CLEAN WATER ACT
PENALTY POLICY FOR CIVIL SETTLEMENT NEGOTIATIONS
UNITEL STATES
ENVIRONMENTAL PROTECTION AGENCY
FEB I I l9tb
EFFECTIVE DATE:
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| UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF ENFORCEMENT
ANDCOMPLISSCI
MONITORING
MEMORANDUM
SUBJECT: New Clean Water Act Civil Penalty Policy
FROM: Lawrence J. Jensen (j^m*1 J .^^^
Assistant Administrator for Water
Courtney M. Price \_^OcuJ^
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: General Counsel
Regional Administrators
Regional Counsels
Regional Water Management Division Directors
Attached is the Agency's new Clean Water Act civil penalty
policy to be used by EPA in calculating the penalty that the
Federal government will seek in settlement of judicial actions
brought under Section 309 of the CWA. This policy supersedes
the CWA Civil Penalty Policy issued on July 8, 1980 and repre-
sents the Office of Water's guidance in response to EPA's
Policy on Civil Penalties (GM-21) and A Framework for Statute-
Specific Approaches to Penalty Assessments (GM-22) issued on
February 16, 1984. This policy is effective as of the date of
this memorandum and shall be applied to future enforcement
actions and to pending enforcement actions in which the
government has not transmitted to the defendant a proposed
settlement penalty.
The attached document consists of the following three
parts: (1) the CWA Penalty Policy; (2) the policy "methodology ,
which is a one-page description of each of the steps to be
taken in a penalty calculation, along with one page of footnotes;
and (3) the "worksheet", a proposed model sheet to be used to
record the different numerical components of the final penalty.
This penalty policy is designed to promote a more consistent,
Agency-wide approach to the assessment of civil penalties while
allowing substantial flexibility for individual cases within
certain guidelines. We believe that this penalty policy, when
effectively applied, will promote the goals of increasing
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recovery of economic benefit of non—compliance, providing
substantial deterrence to noncompliance, providing a more fair
and equitable treatment of the regulated community, aid achieving
a more swift resolution of environmental problems and of
enforcement actions. In order to support the goals of this
policy and EPA’S enforcement efforts generally, application of
this policy may result in EPA seeking higher civil penalties
than it has in the past.
This CWA penalty policy tracks the basic concepts and
procedures embodied in the general penalty policy and Framework .
For example, the CWA policy directs the Regions to calculate
the economic benefit of noncompliance, calculate the “gravity”
(or seriousness) component, and then calculate adjustments to
consider ability to pay, litigation factors, and other factors.
This policy includes the following minor deviations from
the general penalty policy and the Framework which we believe,
based upon our past experience with Clean Water Act enforcement,
are reasonable:
(1) The first adjustment factor is “History of Recalci-
trance.” We believe that this factor should only result in an
increase in the proposed penalty amount;
(2) The remaining two adjustment factors (“Ability to
Pay” and “Litigation Considerations”) should only be used to
reduce the proposed penalty;
(3) A proposed section on “mitigation projects” has
been included, although the Department of Justice and the
Agency may make some additional refinements on this issue in
the near future; and
(4) The economic benefit component will not be deleted
merely because the component involves an “insignificant amount.”
Substantial thanks are due to the Clean Water Act Penalty
Policy Work Group for an excellent job in developing an initial
draft, collecting comments, carefully considering all comments,
and reconciling and balancing often disparate viewpoints
regarding penalty assessment. Thanks also to staff in the
Regional Offices and in a number of Headquarters offices and
the Department of Justice for considerable assistance in
providing review and comment on drafts.
During the upcoming months, we will carefully analyze
and evaluate the application and effectiveness of this penalty
policy. After that, we will issue appropriate refinements to
the policy.
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In the near future, we will publish the policy in the
Federal Register . In addition, we will soon distribute some
example calculations and hold training workshops to
provide further guidance on the application of this policy.
