental  guidance is  to consolidate and
clarify the national  guidance for the  water quality management (WQM)
program, which EPA administers under sections  106, 208,  and 303(e)  of
the Clean Water Act.   This  is the first in  a series of annual  supplemental
WQM guidance documents.   Prior to the  start of FY  81, and each subsequent
fiscal  year, EPA will  issue updated guidance.   As  policy developments take
place during each year,  EPA will  issue corrections or addenda  as appropriate.
To facilitate keeping the guidance up-to-date, it  is printed in a loose-
leaf format.

     This guidance  coincides with the final  WQM regulations which  EPA has
recently revised [1].   All  of the citations in this package refer to the
new regulations, 40 CFR 35  Subpart G.

     This guidance replaces the WQM program guidance memos ("SAMs") which
EPA published between February, 1976,  and the present.  Current SAMs
become part of this guidance, but they have been edited, re-numbered,
and re-organized around  subject areas.  The supplemental guidance also
supercedes the November 1976 Guidelines for State  and Areawide Water
Quality Management Program  Development [4].

     Two current Water Planning Division (WPD) publications relate  to this
guidance.  The first is  the WPD work program [2 ]  which  the Division uses
to program, monitor, and evaluate activities and to inform and coordinate
with other offices.  The second is the FY 80 Baseline WQM Five-Year
Strategy [3], which sets forth the long-range WQM program.

B. Contents

     Sections II and III of the guidance present a discussion  of the goals,
objectives, priorities,  and philosophy of the WQM  program for  FY 80.  Section
IV presents an overview of  the problem-solving process for water quality--
* This guidance makes frequent references to legislation, EPA regulations,
  guidance documents, and other related documents.  For convenience, a list
  of references is attached.   Where the text refers to one of these
  documents, the number of the reference appears in brackets.  Where the
  reference is to a WQM policy memorandum in Section VI, the number of the
  memo is noted, e.g.,  A-2.

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of which the WQM program is a component—and section V presents a management
framework for the WQM portion of the process.   Section VI  contains the new
series of WQM policy memoranda.

C. The Problem-Solving Process

     The discussion of the problem-solving process for water quality problems,
section IV, shows how the various aspects of the water quality program fit
together.  In the past, persons working in water pollution control programs
have often lost sight of the overall problem-solving process because of such
factors as administrative burden, fragmented legislation,  and professional
and organizational specialization.

     The description of the problem-solving process touches on many programs
for the prevention of water pollution--permits, enforcement, construction
grants, planning, nonpoint source control, monitoring, evaluation, and
others.  The description is broad and simple,  and contains over 40 references
to other more-detailed documents.

D. The Management Framework

     The discussion of management of the WQM program in section V places the
program in a management perspective, focusing  on State and areawide management
procedures, rather than technical or institutional issues.  The purpose is
to promote active, rather than reactive, management of the program at all
levels.  It stresses the importance of a strong inter-governmental partner-
ship for the success of the WQM program.

     The management framework presents a streamlined management process
which should minimize paperwork and duplication of effort, and which identifies
all required outputs.  Management of the program is a straight-forward process
which, under the new regulations [1], dovetails with other environmental
efforts under the State/EPA Agreements.

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   II.  GOALS,  PRIORITIES,  AND OBJECTIVES  FOR  WATER  QUALITY MANAGEMENT


     The WQM program is  one  of the  EPA  programs  contributing  to  the
achievement of the water quality  goals  of the Clean Water Act [5 ] including
"protection and propagation  of fish,  shellfish,  and wildlife  and provision
of recreation  in and on  the  water by  1983 wherever  attainable .  .  .  ."
Specifically for the WQM program, the goal  is:

     To assist in the development and administration of  a State  and
     local  government decision-making process to control  point and
     nonpoint  sources of pollution  to meet the water quality  goals of
     the Act.

     Management Priorities.   Management of the WQM  program  involves  two
large grant funds under  the  Clean Water Act—section 106 State Program
Assistance  Grants and section 208 Waste Treatment Management  Grants.
Management  priorities are  discussed in  detail  in the WQM FY 80 Baseline
Strategy [  3].

     With respect to 106 grants,  EPA  does not have  firm  national priorities
at this time.   The Water Planning Division (WPD) is coordinating a WQM
Meeds Assessment which will  provide data  on 106  needs and assist EPA in
setting future 106 priorities.

     The entire water program is  moving into  more areas  as  EPA,  the  States,
and others  begin to address  such  topics as toxic and nonpoint source controls
In response to the changing  demands on  State  programs, the  EPA Agency
Guidance for FY 80/81  [ll] directs  the  States to program 106  funds freed
up as a result of 205(g) delegations* into new areas such as  hazardous and
toxics  monitoring, spill prevention,  and  implementation  of  approved  WQM
plans.

     For management of section 208  grants, EPA has  two management priorities.
First,  in FY 80 and beyond,  EPA will  initiate a  more active,  rather  than
reactive, management stance  with  increased emphasis on filling gaps  in WQM
plans,  providing technical and fiscal/financial  assistance,  improving
Regional Office program  management, and linking  continuing  funding for
203 agencies to evidence of  implementation.

     Second, assuming adequate funding  levels, EPA  anticipates completion
of the  208  grant program and expects  no 208 grants  after FY 83.   This will
represent the  successful completion of  a  framework  for solving water quality
problems allowing EPA, the States,  and  others to make the transition from
planning to implementation of controls.  After FY 83, EPA will recommend  a
restructured program focusing on  implementation  of  nonpoint source controls.
* Construction Management Assistance Grant program (205(g))

                                  3

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     In FY 80-83, State and areawide WQM agencies will  fill  in  the_gaps  in
their WQM plans, largely through the use of prototype problem-solving
projects for more difficult problems.  EPA will  provide funding,  expert
technical assistance, and information transfer mechanisms  to ensure  the
success of their efforts and the transferat-il ity of their  results.

     Problem Priorities.  EPA has set national priorities  for the 208-funded
portions of the WQM program—areas of emphasis which EPA encourages  the
States and areawides to address with 208 grants.  The program also supports
Regional, State, or local priorities which differ from the national  208
priorities if they are implementation-oriented, are for nonpoint  sources,
and will have a major impact on water quality.

     It  is EPA policy that section 208 grants are only for nonpoint  source
problem-solving activities in FY 80 and beyond.  In general, the  highest
priorities for 208 funding are urban storm runoff, agricultural runoff,
and groundwater protection.  Other nonpoint sources such as construction,
mining,  or silviculture runoff are secondary priorities.  For a detailed
discussion of the section 208 priorities, see the WQM FY 80 Baseline
Strategy [3 ].

     Public Participation.  Since the start of the WQM program, public
participation has been a high priority.  All aspects of the program are
governed by the  recently-revised public participation regulations, 40 CFR
Part 25  [8 J.   In FY 80, EPA will focus public participation activities  on
specific problem-solving projects and implementation activities that State,
areawide,  and local agencies undertake.  Thus, public participation efforts
will be  more project- and problem-specific, and will help to assure that
technical  solutions to nonpoint  source  problems, for example, are understood
and  have local  support and  political acceptance for implementation.

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              III. WATER QUALITY MANAGEMENT PROGRAM PHILOSOPHY


      As  the WQM  program has evolved since FY 73, its philosophy has changed
 as  a  result of external events and experience within the program.  Below
 are three  important directions for WOM philosophy in FY 80:

 A.  Emphasis on Implementation and Problem-Solving

      From  the start of the WQM program, EPA has emphasized the importance of
 plan  implementation, so that taxpayers would realize their investment  in WQM
 planning in water quality improvements.  In FY 80, EPA will place more
 emphasis on problem-solving through its 106 and 208 grant policies.

      As  mentioned briefly above, EPA is urging States to use 106 grants to
 fund  WQM plan implementation, since 208 funds can't be used for that purpose.
 The WQM  regulations [ 1 ] permit the States to use 106 funds to support
 regulatory programs for nonpoint source control or other similar programs
 such  as  State dredge and fill regulatory programs under 208(b)(4)(B).

      At  the same time, EPA is directing 208 funds toward problem-solving
 projects designed to fill  gaps in WQM plans and identify cost-effective
 controls for nonpoint source problems.   For example, EPA is funding urban
 runoff projects  in its Nationwide Urban Runoff Program (NURP).  When these
 projects have tested best management practices (BMPs) for urban runoff,
 States and areawides will  use the results to solve similar problems in other
 urban areas.

      For agriculture,  EPA is cooperating with USDA on funding and managing
 several types of pilot projects, including Model  Implementation Projects
 (MIPs) and Agricultural  Conservation Program (ACP) special projects, in
 which States or local  agencies test BMPs in -different types and sizes of
 agricultural  watersheds.   Under section 208(j) of the Act, EPA also
 participates in an implementation program for nonpoint sources, the Rural
 Clean Water Program (RCWP).   The RCWP will  provide cost-sharing for owners/
 operators of rural  lands  to  implement BMPs contained in certified and
 approved WQM plans.

     For other problems,  such as construction runoff, groundwater contamin-
 ation, failing septic  systems, and municipal waste treatment, the Regions,
 States, and  areawide  agencies will  often use prototype projects to solve
 problems.

 B. Changing Role  of State/EPA Agreements

     The requirement that  the States and EPA Regions prepare annual State/
 EPA Agreements first appeared in the 1976 WQM regulations [6 ].   Under those
 regulations,  the  Agreements  covered the detail, timing, content,  and sequence
of State WQM planning.

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     Now, beginning in FY 79, EPA and the States negotiate integrated annual
Agreements covering not only water quality programs, but also water supply,
solid waste, and other programs the Regions and States agree to include.
Areawide agencies, Interstate Basin Commissions, and the public participate
in the Agreement process.

     The Agreements are management tools to maximize the effectiveness of
resources for implementing solutions to environmental  problems.  They respond
to EPA priorities and the States' problem assessments  and strategies, and
contain or make reference to one-year work programs.  To simplify paperwork,
the Agreements, with their work programs, can serve as the narrative portions
of grant requests for programs covered under the Agreements.  For more
information, see the State/EPA Agreement Policy and Guidance, February 1979


C. Roles of State and Areawide Agencies

     During the first phase of the WQM program (FY 73-75), the States and
designated areawide agencies conducted three separate  programs under
sections 106, 2C8, and 303(e) of the Act.  With 106 grants, the States
managed their water programs and did basin planning under section 303(e).
Meanwhile, 149 areawide agencies received 100 percent-Federal-share 208
grants in FY 74-75 for three-year comprehensive areawide planning.

     Starting in FY 76, EPA administratively merged the requirements of
208 and 303(e) in a single planning program, the WQM program, with State
and areawide components, after the Smith decision [7] opened up 208
funding to the States.  In FY 76, 49 States received 75 percent-Federal-
share 208 grants to oversee areawide planning and conduct planning in
non-desianated areas.  Bu ^ although EPA merged 208 and 303(e), there was
still a lack of coordination between the management and implementation
programs (State--106) and the planning programs (State/areawide--208/303(e)).

     Now, with the promulgation of the new WQM regulations [1 ], EPA has
integrated the requirements of 106, 208, and 303(e) into a single State and
areawide process.  The new regulations set forth a streamlined program, with
the State at its focus.  Each Federal, State, or local unit of government
performs those activities which it is best-suited to handle.

     Regarding relationships between States and designated areawide agencies,
the regulations call for a strong State management role, but at the same
time they maintain a link between EPA and the areawide agencies.  The States
set the policy framework, and have a major role in the review of areawide
priorities and work programs.  They must, however, consider areawide
priorities in the policy framework.  EPA will approve  areawide work programs,
with consideration of State comments, and generally fund the areawides
directly.  Any conflicts that arise between States and areawides will be
resolved by the conflict-resolution procedures the regulations require.

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             IV.  SUMMARY OF THE WQM PROBLEM-SOLVING PROCESS
     This portion of the guidance is a summary of the overall problem-
solving process of which the WQM program is a part.  In keeping with the
Agency's emphasis on program integration, the summary describes a broad
program incorporating many authorities and sources of funds.  Each section
makes reference to other more-detailed documents.

     The problem-solving process consists of four elements: defining problems,
developing solutions, implementing solutions, and evaluating results.  Federal,
State, and local funds all support the problem-solving process.  Two major
sources of Federal funding are section 106 and 208 grants under the WQM
program.

A.  Defining Problems

     The first step in the problem-solving process, problem definition,
consists of setting water quality goals and standards, assessing the causes
of water quality problems, and setting priorities for action.

     1.  Water Quality Standards (WQS)

     Water quality standards are one major basis for judging the existence
of water quality problems.  The States set WQS, based on EPA guidance, and
EPA approves them.  The States must review the standards, and revise them if
necessary, at least once every three years.  The WQS consist of use desig-
nations, a set of numerical criteria to support the use, and a Statewide
anti-degradation statement.

     Some current concerns in the water quality standards area are  (1)
application of water quality criteria for toxic pollutants in water quality
standards,  (2) the appropriate policy regarding State actions to ensure the
maintenance of minimum stream flows,  (3) intermittent stream and mixing zone
policies,  (4) implementation of Natural Resource Water designations with the
Department of Interior, and (5) requirements to justify State failure to upgrade
streams to "fishable/swimmable" levels.

     For more guidance on water quality standards and related topics, see
references [12] through [15].   The Advance Notice of Proposed Rulemaking
of July, 1978,  [13] discusses many WQS issues in detail.

     2.   Problem Assessment

     Problem assessment is a process of EPA, States, areawide agencies, and
others  to identify water quality problems and connect them with the causes
of pollution.   The assessment process identifies existing water quality
problems and future problems by anticipating population, land use, and
economic changes.

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     A major part of the assessment process is water quality monitoring,
which is a cooperative effort of EPA and other Federal, State, areawide,
and local agencies.  Monitoring must meet the specific needs of a State or
local area, must be useful, cost-effective, and non-duplicative, and must
build on existing information.

     The first step in the problem assessment process is to define problems.
Are beneficial uses of streams being denied?  Are criteria not being met?
Are there other indications of problems, such as unsightly conditions, fish
kills, severe erosion, or strong odors?  The second step is then to identify
the pollutant or pollutants causing the problem, usually through new data
collection and review of existing data.

     Identification of the sources of the pollutants is the third step in
the process.  Some tools for identifying sources are discharger inventories,
self-monitoring reports from NPDES permits, and on-site surveys or inspec-
tions.  Then, the final step in the assessment process is to determine what
is controllable.  Pollution from some sources (e.g., benthic deposits) is
difficult, if not impossible, to control.

     Another aspect of the assessment process is the determination whether
base-level technology for point sources and feasible controls on nonpoint
sources will allow streams to meet water quality standards in the present
and future.  If a stream will meet standards, it is classified "effluent
limited."  If it won't meet standards without additional  controls, it is
classified "water quality limited."  These classifications later affect the
calculations of point source effluent limits.

     For further guidance on monitoring and the problem assessment process,
see references [16] through [23].

     3.  Identification of Priority Problems

     Since resources to solve water quality problems are limited, the agen-
cies involved must set priorities.  The priorities should flow logically from
the problem assessments.

     For construction of municipal facilities, each State has a priority
system  which governs preparation of a five-year construction priority list.
For other problem areas, such as nonpoint sources, urban runoff, wetlands
protection, toxics hot spots, or ground water protection, the States, area-
wide agencies, and EPA negotiate long-term priorities in the process of
developing State strategies, work plans, and State/EPA Agreements.

     The States, areawides, and EPA may also address priorities for
institutional, financial, or other problems delaying specific water quality
improvements.  Sources of information for such problems include institutional
assessments in certified/approved WQM plans and management agency evaluations
which the States conduct.

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     The States should also develop priorities for the development of total
maximum daily loads (TMDLs) and waste load allocations (WLAs) for water
quality limited segments.   These priorities depend in part on where advanced
waste treatment decisions  are unresolved.

     For further guidance  on priority determinations, see references [24]
through [26].

B.  Developing Solutions

     The second step in the problem-solving process,  developing solutions,
is essentially the planning phase.   It includes development of permit
conditions and planning for both point and nonpoint source controls.

     1.  Haste Load Allocations (WLAs)

     For all water quality limited stream segments, the States must develop
waste load allocations in  order of priority.    WLAs allocate the maximum daily
load for particular pollutants among the dischargers  on the segments.  They
serve as the basis of point source permit conditions  on these segments.

     One aspect of the allocations is point source/nonpoint source tradeoffs
in situations involving nutrient loads and downstream euthrophication.
Application of best management practices (BMPs) for nonpoint sources could
make possible less-expensive treatment for point sources, while maintaining
in-stream beneficial uses.

     Recently, EPA has scrutinized, at Congressional  request, existing  waste
load allocations for municipal dischargers and has found, in many instances,
that they lack a firm technical and water quality basis.   All WLAs for  muni-
cipal and industrial discharges must accurately represent the maximum loads
that the stream can assimilate without impairment of  the designated or  pro-
posed beneficial uses.  The Agency has issued technical guidance pertaining
to development of WLAs for publicly-owned treatment works [B-8].  LPA is
also developing further guidance which will be issued early in 1980.  For
more information on modeling and waste load allocations,  see the list of
publications in reference  [27].

     2.  FNsrmit Conditions

     With the information  from preceding steps, the next step in the problem-
solving process is to set  permit conditions.   NPDES permits for point sources
under section 402 of the Clean Water Act typically include effluent limits
for various pollutants, expressed in concentrations or total loads; schedules
of compliance for dischargers not already in  compliance;  and requirements
for self-monitoring and reporting.   In the case of publicly-owned treatment
works,  the permit also includes requirements  for residuals disposal under
section 405 of the Act.

     EPA,  or the State if  it has permit authority, calculates NPDES permit
conditions for industry based on EPA's effluent guidelines and any appli-
cable waste load allocations.   Permits vary depending on the type of industry,

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whether it is a new or existing source, and whether it is on a water quality
limited segment.  Permits for POTW's are calculated similarly, based on EPA's
definition of "best practicable waste treatment technology" (BPWTT).  Point
sources which don't lend themselves to traditional end-of-pipe treatment,
such as discharges from storm sewers, receive general  NPDES permits.  The
permit conditions may include required management practices, general guide-
lines, or monitoring and reporting requirements.

     In addition to the NPDES permits which the States or EPA administer
under the CWA, EPA also administers dredge and fill permits under section
404 and is developing permit programs for underground injection (SDWA) and
hazardous waste disposal (RCRA).  To streamline the permit process, EPA has
recently proposed regulations [30] for integration of surface, underground,
residual, dredge and fill, and hazardous permits for point sources.  For
more information, see references [28] through [31].

     3.  Planning for Municipal Systems

     At the project level, owners/operators of publicly-owned municipal
treatment works conduct necessary planning with Step 1 construction grants.
The Step 1 facility plans—which include public participation—investigate
the cost-effectiveness of various engineering alternatives, select the most
cost-effective options, and investigate other technical  matters such as
pretreatment requirements, user chargers, operations and maintenance costs,
industrial cost recovery, and infiltration/inflow.

     State and areawide WQM planning agencies, also with public participation,
look at municipal waste treatment problems from a broader perspective—
financially, geographically, technologically, and institutionally.  In the
initial phases of the 208 grant program, from FY 74-79,  many areawide agencies
used 208 grants to study areawide treatment issues for municipal  point
sources.  Now, in the continuing planning phase (FY 80 and beyond) 208 grants
may not be used for point source planning, but the States and designated area-
wide agencies still have an interest in planning for treatment works.  Several
208 grants EPA awarded in FY 79 have multi-year periods  of performance, and
the States may use other-than-208 funds to support areawide planning
activities.

     Fiscal/financial management analysis is an important part of planning
for sewage treatment facilities.  Structural controls are expensive, and
must be economically feasible in the communities they serve.  Recent EPA
thrusts in planning for municipal systems—land treatment, water conserva-
tion, innovative/alternative technology—are partially intended to mitigate
the monetary costs of treatment or to advance technology which will eventually
be more economical.  Water Planning Division is also providing financial
management technical assistance to selected State and areawide agencies
through a contract.

     For further guidance on planning for municipal systems, see references
[32] through [36].
                                    10

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     4.  Nonpolnt Source Control  Requirements

     In accordance with their problem assessments and nonpoint source control
priorities, States and areawide agencies develop best management practices
(BMPs) for controlling nonpoint source pollution.  BMPs are defined as the
most practical means of controlling or reducing pollution from nonpoint
sources, considering technological, economic, and institutional factors.
They may include structural  controls, nonstructural  controls, or a
combination.

     Fiscal/financial  and management analysis is also an important part of
BMP development, since BMPs  will  not be accepted, and may be counterpro-
ductive, if they are too burdensome on the person or entity required to
implement them.

     Although cost-effective BMPs exist for some problems, such as construc-
tion runoff and failing septic systems, BMPs for such problems as urban storm
runoff and agricultural runoff are not fully tested.  For this reason,
designated State and areawide WQM planning agencies  are testing BMPs in
prototype or pilot projects.  When complete, these prototypes will provide
a technological  basis  for control which EPA can transfer to States and
areawides nationwide.

     The prototype projects  also  test the financial, institutional, and
political aspects of controls.  State, areawide, and local planners work
with local elected officials and  the public on institutional arrangements,
public support,  and sources  of funding for selected  controls.

