Handbook of Procedures
Construction Grants Program
for Municipal Wastewater
Treatment Works
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
OFFICE OF
WATER
Transnittal Memorandum
TM 85-1
MEMORANDUM
SUBJECT: Updating of Handbook
FRCM: James A. Hanlon, Director
Municipal Construction Divtys^on (WH-547)
TO: Users of Handbook of Proce
Attached are copies of the first updating to the Handbook of
Procedures. The revised, three-hole punched replacenent naoes are
marked -m 85-1" on the botton right side to distingTsh ttaTfS the
originals, and revised or added text material has been underlined so the
changes are easily recognized. The TM noted pages without underlinings
contain either shifted material from an adjacen? page, to accomo^
lengthy insertions, or clarifications which are primarily editorial.
Also attached is a summary chart listing each revised page and the
location of and reason for the changes.
For persons interested in maintaining continuous records, it is
suggested that this memorandum, the summary chart and the replaced
pages be filed behind the flow chart.
Attachments
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TRkNSMITFAL MF!4ORAN(XJM (TM) 85-1
(HANI200K OF PROCEDURES)
SUMMARY OF REVISIONS
PAGE WC TION AND REASCA 1 FOR CHANGE
114 EX its: F—i, 1st par., lines 6 and 9; F—i, 3rd par., line 5
115 ded paragraph referring user to 4/17/85 paper on 205(g) grants
214 Biits: 3, 3rd par.; lines 4, 6 & 8; 4th par. lines 7 & 8
215 Etht: last par., material reorganized to improve clarity
216 Sentence added to emphasize need for Req ional review and approval of
revisions to State priority system
217 Space accawcdation (SA)
409 Par. 3, sentence added to direct user to “need evaluation” guidance
docunent; par. 5, erroneous statement corrected
410 itp line - continues correction frc n previous page
411 Last line, edit
412 Phrases added to clarify equivalent to secondary treatment and 55
limits for waste stabilization ponds: parac”.ph added on effluent
limits for trickling filters and waste stabilization ponds
413 F iit: paragraph 1, lines 3 & 4 (to reflect issuance of secondary treat-
ment regs.); paragraph 1, lines 8—11, note on COBD 5 limit changes; Re:
FR cite added; pars. 2, 3, 4, 5 & 6 added to indicate increased flexi-
bility regarding percent removal requirements under secondary treatment
req S.
414
421 Par. I. — sentence added on applicant requirement where flow
greater than 120 gpcd
438 par. 1. — tw statements dropped and replaced by reference to
section of Handbcok which elaborates on restrictions to on—site
systems in more detail
439 SA
441 Biits: 6.5, par. 2, line 3, descriptive phrase added; paragraph 2, lines
S & 7, descriptive phrases added.
442 E) iit: par. b, line , descriptive term removed
I
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PP43E LOCATION ND REASON FOR CHANGE
453 Par • 1, reference to recent guidance on innovative designations
added
455 6.13, slixige disposal changed to sludge management; “Purpose” revised
to clarify utilization aspect of sludge management
456 Par. 1, edits on lines 1, 4 & 5; par. 2, formerly last paragraph on
p.533, interchanged and rewritten to clarify interface of sludge
management under CG prog ran with 1 RA requirements
457 Par b, cite aided; par. c, line 4 edit
458 Reference to current sludge management docu’nent; also, “utilization”
added
459 “Utilization” aided
476—9 Certain aspects of “Financial and Managerial Capability” clarified
throtx h rewriting and editing
513 Par. 2 rewritten to better convey flood insurance requirements
532
533 par. 4 — formerly paragraph 4, p.456 (interchange); new references added
534
535
613 Par • 4 — delimiting phrase added
623 Pars. 1, 2 & 4 under 11, descriptive phrases added
624 Par. added — further guidance on the application of Section 24
requirements
641 Par. 8, b — clarification arx cite added
650
651 Par. H, 1 — expands on definition of eligible land; paragraph
H ,2, more narrowly defines scope of land acquisition requirements
and review procedures
652 Par. 1, line 3, clarifying phrase added; par. 2, lines 1 & 2 edited
to clarify land eligibility statement; par. 2, line 6, qualifying
phrase added; par. 3, line 4, correction — appriasers replaces
appriasals; 1, b, c & d, statements revised to clarify application
requirements
II
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PAGE LOCATION AND REASON FOR CHANGE
653 Par. 1, application requirement “g”, and cite added. Par. 2. f added
as an item to be deferred in subnittjng application
654 Par. 2, lead edited for clarity; par. 3, lines 7 & 8,— clarifying
phrase added; par. 2, line 10, descriptive term added. Par. 4,
statenents added to clarify content of approval letter.
673 f, “Quality Assurance Program” rewritten to conform more precisely
with regulations. In particular, if QA program is required, it needs
to be made a condition of the grant and the grantee is required to
sut nit a schedule for developing a QA project plan within 30 days of
grant award.
720 SA
721 d, “Number of Bids” — rewritten to explain grantee reQuirements when
one bid is received. Noted in particular are those circumstances under
which a single bid can be considered acceptable; and, grantee actions
when the bidder or his price is questionable.
722 SA
723 SA
727 F, bnca petitive “procuranent” char ed to non—canpetitive “negotiation”
750 Pars. 2 & 3 added to provide guidance on certifying an I/I
proj ect to determine whether performance standards have been met
751 SA
947 D, 1, b, lines 3, 4 & 6 — phases and term aided to clarify land
acquisition requirements under Uniform Relocation Assistance and Real
Property Acauisition Policies Act (The Uniform Act)
948 Expanded to provide more detailed explanations of allowable costs under
The Uniform Act
949 SA
950 2. Appendix A subpoints on unallowable costs for land and rights-of—way
annotated to clarify meaning.
951
Municipal Construction Division
Office of Municipal Pollution Control
June 14, 1985
III
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PAGE
C. Financial Assistance for Facilities
Planning and Design Work 311
d. Step 2+3 Grants 312
e. Preaward Costs 312
f. Phased or Segmented Projects 312
4. Limitations on Eligibility 312
a. Collection Systems 312
b. Individual Systems 313
C. Reserve Capacity 313
5. Intergovernmental Review 313
6. Technical Review 313
a. Water Quality Management Plan 313
b. Facilities Plan 313
C. Value Engineering 314
d. Intermunicipal Service Agreements 315
e. User Charge System 315
f. Sewer Use Ordinance 315
g. Plan of Operation 315
h. Project Performance Standards 315
7. Categorical Exclusion 316
8. Project Management 316
9. Publications 317
E. Advance of Allowance 317
CHAPTER IV. FACILITIES PLANNING 401
A. Introduction 403
B. Regulatory Requirements 403
1. Facilities Planning Regulations 403
2. National Environmental Policy Act 405
3. Water Quality Management Plans 406
4. Facilities Planning Review 407
C. Facilities Plan Contents 408
1. Summary, Conclusions, and Recommendations 408
2. Purpose and Need 408
2.1. Study Purpose 408
2.2. Need for the Project 409
3. Effluent Limitations 410
3.1. Secondary Treatment 411
3.2. Marine Discharge Waivers 413
3.3. Advanced Treatment 414
3.4. Land Application 414
4. Existing Environment 416
4.1. Existing Conditions in the
Planning Area 416
4.2. Existing Wastewater Flows and
Treatment System Performance 418
3 TM 85—1
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PAGE
4.3. Infiltration and Inflow 419
5. Future Conditions 423
5.1. Planning Period 424
5.2. Land Use Projections 425
5.3. Population Forecast 427
5.4 Industrial and Federal Facilities 428
5.5. Flow Reduction 430
5.6. Forecast of Flow and Waste Load 432
5.7. Reserve Capacity 434
5.8. Future Environment without the
Project 434
6. Development of Alternatives 434
6.1. Flow Reduction 435
6.2. Optimum Performance of Existing
Facilities 435
6.3. Unsewered Areas 437
6.4. Conventional Sewers 439
6.5. Alternative Conveyance Systems 441
6.6. Interceptor Sewers 442
6.7. Regionalization 444
6.8. Conventional Treatment 445
6.9. Innovative and Alternative
Technologies 447
6.10. Alternative Technologies g48
a. Effluent Treatment 448
b. Sludge 449
c. Energy Recovery 449
d. Small Alternative Wastewater
Systems 449
6.11. Land Application Systems 450
a. Site Selection 451
b. Loading Rates and Land Area 451
c. Estimated Costs 451
d. Preapplication Treatment 451
e. Environmental Effects 451
6.12. Innovative Technologies 452
6.13. Sludge Management 455
a. Coinposting 457
b. Landspreading 457
C. Distribution and Marketing 457
d. Methane Recovery 458
e. Self—sustaining Incineration 458
6.14. Identification of Principal
Alternatives 459
4 TM 85—1
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PAGE
7. Evaluation of Principal Alternatives 461
7.1. Monetary Evaluation 461
a. Sunk Costs 462
b. Present Worth 462
c. Useful Life 462
d. Escalation 463
e. Interest During Construction 464
f. Staging of Construction 464
g. Cost Preference for Innovative
or Alternative Technologies 465
h. Multiple Purpose Projects 466
i. User Costs 468
7.2. Engineering Evaluation 469
a. Reliability 469
b. Energy Use 469
c. Water Supply 470
d. Revenue Generating Applications 470
e. Open Space and Recreation 470
f. Disinfection 471
g. Process Complexity 471
7.3. Environmental Impacts 472
7.4. Public Involvement 472
7.5. Implementability 473
7.6. Plan Selection 474
8. Selected Plan Description 475
8.1. Relevant Design Parameters 475
8.2. Financial and Managerial Capability 476
a. Screening System 478
b. Financial Capability Demonstrations 479
c. Capital Financing Plan 480
d. Project Implementation 480
D. Facilities Plan Approval 481
1. Criteria for Preparing an Environmental
Impact Statement 482
2. Environmental Review Process 484
2.1. Historical and Archaeological Sites 484
a. Documentation and Strategy
Development Survey 485
b. Site Recognition Survey 486
c. Site Definition and Evaluation
Survey 487
2.2. Environmentally Sensitive Areas 489
a. Wetlands 489
b. Floodplains 490
C. Important Farm Lands 490
d. Coastal Zones 490
e. Wild and Scenic Rivers 491
f. Fish and Wildlife 491
g. Threatened or Endangered Species 492
5 TM 85—1
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PAGE
2.3. Air Quality 492
2.4. Drinking Water 493
3. Direct and Indirect Impacts 493
3.1. Direct Impacts 493
3.2. Indirect Impacts 494
4. Finding of No Significant Impact 495
5. Environmental Impact Statement 496
5.1. Notice of Intent 496
5.2. Preparation 497
6. Grant Award Exception 498
E. Supplemental Considerations 498A
1. Advanced Treatment 498A
2. Industrial Pretreatment 498D
3. Combined Sewer Overflow Projects 498H
CHAPTER V. DESIGN 501
A. Introduction 503
B. Predesign Conference 504
C. Review of Plans and Specifications 506
1. Administrative Review 507
a. Formal Advertising 507
b. Public Notice 508
c. Prequalification of Contractors
and Products 508
d. Addenda 509
e. Bid Proposal 509
f. Basis for Award 509
g. Sole Source Procurement 510
h. Scope of Work 511
i. Responsibilities of Parties 511
j. Subagreement - 512
k. Lower Tier Subagreements 512
1. Bonding and Insurance 512
m. Regulatory Provisions 513
n. Safety 514
o. Schedule 514
p. Permits 514
q. Wage Rate Determination 515
r. Liquidated Damages 515
s. Change Order Procedures 515
t. Payment Request Procedures 516
U. Retainage 516
v. Construction Incentive Clause 517
w. Small, Minority, Women’s and Labor
Surplus Area Businesses 517
2. Technical Review 519
a. Project Performance Standards 519
6
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PAGE
16. Infiltration and Inflow 628
17. User Charge System and Sewer Use Ordinance 629
18. Reserve Capacity 630
19. Industrial and Federal Facilities 634
E. Additional Considerations for Award 634
1. Small Alternative Wastewater Systems 634
2. Marine Discharge Waiver Applicants 637
3. Innovative or Alternative Technology
Reconfirmation 637
4. Pretreatment 637
5. Force Account 638
6. Intergovernmental Review 639
7. Procurement of Professional Services 640
8. General Grant Conditions 641
F. Step 2+3 Grants 643
1. Qualifications 643
2. Application Contents 643
3. Deferred Provisions 644
C. Combined Sewer Overflow Grants 645
1. Source of Funds 645
a. State’s Regular Allotment 645
b. Governor’s Discretionary Set—aside 645
c. Separate Appropriation for Marine
Projects 646
2. Project Requirements 646
a. State’s Regular Allotment 646
b. Governor’s Discretionary Set—aside 647
c. Separate Appropriation for Marine
Projects 648
H. Land Acquisition Grants 651
1. Grant Application 652
2. Deferred Provisions 653
3. Grant Conditions 653
4. Preaward Costs 654
I. Innovative or Alternative Technology Field
Testing Grants 655
1. Grant Application 655
2. Deferred Provisions 656
3. Grant Conditions 657
4. Preaward Costs 657
J. Innovative or Alternative Technology Modifi-
cation or Replacement Grants 658
K. Grants to States for Advances of Allowance 659
1. Defining the State Program 659
a. Qualified Communities 660
b. Application Procedure 661
c. Amount of Advance 661
d. Timing of Payments 661
e. Repayment of Advance 662
9 TM 85—1
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PAGE
2. Applying for the State Grant 662
L. Federal Grant Share 664
1. Total Allowable Project Cost 664
2. EPA Grant Share 667
a. Standard Grant Share 667
b. uniform Lower Federal Share 667
C. Phased or segmented Projects 667
d. Projects Using an Innovative or
Alternative Technology - 667
e. Projects for the Modification or
Replacement of a Failed Innov ative
or Alternative Technology 668
f. Other Projects 668
M. Grant Award procedures 668
1. State procedures 669
2. Priority Certification 670
3. Project Certification by Delegated States 670
4. Grant Agreement/Amendment 670
5. General Grant Conditions 671
a. Effect of Approval 672
b. Step 2+3 672
c. Project Changes 672
d. Land Acquisition 672
e. Project Initiation 672
f. Quality Assurance Program 673
g. Project performance Standards 673
h. Field Testing of Innovative or
Alternative Technologies 673
6. Special Grant Conditions 673
CHAPTER VII. CONSTRUCTION 701
A. Introduction 703
B. Procurement System Requirements 704
1. Procurement System Certification 704
2. Reporting Requirements 706
3. Public Notice Requirements 707
C. procurement of professional Services 708
1. Competitive Negotiation 708
a. public Notice 709
b. Proposal DocumentS 709
c. Proposal Evaluation 710
d. Negotiation 710
e. Contract Award 710
2. Optional Method for Procuring Engineering
Services 710
a. Public Notice 711
b. Evaluation of Qualifications 711
10
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PAGE
C. Proposal Request and Evaluation 711
d. Negotiation 711
3. Continuation of Engineering Services 711
a. Prior Grant 712
b. Prior Competitive Selection 712
c. Noncompetitive Negotiation 713
4. Small, Minority, Women’s, and Labor Surplus
Area Businesses 714
5. Scope of Work 714
a. Engineering Services during Construction 714
b. Post—construction Engineering Services 714
6. Types of Subagreements and Required Provisions 716
7. Cost and Price Analysis 717
8. Additional Services 718
D. Procurement of Construction Contractors 719
1. Competitive Bidding 719
a. Public Notice 720
b. Bidding Documents 720
C. Addenda 720
d. Number of Bids 721
e. Bid Evaluation 721
f. Contract Award 722
2. Rejection of All Bids 722
3. Small, Minority, Women’s, and Labor Surplus
Area Businesses 722
4. Grant Adjustment 722
a. Building Cost 723
b. Construction Contingency 723
C. Land Acquisition Cost 723
d. Allowance for Planning and/or Design 723
e. Grant Amendment 724
5. Contract Award 724
6. Protests 724
E. Small Purchases 726
F. Noncompetitive Negotiation 727
G. Monitoring Construction 728
1. Preconstruction Conference 729
2. Project Management Conference 730
3. Interim Inspection 731
4. Construction Management Evaluation 732
a. Grant Management 733
b. Construction Management 733
5. Final Inspection 734
H. Management of Claims and Change Orders 736
1. Conditions that May Warrant a Change Order 737
a. Differing Site Conditions 738
b. Errors and Omissions 738
C. Regulatory Changes 738
d. Design Changes 739
11 TM 85—1
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PAGE
e. Overruns and Underruns 739
f. Time of Completion 739
2. Claims 740
a. Common Causes 741
b. Prevention 741
c. Resolution 742
d. Allowable Costs 742
3. Prior Approval 743
4. Submission 744
5. Change Order Review 745
I. post —construction Activities 746
1. Engineering Services during the First Year
of Operation 746
a. Scope of Engineering Services 747
b. Procurement of Services 748
c. Payment Requests 749
d. Deficiencies 749
2. Project Performance After One Year 749
a. Certification 749
b. Corrective Action 751
CHAPTER VIII. COMPLETION, AUDIT, AND CLOSEOUT 801
A. Introduction 803
B. Step 1 and Step 2 Completions 804
1. Step 1 Projects Completed or near Completion 805
a. Projects Likely to Receive a Step 2+3
or a Step 3 Grant 805
b. Projects unlikely to Receive a Step 2+3
or a Step 3 Grant 805
c. Review of Facilities Plans for Completeness 806
i. Facilities Planning Initiated
before May 1, 1974 806
ii. Facilities Planning Initiated
after April 30, 1974 and before
October 1, 1978 806
iii. Facilities Planning Initiated
after September 30, 1978 807
d. Step 1 Grant Increases 808
e. Reduction of Work Effort 808
1. Reduction in planning Area 809
ii. Infiltration and Inflow 809
iii. Public Participation 809
iv. Cultural Resources 809
V. Need Survey 809
vi. Alternatives 809
vii. Treatment Facilities 809
12 TM 85—1
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PAGE
3. Allowable and Unallowable Costs 925
4. 40 CFR Part 35, Subpart I, Appendix A 926
A. Costs Related to Subagreements 926
1. Allowable Costs 926
a. Building the Project 926
b. Complying with the Procurement
Requirements 927
C. Deciding Procurement Protests 927
d. Using Minority and Women’s
Business Liaison Services 928
e. Conformance with the Design
Drawings and Specifications 928
f. Negotiating the Settlement of
a Claim 928
g. Change Orders 931
h. First Year Following Initiation
of Operation 935
i. Development of a Plan of Operation 935
j. Start—up Services 935
2. Unallowable Costs 935
a. Preparing a Facilities Plan and
the Design Drawings and Specifi-
cations 935
b. Services Necessary to Correct
Defects 936
c. Defending Against a Contractor
Claim 936
d. Bonus Payments 938
e. Costs of Delay 939
3. Other Costs 940
a. Liquidated Damages 940
b. Bid Bond Forfeiture 941
c. Public Liaison Services 941
d. Professional Liability Insurance 941
e. Services Required by Law 941
f. Field Surveys to Identify Cultural
Resources 942
g. Travel Costs 943
B. Mitigation 943
1. Allowable Costs 943
a. Direct, Adverse, Physical Impacts 943
b. Site Screening 943
c. Groundwater Monitoring Facilities 943
2. Unallowable Costs 944
a. Design Details which Require
Expensive Building Techniques 944
C. Privately or Publicly Owned Small and
Onsite Systems 945
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PAGE
1. Allowable Costs 945
a. Major Rehabilitation, Upgrading,
Enlarging, and Installing 945
b. Conveyance Pipes 946
C. Treatment and Treatment Residue
Disposal 946
d. Treatment or Pumping Units 94.6
e. Restoring Individual System
Building Sites 946
2. Unallowable Costs 946
a. Modification to Physical Structure 946
b. Conveyance Pipes 946
C. Wastewater Generating Fixtures 946
D. Real Property 947
1. Allowable Costs 947
a. Integral Part of the Treatment
Process 947
b. Complying with the Requirements
of Uniform Relocation Assistance
and Real Property Acquisition
Policies Act 947
c. Required Acquisition and/or
Relocation Services 948
d. Preparation of the Treatment
Works Site 949
e. Existing Publicly or Privately
Owned Wastewater Treatment Works 949
2. Unallowable Costs 950
a. Sewer Rights of Way, Waste
Treatment Plan Sites (Including
Small System Sites), Sanitary
Landfill Sites, and Sludge Dis-
posal Areas 950
b. Eligible Land in Excess of Just
Compensation 950
c. Removal, Relocation, or Replace-
ment of Utilities 951
E. Equipment, Materials, and Supplies 951
1. Allowable Costs 951
a. Reasonable Inventory of Laboratory
Chemicals and Supplies 951
b. Biological Seeding Materials 951
c. Shop Equipment 951
d. Safety Equipment 951
e. Collection System Maintenance
Equipment 952
f. Mobile Equipment 952
g. Replacement Parts 953
16 TM 85—1
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infiltration/inflow (I/I) analysis, assessment of environmental
impacts, user charge (UC) systems, industrial cost recovery, cost
effectiveness, best practical waste treatment technology (BPWTT),
etc. The Act also authorized $18 billion over a five year period
to support the construction grants program and to provide for a
continuity of funding.