If you have any questions or comments on this policy,
please contact Anne Lassiter, at 475—8307, or Jack Winder, at
382—2879.
Attachment
cc: Clean Water Act Penalty Policy Work Group
Associate Enforcement Counsel for Water
OECM Office Directors
OW Office Directors
Department of Justice, Environmental Enforcement
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CLEAN WATER ACT
PENALTY POLICY FOR CIVIL SETTLEMENT NEGOTIATIONS
UNITEL STATES
ENVIRONMENTAL PROTECTION AGENCY -
FEB I I i9C
EFFECTIVE DATE: __________
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Clean Water Act
Penalty Policy for Civil Settlement Negotiations
I. Introduction
Under Section 309 of the Clean Water Act (CWA), the
Administrator is authorized to bring civil actions to enforce
certain requirements of the Act and related regulations. In
such actions, the Administrator may seek a civil penalty not to
exceed $10,000 per day of such violation. The Agency will
vigorously pursue penalty assessments in judicial actions to
ensure deterrence and to recover appropriate penalties.
In order to guide settlement negotiations on the penalty
issue in actions under Section 309 of the CWA and Section 113
of the Clean Air Act for failure to meet statutory deadlines,
the Agency issued a Civil Penalty Policy on July 8, 1980.
During the next few years, the Agency identified the following
four goals for improving its civil penalty assesgment practices:
(1) penalties should, at a minimum, recover the economic benefit
of noncompliance; (2) penalties should be large enough to deter
noncompliance; (3) penalties should be more consistent throughout
the country in an effort to provide fair and equitable treatment
to the regulated community; and (4) there should be a logical
basis for the calculation of civil penalties for all types of
violations, industrial and municipal, to promote a more swift
resolution of environmental problems and of enforcement actions.
In an effort to address these and related penalty Issues,
on February 16, 1984, the EPA Office of Enforcement and Com-
pliance Monitoring (OECM) issued the following two civil penalty
guidance documents: The Policy on Civil Penalties (* GM—2l),
and the companion document entitled A Framework for Statute—
Specific Approaches to Penalty Assessments , (* GM—22), as
general guidance for settlements for violations of all statutes
which EPA enforces. Although the 1984 penalty policy documents
do provide basic conceptual guidance for penalty calculations,
they were designed to be implemented further through medium-
specific penalty guidance. The hlPolicyw document states in
part, as follows:
Each EPA program office, in a joint effort with
(OECMJ, will revise existing policies, or write new
policies as needed. These policies will guide the
assessment of penalties under each statute in a manner
consistent with this document and, to the extent
reasonable, the accompanying Framework. ( Polici ,
at 1, 2]
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II. Purpose
This penalty policy and attached methodology is the water—
specific penalty guidance for certain CWA violations. This
policy follows the major principles set out in the general
penalty policy documents and also reflects considerations
unique to CWA enforcement.
As the Framework directs, this CWA Penalty Policy provides
“a system for quantifying the gravity of violations of the laws
and regulations • , . .u Moreover, this policy provides a logical
structure and a number of different ways (number of violations,
duration, etc.) to quantify the severity of a defendant’s
noncompliance with the CWA. The policy also provides a number
of ranges of weighting factors in order to allow the Regions
flexibility in exercising their experienced judgment.
The calculated penalty figure should represent a reasonable
and defensible penalty which the Agency believes it can and
should obtain 4 .n a settlement in compromise of its claim for the
statutory maximum penalty. This figure, and a discussion of
the basis of calculation, must be included in all litigation
reports. After referral, as more information becomes available,
the penalty calculation should be modified to reflect relevant,
new information. In those cases which proceed to trial, the
government should seek a penalty higher than that for which
the government was willing to settle, reflecting considerations
such as continuing noncompliance arid the extra burden plac.ed
on the government by protracted litigation.