     For more information on BMPs, see references [37] through [42] and
WQM Policy Memorandum  B-3.

C.  Implementing Solutions

     This part of the  process is  the problem-solving step.  It involves
agreements on duties,  incorporation of problem-solving into budget processes,
administration of regulatory programs, and other related efforts.

     1.  Agreements on Institutional Responsibility

     The first step for State and areawide agencies  in implementing solutions
to water quality problems is developing agreements on institutional
responsibility.   State and  areawide WQM plans identify agencies with
authority and capability to  implement all aspects of the plan, and the
Governor designates these agencies as WQM management agencies.  The planning
agency and the management agency  develop a long-term agreement detailing the
steps each agency will take  to implement the plan, and a schedule for doing
so.
     Generally,  different institutions handle different problems.  Cities,
counties,  special  service districts, or interjurisdictional compact agencies
normally handle  municipal waste treatment problems, while soil conservation
districts  or county governments are more likely to handle rural  nonpoint
source problems.   For more information on management agencies, see references
[43] and [44].
                                   11

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     2.  State and Local Budget Processes

     Incorporating management of water quality in State and local budgets
is another basic implementation activity.  State and local management
agencies must develop systematic approaches to financial management and bud-
geting.  Ad hoc requests for funding, or over-reliance on Federal funding,
are not suitable long-term substitutes for effective financial planning.

     State and areawide planning agencies incorporate fiscal/financial
planning in their WQM plans.  They identify cost-effective solutions to
problems, determine the costs to local taxpayers, develop sound plans to
defray the costs, and attempt to motivate political  action to implement
the plan.

     In response to the need to improve financial planning and analysis for
water quality management at all levels of government, the Water Planning
Division has instituted a Financial Management Assistance Project (FMAP) to
provide State, areawide, and local agencies with tools and techniques to
finance implementation.  For further information on the FMAP and this subject
area, see reference [45].

     3.  Permit Issuance and Enforcement

     As discussed above, EPA issues different types of permits (surface
discharge, residuals disposal, dredge and fill, underground injection,  and
hazardous waste disposal) which may be integrated to streamline the permit
process in the near future.  Some States and local governments also have
permit programs.

     Enforcement is generally the responsibility of the permit-issuing  agency,
and is a critical part of implementation.  As with other aspects of the pro-
cess, it is necessary to set enforcement priorities.  As a rule, enforcement
aims first at chronic violators, major dischargers,  and potential dischargers
of toxic substances.

     For further information on permit issuance and enforcement, see refer-
ences [28] through [31].

     4.  Other Regulatory and Non-regulatory Programs

     In addition to permit-based regulatory programs for point sources, there
are other regulatory and non-regulatory approaches for nonpoint sources.
Such programs are generally State or local initiatives, and many States and
local governments are planning such programs through the WQM planning pro-
cess.

     For EPA to approve a nonpoint source regulatory program in a WQM plan,
such as a permit, license, or bond program, it must include authority to
control the problem, monitor activity, and enforce the program.  Also,  the
designated management agency must have adequate expertise, staff, funding,
and authority.


                                   12

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      In the absence of regulatory programs, voluntary compliance programs may
work  to control pollution.  Such programs usually depend on education,
citizen involvement, and self-monitoring.  For EPA to approve a non-regulatory
program, the Regional Administrator must determine that it will result in
implementation of needed controls and achievement of water quality goals.

      For more information on these regulatory and non-regulatory programs
see WQM Policy Memorandum B-2 and references [45] and [46].

      5.  Structural Solutions

      Although there are many non-structural solutions to water quality pro-
blems, in some instances construction is appropriate.  EPA's construction
grants program has awarded $28.8 billion in grants since 1972 for construc-
tion  of treatment plants, interceptors, sewers, and appurtenances.  The 1977
Amendments to the Clean Water Act [5] provided an incentive for innovative
and alternative treatment works, by raising the Federal  share of the cost
of such projects from 75 to 85 percent.  Innovative/alternative projects are
those which reuse or reclaim wastewater, recover nutrients and other pollu-
tants in wastewater or sludge, or conserve or recover energy.

      There are, in addition   to treatment plants and sewers, other structural
solutions, such as detention basins for urban storm runoff, recharge systems
for ground water, irrigation systems which reclaim waste water, and erosion
control barriers.  In general, States, local agencies, or private concerns
must  fund these structures themselves, or obtain funds from outside EPA.

      If a structural solution involves multiple purposes, one of which is
wastewater treatment, it may be eligible for a construction grant under EPA's
policy on multi-purpose projects.  The purposes most often combined with
wastewater treatment are reclamation of effluent and disposal of refuse.
EPA's policies on multi-purpose project funding are under review.

      For more information on structural solutions to water quality problems,
see reference [47].

      6.  Cost-Sharing for Agriculture

     The 1977 Amendments [5] provide an incentive for solving agricultural
and other rural  pollution problems through the Rural Clean Water Program
(section 208 (j)).   Under this program, cost-sharing will be available from
USDA for implementing agricultural portions of approved State and areawide
WQM plans.   Some States, such as Wisconsin, Iowa, and Minnesota, also have
their own cost-sharing programs.

      In the  RCWP program, USDA enters into five-to-ten year contracts with
land owners  in high-priority areas which WQM plans have identified.  Land-
owners receive technical assistance and cost-sharing to implement BMPs for
sediment,  pesticides, and nutrient controls consistent with approved WQM
plans.  The  Soil  Conservation Service (USDA) administers the RCWP program.
                                  13

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     The USDA and EPA issued final regulations for the RCWP program in
November, 1978 [49], but the Congress did not fund the program in FY 79.
For FY 80, a House-Senate conference committee has agreed upon $50 million
for RCWP funding.  The funds are directed to the Agricultural  Conservation
and Stabilization Service, USDA.  At the time of this guidance, further
details of the appropriation language are unknown.

     For more information on cost-sharing for agriculture, see references
[48] through [52].

     7.  Sanctions and Incentives

     Where other attempts to solve water quality problems have failed, EPA
or a State may wish to apply sanctions.  Sanctions may be against a single
discharger, a local or areawide agency, or the State itself.

     If a municipal or industrial discharger violates its NPDES permit, the
resulting sanction is permit enforcement.  Dischargers may be subject to
both civil and criminal penalties for polluting.  (Note that EPA or the States
will not usually impose sanctions against municipalities that are too far
down the priority list to receive construction grants to correct their
problems.)

     If a management agency designated to implement a certified/approved WQM
plan fails to carry out its agreed-upon duties, the State may withdraw the
management agency designation and transfer the authority to another agency
or the State itself.  In extreme cases, EPA could rule an agency not deser-
ving of public trust, which would exclude it from all Federal  funding.

     Finally, if a Regional Administrator feels a State is not implementing
its certified and approved WQM plan, he or she may rule that the State's
continuing planning process is inadequate and withhold State assistance or
revoke its NPDES delegation, if any.

     Some incentives exist as possible alternatives to sanctions.  One exam-
ple is the "payment in lieu of a fine," where a discharger/operator faced
with a fine may contribute to the solution of an environmental problem in
lieu of, or in addition to, a fine.  Other examples are Small  Business
Administration (SBA) loans; accelerated tax write-offs for industrial/com-
mercial pollution control; awards and honors; and grants from discretionary
funds as rewards for superior performance.  Also, EPA's 75 percent-Federal-
share construction grants program is an incentive for implementation of
solutions to municipal waste treatment problems.

     For more information on sanctions and incentives, see references [53]
and [54].

D.  Evaluating Progress

     Evaluation establishes the feedback loop in the problem-solving process
to keep management, planning, and implementation moving in the right direc-
tion.   Results of various evaluations affect State and areawide budgets,
                                   14

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work plans, and detailed problem-solving activities.  Theoretically,
evaluation is the comparision of actual performance or status to an idealized
system model.  Thus, evaluation depends on an understanding of what is required
and desirable.

     Evaluation activities weave through the problem-solving process, and
break down into four general areas: evaluation of outputs, water quality,
trends, and institutional aspects.

     1.  Evaluating Outputs

     The States, EPA, and others must evaluate permits, construction grants,
WQM plans, facility plans, and other plans (such as State Implementation Plans
for air quality) to ensure they are consistent with each other and with all
relevant laws and regulations.  EPA, the States, and areawide agencies should
have procedures for evaluating such outputs, such as formal  A-95 review, work
groups, and task forces.  Outputs must be consistent not only with the Clean
Water Act, but also with Presidential directives and other major environ-
mental legislation.*  Many laws have built-in consistency requirements, such
as the requirements of sections 176(c) and 316 of the Clean Air Act and
sections 208(d) and (e) of the Clean Water Act.

     Evaluation of construction outputs is an important aspect of the
Construction Grants program.  EPA has made arrangements with the Corps
of Engineers to conduct inspections at construction sites and to evaluate
plans and specs to ease the burden on EPA and provide expert evaluation of
construction progress.

     Also, the EPA Regions meet annually with the States and areawide
agencies receiving section 208 grants to determine how all parties have
performed against the commitments they made in their work plans and State/
EPA Agreements.  These reviews focus on completion of quantifiable outputs,
and lead to mid-course corrections or adjustments to subsequent years' work
plans.

     2.   Evaluating Water Quality

     The ultimate test of any environmental program is whether it meets its
overall  objectives of environmental protection.   For water programs, this
means protecting or improving water quality in such a way that problems aren't
simply transferred to other media--the air and the land.

     Through monitoring and other observations,  EPA, the States, areawide
agencies,  local agencies, and the public continuously evaluate water quality.
* For example: Clean Air Act, Safe Drinking Water Act, Resource Conservation
  and Recovery Act, Toxic Substances Control Act, National Environmental
  Policy Act, Wild and Scenic Rivers Act.
                                    15

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Is water quality improving, staying the same, or going downhill?  Are
numerical criteria being met?  Are designated uses being met, or are they
denied?  Are designated stream uses justified—or are they too optimistic or
pessimistic?  Is stream biology healthy?  Is ground water being protected from
overdrafting and contamination?  Are residuals properly disposed of, recycled,
or reused?  And finally, where problems exist, what is causing them?

     3.  Evaluating Trends

     Because pollution is a dynamic problem, trend analysis is a key part of
evaluation.  They key variable in trend analysis is population and economic
growth or decline.  It is possible that, in some instances, population and
economic growth could cancel out improvements in water quality which the
problem-solving process achieved.

     Through their planning processes, State, areawide, and local  agencies
evaluate the impacts of population/economic growth on domestic waste
generation, industrial waste generation, sediment production and transfer,
pollution from nutrients and pesticides, ground cover, land use, water
demand and withdrawls, or other factors.  One trend which they monitor
is the build-up of toxic pollutants in the environment and in aquatic life,
particularly fish and shellfish.

     4.  Evaluating Institutional Aspects

     When assessing the causes of water pollution, it is sometimes impossible
to separate the technical problems from the related institutional  and
political problems.  Thus, agencies must evaluate the institutional  aspects
of their programs.  Some mechanisms for doing this are WQM plans,  the mid-
year reviews of States and areawide agencies, and the management agency
evaluations which the States perform.  (See State and Areawide Management of
the WQM Process, below).

     The WQM regulations [1] set up criteria for making institutional
evaluations.  Some important considerations are:

     Do management agencies have adequate authority to control pollution?
Do they have adequate fiscal/financial expertise?  Are staffing, training,
and salary scales adequate?  Do the agencies perform adequate monitoring and
enforcement?  Are activities coordinated?  Do the responsible agencies
understand the laws and regulations?  Is EPA guidance adequate?  Is the
agency encouraging and providing for public participation, is the public
involvement broad-based, and does the public support the agency's actions?

     Questions such as these set the tone for institutional evaluations.
Depending on the answers, the agencies involved may take corrective action
in the areas of management, planning, legislation, and training.
                                    16

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            V.  STATE AND AREAWIDE MANAGEMENT OF THE  WQM PROCESS


     The problem-solving process depends  on the coordinated efforts  of
many programs and agencies for its success.  This  section of the guidance
recommends management procedures for the  HQM portions  of the process,
that is, those activities the States and  areawide  agencies conduct
under sections  106, 208, and 303(e) of the Act and the WQM regulations.*

     This portion of the guidance augments the regulations with descrip-
tions of management procedures,  identification of  required outputs,  and
references to detailed guidance.  The thrust of this portion of the
guidance is to  promote active, rather than reactive, management of the
WQM program on  the part of all participants.

     The State/areawide management process for the WQM program breaks down
into seven annual components, discussed in detail  immediately below.   The
seven components are:

     (1) assessing water quality pYoblems

     (2) developing the five-year State strategy

     (3) developing the WQM portion of the draft State/EPA Agreement

     (4) developing detailed State and areawide work programs

     (5) developing the WQM portion of the final State/EPA Agreement

     (6) implementing the work program and the State/EPA Agreement

     (7) evaluating progress
* Although this guidance is geared toward State and areawide agencies
  and their management of 106 and 208 grants,  it also applies generally
  to Interstate Basin Commissions which receive grants under section
  106.   The Interstate Commissions participate in problem assessment,
  develop work programs and implement them,  evaluate their progress,
  and participate in the development of State/EPA Agreements for the
  States in their basins.  For details on the  role of the Interstate
  Basin Commissions, see the WQM regulations (35.1540) and WQM Policy
  Memorandum B-l.  The affected Interstate Commissions -are NEIWPCC,
  ISC,  DRBC, INCOPOT, SRBC, and ORSANCO.
                                    17

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     EPA is making every effort to manage the HQM program on a rational
annual  cycle, geared toward obligations of most 106 and 208 grants no
later than the end of the second fiscal quarter, with no carry-over of
unobligated funds past the fourth quarter.

     To promote the concept of a predictable, annual  planning cycle for
the WQM program, the guidance below contains certain deadlines and
recommendations on the timing of various steps.  The relationships of
the steps appear in the WQM time-line, Figure I.
A. Assessing Water Quality Problems

     1.  Discussion

     The first task in State and areawide management of the WQM program
is to establish a process for assessing water quality problems.  Agencies
must assess both existing conditions and anticipated conditions result-
ing from changes in land use, population, and the economy.   The assess-
ment process includes both point and nonpoint sources.

     The WQM regulations [1J require no hard outputs from the assessment
process except for the biennial 305(b) report, but the  process builds  a
basis for subsequent work on State/EPA Agreements, State strategies,  and
work programs.  Each State/EPA Agreement should include a brief problem
statement [9 ].

     Assessing water quality problems is generally a State responsibility,
although EPA also has a role, especially in the monitoring and assessment
of toxic pollutants.  Areawide agencies also may conduct portions of  the
assessment with the approval of the Regional Administrator.  State
monitoring programs provide most of the data.  Some States have begun  to
employ environmental indices to assist with the critical assessment
functions of ranking segments and discerning trends.

     In keeping with EPA's emphasis on integration, State and areawide
agencies should attempt to integrate their various problem assessments
and review data from all relevant sources, for example, approved WQM
plans and Clean Lakes Assessments (CMA*), the Open Dump Inventory (RCRA*),
and the Surface Impoundment Assessment (SDWA*).
* CWA--Clean Water Act
  RCRA--Resource Conservation and Recovery Act
  SDWA--Safe Drinking Water Act
                                18

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              FIGURE I
RECOMMENDED WQM MANAGEMENT TIME-LINE
FY 30
MANAGEMENT ACTIVITY
assessing water quality
problems
Hpvplnninn thp fivp VPflr
State strategy
developing NQM portion of
draft State/EPA Agreement
developing detailed State
and areawide work programs
developing WQM portion of
final State/EPA Agreement
implementing work program
and State/EPA Agreement
evaluating progress
Ql


I




Q2




I






Q3


"J



1




Q4









FY 31
Ql







Q2




f






Q3


nl








Q4










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     2.  Recommended Management Procedures
                        *
     The States and areawide agencies  should manage the problem  assessment
process  in accordance with the regulations  and  appropriate guidance.   Each
State should review EPA assessment guidance, work with the Regional  Office
to agree on review procedures and assistance, analyze the data and develop
the State position on where problems  exist, and review the State's position
with the Region.  Recommended steps for the process are:

     o  The States should review EPA  Headquarters guidance on assessments
        [16 - 23] and additional guidance  the Regional Offices provide for
        the particular Region or State.

     o  The States should work with the Regional Office to agree on
        assessment process review procedures, including format,  timing,
        and annual v- biennial requirements.  They should also agree on
        necessary technical assistance the Regions will provide.

     o  States should analyze available data and develop information on
        attainability of beneficial uses;  appropriateness of existing
        standards and stream classifications; sources of pollution;  projected
        loads; and current and projected abatement.  Based on these  findings,
        the States may make recommendations for further assessment work in
        upcoming work programs.

     o  The States should review the  results of their assessments with the
        Regions and agree upon desired changes  in methods, procedures, or
        content.

     o  Areawide agencies should, after negotiations with the States and
        EPA, conduct assessment activities crucial to their  area.

     3. Required Outputs

     STATE OUTPUT  -- biennial 305(b)  report in  even-numbered years
                                   20

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B. Developing the Five-Year State Strategy

     1. Discussion

     According to the WQM regulations [l], each State must prepare and
update annually a strategy for controlling pollution from point and nonpoint
sources.  Long-term strategies are an essential component of the State WQM
programs, where they drive subsequent efforts on work programs and State/EPA
Agreements.

     The strategies include environmental  goals for a five-year period,
priority water quality problems, estimated costs of activities to control
the problems, identification of responsible entities, and a summary of
anticipated funding.  They should address  the problems and priorities which
certified/approved WQM plans have identified, other problems the State has
identified in its problem assessment process, and any needs related to
problems with management agency performance.

     A major emphasis of the strategy should be on solving specific
environmental problems in specific locations, consistent with EPA guidance
and current EPA policy expressed in the WQM FY 80 Baseline Strategy [3].
The strategies should also discuss long-range objectives for those areas
the States fund with their 106 grants—such as monitoring, enforcement,
permitting, and management—and explain how these activities contribute
to the  solutions of priority problems.

     The States must involve areawide agencies and interested publics in
the development of the strategies, and  the Regional Administrators will use
the State strategies in their reviews of areawide work programs.  Also, in
accordance with EPA's emphasis on integration, the Regional Administrator
has flexibility to allow a State to develop an integrated water quality/
drinking water/solid waste strategy or  more comprehensive integrated
strategy.

     2. Recommended Management Procedures

     The State strategy, like the problem  assessment process, is primarily
a  State responsibility, although the areawide agencies and others have
important inputs.   The recommended process for developing the State
strategies is for the States to review  EPA criteria and guidance with the
Regions to agree on expectations, analyze  alternative strategies, select a
State strategy, and—throughout the process — involve areawide agencies and
the public.

     The specific recommended management steps are:

     o  The States should review the WQM regulations and additional guidance
       the Regions provide for the particular Region or State.  The States
       should work with the Regional Offices to agree on review procedures,
       timing, the roles of the various parties, and what constitutes
       approval.
                                  21

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     o  Public participation:  The States must inform the public  about  the
        proposed goals and scope of the State strategy  early in  the  process
        of its development and schedule opportunities to consult with  the
        public and the State WQM advisory committee.  Consultation with  the
        public could occur simultaneously with advisory committee consultation,
        or it could be accomplished by a separate meeting or other less-formal
        means.

     o  The States should identify possible alternative strategies and--
        to the extent time and resources al low—analyze them for cost-
        effectiveness, funding needs, consistency with  national  strategies,
        and other factors.  The States should then select strategies and
        submit them to the Regions.

     3.  Required Outputs

     STATE OUTPUT -- annual  five-year State strategy with public
                     responsiveness summary

                  -- summary of areawide involvement and comments


C. Developing the WQM Portion of the Draft State/EPA Agreement

     1.  Discussion

     With consideration for the problem assessment process,  and  based  on
their five-year strategies, each State should begin to  develop draft State/
EPA Agreements and WQM work programs at least six months prior to the  start
of each fiscal year.  Development of draft State/EPA Agreements  and  WQM
work programs is simultaneous, with much interaction between the two efforts.
The final State/EPA Agreement eventually incorporates the State's WQM  work
program, either directly or by reference.

     In keeping with EPA's policy of conducting the 106 and  208  grant  programs
on a rational annual cycle with grant awards early in the fiscal year  and no
carry-over, State/EPA Agreements must address the use of funds for the same
fiscal year the Agreements cover.  For example, FY 81 Agreements must  include
plans and priorities for the use of FY 81 208 grants.

     The States must involve the areawide agencies and  interested members of
the public in the preparation of the draft Agreements and submit summaries of
their participation with the drafts.  The areawide agencies  may  also comment
directly to EPA.  The draft Agreement usually sets forth high-priority
problems, goals, and  objectives for the upcoming year  and serves as a
basis for negotiation.

     It is important to note that the WQM orogram is just one of many  programs
covered by the Agreements.  States, areawide agencies,  and EPA  Regional
                                   22

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Offices should consider opportunities  for integration  involving  the  WQM
program, as well  as possibilities  for  conflicts,  during  this  stage of their
management process.