The Clean Water Act of 1977 (PL 95—217) contained mid—course
corrections to the 1972 legislation and authorized $24.5 billion
over a five year period in support of the construction grants
program. Several significant changes were introduced into the
construction grants program, one of which required grantees to
evaluate I/A technologies when planning their projects. The
mandatory I/A evaluations conveyed the desire of Congress to
bring about conservation through recycling and more efficient
energy use or recovery. For approved I/A projects, the Federal
grant share could be increased to 85 percent.
Another significant provision of the 1977 Amendments was the
encouragement of, and financial support for, States to administer
the construction grants program. Under this provision, the EPA
Regional Administrators (RAs) were able to negotiate delegation
agreements with the State agencies, detailing the staffing,
scheduling, functions, and procedures to be used by the state in
program administration.
The Municipal Wastewater Treatment Construction Grant Amend-
ments of 3.981 (PL 97—117) eliminated Step 1 and Step 2 grants
after December 29, 1981, and replaced them with an allowance to
help defray the costs of planning and design. Other provisions
reduced the Federal grant share to 55 percent after September 30,
1984; eliminated grants for collection sewer systems, major sewer
rehabilitation, and correction of CSOs after September 30, 1984
(except under certain conditions); required States to reevaluate
their water quality standards; emphasized low cost alternatives,
particularly for small communities; limited the eligibility of
reserve capacity; required engineering services to be provided
for one year after project completion; and required each grantee
to certify, one year after initiation of operation, whether the
project is meeting its performance standards.
The Handbook reflects the provisions of the 1981 Amendments
and its implementing regulations. Projects receiving grants
prior to the 1981 Amendments are subject to the policies and
regulations in effect at the time of grant award and, therefore,
are not necessarily subject to the review procedures and regula-
tory requirements contained in this Handbook.
113
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Although the authorizing legislation for the construction
grants program is officially entitled the Federal Water Pollution
Control Act, Section 518 of the Act provides for the use of the
title Clean Water Act (CWA), and this latter title is used
throughout the Handbook.
F. STATE DELEGATION
1. General
The 1977 Amendments added Section 205(g) to the CWA,
authorizing EPA to use a portion of each State’s annual allotment
of construction grants funds to award grants to the States to
administer the day—to—day operations of the construction grants
program. The grants are for 100 percent of the eligible opera-
tional costs. Under EPA regulations, the execution of a delega-
tion agreement between an RA and a comparable level State official
provides the basis for a construction management assistance (CMA)
grant (frequently referred to as a 205(g) grant). The purpose of
the agreement is to describe, in specific terms, the relative
roles of the State and EPA in the management of the construction
grants program in that State.
Delegation agreements were developed and negotiated on a “phase
in” basis. That is, once the many specific functions of the program
to be delegated were identified, a timetable was established for
transferring (i.e., delegating) those functions. Each function was
delegated only after the Region determined that the State had trained
staff in sufficient numbers to effectively perform that function
without direct assistance from the Region.
All agreements describe the procedures to be followed in imple-
menting each function and the forms to be completed by the States
as evidence that each function has been fully performed. period-
ically, EPA reviews the State’s program and representative grant
projects, to insure that the delegated functions are being carried
out in accordance with the delegation agreement.
Since 1977, forty—nine States and the Commonwealth of Puerto Rico
have entered into delegation agreements with EPA. During those years,
considerable experience has been gained concerning the form of dele-
gation agreements, the respective roles of each agency, and the most
practical and efficient management implementation practices. Because
of the attention to detail and mutual concern continuously exer-
cised by EPA Headquarters, the Regions, and the States during this
period of transition, the goal of achieving full delegation of the
construction grants program to the States is close to being realized.
114 TM 85—1
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Regulations implementing State delegation are found
primarily in three subparts to 40 CFR Part 35:
Subpart A — Financial Assistance for Continuing
Environmental Programs. This subpart
deals primarily with grants for State
water pollution control programs
under Section 106 of the CWA, for State
management of the construction grants
program under Section 205(g) of the CWA,
and for water quality management (WOM)
planning under Section 205(j) of the CWA.
Subpart I — Grants for Construction of Treatment
Works. This subpart deals with grant
requirements for building wastewater
treatment works.
Subpart J — Construction Grants Program Delegation
to States. This subpart addresses the
requirements for delegation agreements,
oversight, and grants to States to perform
delegated functions, in accordance with
Section 205(g) of the CWA.
Guidance on the general use of CMA grant funds and, more
particularly, on the conditions under which Section 205(g) funds
can be used to support the Costs of conducting certain water
quality management and permitting activities, is presented in the
Office of Water issuance of April 17, 1985, titled “Use of 205(g)
Funds for Construction Grants Management on Monconstructjon
Grants Activities. ”
In addition, “Construction Grants Delegation and Overview
Guidance,” dated December 1983, was prepared to integrate in one
document the relevant regulatory requirements, policies, and
guidance for managing the delegated program. The sections below
briefly summarize relevant aspects of this publication. Program
managers responsible for delegation should consult the text for
specific details.
2. Delegation Agreements
Delegation agreements, which vary from Region to Region
with regard to specific procedural requirements, generally
contain two main parts:
115 TM 85—1
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a. Basic or “Umbrella” Agreement
This part of the delegation agreement sets
forth the basic commitments between the State
and the EPA Regional Office, and defines the
operational framework for accomplishing those
commitments. In addition, it covers specific
operational items such as scheduling, cost
information, hiring and training, accounting
methods, and level of effort.
b. Functional Agreements or Subagreements
Along with the basic agreement are a series of
individual agreements describing each function or
activity (or group of activities) to be delegated.
These agreements contain information which State
reviewers are expected to be familiar with and use,
including the procedures to be followed in reviewing
project documents and conducting grant activities,
the interface with the Regional Office and other
Federal and State offices, and the criteria to be
used in evaluating the effectiveness of State grant
program activities. The format of functional agree-
ments may vary (e.g., checklists and/or evaluation
procedures may be separated from review documents,
and included separately as a supplement or appendix).
Functional agreements are critical to the operation of the
construction grants program and need to be kept current. That
is, as improvements in procedures are developed, as regulations
are revised, and as guidance documents are changed, modifications
to the agreements will be necessary. Such revisions can be formally
adopted by approvals at the State and EPA program manager’s level
(e.g., Division Directors or Branch Chiefs). It should be noted
that one of the purposes of this Handbook is to help bring about
general agreement on current review procedures so that they can
be more uniformly practiced among the States.
Re: 40 CFR 35.3005, 35.3010
3. Delegated Functions
Earlier regulations included a listing of functions which
could be delegated to the States and those functions which
because of statutory requirements could not be delegated.
Current regulations do not contain these specific listings,
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E. FUNDING THE CONSTRUCTION GRANTS PROGRAM
1. General
In the case of POTWs, water quality planning is implemented,
in part, through the construction grants program. WQM plans
identify priority water quality areas and recommend actions neces-
sary to achieve water quality standards. NPDES permits may also
require actions necessary to maintain and enhance water quality.
Where such actions include the upgrading or expansion of existing
municipal treatment facilities or the construction of new
facilities, the municipalities may be considered potential grant
applicants and may qualify for grant assistance.
2. Allotment of Funds
The CWA authorizes funding of the construction grants proqram,
usually for a period of several years. However, funds only become
available for each fiscal year when Congress appropriates them.
The CWA specifies the formula to be used in computing each
State’s annual allotment of the appropriated grant funds. (For
the purposes of the CWA, the term “State” includes the fifty
States, as well as the District of Columbia; the Commonwealths of
the Northern Marianas and Puerto Rico; the Territories of American
Samoa, Guam, and the Virgin Islands; and the Trust Territory of the
Pacific Islands.) Generally, the allotment formula is based on
each State’s population and the need for wastewater treatment works
in each State, as identified in the Needs Survey discussed below.
After the allotment formula has been used by EPA to compute each
State’s annual allotment, the allotments are published in the
Federal Register (FR).
Every two years EPA, in cooperation with the States, prepares
the “Needs Survey — Cost Estimates for Construction of Publicly—
Owned Wastewater Treatment Facilities.” The needs survey ident-
ifies, by category, treatment works needed as of the date of the
survey, projected through the year 2000. The categories of need
correspond with the categories of projects used in the State’s
priority system and project priority list (see Item 3 below) . In
addition to cost estimates, the needs survey provides an inventory
of municipal facilities which may be eligible for grant assistance.
Re: 40 CFR 35.910—1 through 35.910—11, 35.2010; EPA “Notice of
— Allotment,” 47 FR 42024—42025 (September 23, 1982); EPA
“Notice of Allotment,” 47 FR 56177 (December 15, 1982); EPA
“Notice of Allotment,” 48 FR 51174 (November 7, 1983)
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3. State Priority System and Project Priority List
Purpose :
Establish a priority system and project priority list for
awarding grant assistance for specific projects.
Discussion :
The 1981 CWA amendments stress the importance of achieving
optimal water quality and protecting public health through the
construction grants program. The implementing regulations empha-
size that high priority should be given to projects in priority
water quality areas (i.e., specific stream segments or bodies of
water where municipal discharges have resulted in the impairment
of a designated use or significant public health risks, and where
the reduction of pollution from municipal discharges will sub-
stantially restore surface or ground water uses) . The concept of
priority water quality areas is also used by the States for
scheduling revisions to water quality standards; computing total
daily maximum wasteloads; issuing major permits; and focusing
monitoring, enforcement, and reporting efforts on critical water
quality problems.
The methodology used to rate and rank proposed individual
municipal wastewater projects for grant assistance is the State
priority system. Using the State priority system and the criteria
contained therein, each State develops annually a list of projects,
ranked in the order of their importance, which are expected to
qualify for grant assistance. The priority system also include
administrative, management, and public participation procedures
required to develop, revise, and manage the project priority list.
The concept of priority water quality areas is also embodied
in the development of the State priority system, and is reflected
in the criteria to be used in ranking individual proposed projects.
Some criteria are mandated by legislation or regulation, while
other criteria may be used at the discretion of the State. The
specific criteria mandated by regulation in the development of the
State’s priority system and which should receive emphasis in the
ranking are:
— the impairment of classified water uses resulting
from existing municipal pollutant discharges, and
— the extent of surface or ground water use restor-
ation or public health improvement which would
result from the reduction in pollution.
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Optional criteria include:
— higher priority for projects employing innovative
or alternative (I/A) technology;
— need to complete a waste treatment system for
which a grant for an earlier phase or segment was
Previously awarded;
— category of need (e.g., treatment plant, inter-
ceptor, sewer rehabilitation, etc.); and
— existing population affected.
If the State includes new phased or segmented projects in
the priority list, the projects must meet certain conditions
(see Section VI.D]0).
All projects listed in the State’s project priority list after
September 30, 1984, must fit into at least one of the categories of
need described below.
— secondary treatment or any cost effective
alternative,
— treatment more stringent than secondary or any
cost effective alternative,
— new interceptors and appurtenances, and
— correction of excessive I/I.
After September 30, 1984, the Governor of a State may elect to
use up to 20 percent of the State’s annual allotment for any of
the earlier (before October 1, 1984) project categories which
comprise new collection sewers and appurtenances, major sewer
rehabilitation and correction of CSOs. Also after September 30,
1984, the Governor may elect to include a category of need for
CSOs (i.e., to use more than 20 percent of the allotment), but
215 TM 85—1
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only if those projects result in the correction of impaired
uses in priority water quality areas. The State must demonstrate
that the water goals of the CWA will not be achieved without
correcting these CSOs (see Section VI.G).
The project priority list contains two portions:
— the fundable portion, consisting of those projects
anticipated to be funded from the current allotment,
and
— the planning portion, consisting of projects antic-
ipated to be funded from future allotments.
The project priority list is subject to EPA’S public participation
requirements, and must be annually reviewed and accepted by the
EPA Regional Office. In addition, revisions to the State’s
priority system must also be reviewed and approved by the EPA
Regional Office.
Review Procedures :
Each State must submit •its priority system, as well as all sub-
sequent revisions, to the EPA Regional Office for review. The
Regional Office will review each document to insure that it:
— is consistent with the criteria and the categories of
need discussed above, and
— reflects adequate public participation in the develop-
ment of both the priority system and the project
priority list.
The Regional Office will complete. its review, and will notify the
State in writing of its approval or disapproval, within 30 days
of its receipt of each document.
By August 31 of each year, each State must submit a project
priority list for use in the following fiscal year. The Regional
Office will review each State’s list, as well as any subsequent
revisions, to insure that each document:
216 TM 85—1
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— is consistent with the State’s approved priority system;
— is properly divided into a fundable portion, which is
consistent with the amount of funds expected to be
available for grant awards in the following fiscal
year, and a planning portion;
— includes an estimate of the eligible cost of each project;
— reflects adequate public participation in the development
of the priority list; and
— contains only projects which will contribute to
compliance with the enforceable requirements of
the CWA, except for projects which are exempt from
this requirement as described below.
The Regional Office will complete its review, and will notify the
State in writing of its acceptance or rejection, within 30 days
of its receipt of each document. If the project priority list is
rejected because it contains projects which will not contribute
to compliance with the enforceable requirements of the CWA, the
Regional Office must hold a public hearing before requiring the
State to remove these projects from the priority list. Further-
more, the Regional Office may not require the removal of any
project if:
— it is in one of the following categories: major
sewer rehabilitation, new collector sewers and
appurtenances, new interceptors and appurtenances,
and correction of CSOs; and
— the Federal share of the cost of projects in the
above categories does not exceed 25 percent of
the State’s annual allotment.
Re: 40 CFR Part 25; 40 CFR 35.2015, 35 .2024(a)
4. Reserves
Portions of each State’s annual allotment of construction grant
funds are reserved for certain specific uses in accordance with EPA’s
regulations. There are five reserves specified in the regulations:
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a. Reserve for State Management Assistance
Section 205(g) of the CWA allows each delegated State
to reserve up to 4 percent of the State’s allotment based
on the amount authorized to be appropriated, or $400,000,
whichever is greater, to pay for the State’s administration
of the construction grants program. These funds are used
by EPA to award a grant to the State for the administration
of the program (see Section I.F). Once these funds are
obligated (as a grant to the State) , they remain available
to the State until expended. However, if the entire reserve
is not obligated during the allotment period, the unobligated
funds are transferred by EPA, at the beginning of the next
fiscal year, to the State’s regular allotment for construc-
tion grants.
Re: 40 CFR 35.2020(a)
b. Reserve for Alternative Systems for Small Communities
Each State with a rural population of 25 percent or more
must reserve 4 percent of its annual allotment for alterna-
tives to conventional treatment works for small communities.
