3 UNITED STATES ENVIRONMENTAL. PROTECTION .AGENCY
"V**1* .«^ WASHINGTON DC 204GO
OPKICE OH V»ATEn / NO
HAZARDOUS MATERIALS
PROGRAM REQUIRFMENrS MEMORANDUM
PRMi? 79-8
SUBJECT: Small Wascewater Sy seems
FROM: John T. Rhett, Deputy Assistant Administrator
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limited conveyance systems serving clusters of households and small
commercial establishments and pressure and vacuum sewers. These
alternative sewers are bpecif icclly exempted fnr.i the collection sewer-
interceptor designations when planned for small communities and are not
subject to the collection system policy. These systems also include
other treatment works which employ alternative technologies listed in
Appendix E, 40 CFR 35, and serve communities of 3,500 population or less
or the sparsely populated areas of larger communities.
A conventional system is a collection and treatment sysrem consisting of
minimum-size (6 or 3 inche's) or larger gravity collector sewers, normally with
manholes, force mains, pumping and lift stations and interceptors leading to
a central treatment plant employing conventional concepts of treatment as
defined in Section 5, Appendix E, 40 CFR 35.
Small alternative wastewater systems may be publicly o»- privately owned.
Privately owned systems (called "individual systems" in the Act and 40 CFR 35)
may serve only one or more principal residences or small commercial establish-
ments. Publicly owned systems may serve one or more users. Perpetual or
life-of-project easements or other binding convenant running wth the land
affording complete access to and control of wastewater treatment works on
private property are tantamount to ownership of such works.
High wastewater user costs exceeding $200, $300, and even $500 annually
for households in some communities under 10,000 in population have resulted
from debt retirement costs for rew collection systems or from high ope,-tion
and maintenance costs of new sophisticated plants. Extremely high cost
projects have culminated in political upheaval, refusal to connect into or
to pay after connecting into central sewers, violence at public meetings,
requests for injunctions, and filing suits against several parties, including
EPA. In most cases, all of the feasible alternatives were not considered in
the cost-effectiveness analysis and some systems were overdesigned by using
inflated population projections and excessive water usage data. In the past,
it has been difficult during facility plan review to pinpoint those projects
that have severe financial impacts.
Previous policy and facility planning guidance have called for verification
by the grantee that that community is able to raise the local share. PRM 76-3
requires the estimated operation and maintenance and debt retirement costs to
each user to be presented in clear, understandable terms at the facility
planning public meeting. In his letter of December '30, 1976, the Administrator
asked the Regional Administrators to pay careful attention to facility plans
where average local debt retirement costs per household exceed 1 percent of
annual median income and for which local debt retirement costs plus operation
and maintenance costs exceed 2 percent.
Guidelines modifying the 1 percent to 2 percent guide have been included
below to assist in identification of expensive projects for further analysis.
We are preparing a format with instructions for municipal officials and State
and Federal reviewers to use to determine the size of project the municipality
can afford using readily available local financial data.
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Loan and grant programs of several Federal agencies for construction of
wastewater treatment works in tne past usually have been handled individually
with little coordination among the agencies. This has resulted in unnecessary
paperwork, duplication, federally imposed administrative burdens, construction
of inappropriate or too sophisticated, costly facilities, fostering of
development on rural land, and poor structuring of local share debt financing.
Under the Interagency Agreement for Rural Water and Sewer Projects,
Environmental Protection Agency (EPA), Farmers Home Administration (FmHA),
Economic Development Administration (EDA), Housing and Urban Development (HUD),
and Community Services Administration (CSA) will coordinate their efforts to
improve the delivery of Federal water and sewer programs to rural and semi-rural
communities. Major features include:
"Emphasis on alternatives that may have lower per capita capital and
operating costs and require less sophisticated technology and skill
to operate than conventional collection and treatment facilities;
°A regular exchange of information among the agencies involved in
funding the project, including meeting periodically and using the
Federal Regional Councils;
°The facilitating of application end disbursement of funds for rural
water and sewer projects and informing communities of the range of
funding and other assistance available to them;
°The establishment of a universal data base for national wastewater
disposal and treatment needs;
°The more efficient use of the A-95 process of review by clearinghouse
agencies;
"Use of the same criteria to evaluate the financial impact of the pro-
posed system upon the community;
"Coordination of the review of facility plans between EPA and FmHA and
use of the plans by FmHA as their feasibility report to the extent
possible;
"The demonstration of compliance with Federal requirements under specific
statutes only once when communities are using funds from more than one
program with identical compliance requirements. Where agency regulations
differ in compliance requirements, agencies will work together to ensure
individual or coordinated review as appropriate.