III. Applicability
This penalty policy applies to Federal CWA civil judicial
enforcement actions commenced after the effective date of this
policy and to pending judicial enforcement cases in which the
government has not transmitted to the defendant an approved oral
or written proposed penalty. The policy applies to civil
penalties sought under CWA Section 309 for violations including
the following: violations of HPDES permits by industrial and
municipal facilities; discharges without an NPDES permit;
violations of general and categorical pretreatment requirements
and local limits; monitoring and reporting violations; viola-
tions of Section 405 sludge use or disposal requirements; eic.
The policy also applies to violations of Section 308 informatiOn
requests and to violations of Section 309 administrative orders.
This policy shall not be applied to CWA civil enforcement
actions brought exclusively under §311 (“hazardous substance
spills”) or for violations related to requirements in §404
(disposal of “dredged or fill” material). The CWA and imple—
meriting regulations provide unique enforcement procedures and
penalty provisions for §31]. and §404 violations which are
currently being followed in pursuing these types of cases.
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IV. Penalty Calculation Methodology
The initial calculation shall be an estimate of the
statutory maximum penalty in order, for comparison purposes,
to determine the potential maximum penalty liability of the
defendant. The penalty which the government seeks in settle-
ment may not exceed this statutory maximum amount.
The Regional office shall then calculate a civil penalty
figure for settlement purposes based upon the following
formula: “Civil Penalty = (Economic Benefit Component) + (Gravity
Component) +1— (Adjustments).”
The civil penalty settlement calculation involves the
following four consecutive steps: (1) calculate the “Economic
Benefit” of noncompliance; (2) calculate the monthly and total
“Gravity Components”; (3) calculate the “Adjustment Factors”;
and (4) calculate the total penalty.
(1) Economic Benefit . Consistent with the Agency—wide
“Policy and Framework”, every reasonable effort shall be made
to calculate and recover the economic benefit of noncompliance.
Note that the economic benefit should be calculated from the
start of noncompliance up to the point when the facility was or
will be in compliance. In a limited number of cases, based
upon a defendant’s inability to pay or “litigation practicalities”,
application of the “adjustment factors” may justify recovery of
less than the calculated economic benefit. The economic benefit
component shall be calculated by using the EPA computer program
—— “BEN.” This program produces an estimate of the economic
benefit of delayed compliance, which is calculated to be the
sum of the net present value of: delayed capital investment,
one—time, non—depreciable expenditures, and avoided operating
and maintenance expenses. (See “BEN Users Manual,” OPPE/OECM,
January 1985.)
(2) Gravity Component . The gravity calculation methodology
is based upon a logical scheme and criteria which relate the
gravity of the violations to the Clean Water Act and its regula-
tory scheme. Every reasonable effort should be made to calculate
and recover a “gravity component” in addition to the economic
benefit component. As the penalty Policy states:
The removal of the economic benefit of
noncompliance only places the violator in
the same position as he would have been
if compliance had been achieved on time.
Both deterrence and fundamental fairness
require that the penalty include an
additional amount to ensure that the
violator is economically worse off than
if (he) had obeyed the law. ( Policy , at 31
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The following four gravity weighting factors should be
considered for each month during which there was one or more
violations and assigned valu€s according to the attached “CWA
Penalty Policy Calculation Methodology”:
“A” —— “Significance of Violation.” This factor is to
reflect the degree of the exceedance of the most significant
effluent limitation violation each month, and is weighted more
heavily for exceedances of toxic effluent limitations. The
attached outline contains a table indicating the range of
“significance of violation” factor values for exceedances of
effluent limitations (% over permit effluent limitation).
Note that all exceedances, and all other violations of permit
conditions in a given month, should be accounted for under
gravity weighting factor “C” — “Number of Violations.”
“B” —— “Health and Environmental Harm.” A value between
1 and a value that results in the statutory maximum penalty may
be applied to each month in which one or more violations present
actual or potential harm to human health or to the environment.