All other States, at the option of the Governor, may also
reserve 4 percent for the same purpose. A small community,
for the purpose of this reserve, is any municipality with a
population of 3,500 or less, or a highly dispersed section
of a large municipality.
These funds are used to fund the base grant (normally 55
percent, unless a different rate is applicable, as described
in Section VI.L.2) for I/A projects which serve small communi-
ties. Funds for the increased grant for the use of an I/A
technology (normally 20 percent, except that the total Federal
share may not exceed 85 percent) must be taken from the reserve
for I/A technologies (see Item c below).
Re: 40 CFR 35.2005(b)(40), 35.2020(b)
c. Reserve for Innovative or Alternative Technologies
Each State must reserve at least 4 percent, but not more
than 7.5 percent of the State’s annual allotment, to increase
the Federal grant share by an additional 20 percent for pro-
jects which use I/A wastewater treatment processes and tech-
niques (see Sections IV.C.6.9 through IV.C.6.13, V.C.2.y,
VI.E.3, VI.I,VI.J, VI.L.2.d,VI.L.2.e,aridV l.M.5.h).
218
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2.2 Need for the Project
Purpose :
A facilities plan must establish the need for the
proposed project and demonstrate how the project, or the
complete treatment system of which it is a part, will meet
the enforceable requirements of the CWA.
Discussion :
Demonstration of project need may range from a rela-
tively simple to a complex justification. Relatively simple
cases arise where an existing treatment works is in violation
of its National Pollutant Discharge Elimination System (NPDES)
permit, or the municipality is under a Court or enforcement
order requiring corrective action. The need for the project
is represented by the regulatory directive to abate water
poll Ut lOfl.
An example of a more complex case, in terms of demon—
strating need, is where a municipality claims need based on
failing onsite systems. Since no discharge permit exists,
the facilities plan must demonstrate the need for the project
based on the extent of surface or ground water use, restoration
or public health improvement resulting from the project. In
order to demonstrate project need, a grant applicant may be
required to document the number, frequency, type, and location
of failing onsite systems through the use of local health
department records, survey questionnaires, or house—to—house
surveys. Earlier EPA policy required this type of specific
documentation. However, present agency policy allows States
and EPA Regions to determine the type of documentation re-
quired to substantitate failing onsite systems on a case—by—
case basis. Guidance on evaluating need is presented in “How
to Conduct A Sanitary Survey” which is contained in Appendix R
of CG—85 .
Another relatively complex case, requiring judgernent in
terms of demonstrating need, concerns proposed cso projects.
Depending on the source of funding from the States’ allotment,
the State may have to demonstrate that significant uses of the
water for fishing and swimming will not be possible without
the project, and that the project will result in substantial
restoration of an existing impaired use (see Sections II.E.3
and VI.G).
Other types of eligible projects for which a unique approach
may be necessary to demonstrate project need include: infiltra-
tion/inflow (I/I) correction, treatment more stringent than
secondary and (in States where the Governor elects to include
409 TM 85—1
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project categories not normally eligible for grant assistance
after September 30, 1984) major sewer system rehabilitation
( see Section II.E.3) .
A demonstration of project need is not necessarily an
easy task, and will require unique documentation depending
on the circumstances of a particular project. Project need
may also be demonstrated throughout many sections of a
facilities plan, rather than being presented in one chapter
or section. With regard to acceptance of the grant appli-
cant demonstration of project need, the principal respon-
sibility of project reviewers is to insure that the proposed
project, or the complete treatment system of which the project
is a part, meets the enforceable requirements except as noted
in the review procedures below.
Review Procedures :
A facilities plan must demonstrate project need in terms
of meeting the enforceable requirements of the CWA by:
a. including a copy of regulatory directives
(e.g., NPDES permit requirements, court
or enforcement orders, etc.) in the case
of existing treatment facilities; or
b. substantiating that the proposed project
will reduce pollution and result in sur-
face or ground water use restoration or
public health improvement.
An exception to this requirement may apply to certain “sewer
projects,” as described in Section II.E.3.
Re: 40 CFR 35.2000(a), 35.2015(b) and (f) , 35.2024(a),
— 35.2030(a)(1)
3. Effluent Limitations
Purpose :
Effluent limitations establish the effluent characteristics
for surface water discharges, or the quality of groundwater to
be maintained for land application systems.
Discussion :
Effluent from a treatment works is either discharged to a
surface water body, recharged to groundwater, recycled for other
uses, or evaporated in containment ponds. For containment ponds,
assuming that the ponds are lined to prevent seepage into the
410 TM 85—1
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groundwa , no effluent limitations are required. Recycled
effluents must meet the characteristics necessary for their in-
tended use. However, if the recycled effluent is eventually dis-
charged to a surface water body or to groundwater, the recycled
effluent must satisfy the applicable effluent limitations.
Facilities plans are required to describe the Best Practicable
Wastewater Treatment Technology (BPWTT) applicable to each alter-
native under consideration. BPWTT is defined in the regulations
as the cost effective technology that can treat wastewater, CSOs,
and nonexcessive i/i to meet the applicable provisions of:
a. 40 CFR 122.44(d) — Water Quality Standards and
State Requirements;
b. 40 CFR Part 125, Subpart c — Criteria for Modifying
the Secondary Treatment Requirements under Section
301(h) of the Clean Water Act;
c. 40 CFR Part 133 — Secondary Treatment Information;
and
d. 41 FR 6190 (February 11, 1976) — Alternative Waste
Management Techniques for BPWTT (treatment and
discharge, land application techniaues and utili-
zation practices, and reuse).
BPWTT defines a minimun level of treatment, as well as pro-
visions for higher levels, where necessary to achieve or maintain
water quality Standards. Projects proposing higher levels of
treatment (i.e., advanced treatment) may be subject to EPA’s
“Policy for Review of Advanced Treatment Projects” (see Item 3.3
below).
Re: 40 CFR 35.2005(b)i(7), 35.2030(b)(2)
3.1 Secondary Treatment
The 1981 CWA amendments added Section 304(d)(4) to
the CWA, which states that “such biological treatment
facilities as oxidation ponds, lagoons, and ditches and
trickling filters shall be deemed the equivalent of
secondary treatment.” However, Section 304(d) (4) also
requires “that water quality will not be adversely affected
by deeming such facilities as the equivalent of secondary
treatment.”
In implementing these provisions of the CWA, EPA con-
ducted extensive Studies of existing facilities to determine
the effluent characteristics of various treatment processes .
411 TM 85—1
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The investigation concluded that oxidation ditches are
appropriately classified as treatment processes capable of
providing secondary treatment. Oxidation ponds and lagoons,
referred to as waste stabilization ponds in the regulations,
and trickling filters were classified as equivalent treat-
ment processes. All other biological treatment processes
were found to be capable of achieving secondary treatment.
EPA has defined the minimum level of effluent quality
attainable by secondary treatment in terms of the parameters
five—day biochemical oxygen demand (BOD5), suspended solids
(SS), and pH as:
— BOD 5 and SS — 30 day average shall not exceed
30 milligrams per liter (mg/i); 7 day average
shall not exceed 45 mg/i; 30 day average percent
removal shall not he less than 85 percent; and
— pH — effluent maintained within the limits of
6.0 to 9.0 (certain exceptions are allowed).
Treatment deemed equivalent to secondary treatment ( i.e.,
ponds and trickling filters not capable of meeting the 30/30
mg/i effluent limits ) is defined in terms of the parameters
BOD 5 , SS, and pH as:
— BOD 5 and SS — 30 day average shall not exceed
45 mg/i; 7 day average shall not exceed 65
mg/i; 30 day average percent removal shall not
be less than 65 percent ( less stringent SS limits
are allowed for waste stabilization ponds where
alternative values have been determined by the
State and approved by EPA) ; and
— pH — effluent maintained within the limits of 6.0
to 9.0 (certain exceptions are allowed).
For those States choosing to adjust effluent limits for existing
trickling filters and waste stabilization ponds deemed equivalent to
secondary treatment, those adjusted limits are to be set on a case—
by—case basis based on the performance or design capabilities of the
facility to prevent backsliding. The effluent limits are not auto-
matically adjusted to 45 mg/i. Adjustments of limits for equivalent
treatment must assure that water quality _ a not adversely affected.
A State must develop an appropriate set of effluent limits for new
facilities using trickling filters or ponds. The regulations also
provide for upward adjustment by the State, with EPA approval, of
the equivalent treatment requirements for existing trickling filters
and ponds (i.e., “Alternative State Requirements”) . In these cases,
the project reviewer is to refer to the appropriate section of the
secondary treatment regulations for specific requirements.
412 TM 85—1
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Project reviewers should also be aware that the effluent
parameter carbonaceous biochemical oxygen demand (CBOD 5 ) may
be used in lieu of the more common BOD 5 under the revised
secondary treatment regulations. it has been determined that
CBOD 5 more accurately reflects treatment performance with
regard to organic material than ROD 5 . Where CBOD 5 is used,
the secondary treatment definition changes for 30 and 7 day
averages to 25 mg/i and 40 mg/i respectively. For treatment
p rocesses deemed equivalent to secondary treatment, the CBODç
limits for 30 and 7 day averages are 40 mg/i and 60 mg/i
respect ive l 1 .
Re: Final amendment to 40 CFR Part 133, 49 FR 36986
( September 20, 1984).
EPA has also proposed that the percent removal provision of
the secondary treatment regulations allow more fiexibiiity
in terms of adjusting percent removal requirements for in—
dividuaiiy justifiable cases. The proposed change would allow
a lower percent removal requirement or a mass loading limit if :
— The treatment works is consistently meeting or will
meet (for new plants) its permit effluent concentra-
tion limits (e.g., 30 mg/i BODç and TSS for second ry
treatment; 45 mg/I BODç or TSS for equivalent tech-
nologies) , but its percent removal requirements can-
not be met due to less Concentrated influent wastewater .
— To meet the percent removal requirements, the treatment
works would have to achieve significantly more strin-
g ent limitations than would otherwise be required by
the concentration _ based standards (e.g., at least 25
g/l BOD 5 and TSS for secondary treatment) or would
force significant construction or capital expenditure .
— The less Concentrated influent wastewater is not the
result of excessive I/I. Definition of excessive I/I
is based on that used in the construction grants
regulations.
The final regulation for the percent removal requirement
is scheduled to be published by May 30, 1985, if final Agency
pprovals are received .
3.2 Marine Discharge Waivers
Refer to Section VI.E.2 for a discussion of requirements
applicable to projects with marine discharge waivers.
413 TM 85—1
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3.3 Advanced Treatment
Effluent limitations more stringent than secondary
treatment (i.e., advanced treatment) may be established
by a State for water—quality—limited stream segments.
These effluent limitations are determined in the WOM
plan, and, are based on the wasteload allocation for the
specific stream segment into which the effluent is dis-
charged (see Section ii.C.3). Where advanced treatment
is required to achieve or maintain water quality
standards, and where the incremental costs exceed specific
limitations, such projects are subject tO a more inten-
sive review by the State, EPA Regional Office, and possibly
EPA Headquarters. Refer to Section E.l below for a dis-
cussion of the review and processing procedures for such
projects.
3.4 Land Application
Wastewater effluent applied to land may either recharge
the groundwater, be collected for disposal to surface water
bodies, or a combination of both. Surface water discharges
are subject to the effluent limitations defined in Item 3.1
above. Effluents which recharge groundwater may not them-
selves be directly subject to effluent limitations. Rather,
the quality of groundwater is defined, depending on current
or potential uses, which in turn indirectly establishes the
effluent limitations for the applied wastewater.
EPA’S definition of BPWTT for groundwater discharges
considers three cases:
a. groundwater which can potentially be used
for a drinking water supply,
b. groundwater which is used for a drinking
water supply, and
c. uses other than for a drinking water supply.
In the first two cases, the groundwater quality should not
exceed the National Interim Primary Drinking Water Regula—
tions (40 CFR Part 141) for organic and inorganic chemicals.
Where the groundwater is presently used for drinking water,
the groundwater should also satisfy the microbiological
contaminent levels of these regulations. The groundwater
quality for other uses is to be established jointly by the
State and EPA on’ a case—by—case basis.
414 TM 85—1
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If a grant applicant can demonstrate that the domestic
base flow plus infiltration is less than 120 gpcd and that
no chronic operational problems are experienced during rain
events, no further I/I work is required. If the flow rate
is not significantly more than 120 gpcd, the grant appli-
cant may proceed, with reviewing agency approval, without
further Study. However, in this case the allowable pro-
ject cost will be limited to the cost of a project with a
capacity of 120 gpcd for the existing residential population.
In addition, the grant applicant must show that the project
is cost—effective and sufficient funds are available for the
local share of higher costs, including capital and operatin
costs. If a grant applicant cannot demonstrate these conditions ,
further I/I investigations will be necessary, as briefly des-
cribed in the next paragraph. The criteria described above is
equally applicable to excessive infiltration in combined sewers,
but inflow is never considered excessive iricombined sewers.
In determining if a sewer system contains excessive I/I,
the grant applicant will analyze the treatment plant flow
records, compare the sewage flows against water consumption
records, possibly conduct flow rnonitorjnq at selected man-
holes or pumping stations, and otherwise conduct a field
investigation, if necessary, to determine the quantity and
source of I/I. The comparison of estimated costs to elim-
inate portions of the I/i will determine if the I/I is ex-
cessive. Where a portion of the I/I is determined to be
excessive, the grant applicant must propose a sewer system
rehabilitation program to eliminate the excessive i/I.
Normally, sewer system rehabilitation is carried out after
grant award, and the excessive l/t to be eliminated becomes
part of the grantee’s project performance standards (see
Sections VI.M.5.g and VII.I.2).
The facilities plan includes a demonstration of the non-
existence or possible existence of excessive I/I in the
sewer system. Data Supporting the conclusion may be con-
tained in or appended to the facilities plan. it is impor-
tant to note that the results of the I/I investigation are
essentially two numbers, namely: the nonexcessj.ve I/I and
the excessive I/I, if any. Nonexcessjve I/I is added to
the existing domestic, commercial, and industrial base flow,
to establish a total existing flow for the proposed treat-
ment works. This flow is particularly important since after
September 30, 1984, construction grants are limited to the
capacity required to serve existing needs on the date of
grant award (see Section VI.D.18).
421 TM 85—1
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Review Procedures :
For grant applicants whose project includes existing
sewer systems, insure that the proposed treatment works
is not, and will not be, subject to excessive I/I though
a determination that:
a. An I/I study has been conducted which iden-
tifies the quantity of I/I.
b. Based on the criteria of 120 gpcd for domestic
base flow plus infiltration, and 275 gpcd for
domestic base flow plus infiltration and peak
inflow, it is concluded that:
i. excessive I/I does not exist, in
which case no further study is re-
quired; or
ii. excessive I/I may exist, in which
case the grant applicant must either:
— conduct further study, including
a cost effectiveness analysis, to
more accurately determine the ex-
istence of excessive I/I, and pro-
pose a sewer rehabilitation pro-
gram where appropriate; or
— propose that the treatment works
be designed to accomodate domestic
base flow plus infiltration which
is not significantly more than 120
gpcd, in which case the allowable
project cost will e limited to the
cost of a project with a capacity
of 120 gpcd.
C. The methods and data used in analyzing I/I are
sufficient to support the results and conclusions
in Items a and b above.
d. The quantity of nonexcessive I/I has been deter-
mined and is used as one component of the average
daily base flow.
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g. the impact on performance of removing
excessive I/i or of other flow reduction
programs;
h. the effectiveness and suitability of existing
onsite disposal systems, and possible modifi-
cations for improving performance through
public education and public management.
Re: 40 CFR 35.2030(b)(3)(jjj); EPA publication, “Estimate
of Effluent Limitations to be Expected from Properly
Operated and Maintained Treatment Works”
6.3 Unsewered Areas
Purpose :
Evaluate the use of onsite systems for unsewered por-
tions of communities with a population of 10,000 or less.
Discussion :
This specific requirement for the evaluation of onsite
systems, while mandatory for communities with a population
of 10,000 or less, may also be applicable to any sparsely
populated area within the total planning area. While once
considered a poor wast-e disposal orar:- r. ] :e ,ct-etiS
Otter sate, err1ui nt, ana eeonom1c j w . uibpu dj it
properly designed, installed, and operated. One principal
reason for the failure of onstte systems is improper O&M
by homeowners. A solution to this problem may he O&M by a
public body, Coupled with a public education program. The
term septage management IS frequently used 1o describe O&M
of onsite systems by a public Dody.
To encourage consideration of septage management, the
CWA and its implementing regulations allow a public body to
apply for a grant to build privately owned onsite systems
which serve one or more principal residences or small
commercial establishments. A principal residence requires
habitation by a family or household for at least 51 percent
of the year. Second houses or recreational residences are
not considered a principal residence. Small commercial
estabi ishments include private estabJ , ishments (restaurants,
hotels, stores, filling stations, recreational, facilities,
etc.) and non—profit organizations (churches, schools,
hospitals, charitable organizations, etc.) with dry weather
437 TM 85—1
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wastewater flows less than 25,000 gallons per day.
Other grant restrictions applicable to privately owned
individual onsite systems are contained in Section VI.E.l .
While satisfaction of the above definitions and limita-
tions is required for grant assistance, this should not pre-
clude consideration by the public body of assuming manage-
ment responsibility for all onsite systems, regardless of
grant eligibility. Ideally, a public body would be able to
convince businesses and homeowners of the benefits of
septage management, and to negotiate public ownership of all
onsite systems. In reality, however, the public body may
not be able to own all systems, but may be able to operate
them.
Rehabilitation of publicly or privately owned onsite
systems is considered an alternative technology, and there-
fore qualifies for increased Federal grant assistance (see
Item 6.10 below).
