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Office of Inspector General
Audit Report
WATER
North Carolina NPDES Enforcement
and EPA Region 4 Oversight
REPORT NUMBER 2000-P-00025
September 28, 2000
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Inspector General Division(s)
Conducting the Audit
Region covered
Program Office(s) Involved
Southern Audit Division, RTP Regional Audit
Office
Research Triangle Park, NC
Region 4
Office of Water
Office of Enforcement and Compliance Assurance
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
SOUTHERN AUDIT DIVISION
ATLANTA FEDERAL CENTER
100 ALABAMA STREET, S.W.
ATLANTA, GEORGIA 30303-3104
Regional Audit Office
Mail Drop 53
Research Triangle Park, NC 27711
September 28, 2000
MEMORANDUM
SUBJECT: North Carolina's NPDES Enforcement and Region 4 Oversight
Final Audit Report No. 2000-P-00025
FROM: John M. Bishop /s/
Audit Manager, RTP Regional Office
Southern Audit Division
TO:
John H. Hankinson, Jr.
Regional Administrator
EPA Region 4
Attached is our final report on our audit entitled "North Carolina's NPDES Enforcement
and EPA Region 4 Oversight." The primary objectives of the audit were to determine whether: (1)
EPA Region 4 had provided sufficient oversight to ensure that North Carolina operated an
adequate NPDES compliance monitoring and enforcement program, and (2) North Carolina had
taken timely and appropriate enforcement action against major and minor facilities in
noncompliance with their permit conditions and had developed a permit for concentrated animal
feeding operations that provided all necessary Clean Water Act statutory and NPDES regulatory
provisions and was subject to EPA review and enforcement.
This audit report contains findings that describe problems the Office of Inspector General
(OIG) has identified and corrective actions the OIG recommends. This audit report represents the
opinion of the OIG and the findings contained in this audit report do not necessarily represent the
final EPA position. Final determinations on matters in this audit report will be made by EPA
managers in accordance with established EPA audit resolution procedures. Accordingly, the
findings described in this audit report are not binding upon EPA in any enforcement proceeding
brought by EPA or the Department of Justice.
In accordance with EPA Order 2750, the primary action official is required to provide us
with a written response to the audit report within 90 days of the final audit report date. Since this
report deals primarily with North Carolina's NPDES enforcement and Region 4's oversight of that
enforcement, we are requesting that you, as the primary action official, take the lead in
coordinating and providing us a written response to this report. For corrective actions planned but
not completed by the response date, reference to specific milestone dates will assist us in deciding
whether or not to close this report in our audit tracking system.
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Should you or your staff have any questions about the report, please contact me
at 919-541-1028.
Attachment
cc: See Report Distribution List
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
EXECUTIVE SUMMARY
This audit was conducted to evaluate EPA Region 4's
oversight of North Carolina's National Pollutant Discharge
Elimination System (NPDES) enforcement program and the
effectiveness of the State's operation of that program. Our
primary audit objectives were to determine whether:
EPA Region 4 had provided sufficient oversight to
ensure that North Carolina operated an adequate
compliance monitoring and enforcement program,
and, whether North Carolina had:
taken timely and appropriate enforcement action
against major and minor facilities in noncompliance
with their permit conditions,
developed a permit for concentrated animal feeding
operations (CAFOs) that provided all necessary
Clean Water Act (CWA) statutory and NPDES
regulatory provisions and was subject to U.S.
Environmental Protection Agency (EPA) review and
enforcement.
RESULTS IN BRIEF
Region 4 Needs to Expand Region 4 needs to expand and strengthen its oversight of
and Improve Its Oversight North Carolina's NPDES program. The need for these
actions is emphasized by the fact that Region 4 did not have
reporting procedures in place which would inform them
about whole effluent toxicity (WET) violations or
continuing problems with minor permitted facilities in the
State. In addition, the Region did not generally overfile, or
take comparable actions, to supplement State efforts to
maintain water quality and improve the environment when
violations continued and the State had not negotiated
Special Orders by Consent (SOCs) with permittees to
achieve compliance. Since the Region was not aware of the
PURPOSE AND
OBJECTIVES
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
WET violations we reviewed, or the continuing problems
with the minor facilities we reviewed, the Region could not
adequately oversee the State's efforts to improve water
quality.
The State implemented a new enforcement policy on July 1,
1998 which appeared to have caused more facilities to come
into compliance with their NPDES permits. North Carolina
Department of Environment and Natural Resources'
(NCDENR) reports indicated that the overall compliance
rate for NPDES facilities rose from approximately 80
percent during the eight-year period before 1998 to more
than 87 percent during the first half of 2000. Also, the
State established a public website which provided extensive,
useful information about its NPDES enforcement actions to
the public.