Facility planning in some small communities with unusual or inconsistent
geologic features or other unusual conditions may require house-to-house
investigations to provide basic information vital to an accurate cost-effectiveness
analysis for each particular problem area. One uniform solution to all
the water pollution problems in a planning area is not likely and may not be
desirable. This extensive and time-consuming engineering work will normally
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result in higher'planning costs rfhich are expected to be justified by the
considerable construction and operation and maintenance cost savings of small
systems over conventional collection and treat-menl works.
Though house-to-house visits are necessary in some areas, sufficient
augmenting information may be available From the local sanitarian, geologist,
Soil Conservation Service representative or other source to permit preparation
of the cost-effective analysis. Other sources include aerial photography and
boat-carried leachate-sensing equipment which can be helpful in locating
failing systems. Detailed engineering investigation, including soil profile
examination, percolation tests, etc., on each and every occupied lot should
rarely be necessary during facility planning.
III. Policy
A. Funding oF Publicly and Privately Owned Small Alternative Wastewater
Systems
1. Minimum Standards and Conditions
The Clean Water Act and the regulations implementing the Act
impose no restrictions on types of sewage treatment systems. These
alternative systems are eligible for funding for State approved
certified projects when the following minimum standards and
conditions are met:
a. For both publicly and privately owned systems, the
public body must meet the requirements of 40 CFR 35.918-1
(b), (c), (e) through (j); 35.918-2 and 35.918--3.
A comprehensive program for regulation and inspection
of these systems must be established prior to EPA approval
of the plans and specifications. Planning for this compre-
hensive program shall be completed as part of the facility
plan. The program shall include, at a minimum, the
physical inspection of all on-site systems in the facility
planning area every three years with pumpouts and systems
renovation or replacement as required. The program shall also
include, at a minimum, testing of selected existing potable
water wells on an annual basis. Where a substantial number
of on-site systems exist, if necessary, appropriate
additional monitoring of the aquifer(s) in the facility
planning area shall be provided.
For privately owned systems the applicant must demonstrate
in the facility plan that the solution chosen is cost-effective
and selected in accordance with the cost-effectiveness
guidelines for the Construction Program, (Appendix A,
40 CFR Part 35). These systems'are not eligible for a
15 percent cost preference for the alternative and innovative
processes and techniques in the cost-effectiveness analysis.
Publicly owned systems, however, are eligible for the' 15 percent
cost preference.
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b. In addition to the conditions in paragraph A.I, privately
owned syster.s miist meet the requirements of 40 CFR 35.918-1 (a)
and (d) and the following.
(1) Provide facilities only For principal residences,
(see 40 CFR 35.918(a)(2)) and small commercial
establishments (i.e., those with annual or seasonal,
if not operated throughout the year, dry weather flows
of less than 25,000 gpd and more than one user
equivalent per day; e.g. 300 gpd). Not included
are second homes, vacation or recreation residences;
(2) Require commercial users to pay back the Federal
share of the cost of construction with no moratoriumt
during the industrial cost recovery study. The
25,000 gpd exemption does not apply for those
commercial establishments;
(3) Treat nonprofit and non-governmental institutional
entities such as churches, schools, hospitals and
charitable organizations, for purposes of this special
authority, generally the same as small commercial
establishments.
2. Other Eligible and Ineligible Costs
In addition to the costs identified in the Construction Grants
Regulations, 40 CFR 35.918-2, the following costs are also grant
eligible:
(a) Vehicles and associated capital equipment required for
servicing of the systems such as septage pumping trucks
and/or dewatered residue haul vehicles.
(1) Vehicles purchased under the grant must have as
their ^ol_e purpose, the transportation of liquid or
dewatered wastes from the collection point
(e.g., holding tanks, sludge-drying beds) to the
treatment or disposal facility. (Other mobile
equipment is allowable for grant participation as
provided for on pages VII-12 and 13, "Handbook of
Procedures, Construction Grants Program for Municipal
llastewater Treatment Works.")