The reauired comparison between the rehabilitation of
onsite systems and the construction of conventional collec-
tion sewers may point out possible adverse environmental
impacts associated with sewers. While sewers in the devel-
oped areas may not cause adverse environmental impacts, the
transport of the collected wastes by a trunk or interceptor
sewer may subject environmentally sensitive areas to
developmental pressures. This condition could prevent
the award of grant assistance.
Review Procedures :
For unsewered portions of communities with a population
of 10,000 or less, insure that the grant applicant has
considered rehabilitation and management of onsite systems.
The evalution should include:
a. identification of the number, type, and
location of onsite systems;
438 TM 85—1
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b. an analysis of the reasons for onsite
system failures;
c. cost estimates for rehabilitation and
the development and operation of a septage
management program;
d. an analysis of the methods by which all on—
site systems could become publicly managed,
or a listing of reasons why public management
is not feasible; and
e. a cost comparison with a conventional collec-
tion and treatment system, and an environ-
mental evaluation of both;
Re: 40 CFR 3 5.2005(b)(3l) and (b)(39), 35 .2030(a)(l) 35.2034;
40 CFR Part 35, Subpart i, Appendix A, Paragraphs c and
H.2.k; EPA publication 625/1—80—012, “Design Manual —
Onsite Wastewater Treatment and Disposal Systems,”
October 1980
6.4 Conventional Sewers
Purpose :
Demonstrate the need for conventional collection sewers
for unsewered areas by evaluating all three methods of pro-
viding wastewater treatment services to such areas: conven-
tional sewers, rehabilitation of onsjte systems, and small
diameter sewers.
DiSCUSS jOfl :
Conventional collection sewers (i.e., 8 inch or larger
gravity sewers) represent one method of Providing waste dis-
posal to developed areas. Other methods include rehabilita-
tion of onsite systems (see Section 6.3 above), or the use
of small diameter gravity, pressure, or vacuum sewers
carrying Partially or fully treated wastewater (see Section
6.5 below). For unsewered communities or portions thereof,
the facilities plan is to evaluate all three methods of pro-
viding waste collection and disposal.
439
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After September 30, 1984, conventional collection
sewers do not qualify for grant assistance unloss the
Governor of a State elects to use up to 20 percent of the
State’s allotment to fund such projects (see Section II.E.3).
However, where the rehabilitation of onsite syste ns is con-
sidered, their total cost and environmental impact must he
compared with a conventional system (see Section 6.3 above).
In evaluating conventional sewers, the grant applicant
must demonstrate their need, based on an analysis of failing
onsite systems (see Section 2.2 above), Where conventional
collection sewers are justified, and are within a category of
projects eligible for grant assistance, other grant limitations
(e.g., date of residential occupancy and bulk of flow) must
be satisfied (see Section vI.D.14). Collection sewers are
also subject to the reserve capacity limitations described
in Section VI.D.18.
Conventional collection sewers are to oe .e -jned in
accordance with State design standards regardinu ninimum
pipe size, slope, allowable rates of infiltration, and
spacing between manholes.
Review Procedures :
Where conventional collection sewers re prcposed as
one alternative to serve developed areas, tnsdre chat:
a. the need for sewers is just cied d
documented
b. other methods of collection ano disposal
(e.g., onsite system rehabilitation a’td
alternative conveyance systems)
uated and compared to conventional ewers
with regard to total cost and environmental
impacts;
c. the sewers will not encourage the develr.ap—
ment of environmentally sensitive areas;
d. cost estimates for grant participation re-
flect the eligibility or ineligthility of
sewers as a category, as welL as grant
limitations concerning date of residential
habitation, quantity of existing flow, and
reserve capacity (see Sections VI. .i4 and
18); and
440
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e. Preliminary designs and the resulting cost
estimates reflect State design standards.
Re: 40 CFR 35.2005(b)(lo), 35.2015(b)(2), 3 5.203 0(a)(j),
35.2034(b)(l), 35.2116, 35 .2123(c); 40 CFR Part 35,
Subpart I, Appendix A, Paragraph H.2.k
6.5 Alternative Conveyance Systems
Purpose :
Provide an alternative method of collecting and trans-
porting wastewater.
DiSCUSS jon .
An alternative conveyance system consists of small dia-
meter gravity, pressure, or vacuum sewers conveying treated
or partially treated wastewater in Cluster systems. As a
general guide, where the population density is less than
6 persons, but at least 1.7 persons per acre (one household
per 2 acres) , both Conventional sewers and alternative
conveyance systems should be evaluated. Where the population
density is less than 1.7 persons per acre, conventional sewers
generally are not cost effective, and only alternative con-
veyance systems should be evaluated.
One Common application for alternative conveyance systems
is to collect wastes from existing residential and commercial
structures presently served by onsite disposal systems. If the
problem with the onsite systems is the failure of the absorp-
tion systems due to poor soils, high groundwater or ledge rock,
it may be possible to use the septic tanks to remove the settle—
able solids, and transport the clarified, partially treated,
effluent in small sewers. The conveyance system may be small
diameter gravity sewers (since settleable solids are removed),
pressure sewers (where each septic tank is equipped with a
pump), or vacuum sewers with a cluster vacuum station. If the
septic tank is retained as part of the system, a septage manage—
rnent program must be established by the grant applicant to pro-
vide periodic pump—outs and other routine maintenance. The
collected wastes may be transported either to a centralized con-
ventional treatment plant or to a relatively small soil absorp-
tion field.
441 TM 85—1
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Alternative conveyance systems for small communities
are included within the definition of alternative technology,
and therefore qualify for increased Federal grant assistance
(see Item 6.10 below). Because of their potential cost
savings, alternative conveyance systems should be considered
as one method of collecting and transporting wastewaters.
Review Procedures :
For projects which include the construction of collec-
tion sewers, alternative conveyance systems should be
evaluated, particularly for isolated developed areas. The
evaluation includes:
a. justification of the need to abandon exist-
ing onsite systems (see Section 6.3 above);
b. consideration for using septic tanks and
conveyance of treated wastewater by small
diameter gravity, pressure, or vacuum sewers;
c. comparison of costs and environmental impacts
between rehabilitation of existing onsite
systems and conventional collection sewers;
and
d. consideration of the development of a septage
management program.
Re: 40CFR35.2005(b)(4) and (b)(18), 35.2030(b)(3),
35.2032(a), 35.2034
6.6 Interceptor Sewers
The location and size of intercepting and collection
sewers will influence growth in the planning area. Inter-
cepting sewers must be carefully planned, with consideration
given to staging of construction, in order to accommodate
future growth. Intercepting sewers should not extend into
environmentally sensitive areas, unless absolutely necessary
to eliminate existing raw sewage discharges or discharges
from existing treatment facilities which are to be abandoned.
442 TM 85—1
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Since innovative technology is not a specific process,
either conventional, concepts of treatment or alternative
technology processes are candidates for innovative classifi-
cation, provided that they satisfy certain conditions. The
first condition, and the most difficult to assess, is the
element of risk. A proposed innovative project which is not
developed and has not been the subject of a research or
demonstration project is generally not acceptable, since its
risk of failure may be too great. Conventional concepts of
treatment are not innovative because they are fully proven,
and therefore have no risk and offer no significant advance-
ment over the state of the art. Somewhere between these
extremes lies a developed process, not fully proven, offering
significant benefits, with a corresponding level of accept-
able risk. An analysis of the level of risk for a given
technology by the grant applicant and the project reviewer
requires professional engineering judgement and collaboration.
Project reviewers should refer to the three page issuance
titled “Guidance on Innovative Designations, October 1984. ”
Assuming that a proposed innovative project contains
an acceptable level of risk, the next condition which must be
satisfied is significant advancement over the state of the
art. Six criteria have been identified by EPA as represent-
ative of significant advancement. Briefly, these criteria
are:
— cost reduction (in the range of 15 percent
of life cycle costs)
— net primary energy reduction (in the range
of 20 percent),
- improved management of toxic substances,
— improved operational, reliability,
— improved environmental benefits, and
— improved joint industrial/municipal
treatment.
The first two criteria, cost and energy reduction,
are quantative, while the other criteria are qualitative
and tend to be subjective, and therefore more difficult
to review and assess.
453 TM 85—1
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Where the cost or energy reduction criterion is used
as a basis for claiming innovative classification, the
proposed innovative project must be compared with a base
standard in order to measure the claimed reduction. The
base standard for comparison is the least costly or least
energy consuming noninnovative project which would have been
selected if no innovative process was considered. Note that
the least costly project and the least energy consuming pro-
ject are not necessarily the same. Additionally, the base
standard project also must be acceptable from an environmental
standpo mt.
In applying the cost reduction criterion, the costs to
be compared are the present worth costs (i.e., capital costs
plus the present worth costs of operation, maintenance, and
replacement (oM&R), over the design life of the project, minus
the present worth cost of the project’s salvage value.
tn applying the energy reduction criterion, the energy
to be compared is the net primary energy, which is that which
crosses the treatment plant boundary (electricity or fossil
fuel) . Net primary energy reduction is the difference bet-
ween the primary energy requirement for the least energy
consuming nonjnnovatjve alternative, minus the primary energy
for the proposed innovative project.
As part of facilities planning, the project reviewer
is to insure that the grant applicant has considered the
following items when a potential innovative technology is
evaluated:
a. the proposed process must he developed
but not fully proven;
b. the facilities plan must assess risk, and
must establish that the level of risk is
acceptable in light of the corresponding
benefits;
c. the proposed process must satisfy one of
the six innovative criteria described above;
d. where cost or energy reduction is claimed
as a basis for innovative classification,
the present worth costs or the net primary
energy must be compared with the least
Costly or least energy Consuming noninrto—
vative project, respectively;
454
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e. cost reduction must be in the range of 15
perc2nt, and net primary energy reduction
in the :ctnge of 20 percent;
f. where the risk of a promising technology
is relatively high, field testing of the
technology, either under a grant or as an
allowabje r:’ award cost, must be used to
Eurt er ev i•jate the proposed project
see 33c ti. n V I . t) and
i. ;ner •c ole. the I/A cost preference
must e properly applied to the project
(see Item 7.i.g below).
Re: 40CFR35.2005(b)( 14) (b)(17), (b)(23), 35.2030(b)(3),
35.203:, 35 .2040(e), 3 5.2118(a)(1), 35.2211, 35.2262
6.13 Sludge .t r ment
Purcose:
Use and disposal of sludge in a cost effective manner,
while avoid mc i adv rse imoacts on public health and the environ-
ment. EPA activeLv oromotes management practices which provide
for the beneficial use of sludge, as stated in the policy on
municipal ivJcia m€naaement (49 FR 24358, June 12,1984).
Discussion :
Sludge management must be evaluated and planned with as
much care as the wastewater treatment process. Many sludge
treatment, Ut!]_.tz ticn arid disposal methods are available for
evaluation. In len9rzll, these methods can be considered in two
major c tegcr’es:
— troatment E nd volume reduction:
—
— diaestton,
— co,npostino, and
-- urf ’c impoundments;
-. i:il j.o and disposal•
—
- ocean dumping,
455 TM 85—1
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- land spreading, and
— distribution/marketing.
Some methods of sludge treatment, utilization and
disposal may not be feasible, by virtue of a project’s size
or location, (e.g., incineration for a small community).
Sludge treatment, utilization and disposal is subject to
Section 405 of the Clean Water Act and may also be subject to
other Federal laws such as the Clean Air Act (stack emissions
from thermal reduction methods) or the Resource Conservation
and Recovery Act (RCRA) (hazardous and non—hazardous wastes).
Domestic sewage sludge is not listed as a hazardous
waste under RCRA. However, specific municipal sewage sludges
will be considered hazardous if they exhibit any one of the
four characteristics of hazardous wastes —— iqriitability,
corrosivity, reactivity, and toxicity (see 261.21 through
261.24). In general, the characteristic most likely to cause
sewage sludges to be hazardous is toxicity. Since grant
applicants must develop pretreatment orograms (see Section E.2
below) , it is reasonable to assume that commercial/industrial
wastes which may cause the grantee’s sludge to be considered
hazardous will not be discharged into the sewer system. Under
RCRA, wastewater treatment authorities have the responsibility
to determine whether or not their sludge is hazardous. If the
wastewater treatment authority (grantee) suspects that
commercial or industrial discharges to its sewerage system
may cause its sludge to be classified as hazardous, it is
responsible for the appropriate € sting of its sludge. If the
testing indicates the sludge is hazardous, the grantee should
attempt to find and eliminate the source of the discharge
causing the sludge to be classified as hazardous. If the source
cannot_be_eliminated, the generation, treatment, storage, and
disposal of the grantee’s sludge is subiect to the RCRA subtitle
C regulations (see 260 through 270) .
Some of the intermediate sludge treatment processes or
ultimate sludge utilization and disposal methods are encouraged by
the CWA, and are defined as alternative technology (see Item 6.9
above) . The discussion below briefly describes these alternative
technology unit processes and disposal methods, highlighting some
some important considerations for review:
456 TM 85—1
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a. c postir g
Composting stabilizes and disinfects sludge,
allowing public distribution under a giveaway
or sale program, or application to land as a
soil Conditioner or as a cover for landfills.
The most common composting technique used in
the United States uses open air systems (e.g.,
aerated pile and windrow), although more com-
plex systems (e.g., enclosed mechanical systems)
are being introduced. The cost of land used for
composting and for the temporary storage of com-
post residues IS allowable for grant participa-
tion.
Re: 40 CFR Part 35, Subpart i, Appendix A,
Paragraph D.l( a)(3)
b. Landspreadi g
Properly treated sludqe may be used in agri-
culture, Silviculture, turf grass production,
revegetatjon of strip mine land, fertilization
of roadside grasses, and many other applica-
tions. Landspreadjng of sludge may be subject
to limitations imposed by State or local law.
Care must be exercised to preclude adverse health
and environmental impacts front a buildup of heavy
metals and toxic organics. The cost of land used
for landspreading may be allowable for grant par—
tic ipation.
Re 40 CFR Part 35, Subpart i, Appendix A,
Paragraph 0.1(a), 40 CFR Part 257
C. Distribution and Marketing
Like landspreading, distribution and marketinq
involves the utilization of the nutrients in
sludge and its soil Conditioning properties.
The sludge should be very stable, disinfecteci,
and have a low ñi isture content. Where
457 TM 85—1
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packaged and sold, the sludge should
contain appropriate warnings and
instructions for its use. Proceeds
from sales must be used to offset user
charges (see Section V.E).
d. Methane Recovery
Anaerobic digestion employing methane
recovery r d use is classified as an
alternatiie technology if 90 percent
or more of the methane is recovered.
The methane rn y be used for heating,
operation of blowers or pumps, or
conditioned and sold to nearby users.
e. Self—3ustaining Incineration
To be classified as an alternative
technology, incineration must real-
ize a net energy gain (i.e., energy
produced must be greater than the
energy used to dewater and condition
the sludge)
Because of the importance and the complex nature of
sludge management, E PA has prepared several publications which
provide guidance on sludge utilization and disposal. Several
of the process design manuals are noted in Section V.C.2.p.
EPA publication 430/9—80—015 (formerly MCD—72), “A Guide to
Regulations and Guidance for the Utilization and Disposal of
Municipal Sludge,” dated September 1980 and 625/10—84—003,
“ Environmental egulations and Technology: Use and Disposal of
Municipal Wastewater Sludge,” dated September 1984 , may also
be helpful during facilities plan review.
Review Procedures :
In reviewing the sludge treatment utilization and disposal
sections of the facilities plan, the reviewer is to insure that:
458 TM 85—1
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— the grant applicant has given appropriate
Consideration to sludge treatment, utilization
and disposal by evaluating several alternatives;
— alternatives evaluated by the grant applicant
are appropriate to the size and location of
the project;
— serious consideration has been given to sludge
treatment and disposal methods which recycle
or reclaim sludge (alternative technologies)
such as methane recovery, self—sustaining in-
cineration, and land application;
— proposed sludqe treatment, utilization and disposal
methods Comply with regulatory requiri nents of other
applicable Federal laws (e.g., Clean Air Act,
Resource Conservation and Recovery Act); and
— where applicable, the I/A cost preference has
been properly applied to the project (see
Item 7.l.g below).
Re: 40 CFR 35.2030(b) (3), 35.2032, 35 .2040(e), 35.2152(b)
6.14 Identification of Principal Alternatives
Purpose :
After identifying and evaluating feasible alternatives,
systematically screen them to identify principal alternatives
capable of meeting Federal, State, and local requjremen
Discussion :
Ideally, the principal alternatives identified by the
grant applicant will include one or more conventional con-
cepts of treatment, one alternative technology and one pro-
ject proposed as innovative. While there is no prescribed
459 TM 85—1
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methodology or procedure for screening alternatives, one
possible method employs monetary evaluation, followed by
evaluation of environmental impacts, engineering feasibility,
public acceptance, and implementability. The monetary eval-
uation is best considered first, because it tends to be more
quantitive than the other criteria. It is to be noted that
neither EPA regulations nor policy guidance suggests that one
criterion is more important than others in selecting the pro-
posed project. However, EPA policy does require that the
grant applicant give careful consideration to the financial
impact of the project upon the community, to insure that the
project is affordable (see Item 8.2 below).
In preparing preliminary cost estimates for each alter-
native, the grant applicant may use published cost estimating
techniques found in the literature, or the grant applicant’s
engineer may generate unique estimates to reflect local con-
ditions. Another cost estimating technique, recommended for
use by grant applicants and available to States for comparison
purposes, is the Computer Assisted Procedure for Design and
Evaluation of Wastewater Treatment Systems (CAPDET). Avail-
able from the CAPDET Clearinghouse at Mississippi State
University, this computer program can be used to quickly
analyze the costs of a large number of alternatives. CAPDET
can also evaluate the cost of upgrading and expanding waste—
water treatment facilities, and can rank alternative treat-
ment systems by the present worth of capital and OM&R (in-
cluding energy) costs.
using the preliminary cost estimates, the grant appli-
cant can apply the remaining criteria, considering factors
described in Item 7 below.