“C” —— “Number of Violations.” This factor allows
consideration of the total number of violations each month,
including all violations of permit effluent limitations,
monitoring and reporting requirements, and standard and special
conditions. It is important to account for each violation in
assessing the significance of a defendant’s violations, and
this factor allows for flexibility in assessing penalties for
multiple violations. Violation of a monthly average effluent
limitation should be counted as 30 violations, a weekly average
effluent limitation violation should be counted as 7 violations,
violations of different parameters at the same outfall are to
be counted separately, and violations at different outfalls are
to be counted separately. The attached outline contains a
range of weighting factor values between 0 and 5 to account for
the total number of violations. In addition, this “number of’
violations” factor may be weighted more heavily to account for
serious or significant violations other than the most signifi-
cant effluent limit violation which was accounted for under
factor “A.’
—— “Duration of Noncompliance.” This factor allows
consideration of continuing, long—term violations of an efflueit
limitation or other permit condition, and for extended periods
of discharge without a permit. The attached outline contains
a range of values between 0 and 5 for the “Duration of Noncom-
pliance” factor which should be applied to each month of
continuing violation of the same requirement. Generally, “long—
term” violations are those which continue for three or more
consecutive months.
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The gravity component should be calculated from the date
on which the violations at issue began up to the date when the
violations ceased or the date of anticipated filing of the
enforcement action. The monthly gravity component is the sum
of the gravity weighting factors, plus one, multiplied by
$1,000. The total gravity component is the sum of all monthly
gravity components.
(3) Adjustment Factors . After the economic benefit
component is added to the sum of all the monthly gravity
components,” this total may be modified by the application of
“adjustment factors.” The consideration of “history of recalci—
trance may only result in an increased penalty. In addition,
in some cases and when justified in writing, the following two
factors may be applied for a penalty reduction: ability to pay
and litigation considerations.
(A) History of recalcitrance (to increase penalty).
The “recalcitrance” factor will allow for higher penalties for
bad faith, unjustified delay in preventing, correcting or
mitigating violations, violations of prior administrative orders
or consent decrees, failure to provide timely and full informa-
tion, etc. This factor should also be used to account for the
relationship of the violations to the regulatory scheme, i.e.
the significance of the recalcitrance. For example, higher
values for this factor may be used to account for municipal
violations which continue beyond July 1, 1988. This factor is
to be applied one time, by multiplying a percentage (0 to 150%)
times the sum of the “total gravity component” plus the economic
benefit calculation and then adding this figure to the benefit
and gravity total. The resulting figure is the “preliminary
total,” which shall not exceed the statutory maximum. The
application of the recalcitrance factor to the total figure
allows for a more logical relationship between recalcitrance
and the actual significance of the violations. The recalci-
trance factor may also be increased during negotiations if
defendant continues to be recalcitrant with the remedy or with
settlement efforts.
(B) Ability to pay (to decrease penalty). The
Regional office should evaluate the ability of the defendant to
pay the proposed civil penalty and to pay for the proposed
injunctive relief. The gov . rnment should carefully analyze
this factor where it appears that the defendant can convincingly
demonstrate an inability to pay a given penalty. The defendant
has the principal burden of establishing a claim of inability
to pay. The government typically should seek to settle for as
high an amount which the government believes defendant can
afford without seriously jeopardizing defendant’s ability to
continue operations and still achieve compliance, unless the
defendant’s behavior has been exceptionally culpable, recalci—
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trant, or threatening to human health or the environment. The
government should carefully assess the accuracy of the actual
or anticipated claim. Evaluation by an outside expert consultant
may be necessary to rebut the inability to pay claim. If
securing an outside expert is impractical or impossible, the
Region shall make its best estimate of ability to pay.