     2. Recommended Management Procedures

     Through the  State's designated  contact  person,  the  State WQM staff
should work with  the EPA Region to establish ground  rules  on  the development
of the draft Agreement.   Along with  other covered programs,  they should
develop internal  review procedures for the draft, develop  a  framework of
State priorities  based on the  State  strategy, involve  the  areawide agencies
and the public, and provide  WQM input  to  the draft Agreement.  The specific
steps in the recommended process are:

     o State water quality management  staff, working with  other  covered
       programs,  should review EPA national  guidance on  State/EPA Agreements
       [9].  Through the State's  Agreement  contact, they  should agree with
       the Region on reporting, accounting,  consistency, timing, submission,
       public participation, and other details.

     o Each State should develop internal  review  procedures  among covered
       programs and coordinate them  with  the Region.   State  water quality
       staff should understand what  solid waste and  drinking  water staff
       will contribute and how the draft  Agreement relates to  the problem
       assessment process and  strategy.   They should also  consider EPA's
       national WQM strategy [3], prior  performance evaluations, and other
       factors.

     o The States should develop and implement procedures  for  obtaining
       areawide agency input into  the  draft  Agreements in  accordance  with
       the regulations and EPA guidance  [9 ].

     o Public Participation: The States must inform  the  public of proposed
       goals and  scope of the  Agreement early in  the process  of  its
       development and schedule opportunities  to  consult with  the State
       WQM advisory committee  and  the  public on the  contents  of  the  draft.

     o Finally, the State should develop  a position  based  on  the State
       strategy (i.e., a framework of  priorities  for a one-year  period)
       and prepare a draft State/EPA Agreement.

     3.  Required  Outputs

     STATE OUTPUTS -- information  to assist  public participation in
                      State/EPA Agreement development

                   -- summary  of areawide involvement, comments, and
                      State  responses  with the draft Agreement

                   -- public responsiveness  summary

                   -- draft  State/EPA  Agreement


                                  23

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D.  Developing Detailed State and Areawide Work Programs

     1.  Discussion

     General.   States and areawide agencies develop their detailed work
programs on approximately the same schedule as their State/EPA Agreements.
The WQM regulations [1] call for draft WQM work programs on June 1, and
final work programs September 1.  Conceptually, the WQM work program has
close ties to both the State/EPA Agreement and the State Five-Year Strategy.
Although these documents have different purposes and audiences, together
they represent the whole WQM program within a State.

     State and areawide work programs should stress quantifiable objectives
and outputs so that EPA, the public, and the grantees themselves can accur-
ately assess their progress.  The work programs should also reflect the
problem-solving emphasis of the WQM program, especially for section 208
grants.   It is EPA policy, starting in FY 80, that 106 and 208 grants will
be based on actual needs, rather than arbitrary formulas.  (For more details
on funding policies, see the WQM Strategy [3] and WQM Policy Memo A-2.)

     With respect to section 208 grants, Water Planning Division has recently
adopted a policy of reviewing each Region's needs for 208 funds prior to
allocating funds to the Region.  For FY 80 grants, this review is taking
place in September, 1979.  For FY 81 grants, the review may be earlier in
the year to allow the Regions and States more time to finalize their work
programs.  The Headquarters 208 needs review, however, is based only on
brief project proposals, not on work programs.

     The work programs should not be overly long.  In the past, the
tendency of many grantees has been to provide too much detail, obscuring
the important objectives and outputs.  The revised WQM regulations [1]
represent a significant simplification over the old regulations [6] in terms
of the number of documents they require each year and the detail they must
contai n.

     Scope.  State work programs cover the 16 program elements found in
40 CFR 1513-5(c), although they need not necessarily be organized along the
same lines.  The State work program covers all activities the State will
fund with 106 and 208 grants, as well as Clean Lakes grants (section 314)
and permitting actions they are funding with 205(g) grants.  To give the
State and areawide agencies an idea how much 106 and 208 funds are available,
the WQM FY 80 Baseline Strategy [3 J provides funding targets which they
should use to determine the scope of their work programs.

     Areawide work programs, which are separate from State work programs,
cover only water quality management planning activities under section 208,
unless the State desires to pass through 106, 205(g), or other funds to
the areawide agency to perform specific tasks.
                                   24

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     Contents.   According to the regulations [1], work programs  must contain
a summary of the current year's program including the status  of  outputs
planned for the year, and an identification of outputs the agency will
produce in the upcoming year.   For each output, the work program must show
the cost, the sources of funds, important milestones, the name of the
responsible agency or department, and certain other information  the regulations
requi re.

     The Regions and States have flexibility in deciding on work program
formats and on  how much detail  they need to manage the WQM program effectively.
For example, although the regulations do not require it, many Regions will
continue to require separate work programs for each problem-solving project
they support with 208 grants.   However, State and areawide work  programs
should assume more of a problem orientation than a program orientation in
keeping with the WQM problem-solving strategy.

     Public participation activities must be integrated into  WQM planning
activities and  reflected in the work program for each activity.   However,
a separate public participation work program must also be included.  This
work program must provide for  an advisory committee which meets  the
requirements of 40 CFR 25.7 and 35.1507 and must contain all  of  the
information required in 40 CFR 25.11 [8].  The public participation work
program has four major objectives:

     -- to assure the development of a program for involving  the
        public  in substantive  and technical  policy decisions

     -- to assure that the program is ready to begin at the onset of
        the grant-supported activity

     -- to assist EPA and the  public to determine whether the total
        public  participation effort is adequate

     -- to inform the public of their specific opportunities  to
        be involved in decision making

     The public participation  work program should state, in clear language,
the decisions which will  be made in the course of the planning process,
with a schedule which indicates, at least approximately, when the decisions
will be made.  The schedule should indicate the types of opportunities  the
public will  have to contribute their views,  e.g., public hearings, opportun-
ities to make written comments, and public meetings.

      In general, public  participation programs should not focus on general
 education,  but should be directed toward informing and involving the public
 in specific decisions.

      Approval.  By regulation, EPA may not award a 106, 208, or_314 grant
 to any agency  without an approved work program including a public partic-
 ipation work program.  Conditional work program approvals are allowed,
 however.


                                    25

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     2. Recommended Management Procedures

     The management procedures for work program development involve coordin-
ation of State and areawide work programs, comparison of past performance
and proposed actions, and involvement of technical experts in work program
formulation.  The recommended steps in the management process are:

     o  Each State should notify the areawide agencies of the elements
        of the State's proposed program early in the process of work
        program development, generally by April 1.  Likewise, the areawide
        agencies should inform the States of the proposed elements of their
        work programs to give the States an opportunity to review and
        comment.

     o  The States and areawides should consider Regional Office comments
        concerning problems, priorities, activities, and funding.  They
        should also factor in the results of the Water Planning Division
        (HQ) review of 208 funding needs before finalizing their work
        programs.

     o  The States and areawides should develop internal work program review
        procedures and work with each other and the EPA Region to agree on
        expectations  for review, updating, approval, and timing.

     o  The States and areawides should consider variation between the
        previous year's work program commitments and actual  progress and
        address these variations during work program development.

     o  Public Participation:  The States and areawides must provide the
        public with information about the proposed goals and scope of the
        work program early in the process of its development, consult with
        the public and the agency's advisory group, hold a public meeting
        on the draft work program, prepare a responsiveness summary
        describing the agency's action with respect to public comments, and
        distribute the responsiveness summary to the public.

     o  The States and areawides should identify alternative outputs, in
        keeping with the State strategy and State/EPA Agreement and--to
        the extent that time and resources allow—analyze the alternatives
        for cost-effectiveness, resource commitments, conflict potential,
        relationship to national priorities, and other factors.  Based on
        this analysis, the agencies should select the most appropriate outputs
        States and areawides should request the assistance of national
        technical assistance contractors for work program development as
        annrooriate.
o

   appropriate.
     o  States and areawides should submit their draft work programs to the
        Regions by June 1, or another date the Regional Administrator agrees
        to.  See required outputs, below.
                                  26

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3. Required Outputs

STATE OUTPUTS    -- policy framework for areawides,  approximately
                    April  1

                 -- comments on draft areawide work  programs  to EPA
                    and areawide agencies within 45  days of receipt

                 -- draft  work program to Regional Administrator by
                    June 1 (or other date suitable to RA) with
                    responsiveness summaries

                 -- modified work programs, as necessary, after
                    conditional approval

                 -- conflict resolution procedures for FY 80  work
                    program  per 35.1517(b)

                 -- final  work program, September 1

                 -- distribute public participation  work program to
                    the public

AREAWIDE OUTPUTS -- proposed work program elements to State early in
                    the process of work program development

                 -- draft  work programs to State and Region by June 1
                    (or other date suitable to RA) with responsiveness
                    summaries

                 -- modified work programs, as necessary, after
                    conditional approval

                 -- final  work program, September 1

                 -- distribute public participation  work program to
                    the public
                              27

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E. Developing the WQM Portions of the Final State/EPA Agreements

     1.  Discussion

     The final State/EPA Agreements represent commitments of the States and
EPA to perform environmental management activities, including the WQM program
and other programs.  According to EPA guidance [9], the final  Agreements
contain (1) a brief statement of problems, goals, and objectives, (2) a
detailed work program or reference thereto, (3) a summary of major integrated
work elements, (4) any other information which the Regional  Administrator
requires, and (5) a signature page.

     After the final Agreement is signed, the Regions and States cooperate
on preparing grant applications.  The Agreements may constitute the narrative
portions of the State's WQM grant applications (i.e., for 106,  208, and 314
grants) to save paperwork and repetitious applications.

     The areawide agencies generally apply directly to EPA for  grants after
the State/EPA Agreements are signed.  In some States, however,  the States
pass funds through to the areawides, eliminating the need for them to apply
to EPA.

     2. Recommended Management Procedures

     The management procedures for developing final State/EPA Agreements are
straightforward.  The States and areawides review EPA comments  on draft
Agreements and work programs, negotiate changes, finalize the Agreements,
and work with the Regions on grant applications.  Recommended management
steps are:

     o  State and areawide agencies should review EPA Regional  Office
        comments on the draft State/EPA Agreements and work programs and
        negotiate changes from the drafts.       *

     o  Public Participation:  States and areawide agencies should consult
        with their advisory groups and the public if changes envisioned in
        the final Agreements will depart substantially from public comments
        on the draft.

     o  Based on negotiations and public participation,  the States and EPA
        should finalize the Agreements and sign them.

     o  States and areawides then work with the Regional Office to develop
        procedures for grant application, administration, and evaluation to
        the extent these topics are not covered in the Agreements themselves.

     o  States and areawides prepare grant applications  in accordance with
        the agreed-upon procedures.
                                   28

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     3. Required Outputs

     STATE OUTPUTS    -- final  State/EPA Agreement

                      -- grant  applications  based on signed Agreements

     AREAWIDE OUTPUTS -- grant  applications  based on signed Agreements




F. Implementing the Work Programs and State/EPA Agreements

     1. Discussion

     Once State/EPA Agreements  are signed,  program participants  implement
the Agreements and the work programs  they include.  EPA,  as well  as  the
States  and areawides, is responsible  for carrying out its commitments  under
the Agreements.

     Implementing the work programs and Agreements amounts to implementing
the problem-solving process described in section IV, above.  States, areawide
agencies, and local units of government participate in planning,  permitting
and enforcement, construction grants, water  quality standards, waste load
allocations, nonpoint source management, wetlands protection, monitoring,
training, lake restoration, and other efforts.

     The specific priorities of the 208-funded  portions of the WQM program
are solving the problems identified in the  initial WQM plans, particularly
urban runoff, nonpoint sources, and groundwater pollution.  The  overall
program goal is to help States  and local governments manage the  decision-
making  process to meet the water quality goals  of the Act.
                           *
     To assist State and areawide agencies,  the Water Planning Division has
contracted with expert consultant consortia  in  the areas  of urban runoff,
advanced waste treatment, groundwater protection, and fiscal/financial
management.  These contractors  assist EPA in the areas of work program
development, project management, and  evaluation of results.

     EPA is placing increasing  emphasis on  the  use of site-specific  nonpoint
source  prototype projects to develop  a data  base which all the States  and
areawides can use to solve their nonpoint source problems.  (For  further
discussion of this topic, see the WQM FY 80  Baseline Strategy [3 ].)  Thus,
the State and areawide agencies both  manage  prototype projects in such  areas
as urban runoff and agricultural nonpoint source control, and use the  results
of other prototype projects, which EPA provides, to solve problems.
                                  29

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    2. Recommended Management Procedures

    Management of this phase of the WQM program involves managing the flow
of information and resources to and from the State and areawide agencies
and the public.  The States and areawides receive assistance from EPA and
tap into EPA information exchange mechanisms.  They also provide information
useful to other agencies on control techniques and institutional aspects.
The public participates in the various activities of the State and areawide
agencies, providing feedback and participating in the decision-making process

     The recommended management procedures for implementing the work programs
and State'EPA Agreements are:

     o  The States and areawide should identify assistance requirements,
        if they did not already do so in the State/EPA Agreements; review
        Regional operations manuals; and attend technical workshops which
        EPA organizes—to the extent that time and resources allow.

     o  The States and areawides should tap EPA's information exchange
        mechanisms.  They should use the information EPA provides to plan
        controls in their own areas, and provide EPA with information on
        their own projects which may be of use to others.

     o  Public participation in carrying out work programs and Agreements
        must be in accord with the public participation work program and
        any requirements in the Agreement,  A public hearing must be held
        on draft WQM plans which are ready to enter the certification/
        approval process.  A responsiveness summary must be prepared
        following the hearing and made available to the public.

     o  The States and areawides should take advantage of Regional Office
        and Headquarter technical assistance, especially the national experts
        under contract with Water Planning Division to provide assistance on
        urban runoff, groundwater, waste treatment facilities, and fiscal/
        financial management.

     o  The States, with assistance from the Regional Offices, should manage
        a cost-effective monitoring program.  The program should serve as
        a "floor" for all other actions, and is essential to the execution
        of State and areawide work programs.

     3. Required Outputs

     STATE OUTPUTS    — public hearings on draft WQM plan revisions*
* NOTE: This is not an annual requirement; this output is required only
  as plan revisions occur, as agreed upon in State and areawide work
  programs and State/EPA Agreements.


                                  30

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                      -- draft plan revisions  and public  responsiveness
                         summaries to EPA within 60 days  of public  hearings*

                      -- certification letter  to Regional  Administrator
                         within 120 days  of receipt of plan*

                      -- waste water treatment facility needs  inventory  and
                         construction grant priority list; draft May 1,
                         final July 15, each year

                      -- water quality standards review and revision, at
                         least every three years

                      -- proposed RCWP projects, in priority order, to USDA

                      -- management agency letters of commitment, with
                         WQM plan revisions as appropriate

     AREAWIDE OUTPUTS -- public hearings  on draft WQM plan revisions*

                      -- draft plan revisions  and public  responsiveness
                         summaries to EPA within 60 days  of public  hearings*
G. Evaluating Progress

     1.  Discussion

     Evaluation is a key part of the management  of  the  WQM program.   State
and areawide agencies must evaluate  the consistency of  their  actions  with
WQM plans, the adequacy of the State Continuing  Planning  Process,  progress
against  work programs,  performance of designated management agencies, and
their own internal performance.

     States and areawides should have a process  to  evaluate draft  permits,
construction grant applications, water quality  standards  revisions, and
other plans for consistency with WQM plans.   Consistency  with State
Implementation Plans (SIPs) for air  pollution control  is  important, since
section  316 of the Clean Air Act mandates  consistency.

     The State Continuing Planning Process description  (CPP)  is  a  relatively
static  document each State is required to  have.   The State should  evaluate
the CPP  description to  determine whether it needs to be changed  to reflect
changes  in State or Federal laws, State organization, or  State procedures
for the  WQM program.
  See footnote,  previous page
                                  31

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     State and areawlde agencies  participate  in periodic evaluations  with
the Regional Offices of their progress  against commitments  in work  programs.
The regulations [1] call  for a mid-year evaluation meeting  to consider the
need for mid-course corrections in current work programs or for  adjustments
to upcoming work programs.   The mid-year evaluation must include a  review
of the agency's compliance  with its public participation work program and
the requirements of 40 CFR  Part 25 [8], especially 25.12(a)(2).

    _Given the WQM program's emphasis on implementation of  controls for
specific problems, evaluation of  designated management agencies  is  a  key
component of a State's evaluation system.  Management agency evaluation is
a State responsibility, and should be included in work programs.  Management
agency evaluation should focus on certified and approved WQM plans  and
management agency letters of commitment. Where the Regional Office feels
it necessary, it may also evaluate the  performance of management agencies.

     Finally, although the  regulations  do not require it, each State  and
areawide agency should conduct an internal evaluation to determine where
to raise skills, improve efficiency, or change the distribution  of  resources
State or areawide advisory  committees should  play a key role in  such
internal evaluations.

     2. Recommended Management Procedures

     The recommended management procedures which the States and  areawides
should use in the evaluation area are:

     o  The State and areawide agencies should establish procedures in
        cooperation with the Regional Offices for evaluating draft  permits,
        construction grant  applications, water quality standards  revisions,
        and other plans which affect them for consistency with certified/
        approved WQM plans.

     o  The States should from time to  time assess the need for  CPP
        revisions, identify the necessary changes, review them with the
        Regional Office, modify the CPP description as required,  and  obtain
        EPA approval.

     o  The States and areawide agencies should prepare for mid-year  reviews
        by working with the Regions on  timing and procedures for evaluation
        and by identifying  schedule slippage  and the reasons for it prior
        to the meetings.  During  the meetings, the should discuss recommend-
        ations for work plan revisions.

     o  With the EPA Regions, the States should formulate evaluation  plans
        for designated management agencies and incorporate  the plans  into
        their work programs.  The State should delegate activities  as
        appropriate.  When  evaluations  are made, the State  should provide
        feedback to the management agencies and/or make recommendations to
        the Governor and the Regional Office  to change a management agency
        designation, impose sanctions,  or take other corrective  action.

                                   32

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o  The States  and  areawides should review internal performance,
   possibly through  the use of individual performance contracts  and
   similar management  tools.  The agencies should make internal
   recommendations for improvement through training, additional
   resources,  or redefinition of duties.  Advisory committees  should
   have a  major role in internal evaluations.

3.  Required Outputs

STATE OUTPUTS    --  participation in mid-year evaluations with EPA
                    Regional Office; modifications to work  programs
                    as appropriate

                --  CPP revisions, as appropriate

                -- management agency evaluations, as appropriate

AREAWIDE OUTPUTS --  participation in mid-year evaluations with EPA
                    Regional Office; modifications to work  programs
                    as appropriate
                             33

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                    SUPPLEMENTAL WQM PROGRAM GUIDANCE

                                FOR FY 80


                                APPENDIX
                           WQM REFERENCE LIST
I.    GENERAL REFERENCES
     1.    40 CFR Part 35, Subpart G, "Grants for Water Quality Planning,
             Management, and Implementation."  Final  Regulations.   May
             23, 1979.

     2.    US-EPA, Water Planning Division,  "FY 79 Work Programs."   De-
             cember, 1978.

     3.    US-EPA, Water Planning Division,  "Water Quality Management  Five
             Year Strategy,  FY 80-Baseline."  August,  1979.

     4.    US-EPA, Office of Water and Hazardous Materials,  "Guidelines
             for State and Areawide Water Quality Management  Program  De-
             velopment."  November, 1976.

     5.    Clean Water Act--as amended, 33 U.S.C.  §1251  et seq.

     6.    40 CFR, Subchapter D, Part 130,  "Policies  and Procedures  for
             the State Continuing Planning  Process."   November,  1975.

          40 CFR, Subchapter D, Part 131,  "Preparation of Water  Quality
             Management Plans."  November,  1975.

          40 CFR, Subchapter B, Part 35,  "State and  Local  Assistance."
             November, 1975.

     7.    NRDC  v.  Train 396  F Supp 1386 (D.D.C.  1975),  aff'd  subnom
          NRDC  v.  Costle 564 F2 573 (D.C.  circ 1977).

     8.    40 CFR Part 25, "Public Participation in Programs Under the
             Resource Conservation and Recovery Act, the  Safe Drinking
             Water Act,  and  the Clean Water  Act."  February 16,  1979.

     9.    US-EPA,  Office of  Water and Waste  Management,  "Programs Under
             Clean Water, Safe Drinking Water and  Resource  Conservation
             and Recovery Acts, Guidance  for FY 1980 State/EPA Agree-
             ments."   40 FR  17294, March  21, 1979.

    10.    US-EPA,  Water Planning Division,  "Draft  Water Allocation/Water
             Quality Coordination Study,"  August, 1979.

    11.    US-EPA,  Office of  Planning and  Management.   "EPA  Agency Gui-
             dance Fiscal  Year 1980/81."  April,  1979.

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II.   PROBLEM-SOLVING  PROCESS  REFERENCES

                          Water  Quality  Standards

    12.    US-EPA,  Water  Planning Division,  "Quality  Criteria  for Water"
             (TECH 21) November  3,  1976.

    13.    Us-EPA,  Office of Water Planning  and  Standards,  "Statement  of
             Current  Policy and  Advance  Notice  of  Proposed Rulemaking,"
             43  FR 29588,  July 10,  1978.

    14.    US-EPA,  Office of Water Planning  and  Standards,  "Water Quality
             Criteria, Request for  Comments."   March  15,  1979.

