UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 'WASHINGTON. D c. 20450 CONSTRUCTION GRMiTS Program Requirements Memorandum THE ADMINISTRATOR MEMORANDUM FOR Regional Administrators- SUBJECT: Funding of Sewage Collection Systsn Projects I. PURPOSE This memorandum summarizes Agency policy on the award of grants for sewage collection system projects under P.L. 92-500. It sets forth guidance for rigorous review of grant applications to ensure that proposed projects meet the established requirements of the law and regulations. II. DISCUSSION Sewage collection system projects may be grant eligible projects under P.L. 92-500 (the Act). Eligibility is limited, however, by Section 211 of the Act which provides for funding of collection systems only 1) for the replacement or major rehabilitation of an existing collection system or 2) for new collection systems in existing corrnunities. Sewage collection systems are defined in 40 CFR S 35.905-19 as: For the purpose of S 35.925-13, each, and all, of the cotmon lateral sewers, within a publicly-owned treatment system, which are primarily installed to receive wastewaters directly from facilities which convey wastewater from individual structures or from private property, and which include service connection uyii fittings designed for connection with those facilities. The facilities which convey v/aste- water from individual structures or frora private property to the public lateral sewer, or its equivalent, are specifically excluded from tlie definition, with the exception of pumping units, and pressurized lines, for individual structures or groups of structures when such units are cost effective and are owned and maintained by the grantee. ------- 2 The eligibility of sewage collec Lion system projects is further defined in 40 CFR 8 35.925-13 which reads: That, if the project is for, or includes sewage collection system ork, such work (a) is for replac nent or major rehabilitation of an existing sewer systEm pursuant to S 35.927-3(a) and is neces sexy to the total integrity and perforn ance of the waste treatnent .vrks servicing such corrrruinity, or (b) is for a new sewer system in a ccinmunity in existence on October 18, 1972, with sufficient existing or planned capacity to aciequate] y treat such collected sewage. Replacement or major rehabilitation of an existing sewer system may be approved only if cost effective and must result in a sewer system design caDacity equivalent only to that of the existing system plus a reasonable anount for future grci.zth. A ccimiunity, for purposes of this section, would include any area with sub- stantial hu iran habitation on October 18, 1972. No award may be made for a new sewer system in a ccrmiunity in existence on October 18, 1972 unless it is further determined by the Regional dministrator that the bu]k (generally two-thirds) of the flow design capacity through the sewer system will be for waste waters originating fra u the cxxrirainity (habitation) in existence on October 18, 1972. This section of the EPA regulations implements Section• 211 of P.L. 92—50Q. All treatment works funded under the construction grants prc ram must represent the nost cost effective alternative to canply with the requirements of the Act. Treatment works are defined in Section 212 to include sewage collection systems. EPA cost-effectiveness requir ents are found in 40 CFR S 35.925-7 and in 1 \ppendix A to 40 CFR Part 35. A large number of new collection system projects have appeared on FY 1977 State project priority lists. The lists contain both individual collection system projects and collection systems associated with treat- ment plant and interceptor sewer projects. Many of these projects may not meet the eligibility and cost-effectiveness requir vents set forth above. Funding must be denied for all collection system projects which are not grant eligible or not cost-effective. This is important for two reasons. First, the requirements of the regulations must be satisfied. Secondly, the funding of collection system projects not ir eting the ------- 3 eligiblity and cost-effectiveness requirements will corrinit liiaited Federal dollars to projects which provide fewer pollution control benefits than more needed treatment plants and interceptors. Public disclosure of costs is a fundamental prerequisite for all grants projects, including collection systems. Program Requirements MEtorandUEn 76-3, “Presentation of Local Government Costs of Wastewater Treatment Works in Facility Plans,” August 16, 1976, requires that cost infortr’ation be presented at all public hearings held on facility plans after January 2, 1977. HOWCVeI, public hearings were held on many collection system projects prior to this date. Special-measures are necessary to ensure the public is aware of the cost implications of collection systems prior to their approval. The following policy is to be followed in reviewing future grant applications or collection system projects. This policy supplements all existing Agency regulations and policy statements. It does not levy any fundamentally new requirements, but provides guidance for more rigorous review of grant applications to ensure that proposed projects meet the established requirements of the law arid regulations. Ccmpliance with this policy will help to assure that only grant eligible and cost— effective collection system projects . are funded by EPA. III. POLICY EPA policy on the funding of sewage collection systems is as follows: A. Substantial human habitation New collector sewer projects are eligible for funding only in a ccxmiunity in existence on October 18, 1972, with sufficient existing or planned capacity to treat adequately such collected sewage. The Title II regulation states in Section 35.925-13 that a ccmnunity would include any area with substantial human habitation on October 18, 1972. The bulk (generally two—thirds) of the flow design capacity through the sewer system is to be for wastewaters originating fran the habitation. The Agency policy is that closely populated areas with average densities of 1.7 persons per acre (one household for every two