The primary difference between screening feasible
alternatives and analyzing principal alternatives is the
depth and level of detail. Principal alternatives are to
undergo a thorough cost effectiveness analysis, although the
level of detail in the analysis will depend on the size and
complexity of the project.
Review Procedures :
As feasible alternatives are screened for selection
of principal alternatives worthy of a more detailed analysis,
insure that the grant applicant has:
460
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c. listed Sound reasons for selecting the pro-
posed project and rejecting other principal
alternatives.
Re: 40 CFR 35.2030(a)(].)
8. Selected Plan Description
Once the proposed project is selected, the grant applicant is
to prepare a concise description, at an appropriate level of detail,
of at least the items noted in Items 8.1 and 8.2 below. This des-
cription includes both the proposed treatment works and the complete
waste treatment system of which it is a part.
Re: 40 CFR 35.2030(b)(l) and (b)(8)
8.1 Relevant Design Parameters
Purpose :
Review relevant design parameters to insure that all
major components of the system have been included, cost
estimates are reasonable, design parameters comply with State
standards, and the proposed process and design are capable of
meeting the applicable effluent limitations.
Discussion :
The level of detail describing relevant design parameters
varies from project to project, and depends on the project’s
size and complexity. For example, the description of a stan-
dard package treatment plant will not require the same level
of detail as a pure oxygen system with phosphate removal and
sludge incineration. Representative design parameters to be
described include:
- major process features;
— unit processes and sizes;
— a schematic flow diagram;
— sewer lengths and sizes;
475
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— design criteria (e.g., detention times,
overflow rates, process loadings, computed
removal efficiencies, initial and design
flows, etc.);
- sludge management; and
- a schedule for design and construction.
Review procedures :
Insure that the facilities plan describes relevant
design parameters at the appropriate level of detail, in
order to demonstrate that:
a. all major components of the system are
included;
b. cost estimates are reasonable;
c. design parameters comply with State
standards; and
d. the process and design are capable of
meeting the applicable effluent limita-
tions.
Re: 40 CFR35.2030(b)(8)(i)
8.2 Financial and Managerial Capa ility
Purpose :
Demonstrate the grant applicant’s legal, institu-
tional, managerial, and financial capability to ensure
adequate building and operation of the proposed treatment
works.
Discussion :
The requirement stated above is a limitation that must
be satisfied before award of grant assistance.
EPA has published a final policy entitled “Financial and
Management Capability for Construction, Operations, and
Maintenance of Publicly Owned Wastewater Treatment Systems”
(49 FR 6254—6258, February 17, 1984). This policy ties
L3gether many of the financial and managerial responsibilities
which must be satisfied by a grant applicant prior to the award
of grant assistance and outlines EPA and State responsibilities
476 TM 85—1
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for ensuring compliance with this policy. It is based on
Section 204(b)(l) of the Clean Water Act and Section 35.2104
of the construction grants regulations.
In order to demonstrate financial capability, applicants
are required to answer five questions, consider their financial
condition, and certify their financial capability. The five
guestions are :
- What Is Proposed In The Facilities Plan?
— What Roles And Responsibilities Will Local
Governments Have?
— How Much Will The Facilities Cost At Today’s
Prices?
— How Will Construction, Operation & Maintenance
Be Financed?
— What Are The Annual Costs Per Household?
The policy includes worksheets to help applicants answer
these questions. Detailed instructions on how to complete the
worksheets can be found in EPA’s guidance document “Financial
Capability Guidebook”. For those grant applicants who do not
need the detailed instructions contained in the guidebook, EPA
has published a “Financial Capability Summary Foldout” to help
answer the five questions . However, in order to account for
unique aspects of State laws governing local financing and
institutional arrangements, States are encouraged to develop
their own guidance and procedures for grant applicants to use in
demonstrating their financial capability. EPA’s guidance may be
modified according to the State’s need.
The responses to the five questions must be viewed with-
in the overall context of the grant applicant’s financial
condition, financial resources, legal constraints, and local
public policy. After answering the five questions, the grant
applicant must certify that it has the capability to finance
and manage the proposed facility. Before completing this
certification, the grant applicant should consider:
— reasonableness of population projections (see
Item 5.3 above) relative to historic trends
(if new population growth will be relied upon
to help finance the proposed system);
— total current outstanding indebtedness;
477 TM 85—1
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— State finance laws and legal debt limits;
— historic trends in the community’s revenue sources
(e.g., changes in taxable assessed property valua-
tion with respect to population); and
— current bond rating and its historic trend.
The Financial Capability Guidebook contains detailed
instructions for evaluating the community’s financial condi-
tion. The policy contains a sample certification letter that
applicants may use to certify their financial capability.
Although the financial capability demonstration is not
required until the grant application stage, the facilities
plan must document that the selected alternative is imple—
mentable from a financial viewpoint (see 40 CFR 35.2030(a)(l)).
When two or more jurisdictions are participating in the
project, an intermunicipal service agreement must be executed
unless waived by the Regional Administrator or delegated State.
( See Section V, H for details.)
Review Procedures :
a. Screening System
Delegated States are responsible for developing a screening
system to ensure that potential problem projects are identified
and resolved early. This system should use a combination of
criteria to identify if a project is potentially high cost or
technologically inappropriate. Projects that are identified by
the system as having potential problems should receive very close
scrutiny. Some suggested screening factors are :
i. size of community;
ii. extent of sewers to be built in presently
unsewered areas;
iii. type of technology proposed;
iv. total capital costs per household;
v. total annual household costs;
478 TM 85—1
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total annual cost per household as a
percentage of median income;
vii. capital cost of treatment per 1,000
gallons per day of capacity;
viii. p rcentage of capacity for future flow ;
and
ix. other meaningful indicators.
This screening system should be used as early as
possible so that any problems can be identified early when
project changes are more easily accommodated .
b. Financial Capability Demonstrations
When a demonstration is received, it must be reviewed
to ensure that the applicant has the necessary capability
to finance and maintain the wastewater treatment system.
Review questions to be asked include :
i. Is the project consistent with the facility plan
and FONSI and is it appropriate ?
ii. If required, has an acceptable intermunicipal
service agreement been signed ?
iii. Are the cost estimates comprehensive and accurate ?
iv. Are the financing plan and proposed revenue system
adequate ?
v. What is the total annual household cost and is it
reasonable ?
vi. Has a certification letter been signed?
If this review discloses a problem with the project, the
State should work with the applicant to suggest ways to over-
come the problem. Suggestions might include reducing the
scope of the project, using creative financing techniques, or
eliminating unnecessary items from the design.
Detailed instructions for developing a screening system,
reviewing the demonstrations and resolving problem projects
are contained in “Guidance for Implementing the Policy on
Financial and Management Capability for Publicly Owned Waste—
water Treatment Systems”, December 1983 .
479 TM 85—1
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c. Capital Financing Plan
i. a projection of future wastewa Gr treat
ment services reauired during the i) jear
period after initial operations;
ii. a projection of the nature, extent; timing,
and costs of future expansion ar 1 d r construC—
tion of the treatment works; nd
iii. the manner in ,riich future t ans-r rui
reconstruction ‘jill be tinar.cevi.
d. Project Implementation
i. identification of each participating agency
and its jurisdiction and resnon.:i1 it. eS;
ii. demonstration that each dge c ; b c
ability and authority under :ate (or
a reasonable expectation of obtaining such
authority) to finance, design. construct.
acquire access to, operate, anc pa n a n
facilities within its jurisd: ot Or
iii. identification of eferenda or
elections necessary to implement c.he 3el
ected plan;
iv. adopted cesolut ions of plan acceptance ty
participating agencies; . here oppo ’itlOfl
exists, a description of .3t )S n L ssary
to reach agreement:
v. proposed LntermuniClpal ¶erv. c rent-
or memoranda of underst ndiflCj : 1ufl
V. 1 1);
vi. a schedule ot specific actions ii cessary
to implement the selected plan, ,hicn
agrees with the existing NPDES parmit 3nd
the schedule resulting frcm the attcnal
Municipal policy (see Sections ILD.i and
II.D.2)
480
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Contractors should be required to obtain adequate
CoflSttuCtjon insurance (e.g., fire and extended cover-
age, workmen’s compensation, public liability and pro-
perty damage, and all risk) in accordance with local or
State laws.
EPA regulations require that a grantee participate in
the National Flood Insurance Program if the proposed pro-
ject involves construction or acquisition of insurable
structures (i.e., four walls and a roof, principal1y bove
ound), with a value of $10,000 or more and located in a
flood hazard area. Flood _ protection insurance adequate to
otect the grantee’s financial interest must be providecf
for structures as soon as the walls and roof exist. Insurance
must be provided during construction and maintained by the
g rantee thereafter. Buildlng materials for the insurablé
structure can also be insured if stored on the premises in
an enclosed building .
Re: 40 CFR 30.600(b) , 33.265; Treasury Circular 570
m. Regulatory Provisions
The contract documents must include a copy of the
most recent EPA specifjcatj inserts, including
40 CFR 33.295 (“Subagreeme Awarded by a Contractor”),
Subparts F (“Subagreement Provisions”) arid G (“Protests”),
and EPA Form 5720—4 (“Labor Standard Provisions for
Federally Assisted Contracts’s). By including these in-
serts in the contract documents, many of the administra-
tive requirements will be satisfied.
Subpart F includes subagreement provisions such as
labor standards provisions, patents data and copyrights
clause, violating facilities clause, energy efficiency
clause and model subagreement clauses. The model sub—
agreement clauses include the Buy American requirements
(see Item 2.aa below) and the quality assurance require-
ments (see Section VI.5.M.f). With regard to the model
subagreement clauses, the grant applicant may use the
exact wording in 33.1030 or their equivalent, and should
exclude those clauses which are not applicable to cons-
truction contracts. Grant applicants should be encour-
aged to have their model subagreement or substitute
cluases reviewed by their legal counsel, to insure their
compatibility with State laws and prevailing legal prac-
tices.
Re: 40 CFR 30.302(d)(3), 30.503(f) and (h), 33.420(f),
33.710; 40 CFR Part 33 Subparts F and C
513 TM 85—1
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n. Safety
Project specifications must require contractors
to comply with applicable regulations issued by the
Occupational Safety and Health Administration,
U.S. Department of Labor (DOL). In addition, where a
State has promulgated additional regulations concerning
safety in design of structures or safety during
construction, such regulations should be incorporated
into the specifications (generally by reference)
At the time of plan and specification review,
the reviewing agency should insure that the
specifications require contractor compliance with
applicable State and DOL safety requirements, as
well as the specific additional safety provisions
for chlorination facilities, wet and dry wells,
and other hazardous locations which are described
in Items 2.c through 2.e below.
0. Schedule
Each construction contract must include a
completion schedule and provisions for coor-
dination among contractors. Since the grant
applicant is required to submit a project schedule
with the grant application, the construction
schedule should be reviewed for reasonableness
and conformance with the project schedule, as well
as with any permits, compliance schedules, court
orders, or State administrative orders. The construc-
tion completion schedule is generally given in
calendar days from the date of the notice to proceed,
and forms the basis for assessing liquidated damages
against the contractor (see Item r below). Any
circumstances under which the completion schedule
would be amended should be clearly defined in the
contract documents, which should also indicate that
a formal change order is required in such cases.
Re: 40 CFR 33.420(a), 35.2040(b)(6)
p. Permits
The contract documents should require that, to the
extent possible, contractors obtain all necessary permits
for construction. (Some permits may be required to be
held by the owner of the project.)
514
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m. Sewers
Sewers and interceptors should be adequately
sized to insure minimum Scouring velocities and
reasonable peaking factors. Collection sewers
should conform with State standards and include
properly designed fittings for house connections.
Manhole spacing, grades, alignment, elevations,
materials of construction, and connections should
conform to State standards and be designed to
minimize possible Sources of infiltration and
inflow. Bedding, backfill materials and compac-
tion requirements should be specified to insure
the integrity of the sewers for their useful life.
Infiltration and exfiltratjon testing by the
contractor should be required as a criteria for
acceptance.
n. Sewer Rehabilitation
Where sewer system rehabilitation is an
eligible part of the project, the specifications
should dictate the sequence of construction
(e.g., where necessary, sewer cleaning and
closed circuit television inspection with
possible air pressure testing of joints followed
by joint grouting, manhole grouting, slip lining,
or sewer replacement) . Because of unforeseen
construction difficulties, bid prices for sewer
rehabilitation should be unit prices based on
estimated quantities. The specifications may
also include provisions for post testing as a
condition of acceptance after rehabilitation
of various sections. This may be particularly
important since grantees are required to certify
after one year of operation whether the project
is meeting its performance standards, including
the elimination of excessive infiltration/inflow.
o. Small Systems
Small wastewater treatment projects may range
from rehabilitation of failed onsite septic
systems to larger cluster systems using small
diameter gravity, vacuum, or pressure sewers.
Since long term experience with these systems
(excluding septic systems) is not readily
531
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available, the technical review of the plans
and specifications must carefully consider
both design and O&M criteria. Design should
conform with EPA’S design manual (see Item 1
above) and with State standards for percolation
rates, distribution systems, and depth to ground-
water and bedrock. Where pressure systems are
employed using individual pumps, the specifica’-
tions should provide for the stocking of a
reasonable number of replacement pumps or spare
parts. Small systems are also discussed in
Sections IV.C.6.l0.d and VI.E.1.
Re: 40 CFR 35.2034, 35.2110; EPA publication
625/1—80—012, “Design Manual, Onsite
Wastewater Treatment and Disposal Systems,”
October 1980.
p. sludge Management
In most cases, sludge must be disposed of in
one of three ways: land application, burial in a
secure landfill, or incineration. Design of
facilities for the disposal of sludge, including
intermediate steps such as conditioning, di-
gestion, dewatering, and composting, should be based
on the minimum requirements set forth in the follow-
ing EPA manuals:
i. EPA publication 625/1—83—016, “Process
Design Manual, Land Application of
Municipal Sludge,” October 1983;
ii. EPA publication 625/1—79—011, “Process
Design Manual, Sludge Treatment and
Disposal,” September 1979;
iii. EPA publication 625/1—78—010, “Process
Design Manual, Municipal Sludge Landfills,”
October 1978;
iv. EPA publication 625/1—82—014, “Process
Design Manual for Dewatering Municipal
Wastewater sludge,” October 1982; and
532 TM 85—1
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V. EPA publication 430/9—81—Oil (formerly
(MCD—79) , “Technical Bulletin, Composting
Process to Stabilize and Disinfect Municipal
Sewage Sludge,” June 1981.
For incineration or thermal reduction, the Clean
Air ct requires that the discharge gases meet the
requirer e of an approved State Implementation Plan
(40 CFR Part 52), the New Source Performance Standards
(40 C7R Part 60), and the National Emission Standards
for Hazardous Air Pollutants (40 CFR Part 61). Ash
(residuals) resulting from incineration must be dis-
posed of in a manner which protects the public health
and water quality (both surface and ground water).
Ar • lter ate means of sludge disposal is ocean
dtti oinq. Ocean dumping of municipal sludge has been
the ibj o considerable Controversy and litigation.
. here ocnan aumping is proposed by a grant applicant,
spc .ci i :evlew procedures beyond the scope of this Hand-
book re :o be employed ( 40 CFR Parts 220—228) .
C .! 1udqe disposal processes must comply
with OpLicab1o State and EPA standards. The use of in—
,rccess units (e.q., centrifuges, belt presses,
‘ C LC fi incinerato . ) should not exceed manu—
factu:er c commendpd loadings. Sufficient capacity
must ii. n nciuded to allow for time lost to equipment
- .na rrtaintenance (e.g., capacity based on a six
COU Ia” :.f only one work shift is used)
;er.eral, municipal sludge is not hazardous unless
Lndijs rj 1 rilschargers are major Contributors to the
• a .. r.ro Ement system ( see Section iv.c. 6.13 above) .
rh t -: e the development and implementation of a
mun1cir al pr’ treatment program (see Section E.2 below) may
die discharge of hazardous industrial wastes.
e: JPA ,uoiic ation 625/10—84—003, “Environmental
flequLation and Technology: Use and Disposal of
f’lunlclpal Wastewater Sludge,” September 1984
( see p.2 tor applicable regulations); EPA
publication 430/9—80—015 (formerly MCD—72) , “A
533 TM 85—1
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Guide to Regulations and Guidance for the
Utilization and Disposal of Municipal Sludge,”
1980; EPA publication 430/9—80—001 (formerly
MCD—61), “Evaluation of Sludge Management Systems,
Evaluation Checklist and Supporting Commentary,”
October 1979.
q. Bypassing during Construction
Bypassing of inadequately treated sewage
during construction is normally not allowed.
The construction sequence must be such that
wastes are provided a minimum of sedimentation
(and disinfection if required to protect public
health) during all phases of construction, unless
a different level of treatment is required by the
State agency. Where absolutely unavoidable, by-
passing may be employed for short periods, but
only after approval by the reviewinq and
permitting agency.
r. Ease of Maintenance
Equipment which will require routine
maintenance (e.g., lubrication of bearings,
changing of oil and filters, replacement of belts)
should be designed and located in such a way to
provide ease of maintenance. Piping should be
color coded, with arrows indicating the direction
of flow. Valves and controllers should be readily
accessible, especially those used to control
routine operations. Adequate railings, guards,
and other safety devices should protect operating
personnel during routine maintenance.
5. Emergency Alarms
Emergency sirens, lights, or other alarms
should be provided, depending on the size and
complexity of the project. Emergency alarms
should notify operators or emergency personnel
(e.g., police, fire, disaster coordinator, etc.)
in the event of failures such as power outage,
major equipment failure, chlorine leak, or
explosive gases in influent wastewater or
digestion facilities.