    15.    Settlement  Agreement,  NRDC  v.  Train,  8 ERC  2120,  2122-2129
             (D.D.C.  1976).   Modified  March  9,  1979.

                         Assessment and  Monitoring

    16.    US-EPA,  Office of Water Planning  and  Standards,  "Final Guidance
             for State 305(b) Report  Preparation."   March  8,  1979.

    17-    US-EPA,  "Basic Water Monitoring Program."   January  28, 1977.

    18.    40  CFR Part 35,  Subpart G, Appendix A, "Water Quality and
             Pollutant Source Monitoring."   May 23,  1979.

    19.    National  Water Monitoring Panel,  "Model  State Water Monitoring
             Program."   June, 1975.

    20.    US-EPA,  "Areawide Assessment Procedures  Manual,  Vols. I, II,
             and III."   July, 1976.

    21.    Everett,  L., Schmidt,  K., Tinlin,  R., and Todd,  D., "Monitoring
             Ground Water  Quality:  Methods-and Costs."  May, 1976.

    22.    US-EPA Environmental Research  Laboratory,  "Water Quality Assess-
            ment—A  Screening Method  for Nondesignated 208 areas."   EPA-
             600/9-77-23,  August, 1977.

    23.    US-EPA,  MDQRAL,  NERC,  Cincinnati,  Ohio,  "Handbook for Analytical
             Quality  Control  in  Water  and Wastewater  Laboratories."   June,
             1972.

             Identification of Priority  Problems and  Sources

    24.    US-EPA,  Office of Water Planning  and  Standards,  "Total Maximum
             Daily Loads Under Clean Water Act."   43  FR 60662, December
             28, 1978.

    25.    US-EPA,  Office of Water Program Operations, "Priority List
            Guidance for  the Development and Management of FY 1980 State
            Project  Priority Lists."  (PRM76-6) January 8, 1979.

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26.    40 CFR Part 35, Subpart E, "Grants for Construction of
         Treatment Works—Clean Water Act."  September 27, 1978.

                      Waste Load Allocations

27.    US-EPA, Water Planning and Monitoring and Data Support Divisions,
         "Existing Policy and Technical Guidance on Wasteload Allo-
         cations for Advanced Treatment Planning."  (INFO 79-98)
         August 14, 1979.

                  Point Source Permit Conditions

28.    US-EPA, Office of Water Planning and Standards,  "Effluent Guide-
         lines and Development Documents."  (various dates)

29.    40 CFR Parts 6, 115, 121, 122, 123, 124, 125, 402, and 403,
         "National Pollutant Discharge Elimination System; Revision
         of Regulations."  Final rule, June 7, 1979.

30.    40 CFR Parts 122, 123, 124, "Consolidated Permit Regulations:
         RCRA Hazardous Waste; SDWA Underground Injection Control;
         CAA Prevention of Significant Deterioration;  CWA National
         Pollutant Discharge Elimination System; and Section 404
         Dredge or Fill Programs."  Proposed rule, June 14,  1979.

31.    US-EPA, Office of Water Planning and Standards,  "A Guide to  the
         Dredge or Fill Permit Program."  July, 1979.

                  Planning for Municipal Systems

32.    US-EPA, Office of Water Program Operations,  "Guidance  for Pre-
         paring a Facility Plan."  May, 1975.

33.    US-EPA, Office of Water Program Operations,  "Model Plan of
         Study, Supplement to:  Guidance for Preparing a Facility
         Plan."  March, 1976.

34.    40 CFR Part 35, Subpart E, Appendix A, "Cost-Effectiveness
         Analysis Guidelines."  September 27,  1978.

35.    40 CFR Part 35, Subpart E, Appendix E, "Innovative and Alter-
         native Technology Guidelines."  September 27, 1978.

36.    US-EPA, Office of Federal Activities, "Floodplain Management
         and Wetlands Protection—Statement of Procedures."   44 FR
         1455, January 5, 1979.

                Nonpoint Source Control Requirements

37.    40 CFR 35.1600, "Grants for Protecting and Restoring Publicly-
         Owned Fresh Water Lakes—State and Local  Assistance."  Pro-
         posed rule, January 29, 1979.

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38.   US-EPA, Office of Air, Land, and Water Use,  "Loading
         Functions for Assessment of Water Pollution from Nonpoint
         Sources."  May, 1976.

39.   US-EPA, "Methods for Identifying and Evaluating the Nature and
         Extent of Nonpoint Sources of Pollutants."  September, 1973.

40.   US-EPA, Water Planning Division, "Nonpoint Source Pollution
         Fact Sheets."  (INFO 79-32) January, 1979.

41.   US-EPA, Water Planning Division, "Agriculture/Silviculture
         Nonpoint Source BMP Guidance."  (INFO 79-6) October, 1978.

42.   US-EPA, "Storm Water Management Model:   Level I—Comparative
         Evaluation of Storage-Treatment and Other Management
         Practices."  Cincinnati, Ohio, April, 1977.

            Agreements on Institutional Responsibility

43.   US-EPA, "Management Agencies Handbook  for Section 208 Areawide
         Waste Treatment Management."  November, 1975.

44.   US-EPA, "Legal and Institutional Approaches  to Water Quality
         Management Planning and Implementation."   March, 1977.

                    State/Local  Budget Process

45.   US-EPA, Water Planning Division.   "Section 208 Financial
         Management Assistance  Project."  (INFO 79-31)  December,
         1978.

                  Permit Issuance and Enforcement

See References 28 through 31.

             Other Regulatory/Non-Regulatory  Programs

45.   CONSAD Research Corporation, "Evaluation of  Cost-Effectiveness
         of Nonstructural  Pollution Controls:   A Manual  for Water
         Quality Management Planning."  April  30,  1976.

46.   US-EPA, "Legal and Institutional  Approaches  to Water Quality
         Management Planning and Implementation."   March, 1977-

                       Structural Solutions

47.   US-EPA, Office of Water Program Operations,  "Program Require-
         ments Memoranda,  Municipal  Wastewater Treatment Works  Con-
         struction Grants  Program."

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                   Cost-Sharing for Agriculture

48.   U.S. Department of Agriculture, "Assistance Available from
         USDA Agencies in Section 208 (PL 92-500) Planning."

49.   Title 7--Agriculture, Chapter VI--Soil Conservation Service,
         Department of Agriculture, Subchapter D--Long Term Contracting,
         Part 634-- "Rural Clean Water Program."  November 1, 1978.

50.   US-EP.A, Water Planning Division, "Rural Clean Water Program
         Rules and Regulations."  (INFO 79-17) November, 1978.

51.   U'S-EPA, Water Planning Division, "Rural Clean Water Program."
          (INFO 79-27) December, 1978.

52.   US-EPA, Water Planning Division, "EPA-Forest Service Agreement,
         State WQM Plan Ties to State Forest Resource Program,"
          (INFO 79-59) March 28, 1979.

                     Sanctions and Incentives

53.   Bower, B., Ehier, C., and Kneese, A., "Incentives for Managing
          the Environment."  March, 1977.

54.   Anderson, F., Kneese, A., Taylor, S., Reed, P., and Stevenson,
          R., "Environmental Improvement Through Economic Incentives."
          1978.

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SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80
          VI,  WQM POLICY MEMORANDA

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             SUPPLEMENTAL  WQM  PROGRAM  GUIDANCE  FOR  FY 80

                      VI.   WQM POLICY  MEMORANDA

                        SECTION  A  --  FUNDING



                      WQM Policy Memorandum A-1

                INTERIM GUIDANCE, MINIMUM STANDARDS FOR
                    PROCUREMENT UNDER  SECTION 208*
Purpose

The purpose of this memorandum is to reiterate EPA policies  and procedures
concerning minimum standards for general  procurement under  section  208
grants pending final promulgation of 40 CFR Part 33 Subagreements; Grants
regulations.

Background

The minimum standards for procurement contained in this  memorandum were
prepared to assist section 208 grantees in the procurement of services,
supplies, and equipment necessary to complete approved work  plans prior
to the development of 40 CFR Part 33 Subagreements; grants regulations.
This regulation was published as proposed on February 8, 1977,  and
stipulated that all procurement actions executed by section  208 grantees
under grant awards and amendments after that date were to be governed
by the proposed Part 33 regulations.

Policy

Procurement actions executed under grant  awards and amendments  prior to
February 8, 1977, continue to be governed by the procedures  outlined in
this memorandum.  For procurement actions executed under grant  awards
and amendments after February 8, 1977, the provisions of 40  CFR Part 33
Subagreement  regulations, as proposed, continue to apply.
*0riginally issued as SAM-14 (April  21, 1976) under signature of the
 Deputy Assistant Administrator for Water Planning and Standards and
 the Deputy Assistant Administrator for Resources Management; minor
 editorial changes have been made by the Water Planning Division.

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                     ENVIRONMENTAL PROTECTION AGENCY

              GRANTS FOR STATE AND DESIGNATED AREAWIDE WATER
                             QUALITY MANAGEMENT
                    Minimum Standards for Procurement


                             Interim Guidance



     The following program guidance memorandum, distributed to

 Environmental Protection Agency Regional Offices, shall serve as i?itcrirn

 guidance for Section 208 grantees in their procurement pending pro-

 mulgation of final EPA regulations regarding minimum standards for

 procurement and other subagreement provisions under EPA grants.  Proposed

 regulations were published on May 9, 1975, at FR 20296.  It is anticipated

 that final regulations concerning the subject of the May 9, 1975, -reposed

 regulations will be published in the near future.
 Dated:
               APR 211976
                                           Andrew W. Breidenbach
                                          Assistant Administrator
                                     for Water and Hazardous Materials
                                                        f fc^<- w*-*<
                                           Alvin L. Aim
                                      Assistant Administrator
                                    for Planning and Management
CC: ALL REGIONAL ADMINISTRATORS

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                            INTERIM GUIDANCE

                    MINIMUM STANDARDS FOR PROCUREMENT

                        UNDER SECTION 208 GRANTS
I.  PURPOSE.
     This  interim guidance  has been prepared to assist State and
Areawide Planning agencies,  funded under Section 208 grants, in their
procurement, pending the promulgation of EPA's final rules setting
minimum standards for procurement under grants (40 CFR Part 33,
published  in the Federal Register as proposed rules on May 9, 1975).

     Section 203 grants are awarded and administered under 40 CFR
Part 30.   Subagreement regulations have been issued for EPA's con-
struction  grants program in Part 35.  As an aid to 2C8 grantees wishing
to supplement this interim  guidance with more detailed information,  it
is recomiaended that the amendments to 40 CFR Part 35 (§§35.936, 35.937,
35.938, and 35.939), published in the Federal Register on December 17,
1975, be  referred to for their appropriate use as guidance ir. general
procurement.  It should be  noted that where there are substantive
differences between this interim guidance and the subagrer-ment regula-
tions contained in Part 35,  the provisions set forth in this interim
guidance  shall apply.

II.  APPLICABILITY.

     This  interim guidance  applies to all contracts solicited and
executed  after the effective date of this interim guidance.

     In some cases, a subagreement may have been executed under a Section
208 grant  prior to the effective date of this interim guidance.  Such
contracts  are not affected  by the requirements of this interim guidance.
In other  cases where 208 grantees have received proposals  (but hav-  act
yet executed contracts), the selection and negotiation provisions
contained  herein need not apply.  However, contract provisions, such
as required provisions applicable to all procurement, shall apply to all
pending contracts and any amendments to existing contracts.

III.  GENERAL EPA POLICIES  & PROCEDURES REGARDING PROCUREMENT.

     A.  Definition.

         A subagreement is  a written agreement between an EPA grantee and
another party (other than a public agency) and any tier of agreement
thereunder for the furnishing of services, supplies, or equipment
necessary  to complete the project for which a grant was awarded,
including  contracts and subcontracts for personal and professional
services  and purchase orders.

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     B.  General Subagreement Requirements.

         Sutagreements must comply with the following general require-
ments :
         (1)  Must be necessary for and directly related to the
              accomplishment of the project work (grantees are to
              avoid purchasing unnecessary or duplicative work);

         (2)  Must be in the form of a bilaterally executed
              written agreement (except for small purchases);

         (3)  Must be for nonetary or in-kind consideration; and

         (4)  May not be in the nature of a grant or gift.

     C,  Interagency Agreements and contracts with non-profit
         organizations.

         Tnteragency agreements among and between public agencies are not
treated as subagreements.  However, interagency agreements must contain
binding requirements and responsibilities mutually established and
executed by the public agencies involved and must include an itemized
breakdown of costs in the statement of work.  State and local practices
associated with, interagency agreements shall be used as the prevailing
policy in determining if such work under a Section 208 grant shall be
conducted under an agreement or contract with another public agency.

         Contracts with non-profit organizations (such as universities)
need not. be .subject to the solicitation and selection procedures
applicable to all other procurement.  They are, however, subject  to the
same cost/price analysis requirements and procedures contained in this
interim guidance.

     D.  Grantee Responsibility.

         Section 208 grantees are responsible for the administration and
successful accomplishment of the project and for the proper administra-
tion and settlement of contractual and administrative issues related
to subagreements made under the grant.

     E.  Grantee Procurement Systems.

         Grantees are free to use their own procurement systems provided
that procurements made under an EPA grant adhere to the interim minimum
standards set forth in this guidance.  In some cases, 203 grantees may
choose to contract with other governmental units on the State and local
levels for procurement services.  Such services may, for example, permit
another governmental unit to act as the procurement agent for the 208
grantee or may be in the form of advice and consultation with the

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grantee in  establishing  a sound  procurement system.  Procurement services
obtained  from other governmental units, however, must comply with the
minimum standards set  forth in this  interim guidance.

    Applicable requirements of State and local laws and ordinances
apply to  the extent that such requirements do not conflict with
Federal laws and meet  these interim  minimum standards for procurement.

    F.  Competition.

        It  is the policy of the  Environmental Protection Agency to
encourage free and open  competition  appropriate to the type of work to  be
performed.

    G.  Type of Contract (Subagreement).

        The requirements of §§35.937-1  and 35.938-3, governing tha type
of  contract permitted  under EPA  grants, shall apply.  The cost-plus-
percentage-of-cost and the percentage-of-construction-cost types of
contracts are prohibited.  It is anticipated that the most appropriate
type of subagreement in  most instances  for 208 will be a cost-reimbursement
type of contract.

    H.  Profit.

        Only fair and  reasonable profits may be earned by contractors in
subagreenents under a  208 planning grant.   (EPA, in its own procurement,
uses a  set  of profit evaluation  guidelines—see 41 CFR 15-3.808-50--v;hich
grantees  may utilize,  as appropriate,  if they desire a formal system of
determining profit.  Similar guidelines will shortly be included in the EPA
Grants  Administration  Manual.)

    I.  Small and Minority Business.

        Section 208 grantees must show positive efforts to utilize small
business  and minority-owned business sources of supplies and services.
Such efforts should allow these  sources the maximum feasible opportunity
to  obtain contracts or subcontracts  for work to be performed under the
grant.

    J.  Small Purchases.

        A small purchase is the  procurement of materials, supplies, and
services  when the aggregate amount involved in any one transaction does
not exceed  $10,000.  The small purchase limitation of $10,000 applies to

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the aggregate  total of an order, including all estimated handling and
freight charges, overhead, and profit to be paid under the order.  In
arriving at  the aggregate amount involved in any one transaction, there
must be included all items which should properly be grouped together.
Reasonable competition shall be obtained.

     Subagreements for small purchases need not be in the form of a
bilaterally  executed written agreement.  Where appropriate, unilateral
purchase orders, sales slips, memoranda or oral price quotations and the
like may be  utilized in the interest of minimizing paperwork.   Retention
in the purchase files of these documents and of written quotations
received, or references to catalogs or printed price lists used,
will suffice as the record supporting the price paid.

     K.  Documentation.

         Procurement records and files for purchases in excess of $10,000
shall include  the following:

         {!)   Basis for contractor selection;

         (2)   Justification for the lack of competition if com-
               petition appropriate to the type of project
               work to be performed is required but is not
               obtained; and

         (3)   Basis for the cost or price for an award
               (including EPA Form 5700-41, Cost or Price
               Summary Format for Subagreements under U.S.
               EPA Grants, where required.)

         Procurement documentation required by §30.805 (Records) of the
EPA general  grant regulations must be retained by the grantee or con-
tractors of  the grantee for the period of time so specified and is
subject to all the requirements of that section.  A copy of each sub-
agreement must be furnished to the Project Officer upon request.

     L.  Required Approvals.

         The grantee must secure prior written approval of ths Project
Officer for  the following procurement actions:

         (1)   All Subagreements in excess of $100,000;

         (2)   Each amendment to a subagreeinent in excess of
               $100,000 (See M(l) below); and

         (3)   Cost/Price analysis of Subagreements in excess of
               $100,000.

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     M.  Cost/Price Analysis.

         EPA Form 5700-41, Cost or Price Summary Format for Subagreements
under U.S. EPA Grants, will be required for all negotiated contracts
awarded in excess of $10,000 under a Section 208 grant.  The selected
contractor shall be responsible for the preparation and submission of
this form to the grantee.  (See attached EPA Form 5700-41.)

         It is the policy of EPA that the cost or price of all subagree-
ments and amendments thereto made under Section 208 grants be considered
as follows:

          (1)  Subagreements Over $100,000.  A formal cost/price analysis
will be required for each subagreeinent expected to exceed $100,000 under
a 208 grant.  A cost/price analysis shall also be performed in cases
where an amendment to a subagreement will result in a contract price in
excess of $100,000, or where the amendment itself is in excess of
$100,000.

          (2)  Subagreeraents $100,000 or Less.  A cost review will be
required of the grantee for each subagreement under $100,000.   As a
minimum, proposed subagreement costs shall be presented to the grantee
and shall be supported by a certification executed by the selected
contractor that proposed costs reflect current, complete and accurate cost
and pricing data applicable to the date of anticipated subagreement award.

          (3)  Grantee Responsibility.  The 208 grantee is responsible
for the conduct of all cost/price analyses of all Subagreements, and
amendments thereto, in excess of $100,000, and for the cost review of all
Subagreements, and amendments thereto, under $100,000.  The grantee, at
his own discretion, however, may cost analyze any contract awarded under
a Section 208 grant.  Guidelines discussed in the Cost Analysis Handbook
for Section 208 Areawide Waste Treatment Management Planning,  May 1975
are applicable to all grantees.

          (4)  EPA Responsibility.  It is the responsibility of EPA
to assure that an adequate cose/price analysis has been performed and,
as such, may perform a pre-award cost analysis on any subagreement
although the primary responsibility rests with the 208 grantee.

          (5)  Federal Cost Principles.  Section 30.710 of the EPA
general grant regulations and §35.936-20 of the Construction
Grants regulations contain cost principles which must be used for the
determination of the allowability of costs under EPA grants.

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         (6)   Acceptable Accounting  Systems.  Section 208 grantees and
their  contractors shall have  accounting  systems which account for costs
in accordance with generally  accepted accounting principles.  Such
systems  shall provide for  the identification, accumulation, and
segregation  of allowable and  unallowable project costs under a Section 208
grant.   Allowable costs shall be  determined in accordance with §30.705
of the EPA general grant regulations.

    N.   Fraud and Other Unlawful  or Corrupt Practices.

         A1!L  procurement made  under  Section 208 grants are covered by the
provisions set forth in §30.245 of  the EPA general grant regulations.

    0.   Disclosure of Information.

         Section 208 grantees  and  their contractors should be aware that
information  provided to EPA is subject to disclosure to others unless
otherwise noted exempt or  considered confidential pursuant to §30.235
of the EPA general grant regulations.

IV.  PROCUREMENT BY NEGOTIATION.

    Authorization:  Section 208 grantees may utilize procurement by
negotiation  (i.e., award of contracts by any method other than procurement
by formal advertising)  if  it  is deemed necessary to accomplish sound
procurement,  and if any of  the following  conditions are applicable:

         (1)   Public exigency  will not permit the delay incident for
              formally advertised  procurement (e.g., an emergency
              procurement).

         (2)   The aggregate amount involved does not exceed $10,000.

         (3)   The material  or  service to  be procured is available from
              only one person  or entity.  If the procurement is
              expected to aggregate  more  than $10,000, the grantee
              must document its file with a justification of the need
              for ncncompetitive procurement, and provide such
              documentation to the Project Officer on request.

         (4)   The procurement  is for personal or professional services
              (including architectural or engineering services) or for
              any services  to  be rendered by a university or other
              educational institution.
                                                           -*
         (5)   No responsive, responsible  bids at acceptable price
              levels have been received after formal advertising.

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         (6)  The procurement is for materials or services where the
             prices  are established by law.

         (7)  The procurement is for technical items or equipment
             requiring standardization and interchangeability of
             parts with existing equipment.

         (8)  The procurement is for experimental, developmental or
             research services.

         Procurement  by negotiation shall be conducted in accordance with
the following  procedures  and requirements:

    A.   Grantee Responsibility.  Section 208 grantees are responsible
for the  negotiation  of  their contracts.

    B.   Type of Contract.   The requirements of §35.937-1 (Type of
Contract)  in the Construction Grants regulations shall apply.