Additional Improvement However, North Carolina needed to improve its
Needed in State enforcement efforts to ensure compliance with NPDES
Enforcement Efforts permit requirements. Further improvement was needed in
identifying daily and weekly violations of NPDES permit
limits, obtaining agreements to achieve compliance, and
incorporating economic benefit analysis into enforcement
actions. If there was no monthly permit violation, North
Carolina did not take timely enforcement actions for
significant daily/weekly violations until there was a
compliance inspection. In addition, North Carolina did not
adequately identify similar violations by minor permittees
within 30 days after these violations occurred.
Improvements in the State's enforcement efforts were also
needed because agreements with permit violators to obtain
compliance were either not obtained or not obtained timely.
In some cases, State officials did not obtain SOCs with
permit violators because they believed permittees had
already taken sufficient actions to achieve compliance. In
other cases, SOCs were not obtained timely because State
officials believed State/EPA Memorandum of Agreement
(MOA)-specified time frames were unrealistic and,
therefore, did not attempt to meet those time frames.
Further, economic benefit gained by violators resulting from
noncompliance was not adequately considered when
penalties were assessed because State officials believed
North Carolina Has
Strenghtened Its
Enforcement Program
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
State Needs to Develop a
Stormwater Compliance
Program
State Should Phase in Use
of More Sensitive Test
Methods
State Permits for Animal
Feeding Operations Do Not
Adequately Address Four
Key Provisions of NPDES
Permits
other enforcement actions were sufficient to bring NPDES
permit violators into compliance.
North Carolina did not routinely inspect stormwater
industrial sites, monitor inspections of non-construction
stormwater sites, or review stormwater self-monitoring
reports. North Carolina officials indicated they did not have
the resources to develop a stormwater compliance strategy
and program even though EPA studies, as well as State
water quality data, have shown pollution resulting from
stormwater runoff was a significant water quality concern.
Moreover, implementation of Phase II of the stormwater
program will significantly increase the number of
stormwater sites requiring NPDES permits.
The test methods used by North Carolina's NPDES
facilities were not always sensitive enough to determine
compliance with permit limits for certain pollutants.
Improved test methods have recently been developed which
were more sensitive than the methods used by NPDES
permittees in the State. The usefulness of North Carolina
permit data was significantly diminished because the tests
used by NPDES facilities were not capable of determining
whether the permittee was in compliance with these limits.
In addition, the accuracy of water quality analysis and
reports can be affected if the most sensitive and accurate
discharge data is not available.
North Carolina did not issue NPDES permits to facilities
that were subject to applicable federal CAFO regulations.
According to EPA Region 4 officials, the State resisted
EPA's efforts to induce the State to issue NPDES CAFO
permits. We found that North Carolina's animal feeding
operations (AFO) permits did not adequately address the
following key provisions when compared to NPDES CAFO
permit requirements; Federal enforceability, adequate third
party lawsuit coverage, sufficient public notice, and EPA
oversight. Without these key NPDES provisions in State
permits, EPA Region 4's enforcement ability was hindered
and the public was not adequately informed. Manure and
waste water from AFOs have the potential to contribute
pollutants such as nitrate and phosphorus, organic matter,
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
sediments, pathogens, heavy metals, hormones, and
ammonia to the environment. Due to the potential for
major environmental impacts caused by discharges from
AFOs, it is important that the State's permits and permit
program include all applicable NPDES provisions.
RECOMMENDATIONS We recommend that the Regional Administrator:
Develop procedures to ensure that failures to meet
WET limits in State NPDES permits are recorded
on quarterly non compliance reports (QNCRs), or
are otherwise recorded so that this data may be used
to monitor progress made in resolving such
violations.
Develop procedures to obtain the information
needed to exercise adequate oversight over problem
minor facilities in North Carolina.
Review the major problem facilities which are
identified in North Carolina's QNCRs and the minor
problem facilities which are identified in the State's
summary records, to evaluate the need to overfile or
take comparable enforcement action when
necessary, and require that such overall evaluations
be made periodically, at least annually, for all
problem permittees.
We also recommend that EPA's Regional Administrator
ensure that North Carolina:
Detect exceedances of daily and weekly NPDES
permit limits within 30 days after receipt of the
discharge monitoring reports (DMR). In the
absence of Compliance Monitoring System (CMS)
software enhancements, or other better means of
identifying such exceedances, we recommend that
the Regional Administrator encourage the State to
require that DMRs be manually reviewed for daily
and weekly exceedances of NPDES element limits in
instances where NPDES permits do not contain
monthly permit limits.
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Use SOCs, as appropriate, when permit violations
persist and State waters are being polluted and,
when delays occur in reaching such agreements,
account for those delays.
Adequately incorporate consideration of economic
benefit for noncompliance by permit violators in the
State's penalty assessments against repeat offenders,
and ensure that training on the use of the BEN
model (a system for estimating economic benefit) is
provided to State officials, as necessary.
Evaluate its current NPDES compliance activities
and resource allocation to determine whether
resources could be obtained to implement an
adequate storm water compliance program.