(2) If vehicles or equipment are purchased the
grantee must maintain property accountability in
accordance with OMB Circular A-102 and 40 CFR 30.810.
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(b) Septage treatment plants (eligible for 85 .percent
grant funding as part of an alternative system).
(c) Planning for establishment of small alternative
wastewater systems management districts, including public
hearings to discuss district formation. The "mechanics" of
establishing the districts such as legal and other costs for
drafting of ordinances and regulations, elections, etc., are
a normal function of government and are not grant eligible,
(Construction Grants Program Handbook of Procedures, VII-6).
(d) Rehabilitation, repair or replacement of small alternative
wastewater systems as provided for by 40 CFR 35.908(c).
3. Grant Funding of Small Alternative Mastewater Systems
Small alternative wastewater systems are eligible for 85 percent
grants; 75 percent of the Federal grant may be funded from the
4 percent set-aside. The 10 percent grant increase must be funded
from the 2 percent set-aside (3 percent in FY 1981). The 10 percent
grant increase can alsc be applied to small alternative wastewater
systems where 4 percent set-aside funds are not available (i.e.,
in States where there is no 4 percent set aside or States where
4 percent set-aside funds have been depleted).
4. Use of Prefabricated or Preconstructed treatment Components
The use of prefabricated or preconstructed treatment components
such as septic tanks, grinder pump/tank units, etc., normally is
more economical than construction in place and should be carefully
considered. In the case of very small systems, prefabricated or
preconstructed units should in most instances be the most cost-
effective. For somewhat larger systems of standard design,
prefabricated or preconstructed units may also be cost-effective and
should be carefully considered in the facility plan.
5. Useful Life of Small Alternative Wastewater Systems
Whenever conditions permit, these alternative treatment works
including soil absorption systems, shall be'designed to ensure a
minimum useful life of twenty years.
6. Comparison of Small Alternative Wastewater Systems with
Collection Systems in Cost-Effective Analysis
The present worth of small alternative wastewater systems for
future development permitted by the cost-effectiveness guidelines,
(40 CFR 35, Appendix A) may be compared with the costs of alternative
and conventional collection systems for the same planning area. In
each instance both eligible and ineligible costs shall be considered
including service line costs from residence to collector, connection
fees and service to the on-site units.
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IV. Determination of the Economic Impact of the Project
i
When total user charges for wastewater treatment services, including
debt service and operation and maintenance, for the average user in the
service area, exceed the following percentages of annual household
median incomes:
1.50 percent when xhe median income is under $6,UOO;
2.00 percent when the median income is between $6,000-510,000;
2.50 percent when tne median income is over $10,000.
the projects shall be considered expensive and shall receive further intensive
review to determine, at a minimum:
1. the adeauacy and accuracy of the cost-effective analysis,
particularly noting whether all the feasible alternatives
have been considered and if tne cost estimates are reasonable;
2. the soundness of financing of the local share, and
3. whether the grant applicant has sought out all the sources of
supplemental funding.
(Costs of an expensive project can sometimes be reduced by additional facility
planning effort, including reduction in scope.)
A format, instructions and criteria for determination of the financial
capability of the public body to carry the debt load of a new project are being
prepared and will be promulgated at an early date. This process will be
tailored for the use of municipal authorities and State and FPA reviewing
officials.
V. Interagency Coordindtion and Streamlining the Review and Approval of Grants
or Loans for Construction of Wastewater Treatment Works in Sparsely Populated
Communities
A. Coordination with Farmers Home Administration (FmHA)
Communities should be encouraged to contact FmHA during the development
of their facility plans to receive informal comments before the plans are
finalized and submitted for review.
Upon receipt of State certified facility plans for communities under
10,000 population, the Region shall send a copy of each plan to State
FmHA officials for their review concurrently with regional review. FmHA
will provide comments normally within 30 days to the Region on the
financial capability of the community to carry the project, the structuring
of the local share debt, the viability of the selected alternative and
other matters in which FmHA is interested. Trte comments are for each
Regional Administrator's information and appropriate action, if received
within the 30-day period. They are not FmHA's official comments to the
community on its plan. Close cooperation between FmHA and regional
reviewers is encouraged. For States which are delegated final facility
plan review, the above coordination shall be between the State and State
FmHA officials.