    C.   Adequate Public Notice.  To meet adequate public requirements,
203 grantees have  the option to either:

         (1)  publish the  notice of request for proposal  (as
             described  in (D) below) in professional
             journals,  newspapers, or publications of general
             circulation  over a reasonable area  similar  to
             those provisions established  in §35.937-2(b); or

         (2)  employ  the two-step process as prescribed in
              §§35,937-2  and 35.937-3, whereby a  notice of
             request for  qualifications is published similar
             to the  first option.  After the evaluation  of
             qualifications of  firms and/or individuals
             responding to the notice is completed, the
             request for  proposal  is sent  to qualified
             candidates  pursuant to  §35.937-4.

         These  provisions  shall  apply to negotiated procurements
expected to  exceed $10,000, except where rates or prices are fixed by
law or  regulation  or where a single  source has been justified.

    D.   Requests  for Proposals.  Requests  for proposals  must be in
writing and  must  contain the information necessary to enable a
prospective  offerer  to  prepare  a proposal  properly.  The request  for
proposals must inform offerers  of  all evaluation factors and of the
relative importance  attached to  each criterion  (a numerical-weighted
formula need not  be  utilized).   The  request for  proposal must  also
clearly state  the  time  and place  for submission  of proposals.   Sources
which request  an opportunity to  submit  proposals, and which  are not
otherwise barred by  law or regulations,  shall be promptly  furnished  a
copy  of the  request  for proposal  and shall be permitted  to submit a
proposal in  response thereto.

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                                   8

    Requests  for  qualifications or proposals must include the following
statement, as well as  the proposed terms of the subagreement:

             Any  contract awarded under this request
              for  (qualifications/professional proposals)
              is expected to be funded in part by a grant
              from the  United States Environmental
             Protection Agency.  This procurement will be
              subject to regulations contained in 40 CFR
              Subchapter B.  Neither the United States nor
              the  United States Environmental Protection
             Agency is nor will be a party to this request
              for  (qualifications/professional proposals)
             or any resulting contract.

    E.  Evaluation Factors.

        Qualifications:  Section 208 grantees shall uniformly evaluate,
by an objective process, the qualifications of firms or individuals
responding to the announcement.  Criteria which should be considered in
the evaluation of candidates for submission of proposals shall include,
as a minimum:

        (1)   Specialised experience and technical competence
              of the candidate or firm and its personnel
              (including a joint venture, association, or
             professional subcontract) in connection with the
              type of services required and the complexity of
              the  project;

        (2}  Past record of performance on contracts with the
              grantee,  other government agencies, or public
             bodies, and with private industry, including
              such factors as control of costs, quality of
             work, and ability to meet schedules;

        (3)   Capacity  of the candidate to perform the work
              (including any specialized services) within the
              time limitations, taking into consideration the
              current and planned workload of the firm or
              individual;

        (4)   The  familiarity of the candidate with types of
              problems  applicable to the project; and

        (5)   Avoidance of personal and organizational conflicts
              of interest prohibited under State and local law
              and  §30.340-2 of the  EPA general grant regulations.

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        Proposals;   Section 208  grantees  shall uniformly evaluate, by
an objective process,  all proposals  submitted in response to a request
for personal or professional services.  The  request for proposal must
inform offerers of  the evaluation criteria and the relative importance
attached  to each criterion (a numerical weighted formula need not be
utilized).   Evaluation criteria  shall include:

         (1>  All criteria stated above regarding the
              qualifications of candidates; and

         (2J  The candidate's proposed method to accom-
              plish  the work required, including, where
              appropriate, demonstrated capability to
              explore and develop innovative  or advanced
              techniques and methods.

    F.  yegotiatior.s.   Written or oral interviews should be conducted
with all  responsible offerers who submit  proposals within a competitive
range, price and other factors considered.   Each proposer with whom
negotiations are conducted shall be  given reasonable opportunity  (vith
a coumon  cutoff date)  to support, clarify, correct, improve, or revise
its proposal.  Information shall not  be conveyed to one or more proposers
which would give than a competitive  advantage.

        The object  of negotiation with any candidate shall be to reach
agreement en the provisions of the proposed  contract.  The grantee and
the candidate shall discuss, as  a minimum:

         (1)  The scope and extent of  work and other
              essential requirements;

         (2)  Identification of the personnel and facilities
              necessary to accomplish the  required work within
              the required time,  including, where needed,
              employment of additional personnel, subcontractors,
              joint  ventures, etc.;

         (3)  Provisions of the required technical services
              in accordance with  regulations  and criteria
              established for the project; and

         (4)  A fair and reasonable price  for the required
              work to be determined in accordance with the
              profit and cost/price analysis  provisions set
              forth  in this interim guidance.             *

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                                   10

    G.  Award of Contract.  After the close of negotiations,  the
grantee shall award the contract to the proposer whose proposal offers
the greatest advantage for the project—technical,  economic,  and other
factors considered.

        An unsuccessful offerer shall be notified at the earliest
practicable time that its offer has not been selected for award.  Upon
written request of an unsuccessful offerer, the grantee shall disclose
the reason(s) for rejection.

        The grantee must develop and retain adequate records  of the basis
for selection for negotiation and award.

V.  PROCUREMENT BY FORMAL ADVERTISING.

    Section 208 grantees may utilize procurement by formal advertising
if it is deemed appropriate for the particular procurement.   Formal
advertising shall be conducted in accordance with the following pro-
cedures and requirements:

    A.  Types of Contract.  Each formally advertised subagreement
must be a fixed price (lump sum or unit price or a combination of the
two) contract.  The requirements of §35.938-3 (Type of Contract) in the
Construction Grants regulations shall apply.

    B.  Adequate Public Notice and Solicitation of Sids.  The grantee
will cause adequate notice to be given of the solicitation by
publication in newspapers or journals of general circulation  beyond
the grantee's locality (Statewide, generally), inviting bids  on the
project work, and stating the method by which bidding documents may be
obtained and/or examined.

    C.  Adequate Time for Preparing Bids.  Adequate time, generally not
less than 30 days, must be allowed between the date when public notice
is first published and the date by which bids must be submitted.  Bidding
documents must be available to prospective bidders from the date when
such notice is first published.

    D.  Adequate Bidding Documents.  A reasonable number of bid-ding
documents  (Invitations for Bids) shall be prepared by the grantee and
shall be furnished upon request on a first-come, first-served basis.   A
complete set of bidding documents shall be maintained by the  grantee
and shall be available for inspection and copying by any party.   Such
bidding documents shall include:

        (1)  A complete statement of the work to be performed
             and the required completion schedule;

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                                    11

        (2)   The  terms  and  conditions of the contract to be
              awarded;

        (3)   A clear  explanation of the method of bidding and
              the  method of  evaluation of bid prices, and the
              basis  and  method  for award of the contract;

        C4)   Responsibility requirements or criteria which
              vill be  employed  in evaluating bids; and

        (5)   The  following  statement:

              Any  contract or contracts av;arded under
              this Invitation for Bicls are expected to be
              funded in  part by a grant from the
              United States  Environmental Protection
              Agency.  Neither  the United States nor any
              of its departments, agencies, or employees
              is or  will be  a party  to this Invitation for
              Bids or  any resulting  contract.  This
              procurement will  be subject to regulations
              contained  in 40 CFR Subchapter B.

    E.  Sealed Bids.  The 208  grantee will provide for bidding by
sealed bids and for the safeguarding cf bids received until public
opening.

    F.  Addenda to  Bidding  Documents.  If a grantee desires to ar.end any
part of the bidding documents  during the period when bids are being
prepared,  the addenda shall be communicated in writing to all firms or
individuals in receipt  of bidding documents in time to be considered prior
to the bid opening  time.

    G.  Eld Notifications.   A  firm  or individual having submitted a bid
shall be allowed  to modify  or  withdraw the bid prior to the time of bid
opening.

    H.  Public Opening  of Bids. Section 208 grantees shall provide for
a public opening of bids at the place, date and  time announced in the
bidding documents.

    I.  Award to the Low, Responsive. Responsible Bidder.  After bids
are opened, they shall  be evaluated by the grantee  in accordance with the
methods and criteria set forth in  the bidding documents.  The grantee may
reserve the right to reject all bids.  Unless all bids  are, rejected,
award shall be made to  the  low, responsive, responsible bidder.

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                                   12

        If the award  is  intended to be made to a firm or individual
vhich did not submit  the lowest bid, a written statement shall be
prepared prior to  any award and retained by the grantee explaining why
each lower bidder  was deemed nonresponsible or not responsive.

              State or local laws, ordinances, regulations or procedures
which are designed or which operate to give local or in-State bidders
preference over other bidders  shall not be employed in evaluating bids.

VI. REQUIRED PROVISIONS  APPLICABLE TO ALL PROCUREMENT.

    Each stibagreement awarded  under a Section 208 grant must adequately
define the scope of project work to be performed by the contractor for
the grantee  and must  include adequate provisions to define a sound and
complete agreement.   Such general provisions would include, an a minimum:

    A.  Content of Subagreement

        Eac£h subagreement must adequately define:

        (1J   The scope and extent of project work;

        (2J   The tine for performance and completion of
              the contract work, including where appropriate,
              dates for completion of significant project
              tasks;

        (3)   Personnel and facilities necessary to accomplish
              the work within the required time;

        (4)   The extent  of subcontracting and consultant
              agreements; and

        (5)   Payment  provisions in accordance with this interim
              guidance.

        If any of  these  elements cannot be defined adequately for later
tasks at the time  of contract  execution, the subsequent tasks shall not
be included  in the contract at that time.

    B.  Termination;  Suspension.

        Each subagreement in excess of $10,000 must contain adequate
provisions for termination of  all or any part of contract performance
for default  or for convenience by the grantee, or for suspension of all
or any part  of contract  performance by agreement or by the grantee,
including the manner  by  which  the termination or suspension will be
effected and the basis for settlement.

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                                   13

     C.  Remedies.

         Each subagreement in excess of $10,000 must contain adequate
contractual provisions or conditions to allow for administrative,
contractual, or legal remedies in instances where grantees
or contractors violate or breach contract terms or conditions, and
must provide for such damages, sanctions, and penalties as may be
appropriate.

     D   Records Retention.

         Each subagreement in excess of $10,000 must contain a provision
requiring the contractor to maintain records of contract performance
as defined in §30.805 of the EPA general grant regulations, and make these
records available for inspection, audit, and copying by the grantee, EPA,
ths Comptroller General of the United States, the Department of L^bor, or
any authorized representative, to the extent and for the same length of
time as is set forth with respect to grantee records in §30.805 of the
EPA general grant regulations.

     E.  Access.

         Each subagreement in excess of $10,000 must contain a provision
to ensure that the Project Officer and any authorized representative of
EPA, the Comptroller General of the United States or the Department of
Labor, shall at all reasonable times during the period of EPA grant support
and until three years following final settlement have access to the
facilities, premises, and records (as defined in §30.805) of the contractor
related to the project.

     F.  Audit.

         Each subagreement in excess of $10,000 must contain adequate
contractual provisions or conditions to allow for an audit or audits
of the contractor in accordance with generally accepted auditing
principles and established procedures and guidelines of the reviewing
or audit agency(ies) and 40 CFR 30.805 and 30.820.   (See attached
sample audit clause, Appendix C-l, Construction Grants Regulations.)

     G.  Payments.

         The provisions defined in §35.937-10 concerning subagreement
payments for architectural or engineering services apply to all
procurement conducted under Section 208 grants.

     H.  Price Reduction for Defective Cost or Pricing Data.

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                                    14

          The provisions  of  the  following clause are required by EPA
only  if  the amount  of  the contract exceeds  $100,000.  The grantee may
elect to utilize  this  clause  if the contract amount is $100,000 or
less.

               If  the Project  Officer determines that any
               price, including  profit negotiated in
               connection with this contract or any cost
               reimbursable  under this contract was increased
               by  any significant sums because the contractor,
               or  any subcontractor, furnished incomplete or
               inaccurate cost or pricing data net current
               as  certified, then such price or cost or profit
               shall be reduced  accordingly and the contract shall
               be  modified in  writing to reflect such reduction.
               Failure  to agree  on a reduction shall be subject
               to  the "Remedies" clause of this contract.

      I.   Other Applicable Federal Requirements.

          Where construction activity may be undertaken, other Federal
statutes  and requirements,  such as the Contract Work Hours and Safety
Standards Act, the  Davis-Bacon  Act and related statutes, the Copeland
Act,  or  such other  statutory  provisions, Executive Orders or regulations
as nay be applicable to  contractors under grants, shall apply to each
subagreeinent in excess of $10,000.
Attachment:
EPA Fora 5700-41

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

                          SECTION A -- FUNDING



                       WQM Policy Memorandum A-2

             FY 80 FUNDING POLICIES FOR 106 AND 208 GRANTS



                               [RESERVED]
Note on Policy

     The FY 80 funding policies for 106 and 208 grants are, at the time
of this guidance, being reviewed in draft by Water Planning Division,
the Regional Offices, and others.  The policy statement is essentially
a compilation of the policies in the WQM FY 80 Baseline Strategy and the
FY 80 aspects of the following memoranda:

     (1) INFO 79-80 (June 4, 1979), "208 Fund Obi igations-FY 78, 79
         and 80"

     (2) INFO 79-100 (August 16, 1979), "Funding Policy and Procedures
         for FY 80 Section 208 Grants"

     (3) INFO 79-105 (August 25, 1979), "Procedures for Implementing
         FY 80 Funding Policies for 208 Grants"

     The Water Planning Division will  distribute the final policy
memorandum (A-2) as soon as it is finalized.  This is estimated to be
in October, 1979.

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             SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                       VI.  WQM POLICY MEMORANDA

             SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA

                      WQM Policy Memorandum B-1

             EPA POLICY REGARDING INTERSTATE COMMISSIONS*
Purpose
This memorandum sets forth EPA's policy regarding existing and
prospective interstate water pollution control commissisons, including
EPA policy for funding these commissions under Section 106 of the
Federal Water Pollution Control  Act.  This statement of policy is
accompanied by a discussion of the background and rationale upon which
the policy is based.

Background

The traditional issue of whether water pollution control  programs are
to be administered primarily on the basis of watershed or political
boundaries has been resolved by the passage of P.L.  92-500 and by
the subsequent issuance of EPA regulations governing the  national water
pollution control  effort.   The net effect of this Act and set of reg-
ulations is to establish a joint Federal-State program,  which relies
on the State as the basic  administrative unit.  With regard to the
specific role of the interstate commissions, the Act is silent, but it
does state that:  "The Administrator shall encourage compacts between
the States for the prevention of pollution."  Thus some future role for
interstate compacts is envisioned by the Act, although the specific
role is not defined.

Because EPA has the responsibility to provide the direction for the
national water pollution control program, and because EPA partially funds
six interstate commissions from monies provided by Section 106 of the
Act, the Agency has recognized the necessity of reassessing its policy
toward the interstate commissions, particularly with regard to those func-
tions of the commission for which EPA provides funds.  A  study entitled
"Roles of 'Interstate Water Pollution Control Commissions  Pursuant to
P.L. 92-500" was conducted for EPA by a private contractor during the
winter of 1974-75.  This study,  plus the experience  of EPA in working with
^Originally issued as SAM-24 (December 23, 1976) under the signature of
 the Deputy Assistant Administrator for Water Planning and Standards.

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                                      -2-
   ^ interstate  commissions,  provides the  information base for the
policy review and  decisions  contained  in  this paper.

There are two major questions  which  EPA must address with regard to
the interstate  commissions.  These are:

          (1)   Which activities  of interstate commissions should
                EPA encourage by  providing funding?

          (2)   What should be  the division of Section 106 funds
                between the States as a group and the interstates
                as  a group?

To determine the answers to these questions, several criteria were
used.  The  first of these was  the desirability of defining and
establishing coordinated functions --  for EPA, the  interstate and
the States  --  which do not conflict  and which are not unnecessarily
redundant.  Related to this concern  is the desire to establish the
most cost-effective relationships.   Another consideration was the
need to  allocate Section 106 funds in  a manner that was fair to all
States and  interstates.

An important additional factor which was  considered was the timing
of implementation of the policy. Since this policy sets forth a
definitive  role for interstate agencies,  which may  be a significant
departure from existing practice, a  transitional period, not to
extend beyond  fiscal year 1979,  is provided if a regional administrator
determines  that such a transitional  period is necessary.  During this
interim  period, the regional administrators will encourage each inter-
state to gradually shift its performed functions to those which EPA
will fund  in fiscal year 1979  and  beyond  or to those which the compact
States are  willing to fund.

POLICY

Prior to examining the related questions  of (1)  division of Section
106 funds between the States and the interstates or (2) division of
these funds between the individual  interstate commissions, EPA first
had to determine its attitude  toward the  future  role of all interstates
receiving EPA  funds.  Both the provisions of P.L.  92-500 and the policy
of EPA since October 1972 stress the primary role  of the States in
administering  the water pollution  control program.  Although EPA continues
to issue and  enforce permits and to  process grant  applications for
municipal wastewater treatment facilities, the Agency  is firmly committed

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                                      -3-


to a goal of delegating virtually all functions to the States.   Within
the foreseeable future, EPA's role will be one of setting national
objectives and policy, funding State agencies to perform the operational
role and monitoring State performance.  Given the prospect of this  set
of relationships between EPA and the States, what role will the inter-
state commissions play?

EPA can provide only a partial answer to this question.  From the EPA
perspective, it is the State agency, working with interstate and local
agencies, which should plan and manage the spectrum of activities which
constitute an integrated water pollution control program.  The inter-
state commissions can play a valuable role in coordinating the programs
of several States as they relate to a specific river basin or other
body of water.  This coordination is particularly valuable in the areas
of standard setting, monitoring and water quality management planning -
but may extend to other program areas as the need arises.  Included in
the coordination function is the facilitating of information exchange
between States, for example, by arranging meetings focused on functional
areas of concern to all States in a river basin.

In addition to the coordination role, there are several functions which
are particularly suited to interstate agencies.  One of these is the
determination of wasteload allocations between States on a stream but not
within those portions of a stream inside one State's boundaries.  Another
is the preparation or supervision of preparation of mathematical models
of a stream.  Additionally, an interstate agency is in the position to
review monitoring data on a river, to point out major problem areas and
to assist  in holding an individual compact State accountable to the other
States regarding a particular problem.  Also, interstate agencies are
able to  fund and supervise contracts for special studies or projects which
affect an  entire stream or an interstate portion thereof which are of
benefit  to compact States.

These are  the functions which appear particularly appropriate for
interstates and which complement the EPA and State roles defined in
P.L. 92-500 and  in EPA's national water  strategy and annual operating
guidance.  Additional functions may  be assigned to the interstate agencies
by EPA arid the States according to changing needs and priorities consistent
with EPA's national strategy.  If a  regional administrator wishes to  provide
funding  in FY 79 and  beyond for activities, which appear to be contrary to
this guidance, he should refer the matter to Headquarters  for an exception to
the policy stated below.  Beginning  in FY 77, EPA will encourage a shift
of function to those  discussed above.  Starting with FY  79, EPA will
provide  grant funding  to interstates  to  carry out only these functions.
At that  time, EPA will  pay the actual  cost  of these activities  (up to  the
total funding allocation for  each interstate),  together  with a proportional
share of overhead costs.

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In stating this policy,  EPA is  in  no way  precluding other activities
by interstates.  States  are now funding and presumably will continue
to fund interstate activities.   State  funding may include a pass through
of a portion  of a State's 106 funds  to an interstate.
With regard  to the question of the division  of Section 106 funds
between  the  State and interstate agencies, EPA's  policy will be to
determine  in the annual operating guidance the level for interstate funding.
Except  in  extraordinary situations, the funding  level will be no less
than the allocation in the previous fiscal year.  The only exception to
this policy  will be in instances beginning in FY  79 where interstates
propose  to perform functions (to be funded by EPA) which are contrary to
the functions specified in this memorandum and are not recommended by
the regional administrator.  In such cases,  the  regional administrator
shall deny funds for these proposed functions and shall distribute the
funds to other States and interstates in the region as he sees fit.

With  regard to the application of the foregoing  policy to future interstate
commissions or to current commissions, which have not yet applied for EPA
funding, the policy is in e'ffect upon issuance of this guidance.

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                       VI.  WQM POLICY MEMORANDA

            SECTION B — PROGRAM REQUIREMENTS AND CRITERIA

                       WQM Policy Memorandum B-2

            REGULATORY PROGRAMS FOR NONPOINT SOURCE CONTROL*

Statement of Pol icy

Regulatory programs are required for nonpoint source control  where they
are determined to be the most practicable method of assuring  that an
effective nonpoint source control program is implemented.  Determinations
of practicability shall be based on economic, technical, social and
environmental  factors.  Non-regulatory programs may be approved only where
such programs  will result in implementation of"a 'nonpoint source program
which will result in the achievement of desired water quality goals.  If,
after a period of implementation, a non-regulatory program is determined
by EPA not be  effective, the appropriate planning agency will be
responsible for developing a regulatory program to assure program implemen-
tation.