Many factors often have a significant impact on ability to
pay and may justify a reduction of a penalty. For example, the
Region may consider high user fees, high percentage of local
funds spent on a POTW, low bond rating, low per capita income,
low total of population served by the POTW, bankruptcy, etc.,
in evaluating an “inability to pay” claim.
(C) Litigation considerations (to decrease penalty).
The government should evaluate every penalty with a view toward
the potential for protracted litigation and attempt to ascertain
the maximum civil penalty the court is likely to award if the
case proceeds to trial. The Region should take into account
the inherent strength of the case, considering for example, the
probability of proving questionable violations, the probability
of acceptance of an untested legal construction, the potential
effectiveness of the government’s witnesses, and the potential
strength of the defendant’s equitable defenses. (Also see
GM—22, pp. 12 — 13; discussion of “compelling public concerns”.)
Examples of equitable considerations which may lead to
adjustment of the penalty amount include the following: whether
the defendant reasonably, conclusively, and detrimentally
relied on EPA’S or state or local agency’s representations or
actions; whether the defendant has requested modification of
its final effluent limits (related to, for example, pending
§301(h) decisions, pending industrial variance decisions, or
new wasteload allocations); whether the defendant’s violations
are clearly attributable to accepting new discharges from nearby,
noncomplying jurisdictions; and whether the defendant’s compliance
has been delayed in an unusual or unreasonable manner by other
Federal requirements through no fault of the defendant.
These equitable considerations will justify mitigation only
to the extent that they directly caused or contributed to the
defendant’s violations. The government may reduce the amount
of the civil penalty it will accept at settlement to reflect
these considerations where the facts demonstrate a substantial
likelihood that the government will not achieve a higher penalty
at trial.
V. Mitigation Projects
In the past, in a few cases the Agency has accepted consent
decree provisions which allow the reduction of a civil penalty
assessment in recognition of the defendant’s undertaking an
environmentally beneficial “mitigation project.”
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The following criteria are provided to guide the use of
mitigation projects in settlements.
(1) The activity must be initiated in addition to all
regulatory compliance obligations.
The project may not be an activity which is otherwise
required by law. The project may not be a substitute for full
compliance — — it must be designed to provide an environmental
benefit beyond the benefits of full compliance.-
(2) The activity is most likely to be an acceptable
basis for mitigating penalties if it closely addresses the
environmental effects of the defendant’s violation.
Preferably, the project will address the risk or harm
caused by the violations at issue. In general, qualifying
activities must provide a discernible response to the percep-
tible risk or harm caused by defendant’s violations which are
the focus of the government’s enforcement action.
(3) The defendant’s cost of undertaking the activity,
taking into account the tax benefits that accrue, must be
commensurate with the degree of mitigation.
In order to attain the deterrent objectives of the civil
penalty policy, the amount of the penalty mitigation must
reflect the actual cost to the defendant. With consideration
of tax benefits, the actual cost of the project may exceed
the value of the mitigation.
(4) The activity must demonstrate a good—faith commitment
to statutory compliance.
One test of good faith is the degree to which the defendant
takes the initiative to identify and commence specific, potential
mitigation projects. In addition, the project must be primarily
designed to benefit the environment rather than to benefit the
defendant.
-(5) Mitigation based on the defendant’s activity must not
detract significantly from the general deterrent effect of the
settlement as a whole.
The government should continue to consider mitigation
projects as the exception rather than the rule. Efforts should
be made to eliminate any potential perception by the regulated
community that the government lacks the resolve to impose
significant penalties for substantial violations. The government
should seek penalties in conjunction with mitigation actLvitieS
which deter both the specific defendant and also the entire
regulated community. Accordingly, every settlement should
include a substantial monetary penalty component.
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(6) Judicially—enforceable consent decrees must meet the
statutory and public interest criteria for consent decrees and
cannot contain provisions which would be beyond the power of
the court to order.
A proposed consent decree should not include provisions
which would be beyond the power of the court to order under
the particular statute which had been violated. Additional
guidance on the appropriate scope of relief might be found in
the statute, the legislative history or the implementing
regulations.