Develop plans to phase in the use of test methods
with the lowest reporting limits for analyzing
wastewater effluent concentrations of total residual
chlorine and mercury.
Issue NPDES permits to all facilities that meet the
Federal definition of a CAFO. If no such agreement
can be reached, we recommend that the Regional
Administrator consider withholding an appropriate
portion of Clean Water Act (CWA) Section 106
Water Grant funding relating to State permitting
activities.
EPA REGION 4
COMMENTS
However, Region 4 officials found our recommendations
concerning increased EPA oversight of minor facilities
EPA Region 4 generally agreed with our draft report
findings and conclusions and agreed to work with North
Carolina to resolve many of our recommendations. Region
4 officials agreed to work with North Carolina to
collaboratively construct an action plan to overcome and/or
clarify issues in North Carolina's implementation of the
CWA program as well as EPA's role in oversight of the
delegated program.
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troublesome inasmuch as their ability to oversee the State's
regulation of minor facilities is limited by available resources
as well as CWA regulations and policy. Nevertheless,
Region 4 officials indicated they would address minors as
resources permitted through a variety of tools, such as
sampling during file reviews and requests to the State for
pertinent information on violations and enforcement actions.
STATE COMMENTS The NCDENR's Division of Water Quality (DWQ) had
concerns with some of our recommendations. However,
they indicated that they would work with EPA Region 4
staff to develop a plan to address the issues we raised in our
report. North Carolina indicated their concern that our
report did not recognize their accomplishments in their
water quality program. The State indicated that our report
left them with the impression that they must address every
violation with a formal enforcement action. They believed
that a manual review of DMRs to pick up daily/weekly
violations would be a misuse of their resources. Further,
the State indicated that they disagree that they should be
using SOC's more often and in a timelier manner. North
Carolina believes that factoring economic benefit of non-
compliance more thoroughly into their assessments would
detract from the timeliness of their assessments. The State
indicated they plan to work with EPA to develop a plan for
implementation or phase in of new test methods. Also, the
State indicated that resource limitations had prevented them
from more fully implementing stormwater monitoring and
compliance activities. Finally, the State disagreed that they
had resisted EPA Region 4's efforts to induce them to issue
NPDES permits.
OIG EVALUATION We agree that EPA Region 4's main focus should continue
to be on monitoring the State's oversight of major facilities.
However, we believe that the Region should use State
summary records and any other available information to
monitor the State's oversight of minor facilities. We
believe that the anticipated joint action plan proposed by
Region 4 and the State could significantly help in reaching
this goal. We have retained our recommendations in this
report pending our determination that the anticipated
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EPA/State action plan satisfactorily resolves those
recommendations.
In response to the State's concerns that we did not
recognize their water quality program accomplishments, we
have added that information to our final report where we
were able to identify and evaluate specific accomplishments
related to State program activities covered in our scope of
work. The MOA did not require a formal enforcement
action after every violation. In accordance with their MOA,
we believe every violation that was reflected in a DMR
should have been identified by a State representative. We
did not suggest that the State must address every violation
with a formal enforcement action. The State is required by
their MOA with EPA Region 4 to factor in an evaluation of
the economic benefit of non-compliance in their penalty
assessments. Such an evaluation could be done on a case by
case basis, concentrating on more severe and repeated
violations, as provided for in the MOA.
We continue to disagree with the State's assertion that their
enforcement policy fulfills the commitment they made in
their MOA to take formal enforcement actions. The State's
enforcement actions, other than negotiating SOCs, did not
obtain the permittees' commitment to take specific,
tangible actions to achieve compliance by a specific time in
the future. Based on our discussions with EPA Region 4
and State officials, we revised the wording of the draft
report's recommendation to clarify that we are not
recommending that the State reallocate resources to the
stormwater program. We are recommending that EPA and
the State conduct an evaluation to determine whether it
makes sense to reallocate existing resources to the
stormwater program.
According to several key EPA Region 4 officials, North
Carolina has resisted efforts to issue NPDES CAFO
permits. We recognize that EPA Region 4 has not
responded formally to North Carolina's request for
functional equivalency dated Sept. 29, 1999. However,
EPA Region 4 has informally informed North Carolina that
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EPA would not grant North Carolina functional
equivalency. In addition, North Carolina's original request
for functional equivalency was based on North Carolina's
current program which did not incorporate all of the
necessary NPDES requirements. We recognize that the
North Carolina permit program may be more stringent in
areas outside of the two cited in our report. However, this
does not relieve North Carolina from the requirement of
issuing permits that include all applicable regulatory
provisions.
EPA Region 4's and North Carolina's responses have been
included as appendixes to this report.