Purpose

This memorandum sets forth the requirements, under section 208 of the
Clean Uater Act,  for the development of regulatory and other  programs at
the State and  local level to control nonpoint sources of water pollution.
It complements WQM Policy Memorandum B-3 "Developing and Implementing
Best Management Practices".   It defines the regulatory and other program
requirements;  establishes criteria for approval of the nonpoint source
elements of a  water quality  management plan; and addresses the role of
the State and  EPA in ensuring development and implementation  of effective
nonpoint source control programs.  It should be forwarded to  Water Quality
Management (208)  agencies, to the Office of Regional Counsel, to the
Regional Nonpoint Source Coordinator and to the Regional 208  Coordinator.

Background

Section 201 (c) of the Clean  Water Act requires that, to the extent
practicable waste treatment  management shall provide control  or treatment
^Originally issued as SAM-31  (November 14, 1978) under signature of the
 Deputy Assistant Administrator for Water Planning and Standards; minor
 editorial  changes have been  made by the Water Planning Division.

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of all point  and  nonpoint  sources of pollution.  Section 208(b)(2)(C)
requires  that regulatory programs be established to implement the waste
treatment management  requirements of section 201(c).   Section 208(b)(2)
(F) - (K) requires  that plans developed pursuant to that section set forth
procedures and methods to  control identified nonpoint sources of pollution.
These sections of the Act  provide the legal basis for requiring that
regulatory and other  programs be established to control  water pollution
problems  from nonpoint sources.

Further authority is  found in EPA's general authority to require that  plans
developed pursuant  to section 208 be effective.  Requirements are set  forth
in 40 CFR Part 35.1521.  This guidance memorandum further defines those
requirements.

The following materials are available to assist the States and EPA in
implementing  the  policy established in this memorandum:   "Compilation  of
Federal,  State and  Local Laws Controlling Nonpoint Pollutants" (EPA-440/9-
75-011),  SCAMP (Sediment Control and Manpower Project) issued under TECH
MEMO No.  3, 5, 6, 7,  11, 12 and  16, and "Legal and Institutional  Approaches
to Water  Quality  Manaaement Planning and Implementation" (EPA Contract No.
68-01-3564, March 1977).

Policy Guidance

(1)  General

A regulatory  program  is required and shall be submitted for approval  as
part of a 208 plan  in those cases where the 208 agency, in consultation
with the  affected State agencies and the Governor, has determined that
such a program is the most practicable method of assuring that an effective
nonpoint  source control program  is implemented.  Such a determination  shall
be based  on economic, technical, social, and environmental factors.

Regulatory programs should be designed to attain the 1983 water quality
goals set forth in  section 101(a) of the Act.  The programs must be
enforceable and administered by  agencies with adequate legal authority and
resources to  ensure their  implementation.

Regulatory programs are not required where the plan prepared under section
208 certifies that  substantial water quality problems resulting from
nonpoint  sources  do not exist or are not  likely to develop in the fore-
seeable future.

There is  a great  deal of flexibility as to the particular regulatory
program which is  most appropriate to control a particular nonpoint source.
The program may address a  particular category of activity, such as
construction  or mining; a  particular pollutant, such as sediment; or
particular geographical areas which are determined to be sensitive or

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critical.  Choice of a regulatory program and the appropriate level  of
Government (State,  local or regional) to administer the program will
depend on the  type  and extent of the nonpoint source problem, legal
authorities, existing programs and existing intergovernmental relationships
However, where necessary to ensure an effective program, new relationships
should be developed.

The type of control tools to be utilized, such as permits,  licenses,
contracts, notification, bonding, leases, plans, and various management
techniques, will depend upon the intensity, scope and type  of nonpoint
source problem to be controlled, land ownership patterns, and such physical
factors as rainfall, soil characteristics, geological conditions and
topography.

(2)  Regulatory Program -- EPA Approval

EPA will approve a  regulatory program which includes the following:

     (a)  Authority to control the problem which the program addresses
          (i.e., an activity, pollutant, or geographical area).

     (b)  Authority to require the application of Best Management
          Practices* and their periodic  revision.

     (c)  Monitoring and/or inspection authority.

     (d)  Authority to implement the chosen control tool(s)  (i.e., permits,
          licenses, contracts, etc.)

     (e)  Enforcement authority.

     (f)  A designated management agency or agencies responsible for
          implementing the regulatory program with:

     0  expertise-in the subject matter  area to-be controlled
     0  adequate staff
        adequate funding
        the relevant authorities pursuant to section 208(c)(2)  and 40  CFR
        35.152l-3(c)(l) and (3).
     0  a letter of commitment pursuant  to 40 CFR 35.1521-3(c)(l) and  (2).

To be approved by EPA, a regulatory program must have the necessary
implementing requlations in effect and sufficient resources available  to
carry out the  required activities.
o

o
*Best Management  Practices are defined in 40 CFR 35.15£l-4(c) (1).
 See also WQM Policy Memorandum B-3.

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The adequacy  of a particular  program  to achieve compliance with water
quality goals should be evaluated  in  light of the stage of development
of the program.   Where a program is fully established and has been in
place for a period of time,  it  should be possible to determine its effective
ness and evaluate where changes need  to be made.  Approval shall  be with-
drawn if the  program is not  being  adequately implemented or does  not-prove
to be effective.   (See section  (7) Evaluation of Implementation)

(3)  Regulatory Program -- Approval with Conditions

EPA will attach conditions to approval under the following circumstances:

     (a)  Where the legislative authority exists but means of
          implementation are  not available or are not satisfactory, such
          as  insufficient resources,  lack of regulations, questions
          regarding designated  agency capability, etc.; or

     (b)  Where the authorizing legislation has been introduced,  but
          not enacted; or

     (c)  Where a specific legislative proposal has been developed and
          the plan contains  a reasonable schedule for introduction to
          the legislative body.

In any of the above situations, EPA approval comments must specify the
conditions for full approval.  The planning agency and the State, in
consultation  with EPA, must  agree  on  a schedule for meeting such  conditions.

Periodic (at  least annual) reporting  to the Regional Administrator on
progress being made in meeting  the schedule shall be required.  This
reporting may be submitted under the  States responsibility for monitoring
implementation.   Approval with  conditions shall be withdrawn if the
Regional Administrator finds  the agreed to progress is not being  made.

(4)  Regulatory Program -- Disapproval

The Regional  Administrator shall disapprove any regulatory program which
does not meet the conditions  set forth in this memorandum for approval
with or without conditions.

(5)  Other Program Approval  (Non-Regulatory Programs)

Other approaches to nonpoint  source control may be approved by the Regional
Administrator as fulfilling  the nonpoint source control requirements in
section 208(b)(2)(F-K) only  where, in his judgment, the program will result
in implementation of nonpoint source  controls which will result in achieve-
ment of the desired water quality  goals.  EPA will give full approval of

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.non-regulatory  programs only when implementation efforts, such as hiring
of personnel or budget allocations, have commenced.  If implementation
will occur  in stages  (i.e. only a portion of the total  additional personnel
or funding  required will be in place in year one), and  stage one has been
implemented, and  a definite schedule for implementing future stages has
been agreed upon, full approval may be granted.

Approval with conditions may be granted where the conditions noted below
have been met-,  and a  schedule for implementation has been agreed upon;
but actual  implementation has not commenced.  Approval  with or without
conditions  shall  be given only when the following requirements are met:

     0  Identification of Best Management Practices.

     0  Agreement on  schedule of milestones for implementation.

     0  Provision of  an effective educational program to inform and
        involve the affected public.

     0  Provision of  adequate technical assistance and  financial
        assistance, if needed.

     0  Agreement to  reporting system  (at least annual) to the Regional
        Administrator on progress made in implementation.

The Regional Administrator can require such information in these reports
as  is necessary to evaluate milestone  progress.  Milestone progress can
be  shown in terms of  implementation measures, resource commitment, and
water quality  improvement.

Approval of r&on-regulatory approaches  shall be withdrawn if the Regional
Administrator determines that implementation milestones are not being met.
Non-regulatory  programs will retain approval only when  continuing and
substantial progress, including the application of Best Management
Practices,  is  being made toward attaining water quality goals.  Where such
progress is not being made, approval of these approaches shall be revoked,.
the appropriate agency will be responsible for developing a regulatory
program to  ensure attainment of water  quality goals.

(6)  Other  Programs -- Disapproval

The Regional Administrator shall disapprove a proposed non-regulatory
program as  being inadequate when he has reason to believe it will not be
effective and will not lead to the application o.f Best Management Practices,
Factors to  consider in making that determination include:  the severity of
the nonpoint source problem; past experience of the  involved governmental
unit with the  proposed approach; and the type of program that  is proposed.

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Specific and  realistic  funding  sources must be identified to implement at
least a significant portion  of  the proposed non-regulatory program,  or the
program will  be disapproved.  When a feasible funding source is only
identified  for a portion of  the program, the WQM agency must include
milestones  for securing adequate funding to implement the entire program.
Progress in meeting milestones  will be reviewed through evaluation of
implementation.

Where substantial water quality problems continue to exist, those programs
which are merely a continuation of an existing program which has not
proven to be  effective, will  not qualify as acceptable.

Where regulatory programs already exist (e.g., construction, mining),
proposed new  programs will  be expected to be at least as stringent as
existing regulatory programs, and more stringent if necessary, to achieve
water quality goals.

(7)  Evaluation of Implementation

The State has primary responsibility for evaluating implementation of
point and nompoint source control programs.  The State may delegate  some
evaluation  tasks to areawide agencies.  Monitoring progress in actually  „,
carrying out  a control  program  or in meeting an implementation schedule
may be carried out through this evaluation responsibility.

Development and refinement of BMPs and control programs for nonpcint sources
is an iterative process, which  is based in part on the findings of the
periodic evaluation of implementation.  When the findings indicate that
specific management practices or control programs are not effective  or
adequate, the appropriate WQM planning agency must modify the BMPs and/or
control program.  Such refinements will be developed during continuing WQM
planning.

(8)  Assistance in Development  and Implementation of Nonpoint Source Control
     Programs

EPA Regional!  Offices have the responsibility for providing necessary tech-
nical assistance to State and local planning agencies to assure that
effective programs are developed and implemented.

It is especially important that the planning agency work closely with both
legislative and executive decision-makers at the State and local level in
development of regulatory programs.  Development of regulatory programs
shall be addressed in the water quality management plan by writing mile-
stones into the 208 grant agreements and work programs.  EPA recognizes
that  it will  ordinarily only be possible to identify regulatory needs
after nonpoint source assessment and problem identification have been
completed.

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The milestones  which  will  actually be included in the grant agreements
and work  programs  must  obviously reflect the knowledge existing at the
time  the  schedule  is  agreed  upon.  Where it seems to be a strong possi-
bility  that  regulatory  programs will be required, that possibility can be
identified  in  the  schedule as such.  Specific program milestones might
include the  following,  as  appropriate:

      (a)  completion  of phases in water quality assessment of nonpoint
          source pollution impacts.

      (b)  identification of  nonpoint source problems.

      (c)  identification of  legislative needs.

      (d)  development and  implementation of public participation
          programs.

      (e)  certification from State Attorney-General or local legal
          office that adequate legal authority exists.

      (f)  proposal  of legislation.

      (g)  enactment of  legislation.

      (h)  proposal  of new  or upgraded rules and regulations including BMPs.

      (i)  promulgation  of  rules and regulations including BMPs.

      (j)  establishment or identification of institutions necessary to
          administer  the program.

      (k)  establishment of interagency and intergovernmental coordination
          mechanisms.

      (1)  establishment of monitoring, inspection and enforcement procedures,

      (m)  provisions  of funds, personnel, facilities and equipment for
          regulatory  objectives.

      (n)  development and  implementation of educational programs in
          support  of  regulatory objectives.

      (o)  evaluation  of adequacy of Best Management Practices and management
          agency performance.

The actual milestones should be agreed upon by EPA and the planning agency.
Such an agreement  will  lead  to an orderly development of nonpoint source
controls, early resolution of any EPA objections to the proposed program and
will expedite approval  of  that portion of the plan.  While it is hoped that
such actions will  be  unnecessary, the Regional Administrator will have
authority under such  an agreement to withhold 208 planning funds if mile-
stones  are not  being  met.

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

             SECTION B — PROGRAM REQUIREMENTS AND CRITERIA


                        WQM Policy Memorandum B-3

          DEVELOPING AND IMPLEMENTING BEST MANAGEMENT PRACTICES*
STATEMENT OF POLICY

Feasibile Best Management Practices (BMPs) which reduce nonpoint source
pollution and achieve the water quality goals must be developed and
implemented for all categories of nonpoint sources.  The BMPs will be
developed in a continuing process of identifying problems, devising
control measures, assessing BMP adequacy, and modifying BMPs when neces-
sary to attain water quality goals.  State priorities for developing non-
point source control programs will be established in accordance with
general EPA guidance and will be contained in the State/EPA Agreement.

Water quality goals are broadly defined to include:  Water Quality
Standards; the 1983 goal as set forth in SI01(a)(2) of the Clean Water
Act; the reduction of pollutants from all sources, to the extent feasi-
ble; the prohibition of toxic pollutants in toxic amounts; protection
of public health and welfare; and other goals and objectives of the Act.
To attain the goals of the Act, it is the policy of EPA to minimize if
not eliminate toxic pollution in recognition of the uncertainties in-
herent in establishing "safe levels" for toxic pollutants.

PURPOSE

The purpose of this memorandum is to describe the Agency's policy on
developing BMPs to meet water quality goals under existing time, resource,
and information constraints.  It discusses the relationship between BMPs
and Water Quality Standards (WQS), and complements WQM Policy Memorandum
B-2.
* Originally issued as SAM-32  (November 14, 1978) under the signature
  of the Deputy Assistant Administrator for Water Planning and Standards
  Minor editorial changes have been made by Water Planning Division.

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Discussion

(1)  Program Overview

     The attainment of national and State water quality goals serves as
     the basis of the planning process described in 40 CFR Part 35,
     SS35.1500 to 35.1542 (see Problem Assessment for further discussion).
     Under that process, WQM agencies must establish nonpoint source
     control programs to achieve the water quality goals including water
     quality standards (35.1521-4(0).  The programs will  be concerned
     with prevention of future problems and mitigation of  existing problems
     WQM agencies will identify priorities for addressing  particular source
     control and water quality problems and will develop the necessary
     programs in a long-term iterative process.

(2)  Problem Assessment

     A water quality assessment is necessary under the Clean Water Act
     and the regulations to identify nonpoint water quality and source
     control problems.  Precise quantification of these problems is not
     expected or required to define priorities and develop BMPs.

     Numerical WQS criteria will  be used to assess nonpoint source water
     quality problems whenever the criteria are reasonably applicable to
     the particular nonpoint sources and pollutants under  study.  As water
     quality standards criteria are revised to reflect nonpoint source
     needs,  they will be applied in the assessment.  The remaining elements
     of WQS  (i.e., narrative criteria, antidegradation policy, and
     designated uses) will  be generally applicable in the  assessment and
     will  be particularly useful  where appropriate numerical criteria are
     not available.

     The use of State WQS must be supplemented by additional water
     quality goal considerations in assessing water quality because WQS
     do not  fully reflect the water quality goals and objectives of the
     Clean Water Act at this time.  Safe levels and transport paths for
     many  toxic pollutants  are unknown; effects of future  growth must be
     considered; impacts from wet weather and natural background conditions
     are not fully understood; and downstream impacts are  difficult to
     determine and take into account.

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(3)   BMP Development

     Feasible BMPs which  reduce nonpoint source pollution must be
     developed  in accordance with priorities for developing  control
     programs for all  nonpoint sources identified in areawide  and
     State planning areas.  Site specific conditions should  be taken
     into account during  BMP design and implementation.   BMPs  must
     be designed to make  maximum feasible contributions  toward attain-
     ment of water quality goals including minimization  of toxic
     pollutants.  BMPs  identified in the planning process will be
     implemented through  regulatory programs where'those programs are
     determined  to be  the most practicable method of assuring  effective
     implementation  (WQM  Policy Memorandum B-2).

     BMPs may not completely achieve water quality goals in  the first
     stages of  the planning process and an iterative process may be
     necessary  to achieve this objective.  BMP development with regard
     to water quality  goals may be hampered by:  water quality goals
     which have  not  been  fully quantified: water quality standards
     criteria which, in some cases, have not yet been developed
     sufficiently to identify nonpoint source pollution  problems and
     to develop  control programs; difficulties in identifying  cause-
     effect relationships; and resource constraints.

     WQS, particularly designated uses, will be used primarily as a
     bench mark  of progress in BMP development.  In those instances
     where WQS  numerical  criteria have reasonable application  to
     nonpoint sources,  the criteria may serve as an interim  goal  in
     the continuing  effort to achieve water quality goals.  Once BMPs
     have been  applied, WQS and other water quality goals will be used
     to assess  BMP effectiveness in the same manner as these goals
     are used to assess the water quality.

(4)   BMP Modification

     Once BMPs  are being  applied to control a particular nonpoint
     source, the State has primary responsibility for evaluating  their
     effectiveness (40 CFR 35.15"21).  Where nonpoint sources continue
     to impede  the achievement of the water quality goals after
     application of  BMPs, the appropriate water quality  management
     agency must modify the BMPs or the strategy for applying  BMPs  as
     necessary  to improve BMP effectiveness.  Existing BMPs will
     continue to apply to nonpoint sources while those practices  are
     assessed and modified in the planning process.  As  the modifications
     are implemented,  water quality goals must again be  used to assess
     BMP effectiveness.   Where appropriate, further refinements in  BMPs
     and revisions of  criteria in water quality standards may  be needed
     in this iterative process of developing, implementing, and evaluating
     BMPs.

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(5)   Plan Outputs

     BflPs identified in the planning process  must  make  maximum  feasible
     progress towards the achievement of the  water quality  goals  and
     minimization of toxic pollutant loads.   The rationale  for  the  BMPs
     selected must be included in the plan output.  A schedule  for
     assessing BMP effectiveness  and identifying all appropriate  BMPs  must
     be established in the State/EPA Agreement.

     BMPs are not required for nonpoint  sources in  planning areas where
     the State certifies that:

     -  existing management practices are regarded  as sufficient  to meet
        water quality goals for that particular source  activity and
        location; and

     -  BMPs to achieve water  quality goals will not be necessary to
        accommodate anticipated impacts  of future  activities including
        new sources.

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

             SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA



                       WQM Policy Memorandum B-4

              NEPA COMPLIANCE IN THE STATE AMD AREAWIDE
                    WATER QUALITY MANAGEMENT PROGRAM*


Purpose

This memorandum explains EPA's amendment of 40 CFR Part 6, which exempts
the Water Quality Management  (WQM) program from the Environmental  Impact
Statement (EIS) requirement of the National Environmental Policy Act
(NEPA) as provided by Section 511(c)(l) of the Clean Water Act.

Background

Section 511(c)(l) of the Clean Water Act affords an exemption from the
NEPA requirement for most water programs, including the WQM program under
Sections 106, 208, and 303.  However, except for the EIS requirement of
Section 102(2)(c) of NEPA, it is EPA policy that the spirit and  intent
of NEPA will continue to be served by the WQM program.  The environmental
implications and impacts of alternative WQM planning programs and  actions
shall be considered and evaluated in a manner which is consistent  with the
spirit and intent of NEPA.

Supporting our decision not to require'an EIS are the WQM program
requirements for procedures which are at least equivalent to those
required for the NEPA process:

     o  The WQM public participation process requires that sufficient
        information and opportunities for involvement in the decision-
        making process be provided the public.  These must be early and
        continue through the WQM process so that the public can  both come
        to understand and have an impact on the WQM plan and its implement-
        ation.  This includes full public disclosure of potential  adverse
        impacts throughout the plan development, continuing planning, and
        implementation phases.
* Originally issued as SAM-34 (August 21, 1978) under the signatures of
  the Assistant Administrator for Water and Hazardous Materials and the
  Acting Director of the Office of Federal Activities.  Minor editorial
  changes have been made by the Water Planning Division.

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     o  The WQM process requires assessment and presentation of the
        social, economic, and environmental impacts of alternative
        programs and actions.  This assessment includes an analysis of
        primary and secondary impacts  of alternative WQM programs and
        actions.  It also requires consideration of the environmental
        tradeoffs among these alternative WQM actions.  Further, this
        assessment must comply with Executive Orders 11988 for floodplain
        management and 11990 for wetlands protection and EPA's Statement
        of Procedures* implementing these two orders, and satisfy the
        spirit and intent of NEPA.

These requirements for active public as  well  as interagency involvement
and environmental assessment in the WQM  process are necessary for approval
of a WQM plan by the Regional Administrator.   They are also consistent
with the spirit and intent of NEPA.

Pol icy

1.  An EIS will not be required as part  of EPA approval of a WQM plan.

2.  Regional  Administrators are responsible for assuring that the public
    participation procedures and environmental  assessments required in
    the WQM planning process are conducted in a manner consistent with
    the spirit and intent of NEPA as well as  the Clean Water Act.  In
    addition, Regional Administrators  are responsible for ensuring that
    other appropriate agencies participate in WQM plan review.

3.  Regions which are developing detailed environmental impact statements
    on specific WQM plans in compliance  with  previous policy are encour-
    aged to complete them.  EPA will continue to support and assist such
    programs.