acres) or more on October 18, 1972, shall be considered to meet the requirement for “substantial human habitation”. Population density should be evaluated block by block or, where typical city blocks do not exist, by areas of 5 acres or less. The “two—thirds” rule would apply within each area evaluated when making a decision on collector sewer eligibility. Densities of less than one household for every two acres rarely result in serious localized pollution or public health problems fran the use of properly operated on-site systems. These areas should not be considered to have had, on October 18, 1972, substantial habitation warranting collection sewers f ran a pollution control standpoint. ------- 4 B. Cost-Effectiveness New collector sewers must be proven in the facility plan to be necessary arid cost-effective in addition to being eligible under the definition of “substantial human habitation” arid the t -thirds rule. New collector sewers should be funded only sthen the systans in US (e.g. septic tanks or raw discharges fran hanes) for disposal of wastes fran the existing population are creating a public health problEn, Con- taminating groundwater, or violating the point source discharge require- ments of the Act. Specific documantation of the nature and extent of health, groundwater arid discharge prob]. ns ‘mist be provided in the facility plan. Where site characteristics are considered to restrict the use of on-site systens, such characteristics, (e.g. groundwater levels, soil pemt ability, topography, geclogy, etc.) must be documented by soil maps, historical data and other pertinent information. The facility plan must also document the nature, number and location of existing disposal systans (e.g. septic tanks) which are malfunctioning. A ccim inity survey of individual disposal systens is recarrcended for this purpose, and is grant eligible. In &dition, the facility plan must d ronstrate, where population density is less than 10 persons per acre, that alternatives are clearly less cost-effective than new gravity collector sewer construction and centralized treatment. Such alternatives are cited in the previous Administrator’s mei randwn of DecEnber 30, 1976, subject: “Encouraging Less Costly Wastewater Facilities for Small Camiunities” and Mr. Rbett’ s inairrazidum of August 18, 1976 on “Eligibility of Septic Tanks and other Small Treatment Systans”. A draft guidance document acca anied the August 18 maioraridum. The draft policy represents the policy of the ? gency until issued in final form. The alternatives to be evaluated include the following: - measures to improve operation and xna.interiance of existing septic tanks including irore frequent inspections, timely pumpouts, and prohibition of garbage grinders. - new septic tanks — holding tanks and “honey wagons” - various means of upgrading septic tanks, including irounds, alternate leaching fields arid pressure sewars - other systans to serve individual households or a cluster of households. Such systaiis include, for example, wastewater separation, water conservation and recycle syst ns where feasible. ------- 5 The facility plan, iere applicable, must examine alternatives such as limited sewer service for a portion of a comitunity. For example,. septic systems work very well in many small towns except in one isolated. area such as a business district where open space for adequate on-site disposal is riot available. C. Public Disclosure of Costs All projects, including collection systems, on which public hearings were held after January 2, 1977, must comply fully with the requirements of Program Bequirements M&rorandtm 76—3 prior to approval. Agency policy is to ensure public disclosure of the costs of any collection system projects where a public hearing was held on or before January 2, 1977. Such disclosure -shall take the form of a praniriently published notice in a local ne cspaper, and the cost is grant eligible. The Agency shall pay the cost of the notice if necessary to expedite the project. The notice shall include the estimated nonthly charge for operation and maintenance, the estir ated n -onthly debt service charge, the estimated connection charge and the total rnDnthly charge to a typical residential customer for the new collection system being funded and any other assocIated wastewater facilities required. Such associated facilities 3uld include new treatrrent capacity needed to handle the flows from the new collection system. The charges may be only rough estimates, and may be presented as a range of possible costs when major unkri wns exist such as whether or riot substantial parts of the project are grant eligible. IV. LE 1ENTE½TION The States are to be advised of the issuance of th.is policy at once. P ll pending and future grant applications for collection system projects or projects containing collection systems are to be reviewed for compliance with this policy. The requirements of sections Ill-A and 111-C are effective iinr ediately. - - The requireif nts of Section Ill—B are effective irm ediate1y for all projects which have received a step 1 facility planning grant but have not yet received approval of their facility plan. For all other projects, the requirements of section Ill—B are effective irrarediately unless the Regional Administrator determines, from infonnation in the facility plan and other sources, that a project is necessary and cost-effective even though the full documentation required by section Ill-B is not available. In any case, the full requirements of section Ill-B shall apply without exception to all projects being reviewed for funding after SepteirJDer 30, 1977. ------- 6 V. RE’ERENcES A. Sections 201L 211, 212, P.L. 92—500. B. 40 FR 8. 35.905—19, 925—7, 925—13, 2 ppendix B. C. PRM 76-3, “Presentation of Local Government Costs of Waste iater Treatment Works in Facility Plans”, August 16, 1976. D. - M randum to Regional Administrators fran RusseU E. Train, “Encouraging Less Costly Wastewater Facilities For Small Ccxrrnunities”, Deceiiber 30, 19761 E. Ma orandT1n to Regional Adminis 4 ath s fran “Less Costly Treath ent SystE S”, / Costle / ------- |