The Agency should exercise case—by—case judgment in deciding
whether to accept a mitigation project based upon the above
criteria and, in addition, based upon consideration of the
difficulty of monitoring the implementation of the proposed
project in light of the anticipated benefits of the project.
VI. Intent of Policy; and Information Requests for
Penalty Calculations
The policies and procedures set out in this document are
Intended solely for the guidance of government personnel. They
are not intended, and cannot be relied upon, to create any rights,
substantive or procedural, enforceable by any party in litigation
with the United States. The Agency reserves the right to act
at variance with these policies and procedures and to change
them at any time without public notice. When the Regions
deviate from this policy they shall include in the litigation
report a brief description of the nature of and justification
for the deviation. In addition, any penalty calculations under
this policy made in anticipation of litigation are likely to be
exempt from disclosure under the Freedom of Information Act.
As a matter of public interest, the Agency may release this
information in some cases.
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WATER CIVIL PENALTY POLICY CALCULATION METHODOLOGY: FOOTNOTES
1. In general, the Settlement Penalty amount shall be at least the
Economic Benefit of Noncompliance plus a gravity component.
2. The maximum Settlement Penalty shall not exceed the amount
provided by Section 309(d), $10,000 per day of such violation.
3. Calculate all economic benefits using BEN. There is no minimum
amount triggering the use of BEN.
4. Economic benefit is to be calculated as the estimated savings
accrued to the facility; i.e., it is to be based upon the total
amount which should have been spent by the facility. (All
capital and expense costs, direct and indirect, are to be
considered.)
5. The Total Gravity Component equals the sum of each Monthly
Gravity Component for a month in which a violation has occurred.
6. The Significance of Violation is assigned a factor based on
the percent by which the pollutant exceeds the monthly or
7—day average or daily maximum permit limitation and whether
the pollutant is classified as toxic, non—toxic or conventional.
7. Where evidence of actual or potential harm to human health
exists, a factor from “lOu to a value which results in the
statutory maximum penalty should be assessed. Where the
identified impact relates only to the aquatic environment, a
factor from 1” to 10” should be used.
8. The Region has the flexibility to assign a high penalty factor
where an excessive number of violations occur in any month
(effluent limit, reporting, schedule, unauthorized discharge,
bypass, etc.).
9. The Duration of Noncompliance factor allows the Region to
increase the monthly gravity component for continuing, long—
term violations of the same parameter(s) or requirement(s).
Generally, a Nlong_termN violation is one which continues for
three or more consecutive months.
10. A factor ranging from NON (good compliance record, cooperation
in remedying the violation) to 150 percent of the total of the
Economic Benefit and Gravity Component may be added based upon
the history of recalcitrance exhibited by the violator.
11. In addition, the penalty should be reduced by any amount which
defendant paid as a penalty to a State or local agency on the
same violations.
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Clean Water Act Penalty Policy: Calculation Methodology
SETTLEMENT PENALTY 1 ’ 2 = (ECONOMIC BENEFIT) + (GRAVITY COMPONENT)
± (ADJUSTMENTS)
Step 1: Calculate the Statutory P aximum Penalty
Step 2: Calculate the Economic Benefit Using BEN 3 4
Step 3: Calculate the Total Gravity Component 5
— Monthly Gravity Component = ($1,000) x (1+A+B+C+D)
— Total = Sum of Monthly Gravity Components
GRAVITY CRITERIA ADDITIVE FACTORS
A. Significance of Violation 6
% Exceedence % Exceedence % Exceedence Conventional/
Monthly Avg. 7-Day Avg. Daily Max. Toxic Non—Toxic
0—20 0—30 0—50 0—3 0—2
21—40 31—60 51—100 1—4 1—3
41—100 61—150 101—200 3—7 2—5
101—300 151—450 201—600 5—15 3—6
301 — > 451 — > 601 — > 10 — 20 5 — 15
B. Health and Environmental Harm 7
Ci) Impact on Human Health; or 10 — Stat. Ma
(ii) Impact on Aquatic Environment 1 — 10
C. Number of violations 8 0 — 5
D. Duration of Noncompliance 9 0 — S
Step 4: Include Adjustment Factors
A. History of Recalcitrance 1 ° (Addition)
— Penalty may be increased by up to 150 percent based upon the past
and present iscalcitrance of the defendant.
