AN EVALUATION OF THE
DELEGATED CONSTRUCTION
GRANTS PROGRAM
IN THE STATE OF MONTANA
Prepared for
THE ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF WATER PROGRAM OPERATIONS
Larry Walker Associates
October 1980

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373
AN EVALUATION OF THE
DELEGATED CONSTRUCTION
GRANTS PROGRAM
IN THE STATE OF MONTANA
Prepared for
THE ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF WATER PROGRAM OPERATIONS
Larry Walker Associates
October 1980

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TABLE OF CONTENTS
Page
INTRODUCTION 		1
STATUS OF DELEGATION 		2
DESCRIPTION OF THE STATE'S PROGRAM 		3
Organization 		3
Resources	11
Management	13
Grants Processing Procedures 		15
Processing Times for State Reviews 		21
ASSESSMENT OF THE STATE1S PERFORMANCE	21
Organizational Structure and Resources 		21
Management	25
Grants Processing Procedures 		32
Quality of State Reviews 		36
Timeliness of State Reviews 		38
Overall State Performance 		40

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AN EVALUATION OF THE
DELEGATED CONSTRUCTION GRANTS PROGRAM
IN THE STATE OF MONTANA
INTRODUCTION
This evaluation was conducted for EPA's Office of Water Program Opera-
tions as part of a nationwide assessment of the delegated construction
grants program. Evaluations, in conjunction with on-site reviews, were
made of each of the ten EPA regional offices and of one delegated state
within each region. The purposes of the evaluations were:
1)	To determine the status of delegation in each state and region
2)	To evaluate the performance of the delegated states
3)	To evaluate the performance of the EPA regional offices under
delegati on
4)	To identify any problems or needs developing under delegation.
After the on-site evaluations were completed, a national report was
prepared summarizing the findings of the individual evaluations, discussing
the problems and needs identified, and making recommendations as to how
these problems and needs should be dealt with.
This particular report represents the results of an on-site evaluation
of the State of Montana's administration of the delegated construction
grants program. An accompanying report discusses the findings of the on-site
evaluation of EPA Region VIII 's operation under delegation.
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The contractor spent two days in the Montana State Office's
(July 16 and 17) interviewing the management staff involved in the
grants program. The following individuals were interviewed:
Joe Steiner	Section Head, Construction Grants and Training
Section, Water Quality Bureau
Mark Weston	Sanitary Engineer, Construction Grants and
Training Section, Water Quality Bureau
Scott Anderson Sanitary Engineer, Construction Grants and
Training Section, Water Quality Bureau
STATUS OF DELEGATION
The State of Montana entered into a delegation agreement with EPA
Region VIII on July 9, 1979. The agreement called for the gradual
assumption of authority by the state of some eighteen tasks over a
two year period.
Montana, as of the date of this evaluation, had assumed authority
for ten of the eighteen tasks, as indicated in Table 1. Five of the
remaining non-delegated tasks will be assumed by the state by approximately
September 1980 when the state and Region VIII enter into a revised dele-
gation agreement. Subsequent to that time, only three tasks will remain
undelegated; user charge/ICR systems, bid document review, and construc-
tion inspections. The latter two functions will continue to be admin-
istered by the Corps of Engineers until fiscal year 1982, when the state
expects to take over those activities. Upon entering into the revised
delegation agreement in about September 1980, the state will begin a
one year training period relative to the user charge/ICR systems review.
Subsequent to that training period the state will assume full authority
for this function.
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Table 1
STATUS OF DELEGABLE FUNCTIONS
Function3	Status
D.
Preapplication Conferences
Delegated


E.
Step 1 Applications
Delegated


F.
Step 2 Applications
Delegated


G •
Step 3 Appl ications
Delegated


H.
Facility PIans
Delegated


I.
Change Orders
Delegated


J.
User Charge/ICR Systems
Projected
for
September 1981
K.
Plans and Specifications
Delegated


L.
Payment Requests
Projected
for
September 1980
M.
0 & M Manuals
Delegated


N.
Plans of Operation
Delegated


0.
Site Title Opinions
Projected
for
September 1980
P.
Bid Documents
Projected
for
Fi seal Year 1982
Q.
Preconstruction Conferences
Projected
for
September 1980
P.
Construction Inspections
Projected
for
Fi seal Year 1982
s.
Records and Files
Projected
for
September 1980
T.
Public Participation
Delegated


U.
Preparation of Federal Grant Offers
Projected
for
September 1980
a The Delegation Agreements contained 3 Appendices (A, R and C) which
did not relate to delegated functions.
A revised Delegation Agreement, currently in preparation, will
identify three additional functions, all to be delegated in September
of 1980 when the revised agreement is signed:
Infiltration/Inflow
Operability Inspections
Step 4 Applications
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Within several months then, Montana will be administering all
but three of the delegable functions, two of which have been tradi-
tionally administered by the Corps of Engineers. It will be fiscal year
1982 before the state takes over administration of all delegable
activities associated with the construction grants program.
DESCRIPTION OF THE STATE'S PROGRAM
Organi zation
Within the State of Montana, the construction grants program is
administered by the Environmental Science Division of the State Depart-
ment of Health and Environmental Sciences. The organizational structure
for the department is shown in Figure 1. Within the Environmental
Sciences Division it is the Construction Grants and Training Section
located within the Water Quality Bureau that has prime responsiblity
for administration of the construction grants program. The organi-
zational structure of the Environmental Sciences Division is shown
in Figure 2, the organizational structure of the Water Quality
Bureau is shown in Figure 3 and the organizational structure of
the Construction Grants and Training Section is shown in Figure 4.
As can be seen from Figure 4, the Construction Grants and Training
Section is not further subdivided into organizational units. The pri-
mary reason for this is that only eleven employees are located in
the section and it would be difficult, given the way the section
operates, to further subdivide it organizationally. The section handles
almost all of the activities associated with administration of the program.
These activities include development of the biennial needs survey,
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Figure 1
ORGANIZATIONAL STPUCTURE - DEPARTMENT OF HFALTH AND ENVIRONMENTAL SCIENCES
I
on
i