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TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY i
ABBREVIATIONS xiii
CHAPTERS
1 INTRODUCTION 1
Purpose 1
Background 2
Scope and Methodology 7
Prior Audit Coverage 8
2 EPA REGION 4 NEEDS TO EXPAND AND STRENGTHEN ITS
OVERSIGHT OF NORTH CAROLINA'S NPDES PROGRAM 9
Region 4 Was Not Aware of Continuing Noncompliance
With WET Limits 9
Region 4 Generally Did Not Monitor The Status of Minor
Facilities That Polluted North Carolina Waters 12
Region 4 Generally Did Not Take Unilateral Action Against
Facilities That Remained in Continuous Noncompliance With
Their NPDES Permits 14
Conclusion 15
Recommendations 16
EPA Comments and OIG Evaluation 16
3 ADDITIONAL IMPROVEMENT IS NEEDED BY NORTH CAROLINA
TO ENSURE THAT ENFORCEMENT ACTIONS ARE TIMELY AND
APPROPRIATE 19
MO A Requirements 19
Enforcement Actions Are Not Always Taken Promptly for
Violations of Daily Or Weekly Permit Limits 22
Improvement Is Needed in Forging Agreements Which Bring
About Compliance With NPDES Permit Limits 26
North Carolina Did Not Adequately Consider Economic Benefit of
Noncompliance When Assessing Civil Penalties 31
Conclusion 34
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Recommendations 35
State Comments and OIG Evaluation 35
4 NORTH CAROLINA NEEDS TO IMPROVE ITS STORMWATER
COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM 39
NPDES Storm water Requirements 39
Compliance With Stormwater Requirements Not Routinely Monitored 42
Minimal Resources Were Devoted to Stormwater Compliance 43
Stormwater Contributes Significantly to Stream Impairment 43
Conclusion 44
Recommendation 45
EPA and State Comments and OIG Evaluation 45
5 TEST METHODS USED BY NPDES FACILITIES WERE NOT
ALWAYS SENSITIVE ENOUGH TO DETERMINE COMPLIANCE
WITH PERMIT LIMITS 47
North Carolina NPDES Testing Requirements 47
Some Minor Facilities Did Not Use the Most Sensitive Test
Available for Total Residual Chlorine 49
New Test Method Should Provide Needed Sensitivity to Evaluate
Compliance With Mercury Limits 51
State and EPA Unable to Evaluate Permit Compliance and
Potential Impact of Discharges on the Environment 54
Conclusion 5
Recommendations 56
EPA and State Comments and OIG Evaluation 56
6 NORTH CAROLINA'S ANIMAL FEEDING OPERATIONS
SHOULD BE PERMITTED UNDER NPDES REQUIREMENTS 59
NPDES/CAFO Regulatory Background 60
State AFO Permitting 61
Potential Environmental Impact of CAFO Discharges 62
North Carolina's AFO Program Did Not Adequately Address
Four Key NPDES Provisions 63
Conclusion 65
Recommendation 66
EPA and State Comments and OIG Evaluation 66
OTHER MATTERS 69
EXHIBITS
1 SCOPE AND METHODOLOGY 77
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2 SCHEDULE OF TIME REQUIRED TO OBTAIN SOCs 79
3 DISCREPANCIES BETWEEN MONITORING REPORTS AND PCS REPORTS . . 81
4 ENDNOTES 83
APPENDICES
1 EPA REGION 4 RESPONSE TO THE DRAFT AUDIT REPORT 85
2 NORTH CAROLINA DENR' S RESPONSE TO THE DRAFT AUDIT REPORT ... 87
3 REPORT DISTRIBUTION LIST 99
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ABBREVIATIONS
AFO
Animal Feeding Operation
BEN
Economic Benefit of Noncompliance
BMP
Best Management Practices
BOD
Biochemical Oxygen Demand
CAFO
Concentrated Animal Feeding Operation
CFR
Code of Federal Regulations
CMS
Compliance Monitoring System
CWA
Clean Water Act
DMR
Discharge Monitoring Report
DWQ
NCDENR Division of Water Quality
EMS
Enforcement Management System
EPA
U. S. Environmental Protection Agency
GPRA
Government Performance Results Act
MOA
Memorandum of Agreement
MS4
Municipal Separate Storm Sewer Systems
NCDENR
North Carolina Department of Environment and Natural Resources
NPDES
National Pollutant Discharge Elimination System
NOV
Notice of Violation
OECA
Office of Enforcement and Compliance Assurance
OIG
Office of Inspector General, EPA
PCS
Permit Compliance System
QNCR
Quarterly Non Compliance Report
RTP
Research Triangle Park
RNC
Reportable Non Compliance
SNC
Significant Non-Compliance
soc
Special Order by Consent
sowc
Special Order Without Consent
s&w
Soil & Water Conservation
TMDL
Total Maximum Daily Load
ug/1
Micrograms per liter
WET
Whole Effluent Toxicity
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CHAPTER 1
INTRODUCTION
PURPOSE This audit is one of several regional and state National
Pollutant Discharge Elimination System (NPDES)
enforcement related audits conducted by the Office of
Inspector General (OIG) to evaluate the performance of
state enforcement programs.