B. Ability to Pay (Subtraction)
— Penalty may be adjusted downward to represent the defendant’s
ability tO pay.
C. Litigation Considerations (Subtraction)
— Penalty may be adjusted downward to reflect the maximum amount
which the court might assess if the case proceeds to trial.
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CWA Penalty Summary Worksheet
(1) No. of Violations =
x $10,000 stat. max. $ __________
(2) Economic Benefit (“BEN”)
(period covered!
months) _____ $
(3) Total of Monthly Gravity
Components $ —
(4) Benefit + Gravity TOTAL $
(5) Recalcitrance Factor _____
(0—150%) x Total (Line 4) = $ __________
(6) Preliminary TOTAL (Line 4 + Line 5) $
ADJUSTMENTS
(7) Litigation Considerations
(Amount of reduction) $ ___________
(8) Ability to Pay
(Amount of reduction) $ ___________
(9) SETTLEMENT PENALTY TOTAL $
Name and Location
of Facility
Date of Calculation
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CWA Penalty Summary Worksheet
(1) No. of Violations __________
$10,000 stat. max. $ __________
(2) Economic Benefit (‘BEN)
(period covered/
months) _____ $
(3) Total of Monthly Gravity
Components $ __________
(4) Benefit + Gravity TOTAL $
(5) Recalcitrance Factor _____
(0—150%) x Total (Line 4) — $ __________
(6) Preliminary TOTAL (Line 4 + Line 5) $
AD3USTMENTS
(7) Litigation Considerations
(Amount of reduction) $ ___________
(8) Ability tO Pay
(Amount of reduction) $ ___________
(9) SETTLEMENT PENALTY TOTAL $
Name and Location
of Facility
Date of Calculation
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Draft Analysis of Hypothetical Violations and Proposed CWA
Penalty Policy: Large Municipal
I. BackgroUfl
Large municipal facility (130 mgd) providing secondary treatment
to only 20% of its average flow. Facility is in violation of final
effluent limitations contained in its NPDES permit since issuance
in 1981. Facility applied for a Section 301(i) extension by post-
card which has been acknowledged by the Region. Facility receives
60% of its flow from industrial sources and has had a permit
modification requiring the development and submission of an approv—
able pretreatment program by July 1, 1983. To date, the permittee
has not submitted an approvable pretreatment program, although it
has provided acceptable portions of a program including the legal
authority, administrative procedures and industrial user survey.
Permittee has not been very cooperative in its dealings with the
Agency and most reports are only submitted after repeated phone
calls and letters.
PERMIT REQUIREMENTS
Interim Limits August 8, 1979 to July 1, 1980
Parameter Concentration
30 day Average 7 day Maximum
BOD 5 230 345
TSS 200 320
TKN 10 13.4
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Final Limits June 15, 1981 to June 14, 1986
(effective on
issuance)
Parameter Concentration (mg/i)
30 day Average 7 day Maximum
BOD 5 30 45
TSS 30 45
TKN (Summer Only) 10 18
Fecal Coliform (Summer) 200 400
(Winter) 1000 2000
AO issued on June 16, 1981, finding that permittee was not yet
in compliance with its final permit limitations and established
interim effluent limitations identical to those previously in place
for the period August 8, 1979 to July 1, 1980. This AO provided
interim limits from its date of issuance to July 1, 1985 and required
submission of a CCP by December 31, 1983 and subsequent compliance
with a construction schedule. CCP was submitted on January 29, 1984,
and was found acceptable by the Region.