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Figure 2
ORGANIZATIONAL STRUCTURE - ENVIRONMENTAL SCIENCES DIVISION

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Figure 3
ORGANIZATIONAL STRUCTURE - HATER QUALITY BUREAU

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Figure 4
ORGANIZATION/RESOURCES - CONSTRUCTION GRANTS AMD TRAINING SECTION
Section
Chief


Sanitary Engineer
Sanitary Engineer
Sanitary Engineer
Sanitary Engineer
Environ. Specialist
Training Officer*
Training Officer*
Admin. Assistant
CI erk
CI erk
75% of one Training Officer position is funded by the construction
grants program (i.e. Section 205(g) funds).
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the priority list, the processing of grant applications and related
documents, and all of the activities associated with the construction
phase of grant projects except those activities currently administered
by the Corps of Engineers. In addition the section is responsible
for operator certification, operator training, and the performance
of annual operation and maintenance inspections.
While the Construction Grants and Training Section has the
bulk of the responsibility for administration of the construction
grants program, several of the other sections within the Water
Quality Bureau also participate in program administration.
The Waste Discharge Permits Section provides assistance to
the Construction Grants and Training Section upon request where
it is desirable to have updated waste discharge requirements during
the facilities planning process. The Water Quality Management
Section provides tv/enty-five percent of one person's time to the
Constuction Grants and Training Section for the purpose of reviewing
public participation programs developed by grantees and assisting
grantees and the section in public participation. In addition the
Water Quality Management Section, upon request, will provide special
assistence to the Construction Grants and Training Section, such
as in the development of waste load allocations where necessary.
Finally the two branch offices participate in administration of
the program in an indirect way. Often personnel from the branch
offices will attend pre-construction conference's in their re-
spective areas, they will sometimes attend interim construction
inspections and pre-application conference's, and, more rarely,
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they will review facilities plans for certain special aspects when
requested by the Construction Grants and Training Section.
Within the Construction Grants and Training Section, the four sani-
tary engineers are responsible for almost all aspects of processing
individual construction grant projects, from initial placement on the
priority list through to completion of construction. These individuals
operate in parallel fashion and are each assigned construction grants
projects to process, primarily on a geograhical basis. The sanitary
engineers are responsible for reviewing all aspects of the construction
grants project from start to finish.
The Environmental Specialist also has a limited number of con-
struction grants projects to process and, in addition, serves as a
substitute for the sanitary engineers when they are on vaction or
when a vacancy exists. The environmental specialists also assists the
section manager with certain programantic activities such as development
of the needs survey, and the preparation of procedures manuals.
The two training officers are responsible for the review of oper-
ation and maintenance manuals, plans of operation, and start up programs,
and for the performance of operation and maintenance inspections. In
addition they perform certain non-construction grant related activities.
These include administering an operator training program, administering
an operator certification program for both sewage treatment and
water treatment operators, and providing assistance to treatment plant
operators with operational problems.
The administrative assistant is responsible for processing interim pay-
ments, project tracking, reviewing the federal register for items of
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significance relative to the construction grants programs, and various
other administrative activities. One of the two clerks is primarily
a typist and the other, while also a typist, is responsible for prepara-
tion of the federal grant offers.
Resources
The State of Montana has a staff of 11.5 persons involved in
administering the delegated construction grants program. This is
approximately double what it was when the delegation agreement was
signed. All 11.5 positions are currently filled, with the exception
of one clerk position which will be filled when the state takes
over preparation of the federal grant offers. Of the 11.5 positions
associated with the construction grants program, 9.75 of these are
located in the Construction Grants and Training Section. Within
the section one training officer position and 25% of the other
training officer position are not funded by the construction grants
program. This is because the activities of the training officers
also involve certification and training of water supply operators
and operational assistance, neither of which is considered fundable
under Section 205(g).
Outside of the Construction Grants and Training Section, 25%
of the public information officer's position within the Water Quality
Management Bureau is funded by the construction grants program as
is one half of a position within the State Department of Community
Affairs. The half position within the Department of Community
Affairs is for the purpose of providing demographic review assistance
relative to facilities planning. The department developed the state-
wide projections used in the section 208 plans and now provides
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assistance to the Construction Grants and Training Section when pro-
posed population projections deviate from the Section 208 projections.
Finally one man year of effort is funded under contract to the League
of Cities and Towns. The Construction Grants and Training Section has
contracted with the league for one full time position to provide assist-
ance to small communities. This person helps small communities select
qualified engineers and assists them in reviewing engineering contracts.
He also helps communities develop public participation programs and assists
them in better understanding the grant program requirements and
procedures.
The section anticipates that the 11.5 positions currently employed
will be adequate to administer all delegable functions associated with
the construction grants program, even though several of those functions
are not yet delegated and will have to be absorbed by existing staff.
The most significant function in terms of manpower not currently per-
formed by the state staff is conduct of interim construction inspections.
However, state personnel generally attend pre-construction conferences,
interim construction inspections, and final inspections even though
those activities are not currently delegated.
Of interest the state is fairly close to utilizing the maximum amount
of Section 205(g) funds available to it. The state, being a small state,
receives the minimum funding available under Section 205(g), i.e. $400,000
per year. The state's current budget for the construction grants program,
including indirect costs, is $331,000. Over time, as inflation increases
this budget, it can be seen that the State may soon exceed the amount
of Section 205(g) funds available.
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Management
The chief of the Construction Grants and Training Section has over-
all responsibility for managing the delegated program. To assist
him in fulfilling this responsibility he utilizes a number of manage-
ment tools and practices. For example, from each of his four project
officers, he receives a monthly activity report that indicates the
actions taken on each construction grants project during the previous
month. This report also indicates the responsible party for the next
activity required as a part of a particular project. Using this report