Our objectives were to determine whether:
EPA Region 4 has provided sufficient oversight to
ensure that states operate an adequate compliance
monitoring and enforcement program, and whether
North Carolina had:
taken timely and appropriate action against major
NPDES facilities in significant noncompliance with
their permit conditions,
taken timely and appropriate action against minor
NPDES facilities that violated their permit
conditions, adequately monitored permittee
compliance to detect and resolve instances of
noncompliance,
developed a permit for concentrated animal feeding
operations (CAFOs) that provided all required Clean
Water Act (CWA) statutory and NPDES regulatory
provisions and was subject to EPA review and
enforcement, and
adequately maintained State data in EPA's national
database for tracking NPDES permit compliance.
BACKGROUND The Federal Water Pollution Control Act of 1972 initiated a
broad Federal effort to restore and maintain the Nation's
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waterways, including the creation of a permit program to
regulate and reduce point source pollution. In 1977,
Congress reauthorized and renamed the 1972 Act as the
CWA. Congress amended the CWA in 1987. The CWA
established EPA's responsibility for the implementation of
the NPDES program.
The CWA required that all point sources discharging
pollutants into waters of the United States obtain an NPDES
permit. 40 Code of Federal Regulations (CFR) Part 122.2
defined point sources as "any discernable, confined, and
discrete conveyance, including but not limited to, any pipe,
ditch, channel, tunnel, conduit, well, discrete fissure,
container, rolling stock, concentrated animal feeding
operation, landfill leachate collection system, vessel or other
floating craft from which pollutants are or may be
discharged." NPDES permits were issued as general or
individual NPDES permits. General permits authorized a
category of discharges within a geographical area and
applied a set of generic requirements to all facilities covered
under the general permit. Individual permits were issued to
a specific facility and the permit conditions were specific to
that facility.
Several categories of discharges were covered under the
NPDES program. More common categories include
municipal waste water and industrial process waste water.
Stormwater run-off discharges associated with industrial
activity and large and medium municipal separate
stormwater systems (MS4) were also considered point
sources under the CWA and were required to have NPDES
permits. Under Phase I of EPA's stormwater regulations,
facilities required to obtain NPDES permits included
construction sites of five acres or more, certain industrial
sites (e.g., landfills, junkyards) and MS4 facilities serving
populations of more than 100,000. Certain animal
operations, primarily those housing over 1,000 animal units
and having a discharge into the waters of the United States,
were considered CAFOs and subject to NPDES permit
requirements.
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In EPA Region 4, all NPDES permitting and enforcement
authority had been delegated to appropriate state agencies,
with the exception of Florida Stormwater and Sludge
regulation, in all states. As required by Federal regulation,
each state had entered into a Memorandum of Agreement
(MO A) with Region 4 which outlined the conditions of the
delegation of the program to the state. EPA Region 4
provided partial funding for state NPDES programs through
the CWA Section 106 FY 1999 Grant Program to five states
in Region 4 totaling approximately $2.8 million (Georgia,
Mississippi and South Carolina funding were not included in
this total because such funding was incorporated in
Performance Partnership Grants to these states). Although
states had the opportunity to combine their various program
specific grants into performance partnership grants in FY
2000, all states in Region 4, except Georgia, received their
FY 2000 funding for their NPDES programs through a
separate Section 106 grant.
NPDES Reporting NPDES facilities were generally classified as major or
nonmajor (i.e., minor) and as municipal or non-municipal.
Federal regulations required different levels of reporting
depending upon the classification of the NPDES facility.
NPDES implementing regulations allowed EPA's Regional
Administrators and state officials to define "major" and
"minor" facilities. EPA's primary consideration that
differentiated a major municipal facility from a minor
municipal facility was a flow rate of one million gallons of
water a day from a facility that serviced a population of
10,000 or more. EPA's complete definition of a major
permittee was: 1) any municipal permittee having a design
flow of one million gallons per day or greater servicing a
population of 10,000 or greater, or having a significant
impact on water quality; 2) any non-municipal permittee
having an industrial rating of 80 or higher (signifying a
relatively higher risk to the environment); 3) any permitted
federal facility meeting the criteria for a major municipal or
non-municipal as appropriate; and 4) any discretionary major
permittee allowed within the limits established by EPA
Headquarters.
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The types of pollutants or parameters limited by an NPDES
permit generally included oxygen demand, solids, nutrients,
minerals, and metals. Some facilities were also required to
monitor for whole effluent toxicity (WET). WET testing
consisted of tests to determine if the effluent is toxic to
certain organisms. If the facility's effluent was determined
to be toxic beyond established limits, additional testing and
analysis may have been required to determine the pollutants
which caused the toxicity and the source of these toxic
pollutants.