534 TM 85—1
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t. Pretreatment
In reviewing the plans and specifications, it
is necessary to compare the design considerations
against the municipal pretreatment program
developed by the grant applicant in accordance
with 40 CFR Part 403 (see Section IV.E.2). Where
allowed, some nonresidential wastes may increase
pollutant or solids loadings (e.g., dairy process-
ing or pulp and paper mill wastes), thereby requir-
ing special, design for various unit processes. This
review may also help identify those portions of a
treatment plant, if any, which are not eligible for
grant participation.
u. Aesthetics
One area of particular difficulty in reviewing
treatment plant designs concerns the inclusion of
reasonable and compatible aesthetic features. it
is EPA policy that only essential structures, equip-
ment, and unit processes necessary to meet the
projects performance standards are allowable for
grant participation. This policy, however, must
be tempered by thoughtful Consideration of the
project’s location, visibility, and proximity
to nearby residential commercial, and historic
properties. Reasonable aesthetic features such
as plantings in buffer zones, revegetation of dis-
turbed lands, compatible architectural features, etc.
may be Considered allowable costs if approved by
the reviewing agency (see Section IX.F.4, Paragraph
B.2.a). Other features such as brick veneer on
process units, unusual building shapes, special
siding on buildings, covered walkways, fountains,
or office paneling must be questioned, and where
necessary, justified by an analysis similar to a
value engineering study.
Re: EPA Audit Resolution Board Decision 13/14,
“Criteria for Assessing the Allowabi]i.ty of
Aesthetic Features and Landscaping on EPA
Construction Grant Projects,” February 24,
1984.
535 TM 85—1
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v. Laboratory Facilities
Laboratory facilities and supplies should be
sufficient to provide for sampling and testing,
according to approved methods, that is necessary
for daily operational control and for preparation
of reports submitted to State regulatory agencies
for those effluent parameters specified in the
NPDES or SPDES permit. Except where mandatory
implementation of the pretreatment program is
required for a major wastewater treatment works,
expensive and sophisticated tests should not be
performed. Where periodic expensive and
sophisticated tests are to be conducted (e.g.,
periodic checking on industrial waste discharges)
consideration should be given to contracting with
a nearby university laboratory facility, larger
adequately equipped treatment plant, or licensed
commercial testing firm in lieu of onsite facilities.
w. Handicapped Design Considerations
Design of wastewater treatment facilities
initiated after February 13, 1984 must comply with
EPA nondiscrimination regulations. These regulations
require wastewater treatment facilities to be designed
to provide accessibility to the maximum extent possible
to potential handicapped employees. In meeting these
accessibility requirements, a grant applicant is not
required to take any action that would result in a
fundamental alteration in the nature of the treatment
facility, or an undue financial or administrative
burden. Thus, accessibility for handicapped persons
would not have to be provided solely to allow all
members of the general public to tour all areas of
the facility. Similarly, accessibility would not
have to be provided to areas where, because of the
nature of the facility and the requirements of the
jobs there, it is unlikely that persons with parti-
cular handicaps could meet the physical requirements
for those jobs, even with reasonable accommodation.
For example, elevator access need not be provided
to those areas of a treatment plant in which full
mobility would be necessary to perform the essential
functions of the jobs in those areas. However,
administrative and laboratory areas must be access-
ible to persons in wheelchairs.
536
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D. LIMITATIONS ON AWARD
The following sections describe regulatory limitations to grant
award. At the time of grant application, the grant applicant must
provide evidence of compliance with the applicable limitations des-
cribed below. The documentation supplied by the grant applicant
forms a part of the application package.
1. Advanced Treatment
Projects which propose advanced treatment are subject to a
special EPA Regional or Headquarters review and approval prior to
grant award. Ideally, this review will have taken place during
facilities planning, or at least prior to the initiation of design.
Refer to Section IV. E.l for specific details Concerning the advanced
treatment review. At the time of the application review, insure that
the proposed project and supporting documents agree with the results
of the advanced treatment review.
Re: 40 CFR 35.2101
2. Water Quality Management Plans
The proposed project must be consistent with the approved ele-
ments of the applicable WQM plan approved under Section 208 or
303(e) of the Clean Water Act (CWA). The grant applicant must be
the wastewater management agency designated in the WOM plan. Refer
to Section IV.B,3 for specific details.
Re: 40 CFR 35.2023, 35.2030, 35.2102
3. Priority Determination
Each State annually prepares a State project priority list based
on the State’s approved priority system. To be eligible for a grant
in the current year , a project must be listed on the project priority
list and must be within the fundable range for the State’s current
allotment.
At the time of the application review, insure that the scope of
the proposed project and the amount of the grant request agree with
the corresponding information on the project priority list. All
States have established internal processing procedures for insuring
613 TM 85—1
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that the funds needed for grant award will not cause the State’s
allotment to be exceeded, and that the use of reserve funds (e.g.,
I/A technologies, alternative systems for small communities, etc.)
is properly noted and recorded. These procedures should be followed.
Refer to Section II.E.3 for a more complete discussion of the State
priority system and project priority list.
Re: 40 CFR 35.2015, 35.2103
4. Financial and Managerial Capability
Purpose :
Insure that the grant applicant agrees to pay the non—Federal
project costs, and has the legal, institutional, managerial, and
financial capability to insure the adequate building and operation
of the project.
Discussion :
By signing the application and the grant agreement, the appli-
cant agrees to pay the non—Federal share of project costs if a grant
is offered. If, however, after review of the application package,
the reviewing agency determines that the grant offered will be signi-
ficantly lower than the grant requested, it may be advisable to con-
tact the grant applicant and confirm that the grant applicant agrees
to pay the increased non—Federal share. It may also be necessary to
reassess the applicant’s financial capability (see below).
The grant applicant is required to demonstrate its legal, insti-
tutional, managerial, and financial capability to insure the adequate
building and operation of the treatment works throughout the entire
area to be serviced by the applicant. As part of the grant applica-
tion package, the grant applicant certifies that it has this capa-
bility and has analyzed the local share of the estimated project cost,
including the financial impact on each community and the residents of
the service area, and finds it to be affordable. The reviewing agency
must, however, be satisfied that the application and supporting docu-
ments do in fact demonstrate the applicant’s capability.
The principal information necessary to demonstrate the applicant’s
financial and managerial capability is contained in the responses to
five basic questions contained in EPA’S “Financial and Management
Capability” policy statement. To assist grant applicants in answering
these questions, EPA has prepared a sample format which suggests one
method for displaying responses to the questions. The format, entitled
614
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— the treatment works being phased or segmented
IS described in a facilities plan which was
approved by the reviewing agency before
October i, 1984;
— the Step 3 grant for the initial phase or
segment was awarded before October 1, 1984;
— the phase or segment is a sequential phase or
segment of a primary, secondary, or advanced
treatment facility or its interceptors, or I/I
correction; and
— the phase or segment is necessary to:
— make a Previously funded phase or segment
operational and in compliance with the
enforceable requirements of the CWA, or
— complete the treatment works, provided that
all Previously funded phases or segments are
operational and in compliance with the enforce-
able requiremen 8 of the CWA.
Re: 40 CFR 35.2108, 35.2123, 35 . 2 152(a) and (c)
11. Revised Water Quality Standards
Section 24 of the 1981 CWA amendments requires that after
December 29, 1984 no construction qrants can be awarded for projects
which discharge into stream segments for which the State has failed
to review and revise, as appropriate, water quality standards within
the previous three years.
While the responsibility for reviewing and revising water quality
standards generally does not reside with the construction grants pro-
gram staff, the project reviewer should be aware of the status of the
review of the stream segment into which an applicant project will
discharge.
After December 29, 1984, no grant is to be awarded unless the
State has reviewed and revised, as appropriate, its water quality
standards within the last three years. This limitation on award is
satisfied if:
a. water quality standards for the entire State, or for the
particular stream segment into which the project will dis-
charge, have been reviewed and revised (in accordance with
Section 303(c) of the CWA), as appropriate, within the last
three years and approved by EPA; or
623 TM 85—1
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b. the State agency, in good faith, has submitted to
EPA the results of its review, with appropriate
revisions, but EPA has failed to act on them within
1.20 days of receipt.
The above review also applies to no discharge grant projects such
as sludge handling, odor control and sewer construction or rehabili-
tation if these components are part of a wastewater treatment facility
discharging to a water body. The review does not apply to containment
ponds or land treatment. In addition, funding of a project phase or
segment before December 29, 1984, does not grandfather future phases
or segments for exemption from Section 24 requirements. However, if
a Section 303(c) review is completed for a phased/segmented project
after December 29, 1981, then Section 24 is satisfied for the remaining
phases/segments .
Re: 40 CFR 35.2111; 40 CFR Part 131
12. Environmental Review
A facilities plan, which is a part of the grant application
package, is subject to an environmental review in accordance with the
EPA regulations implementing the National Environmental Policy Act
(NEPA). The environmental review may result in:
a. a categorical exclusion from further environmental review;
b a finding of no significant impact (FONSI); or
c. the need to prepare an environmental impact statement (EIS).
The environmental review is most often performed prior to the initia-
tion of design, and the grant applicant should have been informed of
the need for the review to be performed at that time, to prevent sub-
sequent delays in the award of grant assistance. At the time of
application review, insure that the environmental review has been
completed, and that the project described in the grant application
reflects the conclusions of, and is consistent with, the results of
the environmental review. In the absence of a previous environmental
review, and in the case of significant changes to the project since
the previous environmental review, the proposed project must be
reviewed in accordance with requirements described in Section IV.D.
Re: 40 CFR Part 6; 40 CFR 35.2113
624 TM 85—1
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8. General Grant Conditions
Along with the demonstration that the grant applicant has the
financial and managerial capability to build and operate the pro-
posed treatment works, the grant applicant is required to demonstrate
its ability to comply with 40 CFR Part 30.
Among other things, 40 CFR Part 30 addresses the requirements for
a grant application, payments, project management, deviations,
etc. At the time of grant application review, particular attention
should be given to property management standards and compliance with
other Federal laws. Compliance with some Federal laws will be satis-
fied initially by including the “Labor Standards Provisions for
Federally Assisted Construction Contracts” (EPA Form 5720—4) in the
contract documents. Compliance with other Federal laws will also be
fulfilled initially by the grant applicant’s “assurance of compliance”
in the grant application form (see Section C.l above). The review
procedures below highlight some of the requirements from the general
grant regulations which may require special consideration during appli-
cation review.
Where applicable, insure that the grant applicant has or will have
the ability to fulfill the general grant requirements listed below:
a. Property management standards;
Re: 40 CFR 30.530 through 30.537
b. compliance with the Flood Disaster Protection Act
(if the proposed project involves construction or
property acquisition in a special flood hazard area
and if the project is located in a community partic-
ipating in the National Flood Insurance Program, the
grant applicant must purchase flood insurance or commit
to purchase it at the appropriate time as a Condition
of receiving grant assistance) (see Section V.C.l.l) ;
Re: 40 CFR 30.600(b)
c. the grant applicant may not propose the performance
of any work on the proposed project by a
facility on EPA’s List of Violating Facilities,
which includes facilities which have violated either
the Clean Air Act or the CWA;
Re: 40 CFR 30.600(c) and Cd)
641 TM 85—1
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d. discrimination on the grounds of race, color,
national origin, age, sex, and handicap is pro-
hibited, and the grant applicant is required to
submit a certification of non—discrimination
(EPA Form 4700—4) with the grant application;
Re: 40 CFR 7.8(b), 30.600(d) through (g)
e. compliance with the Uniform Relocation Assistance
and Real Property Acquisition Policies Act, whether
or not the real property is eligible for grant
assistance (see Section VI.H).
Re: 40 CFR 30.600(i)
f. if the proposed project will benefit Indians,
compliance with the Indian Self—Determination and
Education Assistance Act, which requires that
Indians be given preference in training and employ-
ment opportunities;
Re: 40 CFR 30.600(j)
g. compliance with the Hatch Act, which requires State
and local government employees to comply with re-
strictions on political activities if their prin-
cipal employment activities are funded in whole or
part by Federal Assistance;
Re: 40 CFR 30.600(k)
h. compliance with the Safe Drinking Water Act, which
prohibits EPA grant assistance if the proposed pro-
ject may contaminate a sole source aquifer which
will result in a significant hazard to public
health; and
Re: 40 CFR 30.600(1)
i. compliance with the reporting requirements for MBE/WBE
utilization (see Sections B.7.E and D.5 above).
Re: 40 CFR 35.2104(d)
642
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priority water quality areas of marine bays
or estuaries which are due to the impacts
of the CSO, and specifically that, at a
minimum:
— significant usage of the water for
shelifishing and swimming will not
be possible without the proposed
project; and
— the proposed project will result in
substantial restoration of an
existing impaired use.
Re: 40 CFR 35.2024(b)(2)
l v. The project must satisfy all applicable
limitations on award, grant Conditions,
Federal grant share provisions, and
allowable cost provisions, except for:
— allotment and reallotment
(see Sections II.E.2 and II.E.4);
— State priority system and project
priority list (see Section II.E.3);
— reserves and reallotment of reserves
(see Section II.E.4);
— advances of allowance to potential
grant applicants (see Sections
II.E.4.e, III.D.3.c, III.E, Vi.g,
and IX.B8.c);
— review of grant applications and
priority determinations (see
Sections VI.M.,l through VI.M.3);
and
— Step 2+3 projects (see Section VI.F)
Re: 40 CFR 35.2024(b)(4)
649
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V. Two regulatory provisions for marine CSO
projects vary slightly from those for other
construction grant projects:
— final plans and specifications may,
but need not, accompany the grant
application; however, the grant
applicant must commit itself to
providing them by a date set by
the reviewing agency; and
— if the proposed project is a phase
or segment described in the
facilities plan, the criteria used
to demonstrate the need for the
project (see Item ii above) must be
applied to the entire facilities
plan proposal and to each segment
proposed for fund ing.
Re: 40 CFR 35.2024(b)(3)
vi. Marine CSO project applications and supporting
documents are submitted to the State by the
grant applicant. The State reviews the pro-
ject, prepares the special demonstration des-
cribed in Item iii above, and submits the
project to the EPA Regional Office. The
Regional Office determines whether all Federal
requirements have been met, completes the
environmental review, prepares a statement of
regional and national significance, determines
the eligibility of the project for considera-
tion of funding, and submits the required
information to EPA Headquarters.
vii. Once a year, EPA Headquarters will prepare a
priority list, based on the criteria in
Item ii above, for proposed marine csO pro-
jects.
viii. On the basis of the priority list described
in Item vii above, EPA headquarters will
provide obligating authority for grant award
to the appropriate EPA Regional Office.
ix. Projects receiving marine CSO grant awards
will be administered by EPA Regional Offices
or, where delegated, State reviewing agencies.
650 TM 85—1
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Re: 40 CFR 35.2024(b), 35.2040(f); EPA publication,
“Guidance for the Preparation and Review of
Applications, Special Fund for Abatement of
Combined Sewer Overflow POllutjo in Marine
Bays and Estuaries (The Marine cso Fund) ,“
dated January 1984
H. LAND ACOUISITION GRANTS
Purpose :
Provide grant assistance for the acquisition of real property
(i.e., land) which will be an integral part of the treatment process
or provide for ultimate disposal of residuals.
Discussion :
During facilities planning, the grant applicant will have eval-
uated various treatment alternatives, including land application of
wastewater or sludge, and selected the cost effective alternative.
Land associated with the proposed project may already be owned by the
applicant, may be available for lease or purchase, or may be available
for use without payment. Since most acquisitions are fee simple pur-
chases of eligible land, this section will generally deal with that
acquisition method. Other types of acquisitions methods for eligible
land (e.g., long—term lease, permanent easements) are also grant
eligible and should be considered where appropriate. Regardless of
the acquisition method, acquisition must be accomplished in accordance
with the Uniform Relocatjoj Assistance and Real Property Acquisition
Policies Act of 1970 (The Uniform Act) and EPA implementing requla—
tions, 40 CFR Part 4 . The Uniform Act and regulations are applicable
to the acquisitjon f real property necessary for EPA assisted projects
whether or not the land SO acquired is eligible for grant assistance.
Regardless oUthe method of acquisition, owners must be fully informed
of their rights under The Uniform Act. After beina informed of these
iights, landowners may Voluntarily waive (in writing) their right to
an appraisal .
Arrangements for long—term lease, permanent easement, and use
without payment of the treatment site need to be reviewed to insure
that they are adequate for the successful construction and operation
of the project (e.g., that they are not subject to art expiration or
revocation which would prevent the continuing operation of the
project)
651 TM 85—1
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Acquisition of eligible real property may generally be accom-
plished in one of three ways under the construction grants program:
— under authorization to proceed as a preaward cost
— under a grant solely for land acquisition, or
— as a part of the grant for the construction of the project.
In any of the above situations, the provisions of 40 CFR Part 4
must be satisfied if the land is to be eligible for grant assistance .
40 CFR Part 4 in essence is separated into two parts:
— requirements for the acquisition of real property, and
— requirements applicable when persons, businesses or farms
will be displaced as a result of such acquisition .
In view of the potentially high costs and legal fees associated
with land acquisition, grant applicants and reviewinq agencies should
use personnel experienced in all phases of the acquisition process,
including qualified appraisers . The review procedures below address
the highlights of the regulatory requirements, but are not a substitute
for a detailed review by professional personnel to insure compliance
with 40 CFR Part 4. Eligibility of land acquisition and associated
costs is discussed in Section Ix.D which should be consulted prior to
grant award.
Rev jew Procedures :
1. Grant Application
A grant application which requests funds for the acquisition of
real property must include:
a. all applicable information and documents described in
Sections C through E above, except that grant applications
solely for the acquisition of real property need not include
the information described in Item 2 below;
b. a plat map which includes the legal description of the pro-
perty to be acquired ( in lieu of design and specifications
if not available) .
c. a preliminary layout of the distribution and drainage system
( in lieu of design and specifications if not available) .
a. an identification of the interest in real property to be
acquired (e.g., fee simple purchase, long—term lease,
permanent easement) .