as a base, the section chief meets with each of the project officers
several times a month and reviews the status of projects and the com-
peting demands on the project officers and assists them in setting priorities
as well as defining output goals for the coming month. Also, the sec-
tion chief, using the activity reports received from the project officers,
puts together an overall program status report on a monthly basis. This
report identifies the amount of time spent by the section on the various
steps of the construction grants process, it identifies significant
actions during the months, and it indicates the current status of the
program from a financial standpoint.
Another management tool used by the section chief is the projection
of awards on a monthly basis. To develop these projections the section
chief meets with the EPA construction grants officer located in the EPA
Montana Operations Office and develops projections over the coming months.
These projections are updated on a monthly basis. The state then uses
these projections as a focal point for their activities in terms of
processing individual grant projects. In other words, the state project
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engineers attempt to meet the award projections developed jointly by
the section chief and the EPA project officer.
Several other management tools utilized include a monthly training
session conducted by the EPA Montana Operations Office for the entire state
Construction Grants Section staff. At this session the EPA grants per-
sonnel train state staff in various aspects of program administration.
In addition, EPA uses this forum to update the state staff on new program
developments at the federal level.
Relative to communications with outside participants in the con-
struction grants program, the state utilizes several techniques. First,
they produce and publish policy statements that are sent out to all con-
sulting engineers practicing in the grants program field. These statements
identify for the consultants new policies that are developed by the state
that relate to program administration. In addition, when new EPA require-
ments are developed, the state transmits those new requirements, attached to
a generalized information memo, to all consultants in the field. Also the
Construction Grants Section Chief meets periodically with consulting
engineering organizations and organizations consisting of local officials
to update them on construction grant program activities and direction.
Usually these sessions are in conjunction with regular meetings of these
outside groups.
Another practice employed by the state is to review the federal
register on a daily basis to determine whether any new federal program
requirements have been issued which will impact on the construction
grants program. Prior to instituting this practice, the state found that
it was finding out about new federal developments too late to implement
them in a reasonable manner.
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Grants Processing Procedures
The first state involvement in an individual project, after
adoption of the state priority list, is to attend a pre-application
conference if such a conference is desired by the grant applicant.
The state basically leaves this choice to the applicant, and the
general rule of late is that applicants do not feel the need for a
pre-application conference. So, generally the first official state
contact on an individual grants project is when the state receives
a Step 1 grant application and supporting documents including the plan
of study. This package is routed to the project officer responsible
for the geographical area in which the project is located and he is
totally responsible for processing of the application package. Gen-
erally the project officer prepares comments and transmits them back
to the grantee. Upon receipt of a revised, completed and acceptable
Step 1 application package, the project officer will prepare the state
certification and submit it together with the full application package
and supporting documents to the EPA Montana Operations Office. EPA
currently prepares the federal grant offer and, when everything is
prepared, the director of the Montana Operations Office signs the federal
grant offer.
Upon receipt of a Step 1 grant, the grantee and its consultant
will begin preparing the facilities plan. The state has been attempting
to review facilities plans at intermediate steps in the preparation
process. The payment schedule contained in the Step 1 grant states
that the grantee will not receive 80% of the Step 1 payment without
submittal of a draft facilities plan to the state. In addition,
the state is attempting to get involved even earlier in the planning
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process. The state is attempting to review the project early in
the facilities planning process and particularly when the preliminary
population projections and the flow projections, as well as the
infiltration inflow analysis, have been completed. The state hopes
to correct any problems in these areas before the consultant completes
the rest of the facilities planning process. The state is also trying
to initiate a review of the facilities planning after the consultant
has identified the alternatives that he expects to evaluate in detail.
Here again the state hopes to review and input into the alternatives
to be analyzed before the consultant initiates that analysis. To date
however, the state has not instituted formal mechanisms to conduct these
intermediate reviews prior to the review of the draft facilities plan.
Again the project officers review all aspects of the proposed fac-
ilities plan, though they may seek advice and assistance from other
sources on a project by project basis. For example, if the population
projection seems inconsistent with the Section 208 plan, the project
officer will ask the State Department of Community Affairs for advice.
In addition, the project officers periodically will seek advice from the
Wastewater Discharge Permits Section or from the training officers
relative to operations related problems. Generally the project offi-
cers prepare a comment letter on the draft facilities plan and transmit
it to the grantee with a copy to the consultant. Often a meeting is
held with the grantee and consultant to explain and review the comments.
Subsequently, the grantee will make revisions to the facilities
plan and send the revised plan out for comment prior to holding a
public hearing. Subsequent to the public hearing, the grantee will
make another revision to the facilities plan based on both public
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input and state input and transmit the revised document back to the
state for final review and comment.
When the final facilities plan is complete and is satisfactory
to the project officer, the project officer will draft a preliminary
environmental assessment and transmit it to the EPA Operations Office
in Helena for review and finalization. About the same time the project
officer will request that the grantee submit a Step 2 application
package. Subsequent to EPA issuance of the FNSI, the project officer
will review and approve the Step 2 application package. Following this
approval, the project officer will prepare a certification package and
transmit it together with the Step 2 application and supporting
documents to the EPA Operations Office for preparation of a federal
grant offer and award of the grant.
The state is also involved to an extent with the consultant during
the preparation of plans and specifications. The Step 2 grant award
generally requires the consultant to submit final design criteria, in-
cluding the number and sizing of the various treatment plant units,
to the state prior to receipt of the 10% payment associated with
the Step 2 grant. The state reviews the criteria, using the Ten
State Standards as a base, allowing some flexibility in adherence to
these standards. On the very largest projects in the state, the project
officer will meet with the consultant on a bi-monthly basis to review
the status of the plans and specifications and to provide on-going