States and EPA primarily monitored an NPDES facility's
compliance with its permit conditions through discharge
monitoring reports (DMR) submitted by the facility.
Facilities were required to regularly sample and analyze their
effluent (discharge) and record the results of this testing on
DMRs which were submitted to the state. The results
reported on the DMR were compared to the limits
established in the facility's permit to determine compliance.
As part of Region 4's delegation of the program, states were
required to have a quality assurance program in place to
assure the quality of the laboratories performing analyses of
the effluent samples.
40 CFR Part 123.45 required that EPA prepare, or in the
case of delegated programs, the states prepare and submit to
EPA, Quarterly Non Compliance Reports (QNCRs) for
major NPDES facilities. This report provided information
on facilities that were in non-compliance with their permit
conditions, the nature of the violation, and the type of
enforcement action taken, if any, in response to those
violations.
40 CFR Part 123.45 also required states to report on their
compliance and enforcement activities related to nonmajor
(minor) facilities. The reporting requirement for minor
facilities was not as frequent as the requirement for major
facilities. The state was required to submit an annual report
providing the number of minor permittees reviewed, the
number of minor permittees in non-compliance, the number
of enforcement actions taken, and the number of permit
modifications extending compliance deadlines.
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EPA established the Permit Compliance System (PCS) as the
national database for NPDES reporting and to provide an
overall inventory for the NPDES program. The data
gathered in PCS was to be used to respond to Congress and
the Public; encourage a proper EPA/State oversight role by
identifying major permit violators; and serve as an
operational and management tool for tracking permit
issuance, compliance, and enforcement actions. Beginning
in Fiscal Year 1990, PCS has been used to generate QNCRs.
Although state delegated programs often used their own
data bases for tracking permit compliance and enforcement,
the states were required by their MOA with EPA and CWA
Section 106 grant workplans to enter their permit,
compliance and enforcement data into PCS.
Regional Oversight A key component of the EPA Region 4's oversight of state
programs was to review state QNCRs and identify major
permittees that were considered in significant non-
compliance (SNC) with their permit conditions. SNC was a
concept developed by EPA to identify and target those
violations that were of a sufficient magnitude and/or
duration to be considered a high enforcement response
priority. Generally, a facility was considered to be in SNC if
it had exceeded its monthly limit by 40% for any pollutant
categorized as Group I (refer to 40 CFR Part 123.45
Appendix A) or by 20% for any pollutant categorized as
Group II (refer to 40 CFR Part 123.45 Appendix A) at a
given discharge point for any two or more months during the
six-month review period. Violations of any monthly limit at
a given discharge point by any amount for four out of six
months was also considered SNC.
If a facility was identified as SNC for two straight reporting
quarters and the state had not taken a formal enforcement
action, the Region placed the facility on the Active
Exceptions List. The Region provided the Active
Exceptions List to the state. Failure by a state to
adequately address the sites on the Active Exceptions List
could result in an enforcement action by EPA against the
facility. Although there might have been some legitimate
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
justification for a facility to appear on the Active Exceptions
List, EPA generally considered the Active Exceptions List to
signify those cases where the state had failed to respond to
the violations in a timely and appropriate manner.
North Carolina's NPDES The North Carolina Department of Environment and
Program Natural Resources's (NCDENR) Department of Water
Quality (DWQ) was responsible for implementing the
NPDES permit program in the State. DWQ comprised five
sections, with the Water Quality Section having
responsibility for operating the NPDES program. The
Compliance and Enforcement Units within the Water
Quality Section's Point Source and Non-Discharge
Branches oversaw compliance and enforcement activities
for NPDES point sources and animal feeding operations,
respectively. The Aquatic Toxicology Unit monitored
compliance with WET limits. The seven State regional
offices were also responsible for compliance monitoring
and enforcement activities. These activities included
conducting on-site inspections of NPDES facilities, issuing
notices of violation (NOV), and assessing civil penalties.
Records provided by North Carolina showed the following
number of NPDES permits by category as of April 2000.
Category
Number
of Permits
Major Municipal
145
Major Non-municipal
100
Minor Municipal
164
Minor Non-municipal
1167
Industrial Stormwater
3552
Construction Stormwater
2800
Municipal Separate Storm Sewer
6
Total
7934
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
PCS contains enforcement and monitoring data for major
permittees. PCS may contain descriptive information
about minor and stormwater permittees, however, it does
not contain enforcement or monitoring data about such
permittees. As described earlier, EPA policy identified
certain NPDES violators as SNC and expected formal
enforcement actions within a certain time period to address
these violations. This policy defined a formal enforcement
action to include, among other things, actions to achieve
compliance along with a timetable for achieving such
compliance. However, North Carolina's approach to
addressing violations of NPDES permit limits, adopted in
July 1998, did not implement EPA's definition of timeliness
and appropriateness for SNC violations. Under North
Carolina's July 1998 enforcement procedures, State
regional supervisors were delegated the authority to issue
NOVs and assess specific penalty amounts, when
appropriate, for exceedances of some NPDES permit
items. When monthly penalties failed to bring a facility into
compliance, the State considered other enforcement
options, such as encouraging permittees to negotiate
Special Orders by Consent (SOCs) to address the non-
compliance. The civil penalties assessed by North Carolina
under their enforcement policy did not meet EPA's
definition of formal enforcement actions, largely because
they did not include specific actions or time schedules to
achieve compliance. However, North Carolina's SOCs did
meet EPA's definition of formal enforcement actions.