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B. Exchange of .Information Aniong FmHA. HUD. EDA, CSA and EPA Through
Joint Meetings
The agencies shall meet periodically during the year using the Federal
Regional Councils. Meetings shall be initiated by any of these organizations
and one of these meetings will take place at least 120 days before the
beginning of each new fiscal year. These meetings may include:
1. Review of status of projects being jointly or concurrently
funded;
2. Discussion of future projects in common;
3. Exchange of information on current and new administrative
or substantive procedures or requirements; and
4. Review of action items such as:
a. One year priority or project lists to identify
combined funding possibilities;
b. Existing project lists to identify overlapping
projects or funding; and
c. Construction and inspection schedules to identify
areas of coordination.
Regular meetings between respective state-level agencies
are encouraged for similar purposes of coordination.
C. Encouragement of Alternatives to Conventional Collection and
Treatment of Wastewater
Alternatives to conventional wastewater collection and treatment
facilities that may have lower per capita capital, operating and main-
tenance costs and require less sophisticated technology and skill to
operate shall be encouraged.
D. Provision of Funding and Other Assistance Information to Small Communities
Regional offices and other sources will provide, on request, information
on the range of funding and other assistance for rural sewer projects.
Technical information may be obtained from the Environmental Research
Information Center (ERIC), Cincinnati, Ohio 45268, telephone number
(513) 684-73S4, or the Small Wastewater Flows Clearinghouse, West
Virginia University, Morgantown, West Virginia 26506, telephone number
(800; 624-8301.
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E. Establishment of a Universal Data Base for National Wastewater Disposal
and Treatment Needs
The EPA biennial Needs Survey will be used as the initial data base for
all agencies involved in funding rural facilities.
F. More Efficient Use of the A-95 Process of Review
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Notification of intent to apply for grant funds submitted to A-95
clearinghouses should indicate the intention to apply for joint or combined
•funding and identify the prospective assisting agencies.
The A-95 agency needs to conduct only one review of the actual project
for each plan of study and Step 1 grant (except, for special circumstances)
which will meet the requirements for all agencies involved.
The use of the A-95 process and Water Quality Management Planning
process under section 208 to identify projects that may be eligible for
funding should be promoted.
Regions should encourage the clearinghouses to use the A-95 process
to evaluate the rural and urban impact of jointly funded projects.
6. Acceptance of One-Time Demonstration or Assurance of Compliance with
Federal Requirements for Jointly Funded Projects
The Regions and States where responsibility has been delegated slTould
accept evidence of compliance wHh requirements of the following when they
apply in an identical manner to the programs of each agency:
1. Uniform Relocation and Real Property Acquisition Policies
Act of 1970;
2. Civil Rights Act of 1964; Civil Rights Act of 1968;
Executive Order No. 11246;
3. Davis-Bacon Fair Labor Standards Act;
4. The Contract Work Hours Standards Act;
5. The Copeland (Anti-Kickback) Act;
6. The Hatch Act;
7. The Coastal Zone Management Act of 1972;
8. The Archaeological and Historic Preservation Act of 1974;
9. The National Flood Insurance Act of 1968, as amended by the
Flood Disaster Protection Act of 1973, and regulations and
guidelines issued thereunder;
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10. The Wild and Scenic Rivers Act of 1968;
11. The Endangered Species Act of 1973;
12. The Clean Air Act;
13. Executive Order No. 11988 on floodpldins management;
14. Executive Order No. 11990 on wetlands protection;
15. The National Historic Preservation Act of 1966, and
Executive Order No. 11593;
16. The Safe Drinking Water Act of 1974.
Further guidance in this area will be issued after detailed review
and discussion by all agencies of regulations and requirements imple-
menting each of the above statutes.
VI. Implementation
This policy should be emphasized through Step 1 preapplication conferences,
contacts through municipalities and the States and reviews of Steps 1 and 2
grant applications. This PRM is effective for facility plans started after
May 31, 1979, except as follows:
a. The determination of economic impact is applicable to facility
plans review commencing 90 days after issuance of this guidance.
b. Review of facility plans by FmHA should commence on facility
plans received for review 60 days after issuance of this guidance.
c. Joint meetings to exchange information using the Federal Regional
Councils should commence prior to May 31, 1979. At least one of the
future meetings should take place at least 120 days before the
beginning of each new fiscal year that follows.
d. The more efficient use of the A-95 review above shall commence
as soon as practicable, but not later than Kay 31, 1979.
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