review comments. On the more typical project, the next general invol-
vement of the project officer is when preliminary plans and specifica-
tions are received. Generally, these are about 90% complete. Again,
the submission of preliminary plans and specifications is prompted by
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a Step 2 grant condition which states that the grantee cannot receive
more than 90% payment for the Step 2 grant without submission of
preliminary plans and specifications. Upon receipt of the preliminary
plans and specifications, the project officer transmits two copies to
the Corps of Engineers for a biddability/constructability review. The
project officer then performs an in-depth review of the plans and
specifications. The project officer's review is documented in a plans
and specifications review report. This report, contrary to taking the
checklist approach to the review of plans and specifications, identifies
general goals for the project officer's review in each of five different
areas: process design, hydraulic design, operability, safety, and
specifications. The project officer's review is supported by a
detailed set of design calculations in both the process design area
and the hydraulic design area. In other words the project officers
develop separate, independent design calculations to check the process
and hydraulic design of the proposed facility.
Subsequent to the project officer's review of plans and specifications
a comment letter is drafted and transmitted to the grantee with a copy
to the consultant, together with the biddability/constructability review
comments received from the Corps of Engineers.
Upon receipt and approval of a final set of plans and specifications,
the state project officer prepares a state certification and submits the
Step 3 grant application package to the EPA Operations Office for preparation
of a federal grant offer and signature.
During this same period of time, the project officer will generally
receive a preliminary plan of operation and a proposed user charge
system. The plan of operation will be reviewed by the project officer
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or, if the project officer feels uncomfortable reviewing this document,
it will be reviewed by one of the training officers in the section.
The proposed user charge system is sent to the Denver office of EPA
for review and comment by the user charge specialist located in that
office. It should be noted that user charge systems are not yet dele-
gated to the state.
After award of the Step 3 grant and the receipt of bids by the
grantee, the state reviews the bid documents to insure that the low
bidder has been named and transmits the minoritiy business enterprise
(MBE) information in the bid documents to the EPA Denver office for
review by the Civil Rights Officer. Under the current status of delega-
tion, EPA issues the approval to award the construction contract
after it is satisfied that the contractor has satisfactorily conformed
with MBE requirements.
Subsequently, a pre-construction conference is held. The Corps
of Engineers schedules this conference and takes responsibility for
its conduct, but the state project officer generally attends the con-
ference. If the project officer is unable to attend or the conference
is held a considerable distance from the Helena state office, personnel
from one of the two branch offices may attend the preconstruction
conference.
During construction the Corps of Engineers is responsible for the
conduct of interim construction inspections. Again, even though this
activity is not delegated to the state, the project officer tries to
attend all interim inspections. If the state project officer cannot
attend, personnel from one of the branch offices will try to attend
these inspections.
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Change orders are processed by the project officer during the
construction phase of any grant. The Corps of Engineers does not
participate in any aspect of the review of change orders.
During the construction phase, the project officer will generally
receive the sewer use ordinance, draft and final operation and main-
tenance manuals, and the final plan of operation. The sewer use ordinance
is sent to the EPA Denver office for review by the Region's user charge
specialist, since this has not yet been delegated to the state. The
operation and maintenance manuals are reviewed by one of the training
officers within the Construction Grants and Training Section.
Towards the completion of construction, the project officer together
with the training officer will perform an operation and maintenance in-
spection. Under the proposed new delegation agreement currently being
drafted, the Regional EPA office is proposing that a similar inspection be
conducted at the 80% completion stage of a project so that any changes
necessary to effect treatment plant operability can be instituted under
the current construction contract. The state is supportive of this
proposal and intends to implement it within the very near future.
The Corps of Engineers conducts final inspections on projects, but
again the state project officer or, if appropriate, one of the personnel
from the branch offices, will attend the final inspection.
Subsequent to completion of construction, the training officers within
the Construction Grants and Training Section will perform annual operation
and maintenance inspections of completed grant projects. While outside the
scope of the construction grants program, these same personnel will provide
operational assistance and advice, as well as training, to field operational
personnel to help improve the overall operation of these facilities.
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Processing Times for State Reviews
The state does not have official target goals for its major
review activities. Rather, state processing is aimed at meeting
the output targets negotiated between the state section chief and his
EPA counterpart in the EPA Montana Operations Office. The average
processing times for state certification of Step 1, Step 2, and
Step 3 applications, along with the processing times for approval
of facilities plans and plans and specifications are contained in
Table 2. These processing times were obtained from records kept
by the state and are for projects approved by the state subsequent
to delegation from the EPA Regional Office of these activities.
ASSESSMENT OF THE STATE'S PERFORMANCE
The state's performance in terms of administering the delegated
construction grants program was evaluated in the following areas:
Organizational Structure and Resources
State Management of the Program
Grants Processing Procedures
Quality of State Reviews
Timeliness of State Reviews
The contractor's analysis of the State of Montana's performance
in each of these areas is discussed in the following paragraphs.
Organizational Structure and Resources
The state's organizational structure as it relates to administra-
tion of the grants program appears quite adequate. Though the organ-
ization is not broken down within the Construction Grants and Training
Section, the contractor feels that the group is small enough (only
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Table 2
STATE REVIEW TIMES
Review/Approval
Processing Time, Days3
Step 1 Aplications
37(10)
Facility Plans
212(3)
Step 2 Apl i cat ions'3
9(15)
Plans and Specifications
113(5)
Step 3 Applications
55(6)
Total Processing time, All Steps
426
a Number of projects processed shown in parentheses
b Includes Step 2 plus 3 Applications
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10 employees) that this does not present a major problem. In fact
the contractor feels to break such a small group into subdivisions
under the program manager may rob the available resources to too
great an extent for the purpose of increased supervision.
While the contractor found the organizational structure adequate
within the State of Montana, he does have some concerns about the
multiple roles which the chief of the Construction Grants and Training
Section has. The section chief has three basic responsibilities: he
is responsible for overall management and direction of the construction