652 TM 85—1
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e. a copy of the appraisal reports for the property;
f. assurances that the property will be used Only for
the purpose for which it is purchased, and that
EPA ’s interest in the property will be adequately
reflected and protected in compliance with all
recordatjon or registration requirements of appli-
cable local laws on real property (see CFR Part 30;
Item 3.b and Section M.5 below); and
g. assurances of compliance with The Uniform Act .
Re: 40 CFR 30.535, 30.600(i), 35.2040(b)
40 CFR Part 4, Subpart F
2. Deferred Provisions
Grant applications which request funds solely for land acquisi-
tion need not include information regarding the following items
whose submission may be deferred until the award of grant assistance
to build the project:
a. debarment and suspension (see Section D.7 above);
b. user charge system (see Section V.E and
Section D.].7 above);
c. sewer use ordinance (see Section V.F and
Section D.17 above);
d. O&M manual payment limitations (see Section IX.B.5);
e. adoption of UC system and SUO (see Sections V.E and
V.F, and Section D.17 above); and
f. final design drawings and specifications .
Re: 40 CFR 35.2122, 35.2260, 35.2040
3. Grant Conditions
Grant awards which include the acquisition of eligible real
property are to include grant conditions (see Section M.5.d below)
stating that:
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a. real property must not be acquired until the reviewing
agency has determined, based on documentation submitted
by the grantee, that the applicable provisions of 40 CFR
Part 4 have been or will be met; and
b. consistent with 40 CFR Part 30, the Federal interest in
the property to be acquired must be protected by the
inclusion of the following language in the title or other
recordation instrument:
“ Federal lien : Federal grant funds have been
used to purchase this property. The United
States interest is ______ percent ( depending
on the Federal share at the time of grant award )
of the proceeds from any subsequent sale or
current fair market value of the property on the
date of the transaction which removes it from
the use for which it was purchased. (See 40 CFR
30.535(e) , revised on September 30, 1983). P lien
to this effect and extent is hereby asserted.”
Re: 40 CFR 30.535, 35.2210
4. preaward Costs
potential grant applicants requesting approval, as a preaward
cost, of the acquisition of eligible land or of an option for the
purchase of eligible land may receive such approval after completion
of the environmental review (see Section D.12). In addition, the
reviewing agency should request sufficient information from the
applicant, such as that required for grant award in Items l.b through
l.f above, to insure that the costs are likely to satisfy grant appli-
cation requirements for a subsequent grant. The approval letter from
the reviewing agency should include notification that the acquisition
of real property, to be eligible, must be procured in accordance with
the applicable provisions of 40 CFR Parts 4 and 30.
The approval letter should note that these costs will only be
reimbursed if a grant is subsequently made and thus does not repre-
sent a commitment of funds. Grantees should be advised that certain
costs incurred prior to grant award may not be deemed allowable if
specific authorization for preaward costs was not obtained . Refer
to Section D.l5 above for additional warning language to be included
in the approval letter.
Re: 40 CFR 35.2118
654 TM 85—1
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f. Quality Assurance Program
When environmentally related measurements or data gener-
ation are involved in a project, the grantee must develop and
implement a quality assurance program which will assure that
quality data will be produced and a minimum of data will be
lost through out of control conditions or malfunctions. If
a grant Condition requires the grantee to gather environmental
related data, a schedule for developing a ciuality assurance
project plan must be submitted within 30 days of a grant award.
Field testing of I/A technologies and evaluation of wastewater
treatment plant performance (e.g., during the one year project
performance period) are examples of activities which may entail
gathering environmental or environmentally related data.
Re: 40 CFR 30.302(d)(3), 30.503(f) and (h)
g. Project Performance Standards
The grantee should be informed of the parameters which
have been identified by the reviewing agency as project
performance standards (see Sections V.C.2.a and VII.r.2.a).
Re: 40 CFR 35.2218(c)
h. Field Testing of Innovative or Alternative Technologies
See Section 1.3 above.
6. pecia1 Grant Conditions
Where there are compelling reasons, søecial grant conditions
may be included in the grant agreement. Unlike general grant con-
ditions, special grant conditions do not repeat EPA’S regulatory
requirements, but rather are special conditjo s under which the
grant has been awarded, due to unusual circumstances. All proposed
special grant Conditions should receive a technical and legal review,
to insure that their inclusion in the grant agreement/amendment is
appropriate.
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(see Item 5 above) , a change order may be issued to the con-
tractor by the grantee, with the price of the additional services
negotiated as an equitable adjustment to the contract. If the
change order requires prior approval by the reviewing agency
(see Section 11.3 below, and Section IX.F.4, Paragraph A.1.f)
the review procedures described in Section H.5 below, modified
to suit contracts for professional services, should be used.
If the additional work is within the scope of the project , but
outside the scope of work of the existing contract, the additional
services must be procured through the procedures described in
Section c.i or C.2 above, unless the procedures described in
Section E or F below are appropriate.
Re: 40 CFR 33.1030, Paragraph 3(b)
D. PROCUREMENT OF CONSTRUCTION CONTRACTORS
The grantee is required to award subagreements and issue notices
to proceed for building all signifjca elements of the project as
soon as Possible, but no later than 12 months, after grant award.
All grantees must submit limited information concerning each sub—
agreement award to the reviewing agency, Grantees without a certi-
fied procurement system must submit more detailed information.
1. Competitive Bidding
In almost all cases, procurement of construction contractors
and suppliers of equipment and materials must be done using the
competitive bidding method (referred to as formal advertising in
40 CFR Part 33). Competitive bidding involves advertising for bids,
receipt of sealed bids, public opening of bids, and the award of the
contract to the responsive and responsible bidder who submits the
lowest bid. En Practically all cases (see Section B.2.a above), a
bid tabulation must be prepared by the grantee’s engineer, showing
the prices bid by each contractor for each item in the contract
proposal form. The reviewing agency is to insure that all required
competitive bidding procedures were used, including:
719
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a. Public Notice
When advertising for bids under the formal adver-
tising (i.e., competitive bidding) method, the
grantee must give adequate notice to the public.
The public notice must include sufficient infor-
mation to enable bidders to readily obtain and
review bidding documents.
b. Bidding Documents
The bidding documents must include:
i. a copy of 40 CFR 33.295; 40 CFR
Part 33, Subparts F and G: and if
appropriate, “Labor Standard
Provisions for Federally Assisted
Contracts” (EPA Form 5720—4);
ii. a complete statement of the work to
be performed, including where appro-
priate, design drawings, specifica-
tions, and the required performance
schedule;
iii. the terms and conditions of the sub—
agreement to be awarded, including
payment, delivery schedules, point of
delivery, and acceptance criteria;
iv. the place and deadline for submitting
bids;
v. a clear explanation of the bidding
procedures and the method to be used
by the grantee to evaluate bid prices
and to award the subagreement;
vi. the criteria to be used in evaluating
bidders’ compliance with the respon-
sibility requirements; and
vii. the DOL prevailing wage rate determin-
ation, if applicable.
c. Addenda
Prior to bid opening, the grantee may have issued
addenda to correct errors, to clarify information in
the bidding documents, or to incorporate the current
wage rate determination. Contract proposal documents
720 TM 85—1
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should include a form for certification that the bidder
has received all addenda before the bid date. Where
addenda have been issued by the grantee, the reviewing
agency is to insure that receipt of such addenda is
acknowledged by each bidder, and that the addenda were
issued in a reasonable time (generally days) before
the deadline for the receipt of bids (see Section V.C.1.d).
d. Number of Bids
Sufficient bids should have been received. If only one bid
is recef ed, the grantee should analyze the reasons for
receipt of Only one bid. If the grantee determines that the
specificat ions were written in a manner which discouraged
bidding, or that some other situation existed which caused
the lack of bidders, the grantee must correct these problems
and rebid th project .
If the grantee determines that there was a sufficient number
of responsjbij contractors within the area that could have
bid on the proj _ ect, and that there is valid justification
for receiving Only one bid, the grantee may accept the buid
p ovided that he conducts a p ice analysis, if the bid
exceeded $10,000, and determines that the bid is reasonable
( i.e., it compares favorab1L jth the engineer’s estimate
or some other basis for a price comparison)
If the bid price significantly exceeds the engineer’s
estimate, the grantee may reject the bid as explained in
Item 2 below .
e. Bid Evaluation
Evaluation of all bids must have been made using the ob-
jective criteria described in the bidding documents. All
necessary bid bonds and certifications must have been sub-
mitted, and all required forms completed and signed. If
less than three responsive and responsible bids were
received and the low bid exceed $10,000, the grantee must
have conducted a price analysis of the winning bid and
determined that it was reasonable.
721 TM 85—1
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f. Contract Award
A fixed price contract must be awarded to the lowest
responsive and responsible bidder (see Section V.C.1.f).
The contractor to which the contract is awarded must not
be on EPA’s Master List of suspended and debarred con-
tractors.
Re: 40 CFR 33.211, 33.220, 33.235, 33,290(b) , 33,405, 33,410,
33. 415
2. Rejection of All Bids
The grantee may reject all bids only if it has sound, docu-
mented business reasons for doing so. The reviewing agency may
approve such actions where justified as being in the best interests
of the construction grants program. Because of varying State
statutory requirements, it may be prudent to request that the
grantee’s legal counsel submit documentation supporting such
actions under State law. If the grantee improperly rejects all
bids, any additional Costs incurred (including a contract price
which is higher than the original low bid) will be ineligible
for grant assistance. it is therefore advisable for the grantee
to consult with the reviewing agency before rejecting all bids.
After rejection of all bids, the grantee may either readver—
tise using the competitive bidding method (see Item 1 above) , or
negotiate the procurement (if appropriate) in accordance with
40 CFR 33.505 through 33.525 or 33.605.
Re: 40 CFR 33.430(c)
3. Small, Minority, Women’s, and Labor Surplus Area Businesses
The reviewing agency is to insure that affirmative actions
have been taken by the grantee, and where appropriate, by the
grantee’s contractors, to include small, minority, women’s, and
labor surplus area businesses in the bidding process (see Section
V.C.1.w). Where State or local goals have been established,
the reviewing agency is to compare those goals aqainst the
contract awards.
Re: 40 CFR 33.240
4. Grant Adjustment
Each grant award is originally based on the estimated
allowable costs of building the project, a reasonable construc-
tion contingency, the cost of eligible land, and the estimated
722 TM 85—1
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allowance for planning and/or design. After the receipt of
bids and the acquisition of eligible land, the costs of building
the project are more accurately known, and the grant should be
adjusted accordingly. Any grant adjustment requires a formal
grant amendment.
a. Building Cost
The sum of all prime contracts and subcontracts
(including contracts for the direct purchase of
equipment, materials, or supplies by the grantee),
plus the cost of approved force account work in lieu
of awarding construction contracts, equals the total
allowable building cost. If the total allowable
building cost is less than the estimates used for
grant award, the grant is to be reduced accordingly
(see Section IX.C.2). If the total allowable building
cost is more than the estimated allowable building
cost plus the construction contingency, the grant may
be increased (see Section Ix.C.].) if the bids are
judged reasonable, and sufficient funds are available
in the State’s allotment (many States maintain a
reasonable reserve of grant funds for this purpose)
If bids are significantly higher than anticipated, it
may be necessary for the grantee to reevaluate its
financial capability in light of the higher costs.
Also, if bids are significantly higher, it may be
appropriate for the grantee to reevaluate the scope
of work, or when appropriate, reject all bids and
readvertise. This last course of action may only be
undertaken in accordance with State law and EPA pro—
cureinent regulations (see Item 2 above).
b. Construction Contingency
After receipt of bids, the Construction contingency
is usually reduced to between 2 and 5 percent of the
total allowable building costs. The construction
contingency is available for unanticipated cost
increases (i.e., change orders) during construction.
C. Land Acquisition Cost
Assuming that the requirements of 40 CFR Parts 4 and
30 have been satisfied with regard to the acquisition
of eligible land, the grant amount may require adjust-
ment after the actual cost of eligible land is known.
d. Allowance for Planning and/or Design
The final allowance for planning and/or design is deter-
mined only once, and is based on the initial allowable
awaril amount of all prime construction contracts
723 TM 85—1
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(including contracts for the direct purchase of
equipment, materials, and supplies by the grantee),
plus the initial amount approved for force account
work in lieu of awarding construction contracts, and
the purchase price of eligible land. The amount of
the allowance does not change, even if the actual
building costs increase or decrease during the per-
formance of the work. The final allowance is com-
puted in accordance with 40 CFR Part 35, Subpart I,
Appendix B (see Section VI.L.1).
e. Grant Amendment
Any grant adjustment, as determined in Items a through
d above, requires the preparation of a formal Grant
Agreement/Amendment (EPA Form 5700—20A). States are
to verify that sufficient funds are available in the
State’s allotment, certify the grant amendment and
other documents required by the State/EPA delegation
agreement, and submit the grant amendment to EP for
approval (see Section VI.M).
Re: 40 CFR 30.700, 35.2204
5. Contract Award
Grantees are to award contracts and issue notices to proceed
for building all significant elements of the project as soon as
possible, but no later than 12 months, after grant award (see
section IX.F.4, Paragraph A.2.e)
Re: 40 CFR 35.2212
6. Protests
A protest is a written complaint concerning the grantee’s
solicitation or award of a subagreement, and may be filed with
the grantee only by a party with a direct financial interest
which has been adversely affected by the grantee’s action.
Protests may be filed during the procurement of professional
services or construction services (including the direct purchase
of equipment, materials, and supplies by the grantee), and should
normally be submitted to the grantee prior to the closing date for
the receipt of proposals or bids.
724
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1. the aggregate amount of any one procurement does
not exceed sio,ooo, or a lower amount established
by State or local law;
2. the procurement was not divided into smaller amounts
to avoid the dollar limitation for small purchase
procurement; and
3. price or rate quotations were obtained and documented
from an adequate number of aualified sources.
Re: 40 CFR 33.305, 33.310, 33.315
F. NONCOMPETITIVE NEGOTIATION
Noncompetjtjve negotiation (i.e., sole source procurement) is
the least favored method of procurement, and may Only be used if the
other three methods of procurement are inappropriate, or where the
requirements for continuation of engineering services have been
satisfied (see Section C.3.c above). Noncompetjtjve negotiation for
the continuation of engineering services requires the prior written
approval of the reviewing agency.
Noncompetjtjve negotiation may only be used if the other three
procurement methods (i.e., competitive bidding, competitive negotia—
tion, and small purchase) are inappropriate because:
1. the item is available Only from a single source;
2. a public exigency or emergency exists;
3. after Solicitation from a number of sources,
competition is inadequate (e.g., after formal
advertising, only one responsive and responsible
bid is received); or
4. the reviewing agency authorizes noncompetitjve
negotiation for continuation of engineering
services (see Section C.3.c above).
Re: 40 CFR 33.605, 33.715
727 TM 85—1
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G. MONITORING CONSTRUCTION
Purpose :
Insure that the grantee manages the project in accordance with
the commitments made in the grant application and the grant accep-
tance, and that the project is constructed in accordance with the
approved plans, specifications, and change orders.
Discussion :
To insure adequate performance by all equipment vendors and
construction contractors, the reviewing agency must provide for
sufficient monitoring of construction activities. The reviewing
agency’s monitoring program should begin with a preconstruction
conference, extend through interim construction monitoring
activities, and conclude with a final inspection. The extent and
frequency of monitoring will depend on the size and complexity of
the project, and the needs and performance of the grantee, the
resident inspection team, and the construction contractors. The
agency performing the monitoring activities will be designated
in the State/EpA delegation agreement, with monitoring activities
carried out by the State, EPA and/or the U.S. Army Corps of
Engineers (COE) . In some States, one of these agencies has been
given the responsibility for all monitoring activities, while in
others, two or all three agencies share this responsibility.
Each agency is to follow the detailed monitoring procedures in
the State/EPA delegation agreement and/or the EPA/COE interagency
agreement.
To assist reviewing agencies in carrying out a thorough and
efficient monitoring program, EPA has prepared two guidance
documents which include a complete discussion of the specific
actions to be undertaken during construction monitoring:
“Operating Procedures for Ntonitoring Construction Activities at
Projects Funded under the Environmental Protection Agency’s
Construction Grants Program,” dated September 1983, and “Construc-
tion Management Evaluation and Project Management Conference
Manual,” dated December 1983. The documents should be used in
conducting onsite construction monitoring activities. However,
reviewing agencies must also maintain off—site (i.e., in the
reviewing agency’s office) construction monitoring through the
review of payment requests, inspection reports, change orders,
correspondence, and telephone communications. This information,
when compared with the project schedule in the grant agreement,
will provide an indication of the adequacy of construction
progress, and may form the basis for changing the frequency of
728
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C. Payment Requests
Payments for the Federal share of engineering services
during the first year of operation are to be processed
as discussed in Section IX.B. For fixed price contracts,
payment is related to the completion of specific tasks.
For cost—plus—fixed—fee contracts, payments are made as
the work is completed (generally no more frequently than
monthly)
d. Deficiencies
During the first year of operation, problems may develop
with regard to equipment, unit processes, or deficiencies
due to poor construction.. The grantee is responsible for
correcting such deficiencies, using appropriate means
such as: invoking the provisions of equipment warranties,
construction contractor performance bonds, and guarantees
from the design engineer; initiating enforcement action
against industrial dischargers; etc.
As a part of good project management, reviewing agencies
should establish a program which tracks the performance
of completed projects during the first year of operation.
Such a program could include periodic onsite inspections
and a review of monthly operation reports submitted by
grantees. When onsite inspections or monthly reports
indicate that a project is experiencing difficulties
in meeting its project performance standards, the
reviewing agency should work with the grantee and offer
technical assistance or guidance as appropriate.