4.  Regional  Administrators' actions on  the provision of Federal construc-
    tion grants and the issuance of new  source permits are not exempt from
    the EIS requirement of NEPA.
  44 Federal  Register 1445 (January 5,  1979)

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

             SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA


                       WQM Policy Memorandum B-5

         STATE ROLE IN RESPONDING TO ENVIRONMENTAL EMERGENCIES



                               [RESERVED]
Note on Policy

     The State role in responding to environmental  emergencies was
substantially revised by the 1977 Clean Water Act Amendments.   The
Amendments provided EPA with increased responsibility and authority to
respond to environmental emergencies and the States with additional
responsibilities to be eligible for a section 106 grant.  These
responsibilities were outlined in SAM 35, issued September 14, 1978.

     Subsequent to the issuance of SAM 35, the Administration  introduced
proposed Superfund legislation which would substantially impact State
environmental emergency response programs.  It would be inappropriate
for EPA to require State appropriation actions, or other substantial
efforts, when State responsibilities may be altered by passage of the
pending Superfund legislation.  Therefore, pending further Headquarters
guidance, State efforts to comply with sections 106(e)(2) and  504(b)  of
the Act for FY 80 will be deemed adequate if: (1) the State is studying,
or has studied, to the satisfaction of the Regional Administrator,
how best to respond to environmental emergencies, and (2) the  State has
developed, or is developing, legislation to obtain the legal  authority
in section 504(a).

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

             SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA

                       WQM Policy Memorandum B-6

      PRETREATMENT AND THE WATER QUALITY MANAGEMENT (WQM) PROGRAM*
Purpose

This memorandum presents policy on using  208 grant funds to assist State
and local  agencies in complying with 40 CFR 403,  "Pretreatment Standards
for Existing and New Sources  of Pollution," promulgated in the June 26,
1978 Federal Register, which  became effective August 25, 1978.  References
are made to 106, 201, and 205(g) funding  where necessary to explain the
use of 208 funds for pretreatment.  Note: This policy applies only to 208
grants awarded before October 1, 1979.

Background

40 CFR 403 establishes Federal, State and local  pretreatment program
responsibilities.   EPA remains responsible if State and local authorities
do not implement 40 CFR 403 requirements.  Regions must effectively
utilize all available incentives, including 201  and 208 funding to
encourage State and local pretreatment program development.  Administration
of approved State programs is eligible for assistance under 106 and by
those 205(g) funds transferred to the 106 grant for 402 activities.

States with an approved NPDES permit program must submit a request for
pretreatment program approval by March 27, 1979.   Where legislation is
required an additional year is allowable.  If a POTW has a design flow
of greater than 5 mgd or otherwise qualifies as discussed in §403.8, an
approved local pretreatment program is required in the shortest possible
time, not to exceed July 1, 1983.  Compliance schedules and general
requirements or a permit modification clause must be added to NPDES
permits during the regular permit revision cycle.  Compliance schedules
may allow up to three years from the date of revision for the needed
program.

201 grants will provide most  of the incentives to develop approvable
municipal  pretreatment programs.  201 regulations authorize amendments
of existing or pending 201 step 1, step 2 or step 3 grants to provide
for funding assistance for municipal pretreatment program development.
201 regulations do not allow  grants for the sole purpose of developing a
pretreatment program.  201 grant eligible pretreatment development costs
are detailed in 40 CFR 35.907.
* Originally issued as SAM-36 (October 10, 1978) under the signature of
  the Deputy Assistant Administrator for Water Planning and Standards.
  Minor editorial  changes have been made by the Water Planning Division.

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Policy

1 -   General

     208 monies  from the  FY  1979  appropriations may be used
to provide  75-percent funding  for  the development of State or local  pre-
treatment programs  in accordance with the conditions detailed below.   As
208 grant funds  are limited  when compared to total WQM program needs,
Regional Administrators must determine pretreatment program development
funding priorities  in the context  of total State and local WQM requirements.

2.   Development of NPDES State  Pretreatment Programs

     All NPDES States must submit  to EPA by October 9, 1978, a statement
indicating  whether  the State has adequate authority, procedures, and funding
to carry out a State Pretreatment  Program."1  After this statement is submitted
by an  NPDES State and reviewed by  EPA, the Regional Administrator may
provide 208 funds to assist  this State in developing any additional
legal  authorities,  procedures, or  funding/personnel descriptions which
the Regional  Administrator determines are required to obtain EPA approval.2
(Note:  as  non-MPDES States  are  not required to develop a State Pretreatment
Program, non-NPDES  States are  not  eligible for 208 funds for pretreatment.)

     After  an NPDES State Pretreatment Program is approved, this State is  no
longer eligible for 208 funding  for pretreatment.  After approval, State
pretreatment program costs are for administration; such costs are eligible for
106 and those 205(g) funds transferred to the 106 grant for 402 activities.3

3.   Development of Local Pretreatment Programs

     To the maximum extent possible, 201 funds will be used to assist  the
development of local pretreatment  programs.  208 funds may only be used  to
assist in development of pretreatment programs for those POTW's greater
than 5 mgd  that are not eligible for 201 funding for pretreatment
program development.

     The following local  pretreatment program development costs are eligible
for 208 funding assistance from  FY 79 funds:

     0 Development of an inventory of industrial and commercial
        wastes being introduced  into the treatment works;
      o
Evaluation of legal authority, including  the  adequacy of enabling
legislation and the selection of mechanisms  to  be  used for
control and enforcement;
1.  See 40 CFR 403.10(b) (1).
2.  See 40 CFR 403.10(f) and  (g).
3.  Actual 106 and 205(g)  funding  arrangements  to  assist States in
    administering their Pretreatment Program should  be delineated in
    State/EPA 205(g) Delegation Agreements  (see 40 CFR 35, Subpart F
    section 35.1030) and in  State/EPA Agreements (see 40 CFR Subpart
    section 35.1515).

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o
        Evaluation of financial programs and revenue sources to ensure
        adequate funding to carry out the pretreatment program;

        Determination of technical information necessary to develop
        an industrial waste ordinance or other means of enforcing pretreat-
        ment standards; and,

     0  Design of a monitoring enforcement program, including determining
        both the required monitoring equipment for the municipal  treatment
        works and the municipal facilities to be constructed for monitoring
        or analysis of industrial waste.

     The following items are 208 grant eligible if necessary for the proper
design or operation of the municipal treatment works but are not 208 grant
eligible when performed solely for the purpose of seeking an allowance for
removal of pollutants under 40 CFR 403.7:

     0  Determination of pollutant removals in existing treatment works;  and,

     0  Determination of the treatment works tolerance to pollutants which
        interfere with its operation, sludge use, or disposal.

     No 208 funds will be used for actual operation of a local pretreatment
program.  208 grants for performing the eligible tasks listed above may be
used to fund through subagreements designated POTW management agencies.
Regional Administrators may amend an existing or pending 208 grant to provide
for development of an approvable local pretreatment program.

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               SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

              SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA


                       WQM Policy Memorandum B-7

      USING 208 FUNDS TO DO WATER QUALITY AND MUNICIPAL FACILITIES
         EVALUATIONS FOR TREATMENT MORE STRINGENT THAN SECONDARY*

Purpose

This memorandum sets forth eligiblity criteria for selecting the
particular situations and grantees to meet the national WQM priority
on 208-funded water quality/municipal facilities analyses and provides
guidance on developing their work programs which become part of their
grant agreements.  Note: This policy applies only to 208 grants awarded
before October 1 , 1979.

Background

Starting with FY 78 funds, Regional allocation of 208 funds to State and
areawide agencies must be based on priority of needs, not on a funding
formula.  WQM programs developed must ensure that national priorities and
objectives are met.  The national WQM priority on facility planning
requires that each Region, working with the States, select a limited
number of agencies to perform analyses related to critical municipal
facilities decisions, including:

     o  evaluating water quality analyses that have been used as the
        basis for justifying treatment beyond secondary

     o  evaluating the costs and effectiveness of proposed municipal
        facilities relative to alternative methods for achieving water
        quality goals, and

     o  establishing appropriate water quality related effluent
        limitations for proposed facilities being considered for treatment
        beyond secondary and developing either a sound and well-documented
        justification for such treatment levels, or a sound and well-
        documented plan for meeting water quality goals without municipal
        treatment beyond secondary.
* Originally issued as SAM-37  (November 2, 1978) under the signature of
  the Deputy Assistant Administrator for Water Planning and Standards.
  Minor editorial changes have been made by the Water Planning Division.

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EPA is requiring  a  rigorous review for all municipal projects designed
for treatment more  stringent than secondary.  Regions must evaluate all
such projects using the  checklist procedure contained in the June 8, 1978,
joint Rhett/Davis memo.   If a project is identified as having to meet
AWT treatment standards  (BOD less than 10 mg/1 and/or nitrogen removal,
defined  as TKN plus nitrite/nitrate removal greater than 50 percent)', an
independent  justification  is required.^  If the Regional evaluation of a
project  does not  demonstrate that the treatment levels proposed are
necessary, or that  other alternatives were sufficiently evaluated, the
Region can elect  to negotiate to have all or part of the project postponed
until additional  analyses  are completed and other solutions are proposed.
The Region could  require that the State, working with the 201 grantee,
perform  these analyses by  evaluating water quality and cost-effectiveness
data that was not adequately considered in the original justification.
In selected  situations where new extensive data collection and technical
analyses are required and  the WQM process is the most appropriate way to
accomplish these  analyses, the Region should consider initiating a 208-
funded evaluation of treatment more stringent than secondary.

POLICY
1.  General
Each Region must  determine those selected situations for which PY 79 208  funds
will be allocated to perform water quality-municipal facilities analyses
consistent with the national WQM priority on facility planning.  In making
their selections,  the Regions will use the criteria presented below.

WQM arrangements  in a State and the analyses required in any particular
situation must be considered in determining the specific WQM agency,
State or areawide, that will have the lead role in accomplishing the needed
evaluation.  Some of the tasks required, particularly water quality monitor-
ing and waste load allocations, have traditionally been performed by States
using 106 funds.   106 funds may continue to be used, supplemented as
necessary for any particular evaluation with FY 79 208 funds.   If an areawide
WQM agency is given the lead role on developing waste load allocations,
this responsibility must have been or be delegated by the State to the
areawide agency.

The State/EPA Agreement should generally discuss how each State will use
the WQM process to make AWT decisions.  In FY 79 th'e States
and EPA should use the Agreement process to determine specific responsibili-
ties, tasks, and  funding sources for each water quality-municipal facility
evaluation assisted with FY 79 208 funding.
    See WQM Policy  Memorandum B-8, PRM 79-11, "Funding of Waste  Load
    Allocations  and Water Quality Analyses for POTW Decisions."   This
    policy discusses the use of 201 and 205(g) funds on a case-by-case
    basis for the development of POTW-related waste load allocations
    and supporting  water quality analyses.

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 2.  Selection  Process

 In preparing for  the July  1978 Congressional Oversight Hearings, each
 Region completed  Project Review Checklists for projects proposing treatment
 beyond secondary  identified  in the 1976 Needs Survey.  Since that time,
 Regions should have completed additional checklists in accordance with
 the June 8 policy.  The data in these checklists and any other questionable
 municipal facilities situations known to the Region together with the
 selection criteria below should be used to identify those likely situations
 where the WQM  process  should provide new technical analyses in order to
 confidently make  decisions on what treatment levels are needed to meet
 water quality  goals.   Selecting final candidates should be a closely coordi-
 nated effort between the Regions, the States, areawide WQM agencies, and
 201 agencies.

 FY 79 208 funds for water quality-municipal  facilities evaluations can
 be used where:

 1.   the proposed project  involves stringent effluent limitations.
      As a starting point,  Regions should use EPA's definition of
      AWT (BOD  less than 10 mg/1 or nitrogen removal, defined as TKN
      plus nitrite/nitrate  removal greater than 50 percent) as a
      screening criteria.   Other projects more stringent than secondary
      may be considered if  the Region and States cannot identify
      qualified candidates  satisfying this AWT definition which involve
      greater potential cost  savings and/or environmental impacts;

 2.   EPA and the  States believe that the existing technical justification
      for treatment more stringent than secondary is questionable and that
      the decision on whether to design and build a facility with treatment
      more stringent than secondary will be dependent primarily on
      additional technical  analyses;

 3.   the proposed project  has not already proceeded to construction;

 4.   the WQM agency to receive funding has demonstrated a high level of
      technical  and management competence during the initial planning
      process;

 5.   the water quality standards designate beneficial uses and define
      water quality criteria  to protect these uses, in accordance with
      the Clean Water Act, and both the State and EPA have approved
      these WQS.

As FY 79 208 funds  are  limited, Regions must carefully select a  small  number
of situations  for evaluation which offer the greatest potential  for cost
savings and/or  significant environmental impacts when compared to  other
candidates.   Thus,  for those candidates which meet the above criteria,
the Region should consider the following when selecting the actual  situations
which will  be  evaluated  through the WQM process using FY 79 208  funds:

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     0    several municipal facilities serving a large number of
          people and operated by several  municipalities are involved.
          In some cases, this may involve evaluating a blanket effluent
          requirement or policy being applied to all municipal
          dischargers in an area or basin,

     0    there is reason to believe that tradeoffs between constructing
          stringent municipal treatment and other abatement alternatives
          have not received adequate consideration.  (For example,
          alternatives to constructing stringent municipal  treatment
          could include implementable best management practices for non-
          point sources, land treatment,  staged construction of
          facilities, or seasonal treatment requirements.)

3.  Work Program

The grantee, whether a State or areawide WQM agency, is responsible for
developing a work program, which will become part of their grant agreement
The grantee should re-examine the steps in the water quality planning
process that led to the treatment level justification and develop a work
program for completing any of the following tasks that have not already
been satisfactorily completed:

1.   identify the water quality standards, uses and criteria, for the
     affected segments.  The affected segments include the segment  which
     receives the treatment plant's discharge as well as the segment(s)
     immediately downstream (the receiving waters);

2.   evaluate existing water quality data and problem assessments.
     Determine the specific water quality problems and constituents
     which require additional analyses.  Determine additional water
     quality data collection needs;

3.   for the constituents identified in Task No. 2, estimate the
     natural background, nonpoint source, combined sewer, and point
     source loadings to the affected segments (receiving waters), over
     the twenty-year planning period;

4.   establish the load reductions which can be realized by implementing
     point sources control and, where appropriate to the water quality
     issues and specific water bodies involved, readily implementable
     BMPs for nonpoint sources;

5.   estimate the total maximum daily loads for the flow conditions and
     discharge locations in question that these segments can assimilate
     without violating their water quality standards.  This task should
     include examining the establishment of seasonal effluent limits;

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6.   develop  alternative  sets of  load allocations for the constituents
     identified in  Task No.  2, which would not violate the water quality
     standards  in the  affected segments.  Each set of load allocations
     should correspond to a  set of point source control  technologies
     and, where appropriate, readily implementable BMPs  for controlling
     nonpoint sources.  Several levels of municipal  waste treatment
     technology should be considered, as well as alternative or innovative
     technologies.   Phasing  AWT construction in concert  with implementing
     BMPs should also  be  considered;

7.   estimate the cost of the point source control facilities and, where
     appropriate, BMPs, and  the effectiveness of each set of load alloca-
     tions, including  to  the extent feasible, their impact on the benefi-
     cial uses  in the  Federally approved water quality standards;

8.   assess the economic, technical, and administrative  feasibility of
     implementing each set of load allocations;

9.   identify the "best"  set of load allocations, based  on cost-effectiveness
     and feasibility of implementation;

10.  revise the existing  WQM plan, with the full process of public partici-
     pation,  to incorporate  the "best" set of load allocations and their
     corresponding  point  and nonpoint source controls.

The above steps should provide the water quality related effluent limitations
for the segments affected by the  proposed municipal  facility.  This planning
process will  either show  that treatment beyond secondary is not necessary
and document  how water quality standards can be met with secondary treatment,
or it will provide  a documented justification of what treatment levels are
necessary to  meet the  water  quality standards.

In performing these tasks, the WQM agency should carefully review existing
data and analyses,  undertaking new data collection and analyses only  as
required.  Data collection and water quality analysis should be restricted
to that which is required to provide the necessary water quality management
information.  Where technically sound and defensible WQM information  can
only be obtained by new data collection or water quality modeling, this
should be done  and  the models should be calibrated and verified.

Specific outputs that  the grantee will provide from WQM analyses already
completed or  analyses  done under  this grant are listed in Appendix A.

If the justification for  AWT is based on a need to meet  State-imposed
effluent limitations for  specific physical conditions Ce.g., intermittent
streams, critical dilution ratios, public drinking water supply, etc.)
and these effluent  limitations are part of the State's water quality
standards or  a  State policy  or regulation, the State with assistance  from

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the Region should develop a work program for justifying  these  effluent
limitations in addition to the above tasks.   Particular  attention  should
be given to effluent requirements imposed by a  State  under  Section 510  of
the Clean Water Act.

The work program schedule should be coordinated with  the establishment
of NPDES compliance schedules and construction  grants schedules.   The
work program should include specific output  commitments  at  key points
throughout the grant period.

Enclosure
Appendix A

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                                                       APPENDIX   A

            REQUIRED WATER QUALITY MANAGEMENT OUTPUTS


1.   Identification of  the affected segments and their water quality
     standards  (uses and criteria) and a discussion of how these  WQS
     were applied  in the municipal facility evaluation.   If appropriate,
     recommendations concerning revisions to WQS.

2.   List of water quality problems and constituents analyzed, including
     the rationale for  selecting these problems and constituents.

3.   Natural background, nonpoint source, and point source loading
     estimates  to  the affected segments, over the  twenty-year planning
     period.

4.   Total maximum daily load estimates for the affected  segments.

5.   Alternative sets of load allocations for the  affected segments
     and corresponding  water quality related effluent limitations.

6.   Description and cost estimates of the point and nonpoint source
     controls for  meeting these load allocations.

7.   Effectiveness of each set of load allocations.

8.   Assessment of the  feasibility of implementing each set of load
     allocations.

9.   Identification of  the "best" set of load allocations for the
     affected segments.

10.  Revised WQM plan,  incorporating the "best" set of load allocations.

11.  Documentation on water quality modeling and analysis and on
     pollution  control  tradeoffs that would render them reproducible.

In addition to  these required outputs, the final reports  will  answer  the
following questions:

1.   What effluent limits are necessary to meet the applicable water
     quality standards  [WQS)?

2.   Can the WQS be met, if (a) the treatment facility under consideration
     has AWT and (b) one or more of the other point sources and/or  the
     nonpoint sources implement some combination of water quality related
     effluent limitations and best management practices and [c)  the
     remaining  point sources comply with their effluent limitations?

3.   Is AWT necessary to meet effluent limitations for protecting the
     public health and  welfare and/or for specific physical conditions
     (e.g., intermittent streams, critical dilution ratios, public  drinking
     water supply, etc.) which are incorporated into the State's  WQS  or a
     State policy  or regulation?  And if so, what is the justification  for
     these special effluent limitations?

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                       VI.  WQM POLICY MEMORANDA

            SECTION B -- PROGRAM REQUIREMENTS AND CRITERIA


                       WQM Policy Memorandum B-8

                   FUNDING OF WASTE LOAD ALLOCATIONS
             AND WATER QUALITY ANALYSES FOR POTW DECISIONS
•*
Purpose
This memorandum establishes policy and procedures for the funding of
waste load allocations and water quality analyses required for publicly-
owned treatment works (POTWs)  decisions.

Background

EPA, recognizing the costs and energy requirements of publicly-owned
treatment works (POTWs) providing treatment greater than secondary
(AST/AWT), has taken several  steps to insure that such facilities are only
Federally funded when based upon technically adequate effluent limitations
In June 1978 a joint OWPS/OWPO guidance memorandum was issued which con-
tained a checklist to be completed before a project providing AST/AWT
could receive construction grant funding.  On November 2, 1978, SAM 37
was issued by OWPS which established policy and procedures for the use of
Section 208 funds to review and revise waste load allocations for POTWs
subject to permit limitations  requiring AST/AWT.   On March 9, 1979, PRM
79-7 was issued by OWPO which  established policy  and procedures for the
review and funding of proposed AST/AWT projects.

Reduced Section 106 and 208 FY 80 appropriations  coupled with increasing
demands on Section 106 funds  to support the issuance of second round NPDES
permits and expanded monitoring programs may result in some States being
unable to provide adequate funding for the timely review and revision of
waste load allocations.  It is therefore necessary to provide additional
* Originally issued as SAM 38/PRM 79-11  (September 5, 1979) under the
  signatures of the Deputy Assistant Administrators for Water Planning
  and Standards and Water Program Operations.

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                                 -  2  -

policy and procedures for FY'80 on  the use of Section 201 and  205(g)
funding to augment Section 106 funds  to support these tasks.