grants program in the state, he is responsible for direct supervision
of ten employees, and he performs certain staff functions personally
(including development of the state priority list, development of re-
vised delegation agreements, and development of the annual budget for
the section). The contractor believes that the placement of these
three responsibilities with the program manager is too much for a single
person, even though the Montana program is relatively small. The size
of the program in terms of staff or annual expenditures does not take
away from the complexity of the program nor its relative magnitude.
In fact because of the small size of many of the Montana projects, the
state processes as many projects as a state with many times the grant
funds.
The contractor would recommend that action be taken to relieve the
program manager of several of these responsibilities. One course of action
would be to get an assistant section chief to take over direct responsi-
bility for supervising the staff within the section, leaving the section
chief himself free to deal with program-wide and major policy issues.
An alternative, somewhat short of that though perhaps satisfactory, would
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be to relieve one of the personnnel within the section from some of his
responsibilities and have him act, on a part-time basis, as an assistant
to the section chief.
Relative to the resources employed by the State of Montana for
administration of the program, it is the contractor's general opinion
that the current level of resources appear adequate. If anything
however, the contractor believes that the number of resources may be
on the light side because of the large number of projects being pro-
cessed by the state. Each project officer is handling approx-
imately 25 projects. While the state's annual expenditures are low
this project level is greater than that usually observed in other
states. This is especially true given the fact that the project
officers in the State of Montana single handedly perform every review
function associated with the processing of individual grant projects.
One other comment relative to resources relates to the eventual
state takeover of construction related activities currently performed
by the Corps of Engineers. The state's Construction Grants and Training
Section chief has indicated that he feels the state can absord this
additional workload since the project officers generally attend interim
inspections at the present time. The contractor feels that the area of
construction management is an extremely important one and that the state
would benefit by having an experienced person on board (experienced in
the construction field) to oversee the construction management aspects
of the program. The contractor would be concerned if the project
officers take on the responsibility for overseeing the construction
management program for two reason. First, the project officers
have many different responsibilities and will find it difficult
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to devote more than a small percentage of their time to the construction
aspects of the program. Also whereas the project officers are gaining
increasing experience in the construction grants and sanitary engineering
area, they are inexperienced in the complicated construction field. For
both of these reasons the contractor feels that it would be advantageous
for the state, at the time they take over interim inspections from the
Corps of Engineers, to employ a more experienced person in the construc-
tion field and charge him with overall responsibility for managing the
construction portion of the program. The contractor has no problems
with the project engineers, under the general direction and guidance of
the construction grants manager, conducting the interim inspections.
Management
The contractor was impressed with the management tools employed by
the state to assist in the management of this large, complicated program.
The contractor found many of the management tools employed by Montana
to be more sophisticated than the tools employed by many states with far
larger staffs and who have been in the program a considerably longer time.
The particular management tools that the contractor found impressive
were the monthly project activity reports filled out by the project
officers, the monthly reports summarizing activities in the program,
the joint state/EPA operations office projection of grant awards on a
monthly basis, the enthusiasm exhibited by the state towards meeting
those projections, the efforts of the section chief to regularly review
project status with the individual project officers and to assist them
with establishing priorities and setting output targets, the policy
statements issued by the state and the informational memos issued
relative to new EPA requirements. The contractor was also impressed
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with the fact that the state saw the importance of keeping up with
activities at the federal level and routinely reviewed the federal
register. Finally, the contractor was impressed with the monthly
training sessions initiated by EPA relative to the Montana program
and feels that these are exceptional mechanisms for communications
between the EPA Operations Office and the state.
Given discussions with the section chief and the array of manage-
ment tools available to the section chief, the contractor has concluded
that the state's program manager appears to be on top of the construction
grants program in Montana. He appears to know where the projects are and
where the program is and he appears to have a considerable degree of con-
trol over the program. Again, given the fact that Montana has a small
staff and had limited involvement in the program prior to delegation,
this is particularly impressive.
There are some things that the state could do to further improve
its management of the program. The contractor believes one area that
would assist the state in improving its overall management of the pro-
gram would be to expand the monthly report and include more information
on program related matters and staff performance. More particularly,
the contractor suggests that it would be advantageous to record in
the monthly report historical outputs over each of the previous
twelve months. Also it would be desirable to include future projections
of obligations and perhaps other program related parameters, as well
as proposed outputs in terns of grant awards etc. Finally, the
contractor believes it would be advantageous to include in this report
certain qualitative factors relative to staff performance, such as
turnaround times on processing of certain key documents.
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In terms of expanding the monthly report, the contractor suggests
that GICS could be a useful tool in this regard. The Construction Grants
Section Chief has indicated that the section has access to a person who
can program computers, located in the Water Quality Management Section.
The contractor suggests that this person, under the overall direction
of the Construction Grants Section Chief, start working with the EPA
regional office to investigate the potential that GICS may offer the
state in terms of meeting its programming needs. Existing programs
available from EPA should be identified as well as the potential for
EPA developing additional programs. Finally the state's programmer,
again under the direction of the grants staff, should look at the
possibility of developing state generated programs to be applied to GICS.
The contractor also believes it would be useful for the state to
develop a project tracking system. More particularly the contractor
believes the state should develop realistic time schedules for each of
its active projects, and particularly those still in the Step 1 and Step 2
phase of the program. Actual progress should then be tracked, by the
project officers, against the proposed time schedules. Time schedules
should also be updated on a regular basis to keep them current and real-
istic. A final important aspect of a project tracking system is the