Chapter 3 discusses North Carolina's use of SOCs and
penalties in greater detail.
SCOPE AND We performed our audit in accordance with the
METHODOLOGY Government Auditing Standards (1994 Revision through
July 1999 Amendment 2) issued by the Comptroller
General of the United States as they apply to program
audits. Our review included tests of the program records
and other auditing procedures we considered necessary.
We conducted our fieldwork from January 2000 through
June 2000. We performed our fieldwork at EPA Region 4
Offices in Atlanta, Georgia; at the NCDENR Central Office
in Raleigh, North Carolina; and at NCDENR Regional
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
Offices in Raleigh, Asheville, Fayetteville, Winston-Salem,
Raleigh, Washington, and Wilmington. See Exhibit 1 for
methodology details.
PRIOR AUDIT No recent OIG or U.S. General Accounting Office audit
COVERAGE reports have been issued related to Region 4's oversight of
state delegated NPDES enforcement programs or of North
Carolina's enforcement of its NPDES program. In 1989,
the OIG issued a report on EPA Region 4's NPDES
enforcement program. The OIG issued a report on Region
10's NPDES program in March 1998. The Region 10
Audit, which reviewed non-delegated programs operated by
the Region, found that Region 10's compliance monitoring
activities could be improved and that the Region often did
not take formal enforcement actions against significant
violators. Finally, the OIG issued a Special Review Report
in 1997 which detailed the results of a review of North
Carolina's animal feeding operations permit program. This
review concluded that certain provisions of North
Carolina's program were more stringent than related
Federal NPDES program provisions for CAFOs, and
recommended that EPA take several actions to strengthen
the Federal CAFO program.
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
CHAPTER 2
EPA REGION 4 NEEDS TO EXPAND AND STRENGTHEN ITS
OVERSIGHT OF NORTH CAROLINA'S NPDES PROGRAM
EPA Region 4 officials did not have reporting procedures in
place which would have informed them about continuing
problems with WET violations by major and minor
permittees in North Carolina. Further, Region 4 officials
were not exercising oversight over permitted facilities in
North Carolina classified as minor facilities because
guidance provided by EPA's Office of Enforcement and
Compliance Assurance (OECA) encouraged EPA's regional
offices to focus their enforcement efforts on major facilities.
In addition, Region 4 generally did not overfile, issue
administrative orders, or take other comparable
enforcement actions against facilities in the State with
continuing NPDES permit violations during the period of
our review. Regional officials indicated they did not take
these actions because their resources were committed to
other initiatives. Since the Region was not aware of the
WET violations we reviewed, or the continuing problems at
the minor facilities we reviewed, the Region could not work
with the State to improve water quality in those important
areas. If the Region had been aware of these problems and
had taken action, the exceedances of NPDES permit limits
that have continued might have been reduced or eliminated
with resultant improvement in water quality.
REGION 4 WAS NOT
AWARE OF
CONTINUING
NONCOMPLIANCE
WITH WET LIMITS
Region 4's procedures for overseeing North Carolina's
WET program did not ensure that the Region was aware of
continuing permittee violations of WET limitations. As a
result, the Region did not exercise adequate oversight over
North Carolina's program to ensure compliance with
NPDES WET permit requirements.
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
The CWA allows EPA to delegate implementation of the
NPDES program to a qualifying state while retaining
overall responsibility for the program. For example,
Section 1319 of the US Code: Title 13, which is part of the
codification of the CWA, states that when "... The
Administrator finds that any person is in violation of any
condition or limitation ... in a permit issued by a State
under an approved permit program ... he shall proceed
under his authority ... to notify the State . . . [and if] the
State has not commenced appropriate enforcement action,
the Administrator shall . . . [take enforcement action]."
As of April 11, 2000, the State's WET database showed
that four facilities had been put on SOCs to address
continuing WET violations. Further, the Aquatic
Toxicology Unit's monthly report dated March 15, 2000
showed that four facilities (not the same four facilities
discussed in the prior sentence) had incurred six or more
violations of their WET limits in the year ending January
31, 2000. Region 4 officials were not aware that [NC City
A] Wastewater Treatment Plant frequently failed to pass
the WET limits in its NPDES permit for over a decade.