2. Project Performance After One Year
a. Certification
One year after the initiation of the operation of the
project, the grantee is required to certify to the
reviewing agency whether the project meets the project
performance standards. Project performance standards
are performance and operational requirements appli-
cable to the project, including the enforceable
requirements of the CWA, and the design criteria upon
which the plans and specifications are based. For
projects required to satisfy the enforceable require-
ments of the CWA, the performance standards include
749
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the design criteria (usually contained in the
engineer’s design report and/or the facilities plan)
and the effluent limitations contained in the National
Pollutant Discharge Elimination System (NPDES) permit
(see Section II.D.2). For projects not required to
satisfy the enforceable requirements of the CWA (e.g.,
sewers and pumping stations) , performance standards
include only the design criteria. For projects which
include sewer rehabilitation, the quantity of excessive
I/I to be eliminated is one of the project performance
standards. Guidance for certifying an i/i project is
described below.
To positively certify an I/I project, the grantee
must show that the rehabilitation program has achieved
an acceptable level of I/I reduction. Idealy, this
means that the planned I/I reduction target is achieved
at a cost not exceeding the rehabilitation cost projected
in the cost—effectiveness analysis. However, past
experience has shown that it is technically impossible
to determine the actual I/I reduction due to (l)lack of
precise and reliable flow monitoring procedures and (2)
the difference in storm and groundwater conditions before
and after rehabilitation is completed.
For these reasons, criteria for certifying l/t project
performance must be established on the basis of project
cost—effectiveness. Accordingly, a sewer rehabilitation
project is considered certifiable as long as the I/I re-
duction is achieved at a cost not to exceed the transport
and treatment cost for that portion of reduced flow. In
addition, the remaining I/I in the system will not adversely
impact the performance of the treatment facility as designed.
A detailed procedure for determining minimum acceptable I/I
reduction is described in CG—135 .
Project performance standards will normally have been
established at the time of grant award, and should
have been included in the grant agreement as a grant
condition (see Section VI.M.5.g).
Where the grantee certifies that the project is meeting
its project performance standards and where all grant
conditions have been satisfied, the project may be
prepared for audit and closeout (see Section VlIr.D).
If the grantee is unable to certify that the project
is meeting its performance standards, the grantee
must undertake corrective action as described in Item b
below.
750 TM 85—1
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b. Corrective action
If the reviewing agency or the grantee concludes that
the project is not meeting its project performance
standards, the grantee is required to submit the
following:
i. a corrective action report which includes
an analysis of the cause of the project’s
failure to meet the performance standards,
and an estimate of the nature, scope, and
cost of the corrective action necessary
to bring the project into compliance;
ii. a schedule for undertaking, in a timely
manner, the corrective action necessary
to bring the project into compliance: and
iii. the scheduled date by which the grantee
will be able to certify that the project
is meeting its performance standards.
The reviewing agency is to insure that the proposed
schedule is in conformance with, or will become a
part of, the State—developed schedule for imple-
menting EPA’S National Municipal Policy. For a
municipality whose project is not in compliance with
its NPDES permit, this policy requires that the com-
munity prepare a composite correction plan (see
Section II.D.l).
Except in the case of projects which qualify for a
100 percent grant for the modification or replace-
ment (M/R) of a failed innovative or alternative (I/A)
technology (see Section VI.J), or the extent allowed
by EPA’s policy on project additions (see Section IX.F.4,
Paragraph H.l.d), the cost of preparing the corrective
action report and undertaking the corrective action
necessary to bring the project into compliance with
the project performance standards is not eligible for
grant participation.
Re: 40 CFR 35.2218(c) and (ci); 40 CFR Part 35,
Appendix A, Paragraphs H..l.d (3)(b), H.2.e,
and H.2l; EPA notice, “National Municipal
Policy,” 49 FR 3832 and 3833 (January 30, 1984)
751 TM 85—1
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D. REAL PROPERTY
1. ALLOWABLE COSTS FOR LAND AND RIGHTS—OF-WAY INCLUDE:
a. THE COST (INCLUDING ASSOCIATED LEGAL, ADMINISTRATIVE
AND ENGINEERING COSTS) OF LAND ACQUIRED IN FEE SIMPLE
OR BY LEASE OR EASEMENT UNDER GRANTS AWARDED AFTER
OCTOBER 17, 1972, THAT WILL BE AN INTEGRAL PART OF
THE TREATMENT PROCESS OR THAT WILL BE USED FOR THE
ULTIMATE DISPOSAL OF RESIDUES RESULTING FROM SUCH
TREATMENT PROVIDED THE REGIONAL ADMINISTRATOR APPROVES
IT IN THE GRANT AGREEMENT. THESE COSTS INCLUDE:
(1) THE COST OF A REASONABLE AMOUNT OF LAND, CON-
SIDERING IRREGULARITIES IN APPLICATION PAT-
TERNS, AND THE NEED FOR BUFFER AREAS, BERMS,
AND DIKES;
(2) THE COST OF LAND ACQUIRED FOR A SOIL ABSORP-
TION SYSTEM FOR A GROUP OF TWO OR MORE HOMES;
(3) THE COST OF LAND ACQUIRED FOR COMPOSTING OR
TEMPORARY STORAGE OF COMPOST RESIDUES WHICH
RESULT FROM WASTEWATER TREATMENT;
(4) THE COST OF LAND ACQUIRED FOR STORAGE OF
TREATED WASTEWATER IN LAND TREATMENT SYSTEMS
BEFORE LAND APPLICATION. THE TOTAL LAND AREA
FOR CONSTRUCTION OF A POND FOR BOTH TREATMENT
AND STORAGE OF WASTEWATER IS ALLOWABLE IF THE
VOLUME NECESSARY FOR STORAGE IS GREATER THAN
THE VOLUME NECESSARY FOR TREATMENT. OTHER-
WISE, THE ALLOWABLE COST WILL BE DETERMINED
BY THE RATIO OF THE STORAGE VOLUME TO THE
TOTAL VOLUME OF TUE POND.
b. THE COST OF COMPLYING WITH THE REQUIREMENTS OF THE
UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY
ACQUISITION POLICIES ACT OF 1970 (42 U.s.c 4621
et.seq., 4651 et Seq.),UNDER PART 4 OF THIS CHAPTER.
The Uniform Relocation Assistance and Real Property
Acquisitjo Policies Act of 1970 (The Uniform Act),
as implemented by EPA under 40 CFR Part 4, is appli-
cable to the acquisition of land necessary for pro-
jects receiving EPA grant assistance regardless of
whether the land SO acquired is eligible for grant
assistance ( e.g., sewer easements) . The cost of
complying with 40 CFR Part 4 is allowable ; it is
Only the cost of the land itself which may or may
not be eligible for grant assistance.
947 TM 85—1
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Representative costs of complying with the Uniform
Relocation Assistance and Real Property Acquisition
Policies Act of 1970 include:
i. cost of appraisal and review appraisal
(including supplemental engineering,
surveying or other studies necessary to
properly value improvements, minerals,
timber or other resources on the property) ;
ii. necessary services associated with the
acquisition such as title search; documen-
tation relating to just compensation/offer
amount; purchase negotiations; preparation
of purchase agreement (including options
if applicable), proposed deed convenants,
legal description, lease agreements and
related legal documents ;
iii. related costs such as legal notices, closing
costs (e.g., transfer tax, evidence of title,
recording fee), mortgage prepayment penalties
and certain pro—rata prepaid property taxes ;
iv. certain legal and other costs relating to
abandoned or unsuccessful condemnation pro-
ceedings or inverse condemnation proceedings
decided in favor of the landowner ;
v. advisory assistance to displaced persons,
businesses and farms to relocate ;
vi. moving and related expenses for displaced
persons, businesses and farms ;
vii. replacement housing payments for displaced
persons.
viii. other administrative costs of complying with
The Uniform Act .
Each of the representative costs listed above contain
limitations concerning reasonableness, allowability or
eligibility which are more fully described in 40 CFR
Part 4.
Re: 40 CFR 4.101, 4.201, 4.205, 4.400, 4.503, 4.600 et seq .
c. THE COST OF CONTRACTING WITH ! 1OTHER PUBLIC AGENCY
OR QUALIFIED PRIVATE CONTRACTOR FOR PART OR ALL OF
THE REQUIRED ACQUISITION AND/OR RELOCATION SERVICES .
948 TM 85—1
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d. THE COST ASSOCIATED WITH THE PREPARATION OF THE TREAT-
MENT WORKS SITE BEFORE, DURING AND, TO THE EXTENT
AGREED ON IN THE GRANT AGREEMENT, AFTER BUILDING. THESE
COSTS INCLUDE:
(1) THE COST OF DEMOLITION OF EXISTING STRUCTURES
ON THE TREATMENT WORKS SITE (INCLUDING RIGHTS-
OF—WAY) IF BUILDING CANNOT BE UNDERTAKEN WITH-
OUT SUCH DEMOLITION;
Demolition of existing structures on the
treatment works site (including righcs_of_way)
when not required for building the project, will
be considered to be an allowable cost only if the
existing structures constitute a real and pre-
sent hazard to safety, public health, or water
quality, which can only be abated by the removal
of the existing structures. The demolition of
an existing structure for the convenience of the
owner as a means of increasing Property value or
property use is unallowable for grant participa-
tion.
(2) THE COST (CONSIDERING SUCH FACTORS AS BETTER-
MENT, COST OF CONTRACTING AND USEFUL LIFE) OF
REMOVAL, RELOCATION OR REPLACEMENT OF UTILITIES,
PROVIDED THE GRANTEE IS LEGALLy OBLIGATED TO
PAY UNDER STATE OR LOCAL LAW; AND
(3) THE COST OF RESTORING STREETS AND RIGHTS-OF—WAY
TO THEIR ORIGINAL CONDITION. THE NEED FOR SUCH
RESTORATION MUST RESULT DIRECTLY FROM THE CON—
STRUCTION AND IS GENERALLY LIMITED TO REPAVING
THE WIDTH OF TRENCH.
Repaving beyond the trench width may be con-
sidered to be an allowable cost if uniformly
required by State or local law for all projects
involving road construction, regardless of the
source of project funding. Sometimes referred
to as “saw width,” this provision requires that
the road surface and subsurface be cut one or two
feet beyond the trench width. This is not, how-
ever, to be interpreted as allowing the cost of
complete or partial repaving of a road beyond
the “saw width.”
e. THE COST OF ACQUIRING ALL OR PART OF AN EXISTING
PUBLICLY OR PRIVATELY OWNED WASTEWATER TREATMENT WORKS
PROVIDED ALL THE FOLLOWING CRITERIA ARE MET :
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(1) THE ACQUISITION, IN AND OF ITSELF, CONSIDERED
APART FROM ANY UPGRADE, EXPANSION OR REHABIL-
ITATION, PROVIDES NEW POLLUTION CONTROL BENEFITS;
(2) THE ACQUIRED TREATMENT WORKS WAS NOT BUILD WITH
PREVIOUS FEDERAL OR STATE FINANCIAL ASSISTANCE;
(3) THE PRIMARY PURPOSE OF THE ACQUISITION IS NOT
THE REDUCTION, ELIMINATION, OR REDISTRIBUTION
OF PUBLIC OR PRIVATE DEBT; AND
(4) THE ACQUISITION DOES NOT CIRCUMVENT THE REQUIRE-
MENTS OF THE ACT, THESE REGULATIONS, OR OTHER
FEDERAL, STATE OR LOCAL REQUIREMENTS.
2. UNALLOWABLE COSTS FOR LAND AND RIGHTS-OF-WAY INCLUDE:
a. THE COSTS OF ACQUISITION (INCLUDING ASSOCIATED LEGAL,
ADMINISTRATIVE AND ENGINEERING, ETC.) OF SEWER RIGHTS-
OF—WAY, WASTE TREATMENT PLANT SITES (INCLUDING SMALL
SYSTEM SITES), SANITARY LANDFILL SITES AND SLUDGE
DISPOSAL AREAS EXCEPT AS PROVIDED IN PARAGRAPH l.a.
OF THIS SECTION.
Costs of complying with the Uniform Relocation Assistance
and Real Property Acquisition policies Act of 1970 are
allowable even if the property being acquired is not (see
Section D 1.b above) .
b. ANY AMOUNT PAID BY THE GRANTEE FOR ELIGIBLE LAND IN EXCESS
OF JUST COMPENSATION , BASED ON THE APPRAISED VALUE, THE
GRANTEE’S RECORD OF NEGOTIATION OR ANY CONDEMNATION PRO-
CEEDING, AS DETERMINED BY THE REGIONAL ADMINISTRATOR.
An amount higher than the determination of just compensa-
tion may be found allowable through an administrative
settlement if the grantee provides sufficient written
documentation to the Regional Administrator prior to the
actual acquisition. Such an administrative settlement may
be appropriate where negotiated purchase is unsuccessful
and where a condemnation action may entail a long delay
or excessive costs. Administrative settlements may be used
when it is reasonable, prudent and in the public interest.
Documentation may include evidence of purchase negotiations,
real property sales data, estimated court settlement and
legal costs based on previous condemnation proceedings.
Such documentation may form the basis of an administrative
settlement with Regional Administrator approval .
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C. REMOVAL, RELOCATION OR REPLACEMENT OF UTILITIES LOCATED
ON LAND BY PRIVILEGE, SUCH AS FRANCHISE.
These costs are not allowable unless the grantee is re—
guired to pay such costs under State or local law .
E. EQUIPMENT, MATERIALS AND SUPPLIES
1. ALLOWABLE COSTS OF EQUIPMENT, MATERIALS AND SUPPLIES INCLUDE:
a. THE COST OF A REASONABLE INVENTORY OF LABORATORY
CHEMICALS AND SUPPLIES NECESSARY TO INITIATE PLANT
OPERATIONS AND LABORA ORy ITEMS NECESSARY TO CONDUCT
TESTS REQUIRED FOR PLANT OPERATION.
A suggested list of equipment, supplies, and chemicals
for various sizes of treatment plants is given in
Appendix B of EPA publication 430/9—74—002, “Estimating
Laboratory Needs for Municipal Waste Water Treatment
Facilities, 1974. Large stocks of expendable materials
are, however, not allowable.
b. THE COSTS FOR PURCHASE AND/OR TRANSPORTATION OF
BIOLOGICAL SEEDING MATERIALS REQUIRED FOR EXPED-
ITIOUSLY INITIATrNG THE TR ATMENT PROCESS OPERATION.
C. COST OF SHOP EQUIPMENT INSTALLED AT THE TREATMENT
WORKS NECESSARY TO THE OPERATION OF THE WORKS.
The need for installed shop equipment necessary for the
peration of the treatment works should be carefully
reviewed to insure that it is cost effective when
compared to the cost of equipment rental or the pro-
curement of a contractor to perform the required work.
The need will depend on the specific item, its fre-
quency of expected use, and the size and complexity
of the treatment facility. Undoubtedly, larger
treatment facilities will have a greater need for
installed shop equipment than smaller ones. For example,
a portable welding machine may be appropriate for a
large facility, whereas it may be more economical
for a smaller community to employ a local welder when
necessary. Also, smaller projects may not have the
staff (e.g., skilled machinists) necessary to operate
some of the equipment. Where the proposed items of
equipment are inappropriate to the size of the treat-
ment works, the reviewing agency may determine that the
proposed installed shop equipment is unallowable for
grant participation.
d. THE COSTS OF NECESSARY SAFETY EQUIPMENT , PROVIDED THE
EQUIPMENT MEETS APPLICABLE FEDERAL, STATE, LOCAL OR
INDUSTRy SAFETY REQUIREMENTS.
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e. A PORTION OF THE COSTS OF COLLECTION SYSTEM MAINTENANCE
EQUIPMENT . THE PORTION OF ALLOWABLE COSTS SHALL BE THE
TOTAL EQUIPMENT COST LESS THE COST ATTRIBUTABLE TO THE
EQUIPMENT’S ANTICIPATED USE ON EXISTING COLLECTION
SEWERS NOT FUNDED ON THE GRANT. THIS CALCULATION SHALL
BE BASED ON:
(1) THE PORTION OF THE TOTAL COLLECTION SYSTEM
PAID FOR BY THE GRANT,
(2) A DEMONSTRABLE FREQUENCY OF NEED, AND
(3) THE NEED FOR THE EOUIPMENT TO PRECLUDE
THE DISCHARGE OR BYPASSING OF UNTREATED
WAST EWAT ER.
See Paragraph E.2.c below for a discussion of other
allowable maintenance equipment.
f. THE COST OF MOBILE EQUIPMENT NECESSARY FOR THE OPERA-
TION OF THE OVERALL WASTEWATER TREATMENT FACILITY,
TRANSMISSION OF WASTEWATER OR SLUDGE, OR FOR THE
MAINTENANCE OF EQUIPMENT. THESE ITEMS INCLUDE:
(1) PORTABLE STAND-BY GENERATORS;
(2) LARGE PORTABLE EMERGENCY PUMPS TO PROVIDE
“PUMP—AROUND” CAPABILITY IN THE EVENT OF
PUMP STATION FAILURE OR PIPELINE BREAKS:
AND
(3) SLUDGE OR SEPTIC TANKS, TRAILERS, AND OTHER
VEHICLES HAVING AS THEIR SOLE PURPOSE THE
TRANSPORTATION OF LIQUID OR DEWATERED WASTES
FROM THE COLLECTOR POINT (INCLUDING INDIVIDUAL
OR ONSITE SYSTEMS) TO THE TREATMENT FACILITY
OR DISPOSAL SITE.
Mobile equipment necessary’ for the operation of the
overall wastewater treatment facility may also include
vehicles necessary for the daily removal and disposal
of grit. While vehicles used for other purposes
(e.g., sludge tanks or trailers) would normally serve
this purpose, large facilities may have a sufficient
need to justify a separate vehicle to be used solely for
the transportation and disposal of grit. ,Additionally,
for projects which involve the landscraping of sludge
as the method of ultimate sludge disposal, the necessary
952
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