development of an attitude whereby the project officers take on the re-
sponsibility not only of tracking the progress of a project, but doing
whatever is within their power to expedite a project and maintain the
time schedule.
Another observation relates to communications. Upon delegation,
the natural tendency seems to be for the states and the EPA regional
offices to leave communications to chance, i.e. when a particular problem
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or issue arises the states and the regions communicate. It is the
contractor's belief that good communications is vital to the success
of a delegated program and is far too important to leave to chance.
Formal mechanisms for communication are needed and a regular monthly
meeting between the management staffs, or in the case of Montana
perhaps the entire staff, is needed to keep communications open
and flowing.
Currently, it is doubtful whether the EPA Operations Office or
the state would feel the need for additional communications, given
the training sessions and given the fact that there is continual
contact between the two agencies on a day-to-day basis on almost
every project that is processed. The contractor notes that the
primary reason for this existing high level of communications is
that the EPA Operations Office is not yet operating in a delegated
mode and in fact is reviewing and questioning the state on most of
the project approvals submitted to it. In the near future this
practice will stop and when it does, the state and the Operations
Office will cease day-to-day project-related communications, at least
to the extent that they currently exist. At this time the need for
regular communications will become more significant. The contractor
feels that the monthly training sessions, already expanded to an
extent beyond just a pure training session in that the EPA uses this
session to update the state on new federal developments, would be a
useful mechanism to provide the needed communications. The contractor
further suggests that a formalized agenda he developed for the typical
monthly meeting. One item regularly scheduled for this meeting
should be an update by the EPA Operations Office on current program
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activities emmanating from EPA as well as new EPA concerns, directions,
etc. Likewise at these meetings the state should take an opportunity
to update EPA on its program and especially those aspects which
may not be readily apparent to EPA. It would also he useful for the
state at these meetings to brief EPA on some of the more significant
or more controversial projects being processed so that EPA (after they
cease to review individual grant packages) can keep up to date on
the more important projects. These meetings also provide a good
opportunity to review proposed outputs for the coming months and to
discuss any problems that may be developing during the course of
program administration, either at the federal level or at the state
1evel.
The contractor also believes it would be useful for the state to
develop an outside advisory committee to serve as a formal communica-
tions mechanism with those outside of the program who are on the other
end of the program. The contractor believes that current communica-
tions techniques, which are conducted on a one-on-one basis and are
related to particular projects and issues, while extremely useful, do
not serve the total needs of the program in terms of communications
with the "outside world". The contractor notes that a number of states,
increasing all the time, are developing advisory committees for this
purpose. Quite often these advisory committees are broad in nature
and include grantees, consultants and contractors as well as public
interest groups and even private citizens and representatives of business.
In the case of the State of Montana it appears that because the grantees
are often quite small, that the prime state contact is with consultants.
Therefore, it might be most appropriate to develop an advisory committee
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made up of consulting engineers who are active in the grants program.
Advisory committee meetings should be conducted at least on a
quarterly basis and perhaps on a bi-monthly basis. These meetings
should offer an opportunity for the advisory conmittee to identify
any problems that it sees with the program or with state administration
of the program. It should provide a similar opportunity for the state
to identify problems it is encountering in reviewing grant projects
or even problems of a broader nature that go beyond just the processing
of projects. The state should review major concerns and proposed
policies with the advisory group and seek their input on these policies.
On some occasions the state may want to seek the guidance of a subcom-
mittee of the advisory committee to assist in the development of
particular policies. Finally this forum can be used as a mechanism by
the state to keep the "outside world" up-to-date on current program
developments. The contractor has also seen a useful practice in some
states of keeping detailed minutes of advisory committee meetings and
then circulating them widely. If the state were to develop an advisory
committee of consulting engineers, the contractor would suggest
development of a mailing list that would include not only all of the
consulting engineers practicing in the grants program within the state,
but also active grantees, contractors and perhaps other interest groups
that follow or participate in the program.
Another need identified by the contractor for the State of Montana
program is a quality assurance program. The problem in this regard is
that the grants program manager, the chief of the Construction Grants
and Training Section is the only supervisor for the grants program
staff. In other words, all ten employees actively involved in admin-
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i strati on of the program have only one supervisor and all report directly
to that supervisor. In previous discussion the contractor pointed out
that the section chief, the supervisor, is spread exceptionally thin in
that he not only serves as a supervisor but he serves as program manager
in addition to performing certain staff related functions. In this
situation the supervisor, while providing general guidance to his staff
and while keeping close tabs on the overall progress of the staff, does
not have time to review the quality of the work of any of the staff, even
on a spot check basis. The contractor believes this is a situation which
should be modified, as does the EPA Operations Office and the section
chief himself. The contractor would suggest two options that may assist
in this regard. First if the section chief were to identify either a
full-time or part-tine assistant section chief, as suggested under the
previous heading, the assistant section chief could take on the day-to-
day responsibility of supervising the grants staff. In fulfilling
that responsibility, the assistant section chief could periodically
check the quality of the work of the staff.
The second option would be to utilize the EPA monitoring program
for this purpose. EPA under the concept of delegation is already charged
with the responsibility for monitoring the performance of delegated
states on a regular basis under delegation. The contractor believes
it would be possible to go to the EPA staff after they have developed
a monitoring agenda for the coming year and seek assistance in reviewing,
perhaps in a little more focused manner, the quality of the work being
performed by the state staff. It is undoubtedly the purpose of the
EPA monitoring effort to do just this, but the contractor believes
were the state section chief to become more active in directing at least
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the qualitative monitoring aspect of the EPA monitoring effort, the
EPA monitoring effort could be more valuable in a quality assurance
role. The contractor believes that either of these options would be
viable.
Grants Processing Procedures
The procedures employed by the State of Montana for processing