II. Violation Summary
1. Effluent Limitations
Plant DMR data indicate that the plant is in compliance with
its interin effluent limits with the exception of TKN for which the
monthly average limit of 10 mg/i was violated as follows:
Monthly
Year/Month Average TKN % Exceedance
1981/July—Dec.
l98 2 /Jan. —Dec.
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Monthly
YearjMonth Average TKN % Exceedance
1983/Jan. 13.2 32%
Feb. 24 140%
March 31 210%
April 20 100%
May 10.3 3%
June 11.8 18%
July 14.7 47%
Aug. 12.4 24%
Sept. 17.6 76%
Oct.—Dec. — —
1984/Jan.— June — —
July 15.5 55%
Aug. 11.6 16%
Sept .—Dec. — —
19 85/Jan. —Feb.
2. O&M Violations
Diagnostic inspection conducted in August 1983 revealed that
the permittee has failed to keep and maintain Its sludge processing
equipment fully operational, thereby reducing its sludge handling
capacity and the effectiveness of its secondary treatment units.
However, permittee has not violated its interim limits except as
noted previously.
III. Penalty Calculations
Step 1. Economic Benefit
BEN 84 found an economic benefit for not running solids handling
equipment from November, 1982 to February, 1985 of $l3 ,000/yr. x
2 1/4 yrs $292,500 .
The economic benefit associated with the failure to submit a
approvable pretreatment program from July 1, 1983 through
February 28, 1985 is calculated as follows:
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—4—
Large POTW (130 mgd) with 60% industrial flow and 150 lUs.
Program development cost = $250,000. Program is 37% complete.
a) Economic Benefit = ($250,000)(.13 interest rate)(.37
complete) = $12,025
b) Avoided Implementation Cost = (Annual implementation cost)
(% of total submitted)(time in noncompliance)
= ($100,000)(.41)(l.66)
= $68,335
Total Pretreatment Economic Benefit = $80,360
Step 2: Gravity Component Calculation
A B C D (Total + 1) x $1,000
1983
January 0 0 0 1,000
February 2 0 0 3,000
March 5 0 0 6,000
April 5 0 0 6,000
May 5 0 0 6,000
June 5 0 0 6,000
July 5 1 1 8,000
August 5 1 1 8,000
September 5 1 1 8,000
October 5 0 1 7,000
November 5 0 1 7,000
December 5 0 1 7,000
Sub Total $73,000
1984
January 2 0 2 5,000
February 2 0 2 5,000
March 2 0 2 5,000
April 2 0 2 5,000
May 2 0 2 5,000
June 2 0 2 5,000
July 2 1 2 6,000
August 5 1 2 9,000
September 2 0 2 5,000
October 2 0 2 5,000
November 2 0 2 5,000
December 2 0 2 5,000
Sub Total $64,000
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—5—
A B C D (Total + 3) x $1,000
1985
January 2 0 3 6,000
February 2 0 3 6,000
Sub Total $12,000
Gravity Component Total $149,000
Recalcitrance factor (E 30% of Gravity Component
Permittee has consistently missed deadlines for submission of
reports to the Agency and the Region believes that their past
history warrants a recaicitraice add on factor of 30%.
Settlement Penalty = Economic Benefit $372,860
+ Gravity 149,000
+ Recalcitrance 44,700
Subtotal 566,560
— Adjustment 137,000
429,560
* Municipality contends that review comments by State led them to
believe that their pretreatment program was acceptable as submitted
and they had no idea Region would not accept their submission.
Correspondence in file indicates some basis for this assertion.
The Region therefore believes that the likelihood of collecting
the full penalty is questionable because of the strength of the
defendant’s equitable defense. The penalty has been adjusted to
reflect an amount that the Court is likely to award based on
similar cases.
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