Pol icy

     Nothing in this memorandum is  to affect the responsibility  and right
established by Sections 303 and 510 of the Clean Water Act for each State
to develop^water quality standards  and waste load allocations.   The State
water quality management program  will continue to exercise overall manage-
ment responsibility for assuring  that water quality analyses and waste
load allocations are conducted  in a satisfactory manner.  The  primary
sources of funding for these activities are program grants and State  funds.
The amount of Section 106 and State funds currently expended for POTW-related
waste load allocations should not be  reduced because Section 201  and
2Q5(g) _funds may be used, on a  case-by-case basis and subject  to require-
ments in this memorandum, to augment  State and Section 106 funds to provide
for the development of POTW-rel ated waste load allocations and supporting
water quality analyses.  Except where EPA and the State  have determined
that existing limitations should  be revised, Section 201 and 205(g) funds
may not be used to review effluent  limitations or to develop alternative
effluent limitations; e.g., costs associated with the development of  data
in support of Section 301(h) permit modification request are solely the
responsibility of the requesting  municipality and are not grant  eligible.
Where Section 201 or 205(g) funds are used, the areal extent of  waste
load allocation and water quality data collection activities must relate
directly to needed waste load allocations for projects that are  on the
State  5-year construction grant priority list.

     The priority for use of Section  201 and 205(g) funds to conduct
waste  load allocations and water  quality analyses is:

     1.  PQTWs which have been  determined by EPA and the State,  as a
result of  a PRM 79-7 review, to require a revised waste  load allocation.

     2.  POTWs on the State 5-year  construction grant priority list for
which  the  State and Regional Administrator  have determined,  through the
State/EPA  agreement process, that existing  waste load allocations are
probably insufficient to support AST/AWT  requirements.

     SAM 37 continues to apply to the use of FY'78 and  79"Section 208
funds  for  waste load allocations  and  water  quality analyses.   FY'80
Section 208 funds may not be used to  initiate POTW-rel ated  waste load
allocations.

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                                   - 3 -
Procedures
     U  FY  80  State/EPA Agreement:  If Section 201 or 205(g)  funds  are
to be used for  waste  load allocations, the FY 80 State/EPA Agreement
(SEA) must contain or provide for the development of a detailed State
review of the Syear construction grant priority list.  Specific provision
for the review  may be contained in the SEA itself or in the Section  106
program plan or the 205(g) delegation agreement.  Wherever a  POTW has
effluent limitations  potentially requiring AST/AWT and Section 201 and
205(g) funds may be used, the SEA, Section 106 program plan or 205(g)
delegation agreement  shall provide for:

     0  an informal review of applicable water quality standards to
        determine whether they contain unsupported requirements or
        criteria; e.g., blanket discharge prohibitions or criteria
        substantially more stringent than contained in Quality Criteria
        for  Water or  any subsequent criteria documents published by  EPA.

     0  the  review of existing waste load allocations, if any, to
        determine whether they are technically valid and sufficient  to
        support AST/AWT effluent limitations.

     0  the  review of any other water-quality based permit limitations
        not  derived from water quality standards or waste load
        allocations to determine whether they are valid.

Wherever the State and EPA determine that an effluent liaitatinn is  not
valid or supportable, the State shall provide a program to rectify the
inadequacy.   One component of this program shall be a list of projects
for which it is necessary to substantiate inadequate AST/AWT  effluent
limitations.  This list should subdivide these projects into  those
requiring new or revised waste load allocations and those requiring
other work.   Projects requiring new or revised waste load allocations
should be subdivided  into the two priority classes described,  above.
Until this listing  is complete, Section 201 and 205(g) funds,  may not be
used to fund waste  load allocations.

     For all cases where  the State has determined that effluent limitations
are  unsupported for  reasons unrelated to waste load allocations, the
priority of resolution  shall be determined by the State and Regional
Administrator.

      2.  Funding:  The  SEA  shall allocate costs to produce valid effluent
limitations as follows:

      0  Section 106  funds may .be used in any situation.
      0  where  tasks  relate  to  the  basin-wide revision of  waste load
        allocations,  or to  waste load allocations/water quality analyses
        not directly related  to a  POTW on the SEA  needs list, only
        Section  106 or State  funds may be used.

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                                 - 4 -


      Section  201 and  205(g) funds may be used to augment Section 106
 funds for priority one projects upon issuance of this memorandum.
 Section  201 and 205(g) funds may be used to augment Section 106 funds
 for  priority  two projects upon EPA approval of the State waste load
 allocation program.

      3-   Headquarters Assistance:  PRM 79-7 provides for OWPO and OWPS
 review of the adequacy of effluent limitations and facility planning for
 certain  proposed AWT  facilities.  Upon request, OWPS will provide technical
 assistance and advice on the review of existing water quality standards
 and  waste Toad allocations, the-development of work programs, and on
 draft work products.

      4.   Relationships:  The use of Section 201 a-nd 205(g) funds for
 waste load allocations and  the involvement of 201 grantees is new so
 that additional  guidance is necessary:

      0  responsibility for  the validity of waste load allocations lies
         with  each  State  in  accordance with Section 3O3(d)(l)(C) and
         303(e)(3)  of  the Clean Water Act.

      0  accountability for  Section 201 funds used for waste load
         allocations  and  supporting water quality analyses will rest
         with  the Section 201 grantee even  though the grantee may
         execute a  contract  or  intergovernmental agresnent with the
         State or the State  and an areawide 208 agency to' perform the
         work.

      0  inrdrder to  prevent a conflict of  interest, It is recommended
         that  waste load allocations and supporting water quality analyses
         not be conducted directly by the Section 201 grantee.  It is
         recommended  that the Section 201 grantee instead execute a
         contract or  intergovernmental agreement with .either the State
         or the State  and an areawide 208 agency, which may subcontract
         the work,  if  necessary.

      0  wherever Section 201 funds are to  be used far waste load allocations/
         and water  quality analyses, the scope and schedule of work and
         the consultant contract  shall be approved by the State and EPA.
         The terms  of this approval shall be made a condition of the
         grant and  shall  be  contained  in a  memorandum of understanding
         entered into  by  EPA,  the  State, the 201 grantee, and, when
         appropriate,  the areawide 208 agency.  EPA and the State should
         be intimately involved  in all phases of the work as discussed  in
         the attached  management  guidance.

      0  the conduct of joint waste load allocations Is encouraged.

      Some previous waste  load  allocations  funded  by £PA  ultimately  failed
 to be valid because of  inadequate data, inexperienced  personnel  and  improper
 use  of mathematical  models.   Consultant contracts  should  include  specific
-performance standards and  a quality  assurance  program  covering,  where

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                                  -  5 -

applicable, model  calibration  and  verification,  sampling  and analytical
methodologies, statistical  adequacy  of data,  and personnel  requirements
(see the .attached  management and technical 'guidance).

     5.  Municipal Enforcement Strategy:  The "Final National Municipal
Policy and Strategy for Construction Grants,  NPOES Permits, and Enforce-
ment Under the Clean Water  Act" (August 1979} provides  that for projects
undergoing an AWT  review, NPDES permits should not generally be reissued
until this review  is completed. Procedures for  modifying or reissuing
permits for these  projects  are detailed in this  document*

Attachments:
  PRM 79-7
  Management Guidance
  Technical Guidance
  Municipal Enforcement Strategy,  AWT Section

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              SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                        VI. WQM POLICY MEMORANDA

                       SECTION C — COORDINATION


                       WQM Policy Memorandum C-1

                        INTERAGENCY COORDINATION*
Purpose
This memorandum provides the interagency coordination policy and guidance
for State and areawide Water Quality Management planning.  All  interagency
agreements already in existence and sent to the Regions are referenced.   As
new agreements are finalized, they will be forwarded to the Regions.

Background

Successful implementation of the Water Quality Management program will
require the continuing involvement and support of other Federal  agencies,
particularly at the planning agency level.  Many of these agencies have
significant responsibilities in matters relating to water quality manage-
ment, considerable technical expertise and a great deal of useful data  and
information.  At the Headquarters level, coordination is being  established
on a continuing basis with a number of selected Federal agencies and
programs which have nationwide applicability to water quality management.

Pol icy

Regional Offices should take action necessary to implement the  provisions
of interagency agreements and/or policy statements at the State and local
levels.

The Regions should also encourage and assist State and local planning
agencies to establish working relationships with other Federal  agencies
operating within their areas of jurisdiction which have responsibilities,
activities or information which are related or potentially useful to
effective water quality planning or management.

Following is a list of interagency agreements which EPA has signed.
Copies can be obtained by contacting Patti Morris, Water Planning Division,
Operations Branch (202-755-6026).
* Originally issued as SAM-11  (January 23, 1976) under the signature of
  the Deputy Assistant Administrator for Water Planning and Standards.
  Certain editorial  changes have been made by the Water Planning Division,

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                                  -2-
 1.   Hud  701  Planning,  May  2,  1975
          Attachment A,  Performance  Criteria,  March  1976
          Attachment B,  Memorandum to  HUD  Regional Offices,  March  1976

 2.   CZM,  September 29,  1975
          Attachment A,  Memo,  Guidance  on  Coordination  Between  the CZM
          Program  and  the EPA  State  and Areawide  WQM Program, Aug  1976

 3.   NACO, December 8,  1975

 4.   BLM,  January  5, 1976

 5.   Corps of Engineers, March  25, 1976

 6.   Fish and Wildlife Service,  March  12,  1976

 7.   ASCS, March 31, 1976

 8.   U.S.  Forest Service/EPA Joint Policy  Statement,  May  3,  1976

 9.   U.S.  Dept.  of the Interior Geological  Survey, May  7,  1976

10.   Coordination  Memorandum Between the Appalachian Regional
          Commission and EPA,  June 21,  1976 (Regs. 2, 3,  4,  & 5)

11.   Joint Memo  of Planning and Program Coordination between DOT
          and EPA. July 12, 1976

12.   Relationship  Between the  WQM  Program  and  the National  Flood
          Insurance Program.   February 17,  1977

13.   Memorandum  of Understanding Between the U.S. Small  Business
          Administration and the U.S.  Dept. of Agriculture's Farmer's
          Home Administration.   September  20,  1976

14.   Interagency Agreements with the Departments  of  Agriculture, Army,
          and the  Interior, Required Under Section 304(j)  of
          P.L. 92.500.  March  T., 1977

15.   Memorandum  of Understanding with  Department  of  the Interior.
          December 8,  1978.

16.   EPA-FS Forestry WQM Statement of Intent.  March 2, 1979.

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                SUPPLEMENTAL WQM PROGRAM GUIDANCE FOR FY 80

                         VI. WQM POLICY MEMORANDA

                        SECTION C -- COORDINATION



                         WQM Policy Memorandum C-2

           RURAL CLEAN WATER PROGRAM RELATIONSHIP TO A 208 PLAN*
POLICY

Potential Rural Clean Water Program (RCWP) project areas must have been
identified as priority agricultural nonpoint source problem areas in an
agricultural portion of a State or areawide 208 plan that has been cer-
tified and approved.  The planning agency must, as a minimum, have
completed an  adequate problem assessment and developed priorities for
its problem areas or sources of agricultural nonpoint source water qual-
ity problems in the entire planning area.  In potential RCWP project
areas all of the following requirements must be completed in the plan:

     o    Identification and assessment of agricultural nonpoint
          source problems.

     o    Identification of the best management practices to control
          the problems.

     o    Designation of a management agency(s) capable of implementing
          the agricultural portion of the 208 plan.

     o    Provision for program implementation including a work program,
          a schedule of implementation and provision of adequate re-
          sources to manage the program.

PURPOSE

This memorandum sets forth the relationship between the State or areawide
agricultural portion of 208 plans and potential RCWP project areas.  In
doing so, it clarifies the requirements for both the agricultural portion
of the 208 plan and RCWP projects.
* Originally issued as SAM-33  (November  14,  1978) under the  signature of
  the Deputy Assistant Administrator for Water  Planning and  Standards.
  Minor editorial changes have been made by  Water Planning Division.

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BACKGROUND

Section 208{b)(F)  of the Clean Water Act provides for the development of
water quality management plans to include (1) identification, if appropriate,
of agricultural  and silvicultural (related to farms and ranches) nonpoint
sources of pollution and (2) procedures and methods (including best
management practices)  to control, to the extent feasible, such sources.  The
regulations defining the requirements of such plans are included in 40 CFR
35.1521.


Section 208(j)  of  the  Act  authorizes the Secretary of Agriculture with the
concurrence of  the Administrator, Environmental Protection Agency, to establish
and administer  a program to enter into long-term contracts (of five years to
ten years) with rural  landowners and operators for the purposes of installing
and maintaining best management practices to control nonpoint source pollution.
The relationship between the RCWP and the 208 plan is described under 40 CFR
35.1533-4(c).

POLICY GUIDANCE

(1)  General

A State or areawide agency may choose to concentrate on specific areas or
sources and apply  for  RCWP project assistance before completing all planning
requirements  set forth in  40 CFR 35.1521.  However, it must, as a minimum,
identify  and  assess the agricultural nonpoint source problems of the entire
State or  area,  develop priorities for controlling the agricultural nonpoint
source water  quality problems, and schedule  the completion of the remaining
requirements  (2(c)(d)(e) below).  In RCWP application areas, the agency must
complete  and  have  approved the remaining requirements of an agriculture
portion of a  208 plan  (identification of BMPs, designation of a management
agency, preparation of a work program and schedule of implementation, and
provision of  adequate  resources  to manage the program).

 (2)  Elements Required of  an Agricultural Portion of a 208 Plan

     (a)   Identification and Assessment of Agricultural Nonpoint Source
           Problems

           (Note:  For  RCWP project eligibility an area must have significant
                   water quality  problems which are caused by agricultural
                   acti vities.)

          The identification of  agricultural nonpoint source pollutants
           is  to include, as  relevant, one or more of the following:

           --  sediment
           —  nutrients
           --  toxics  (pesticides)
           --  pathogens (animal wastes)
           --  salinity  (from  return flows of  irrigated agriculture,
              saline  seeps, etc.)
           --  other pollutants  from rural nonpoint sources

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                                      -3-
A water quality  assessment  is  necessary to identify the extent,  magnitude,
and source(s)  of the water  quality problems.  The assessment shall
identify those water quality  problems which are a result of nonpoint
source pollution occurring  from  agricultural activities.

The pollutants for which State water quality standards have been established
and the numerical or narrative water quality standards criteria  vary.
Numerical  criteria should be  used  in the assessment whenever numerical
criteria exist which are applicable to  agricultural nonpoint source pollutants
i.e. a number  of States have  established numerical criteria on various
pesticides,  phosphorous and fecal  coliform.  Generally, criteria based  upon
wet weather  flow conditions (which are  more relevant to identify nonpoint
pollution  than low flow conditions) have not been developed.  Therefore,
precise quantification of the cause and effect relationship between agri-
cultural activities and water quality  impacts will be difficult.  As
additional numerical or narrative  criteria  are developed to reflect nonpoint
source pollutants, they should be  applied  in the  assessment.  The other
elements of  water quality standards such as antidegradation policy and
designated uses will be applicable in  the  assessment and will be particularly
useful where appropriate numerical or  narrative  criteria are not available.

Narrative  criteria may be expressed in  terms of  uses impaired, e.g.,  areas
closed to  swimming because of fecal coliform levels or  the  closing of fishing
areas because  of pesticides.   The  data  used to quantify the pollutants  and
to  establish a cause and effect  relationship are  flexible.  For example,
stream monitoring may indicate pesticide and nutrient problems, the probable
cause of which may be the intensity and type of  crops grown, soil type,
improper usage of chemicals (amount,  and/or timing of application) or other
farm management practices.   Or based  on the soil  loss formula and an analyses
of  sediment  delivery ratio, the  probable cause of the turbidity in the stream
is  a high  erosion rate.

      (b)   Identify priority agricultural nonpoint source  problem areas
           or sources

           (Note:  The governor or his  designee  is to  recommend  to  the
                   Secretary of Agriculture or  his designee, RCWP project
                   areas for cost-share assistance in  order of priority.)

The State  or areawide agricultural  portion of  a  208  plan  shall  identify the
areas or stream segments with water  quality problems,  originating  from
agricultural nonpoint sources. Water  quality  degradation  may be indicated
by  maps, for example, which show areas with annual  sediment yields of  10 tons
or  more  per acre or where monitoring  programs  have identified pesticide or
nutrient problems.

An  entire  State or areawide planning  unit  is  not to  be  proposed as a RCWP
project.   Project areas should be limited  to  hydrologic units or  drainage
basins where there  is evidence that  streams are  being  degraded  by  agriculture'

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                                   -4-

nonpoint source pollutants within the basin.  The size of the area will
depend on the type of agricultural  activities and pollutants involved._
A project area, must be of a manageable size to enable substantial application
of required BMP's in five years or less.  Generally, a project area will
be less than 200,000 acres.

     (c)  Identify the best management practices to control the 'problem(s)

Best Management Practices are. the most practical (including technological,
economical or institutional considerations) -means of reducing nonpoint
source pollution to'achieve water quality goals.  The selection of BMPs
is to be made in the 208 planning process after problem assessment, exami-
nation of alternative practices and appropriate public participation.  A
BMP may be a single practice or a combination of practices which  acting as
a system either prevents or significantly reduces nonpoint source pollution.

A system of practices only for erosion .and sediment control when  pesticides
and nutrients are also contributing to water quality problems must be  expanded
where necessary, to include practices to prevent or control the pesticides
and nutrients problems.  Local climatic conditions^ soils, vegetation,
topographic and other site specific conditions are to be taken into con-
sideration in determining eligible BMPs . 'Where timing of installation or
application of BMPs is critical to reduction of pollutants reaching the
receiving waters, the agricultural portion of the 208 plan should specify
appropriate periods for installation or application.

The BMPs identified should be the most cost-effective method of controlling
the agricultural nonpoint  source water quality problems.   It is recognized
that .nonpoint source pollution control is an iterative process and BMPs
may not completely  achieve water quality goals in the first stages of  the
implementation process;  The effectiveness  of the BMPs on water quality
should be evaluated through continuing planning.  BMPs can be modified,
deleted or additional BMPs can be added to  the 208 plan through continuing
planning as set  forth in 40 CFR 35.1509.

Not all best management practices are  structural; many BMPs are  "cultural"
in that they require  changes  in how  operations are performed.   Integrated
Pest  management  programs  and  nutrient  control programs are examples  of BMPs
that  are  non-structural.

      (d)   Designate a management agency-capable  of  implementing  the
           agricultural  portion of the  208  plan"



 The regulations  (40 CFR 1521-3(c)) and  WQM  Policy Memorandum B~2  set forth
 requirements and guidance to  ensure  (1)  that management agencies designated
 to  implement the plans have adequate  authority and expertise to carry out
 applicable portions of the 208 plans,  (2) that plans identify the  rer
 sponsibilities assigned to the designated management agencies and  (3)
 plans  include indications of  the management  agencies' willingness  to
 out such responsibilities.
 that
carry

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                                   -5-
Where more than  one agency  is  designated to implement a part of the
agricultural  portion of a 208  plan, the plan must clearly articulate the
division of responsibilities among agencies.  This may be accomplished through
a^memorandum  of  agreement.   No one agency need have all of the authorities
listed in the Clean Water Act  and regulations as long as in the aggregate the
management agencies have all of the authorities.

The designated management agency(s) must have or prepare an acceptable
plan to achieve:

   — expertise  in the relevent subject matter area (i.e., pesticide,
      nutrient,  and erosion control,  irrigation management services,
      water scheduling and  salinity control, animal grazing and dairy
      operations and woodland  management depending on the type of
      agricultural operations  causing pollution problems.  Related
      expertise  in such areas  as water quality monitoring, fish and
      wildlife,  water quality/water quantity monitoring and instream
      flow requirements if  not available in the designated management
      agency  should be available to  it).

   -- adequate staff (i.e., sufficient capability to provide technical
      and administrative personnel  to carry out the program approved
      in  the  agricultural  portion of  the 208 plan.  If the program is
      regulatory, monitoring and/or  inspection  personnel must be available
      to  enforce the program.   If a  non-regulatory approach is used,
      adequate staff must be provided to monitor  and/or evaluate the
      effectiveness of a non-regulatory  approach  in attaining water
      quality goals).

   — adequate funding (i.e.,  access  to  a  source  of funds for staff and
      for such educational, technical and  financial assistance programs
      approved in the plan).

       (Note:   208(j) funds  are to be  used  to  supplement ongoing programs
               and not to replace them).

   — demonstrated capability to implement the  program (i.e., some
      assurance that the practices  proposed  in  the  208 plan will be
      applied).

      (Note:   An administering agency  will  be  selected  for  each approved
              RCWP area.  A potential  RCWP  administering  agency to  be
              eligible to administer all  or part of  the RCW  program,  must
              show, based on past experience,  that it  has  the  capability
              to efficiently administer a  RCWP).

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                              -6-
     (e)  Program  Implementation

All of the following elements must be completed in areas proposed as RCWP
projects in the 208 plan:

     o  Preparation of a work program to implement the plan in the proposed
        RCWP area  including provision of an effective educational program
        to inform  the affected public of the requirements;

     o  Agreement  on a reporting system (at least annual) to the Regional
        Administrator on progress made on implementation; and

     o  Provision  for adequate financial and technical assistance.

(3)  Preparation of a work program to complete the agriculture portion
     of a 208  plan

Where the agricultural plan for the entire planning area has not been
approved, the  State or areawide planning agency must submit, during the
continuing planning phase, a work program and a schedule of outputs to
complete the remaining portion of the 208 agricultural NPS plan.
                                           *U.S. GOVERNMENT PRINTING OFFICE:  1979 0-302-883/6511

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