construction grants projects appear to be very good. The contractor
did not see any problems, in terms of overlap of responsibility,
unnecessary activities, or lack of coordination. In fact there were
a number of things relative to the procedures employed by the state
that the contractor found impressive. One of these was the active
state involvement during the facilities planning and design review
processes. The state does not just review final products from each
of these two critical phases of the process. Rather, they review
intermediate products along the way. In the case of the facilities
planning review, they always review preliminary draft reports and
population projections as they are developed. In the case of plans
and specifications they review the proposed design criteria and the
unit sizing and loading early in the design process and they review
preliminary plans and specifications at approximately the 90%
completion stage.
In both cases, facilities plan review and design review, the
state is moving towards even greater involvement in these processes.
The state intends to review the facilities planning process at sev-
eral other stages and provide one additional intermediate review of
plans and specifications. The contractor would encourage the state
to move in this direction as rapidly as they can. The contractor
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has found that it is far easier and far more efficient to review
facilities planning documents and plans and specifications throughout
their development, rather than waiting until they are totally developed
and then go back and tell the consultant or the grantee that they made
a mistake somewhere back in the process and their progress from that
time on has been incorrect. The contractor also notes that whenever
the state asks the grantee or the consultant to go back and redo some-
thing that their is a cost associated with that request in terms of
time lost and increased construction costs due to inflation. If these
modifications or problems can be caught before the grantee or consultant
progresses very much beyond that stage, time delays can be minimum.
Also there will tje a greater tendency for the products submitted to be
satisfactory to the state and therefore the review times should be
able to be shortened considerably.
One aspect of the state's grant procedures that this consultant
found especially impressive were the plans and specifications review
reports. The contractor was impressed with the fact that the state
saw the flaws in the more common review guide, the multi-page check-
list. Instead the state staff came up with a concept of dividing
the review of plans and specifications into five different categories
and rather than providing checklists for each, provided general goals
for the guidance of the staff in the review of each of these aspects.
The contractor was also impressed with the details of the design
calculations performed by the state, both relative to the process
design and the hydraulic design of treatment facilities. He was also
impressed with the fact that treatment plant designs were reviewed
specifically from the standpoint of operability by the training offi-
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cers located within the Construction Grants and Training Section. One
comment the contractor would offer is that whereas the review from
the standpoint of process and hydraulic design and specifications
appeared to be very thorough and detailed, the review from the operability
standpoint appeared to be on the light side. The contractor believes
the state should give this area additional attention, especially given
the operational expertise that exists within the Construction Grants
and Training Section in the form of the training officers.
One other aspect of the state's processing procedures that the
contractor found impressive was the philosophy of the state project
officers. They appeared to be very concerned about the time aspects
of a project and more particularly, their processing time associated
with the project. They also seemed to have an ability to keep the
various program requirements in balance, or perspective. Relative to
this latter item the contractor has found that quite often project
reviewers give as much attention to a minor procedural requirement
as they do to the most significant requirements associated with
grants projects. The contractor has observed that the net result of
such an approach is that projects are prolonged almost indefinitely
until every fine detail is taken care of. Also this approach tends
to cause reviewers to focus on the details and perhaps overlook or
not provide sufficient emphasis to the more important aspects of
project level review. The Montana staff appeared especially adept
at assigning relative importance to the various program requirements.
They seemed intent on focusing on the major requirements and areas
of review and minimizing the less important areas. One reason why
this philosophy may exist is the fact that the project officers are
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responsible for the review of the all aspects of individual construc-
tion grants projects. This gives them the opportunity to see the
entire array of program requirements and attach a sense of value or
a sense of importance to each requirement. Where program review is
biforcated among many different individuals the individual respon-
sible for a small piece of the program attaches a great deal of
importance to that piece. Often this individual is not under the
direct control of the project officer and therefore the project officer
tends not to question the view of the specialized individual but
accepts that view. The net result is often project delays for program
requirements that are not that important.
A final aspect of the state grant processing procedures that
the contractor was impressed with was the operability review performed
by the state's training officers at the 80% and 100% completion stage
of the project. The contractor believes that this approach, not
observed in other states, will allow the state to identify operability
related problems and performance related problems at a time when
it is still possible to make modifications in the treatment plant
to take care of these problems. Once the project is completed
and the contract is closed out, it is extremely time consuming
and, in the contractor's view, more costly to correct these problems.
One recommendation that the contractor has relative to the State
of Montana program and particularly relative to the processing pro-
cedures is that the state seek to assume, at least over the next
several years, all delegated functions associated with the construc-
tion grants program. The contractor identified a number of functions,
such as A/E subagreement review, ATA, MBE, and others that were still
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performed by EPA and where the state did not appear to be actively
interested in assuming these activities. It is the contractor's
feeling that a state performs best when the state feels totally
responsible for all activities associated with the program and
likewise when the state has total control of all those activities.
In such a situation there is only one organization, and generally
one individual, who is responsible, and accountable for the program.
The contractor has observed that this type of situation causes the
state to do a better job in terms of program administration. Like-
wise the contractor believes that the state should seek eventually,
within the next several years, to take over those activities currently
performed by the Corps of Engineers.
Quality of State Reviews
The contractor reviewed five facilities planning reviews and five
plans and specifications reviews performed by the state. In conjunction
with facilities planning reviews, the contractor also reviewed the
facilities plans associated with those reviews. An initial obser-
vation by the contractor is that he felt three of the five facilities
plans which were reviewed were not of very good quality. The major
problem observed was a rather skimpy alternatives analysis. In the
three poorer quality facilities plans, the consulting engineer eval-
uated a rather narrow range of alternatives, and then without almost
any analysis at all, jumped to a recommended solution. The contractor
would identify this as a rather serious problem and would further
suggest that more active involvement by the state reviewers earlier
in the facilities planning process will tend, over time, to signifi-
cantly reduce this particular problem.
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In terms of the state review of the facilities plans, it is the
contractor's opinion they are of a very good quality. The reviews
appear to be very thorough and they appear to be substantative in
nature rather than nitpicky or procedural. It is the contractor's
opinion that these reviews will lead to better, more cost effective
projects. An example of the types of comments made by the state in
the review of facilities plans follow: ineligible portions of collection
lines were identified, inadequately low operational staff and operational
costs were identified, inadequate flow projections were noted, problems
with proposed process designs were identified (gravity thickener found
inadequate, separate sludge digestion found unnecessary) and more
detailed analysis of the more probable alternatives were requested.
The only concern that the contractor has with the state's review
of the facilities plans is that in the case of the skimpy alter-
natives analysis, while some questioning of the skimpy analysis was made
by the staff, in general the recommended alternative was accepted and
the review was focused towards the end of ensuring that the recommended
alternative was of adequate quality and cost effective. The contractor
is aware of the difficulty of asking at a fairly late date for a more
detailed analysis of alternatives. The state has also pointed out that
they themselves had been a major bottleneck in the review of facilities
plans and many of the facilities plans that they are reviewing at the
present time have been in their office for more than a year without
review. This obviously makes it difficult for the state, after
having a facilities plan for more than a year, to go back and ask
the grantee to do a more detailed analysis of alternatives. Again the
contractor suggests that more active involvement of the state project
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reviewers in the facilities planning process will make it easier and
more efficient to seek a more detailed analysis.
The quality of the state reviews of plans and specifications also
appears to be very good. The reviews, as contained in the plans and
specifications review report, were very detailed, they were thorough,
they appeared substantative rather than nitpicky and they were backed,
in the case of process and hydraulic design comments, by a detailed
set of design calculations performed by the state reviewer. Again
the comment the contractor would offer is that the operability reviews
performed by the state, in contrast to the review of specifications,
process design and hydraulic design, appear to be on the light side.
The contractor would suggest that the training officers within the con-
struction grants section provide a more thorough review of treatment
plant designs from an operability standpoint. The contractor under-
stands that up until just recently the state has had a backlog of
facilities plans and has probably found it difficult to take the
additional time to do something like this. Now, however, as this
backlog has disappeared there should be more time to perform a more
detailed analysis in this area.
Timeliness of State Reviews
The processing times by the state for grant applications reviews
and approvals appear to be good. The contractor feels that a state
should be able to process grant applications in approximately 30 days.
The State of Montana is coming close to this in terms of Step 1 applica-
tion, as indicated by Table 2. They are doing better than this in terms
of Step 2 applications, and are over this time in terms of Step 3 appli-
cations. In terms of facilities planning review the state processing
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times are considerably longer, as are plans and specifications reviews.
The contractor would note that the total processing for the state
reveiws of the five key review approvals is 426 days or approximately
14 months. The contractor would suggest a total time frame of 7 or
8 months as being achievable, at the same time maintaining a high
quality of state review. The contractor would also note that a key
aspect of achieving a reduced total processing time is more active
state involvement in the facilities planning and plans and specifi-
cations process.
The contractor believes that the state should put effort into
further reduction of processing times, especially for facilities
plans and plans and specifications. The contractor would suggest that
the state adopt processing time goals for each of its major review
activities and that actual performance against those goals be monitored
on a regular basis. The contractor would suggest the monthly report
previously discussed would be a good reporting mechanism for this
purpose. In terms of the goals to be established, the contractor
would suggest 30 days for applications, and 60 days for facilities
plans and plans and specifications.
Another useful technique that the contractor has seen in other
states if for the state to establish a goal of getting comments out
on all major documents received, including applications, facilitites
plans and plans specifications, within 30 days of the receipt of
those documents. The contractor has observed in the several states
that practice this approach, that quality state reviews can be
conducted within this time frame. Again it has been the contractor's
experience that unless state reviews are aimed at being conducted
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within a certain time frame, they tend to take longer.
Overall State Performance
On an overall basis the performance of the State of Montana in
terms of administering the delegated construction grants program has
to be rated as very good. The strengths of the state's program are
the fine array of management tools utilized by the state, the active
involvement of the state in the facilities planning and design pro-
cesses and the quality of the state reviews.
One thing which would further improve state management of the
program v/ould be to appoint as assistant section chief, either full-
time or part-time, to help the chief of the Construction Grants and
Training Section. Another area where improvement would be possible
is to further expand the management tools utilized by the state.
More particularly the contractor recommends that the state expand the
current monthly report to include more program and performance related
information, both past and future, that the state develop a project
tracking system, that the scope of the monthly training sessions be
expanded to the extent that these training sessions become the prime
formal means of communication between the state and EPA field office,
that the state develop an outside advisory committee made up of
consulting engineers active in the program and the state meet with
this committee on a regular basis, and that the state implement a
quality assurance program.
In terms of grants processing procedure the state procedures
appear to be very good. The only recommendation which the contractor
has is that the state pursue their intentions of getting more actively
involved with grantees and consultants during the preparation of
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facilities plans and during the design of proposed facilities.
Insofar as the timeliness of state reviews, the state appears
to be doing a good job in the area of review and approval of appli-
cations, but needs some improvement in the areas of facilities plan
reviews and plans and specifications reviews. The contractor suggests
that the state establish time goals for each of these reviews and that
actual performance against these goals be monitored on a regular basis.
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