The Plant failed eight of 10 tests in 1998, nine of 10 tests
in 1999, and the last nine tests it took through March 2000,
the last month shown in the summary record we reviewed.
The Plant did not submit a test report for January or
February of 2000 and failed the test in March. Since the
beginning of 1996, the Plant passed nine tests, failed 27,
and did not submit data for four months. Further, the Plant
has not passed a WET test during the fourth quarter since
1994, and failed at least one WET test each year since
1990.
[NC City A] toxicity problems were clearly identified in
readily available summary records at the State's central and
field offices. The State issued NOVs and assessed
penalties regularly during this period. For example, the
State issued NOVs and assessed penalties for seven months
of violations in 1998 and six months of violations in 1999.
State officials indicated the City had hired a contractor to
study the situation in 2000 and various options were being
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
considered to correct the problem including a construction
project.
Region 4 officials did not have reporting procedures in
place which ensured that they learned about continuing
problems with WET in North Carolina. WET test results
for North Carolina were not entered into PCS.
Accordingly, WET test results were not recorded in
QNCRs. Sometimes notations were made manually in
QNCRs about penalties for WET violations. For example,
we saw a notation for [NC City A] in a QNCR that
penalties were "assessed for toxicity violations." However,
these notations did not communicate the severity of the
problem by identifying how many times the violations had
occurred, or the time period of continuous problems.
The EPA Region 4 Coordinator for North Carolina
indicated he relied on the Region 4 WET Coordinator to
monitor toxicity issues. The WET Coordinator indicated
she had not received any summary reports which identified
the [NC City A] problem. She stated that she performed a
field review of each state in the Region every two years.
During those field reviews she asked state representatives
to tell her about permittees who had difficulty passing the
WET tests. During the reviews she selected samples of
permittees for detailed review. She also conducted a six-
month and annual review of each state in the Region.
Neither these reviews, nor her visits to North Carolina,
disclosed the continuing WET problem at [NC City A],
Since the Region was not aware of these continuing
failures to meet WET requirements, it did not fulfill its
responsibility to help ensure that the State's waterways
were meeting NPDES permit limits. If Regional personnel
had been aware of the continuing toxicity violations at [NC
City A] over the last eleven years, they could have worked
with State officials, obtained a SOC, resolved the toxicity
problems and cleaned up [NC City A] waters many years
earlier.
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REGION 4 GENERALLY
DID NOT MONITOR THE
STATUS OF MINOR
FACILITIES THAT
POLLUTED NORTH
CAROLINA WATERS
Region 4 intentionally focused its oversight on major
permittees in accordance with national guidance provided
by OECA. OECA encouraged EPA Regions to focus on
permittees who were in SNC and, since only majors were
considered to be in SNC, only majors appeared in QNCRs,
a primary reporting tool for overseeing the NPDES
program. However, available information indicated that
minor facilities in North Carolina may have had a
significant adverse impact on the quality of some State
waterbodies.
According to the Chief of NCDENR's Point Source
Compliance/ Enforcement Unit, nine of 10 State penalty
assessments during 1999 were against minor facilities. The
importance of minor facilities was indicated by the fact that
North Carolina treated violations by minor facilities exactly
the same as violations by major facilities. The type of
problems and the importance of monitoring minors was
illustrated by two wastewater treatment plants that were
operated by [NC Town B] and [NC Company C], a private
corporation.
[NC Company C] NPDES permit allowed the privately
owned treatment plant to discharge a maximum of 50,000
gallons of water each day. However, for 17 of the 20
months between August 1998 and March 2000, the
monthly average of [NC Company C] discharges exceeded
this limit. The State regional official who worked with
[NC Company C] told us that [NC Company C] had
difficulty meeting its flow limits since 1996. She indicated
that, generally speaking, when discharge rates consistently
approach 80% of the NPDES limit, consideration should
be given to expanding the wastewater treatment plant, and
when discharge approaches 90% of the NPDES permit
limit, work on plant expansion should have already begun.
She stated that [NC company C] discharge was recently
121% of its NPDES permit limit.
State regional officials tried to persuade the owner of the
facility to apply for a SOC, but the owner had not done so.
State regional officials assessed penalties on the facility
regularly, however, no payment was received from the
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
facility for the last 12 assessments we reviewed. These 12
assessments, amounting to $19,240, were for violations
between September 1998 and November 1999. The State
Regional Supervisor told us the facility owner, who lived
out-of-state, indicated he did not have funds to fix the flow
problem or pay the State assessments. The owner was
reportedly trying to find another party over the last two
years to take over the facility. State regional officials had
been trying unsuccessfully for several years to get an
adjacent city, the county, or a neighboring military base to
take over the services provided by [NC Company C],
The Wastewater Treatment Plant in [NC Town B] is
illustrative of minor facilities that have experienced
continuing monitoring and permit limit violation problems.
This Plant failed to monitor six items in its NPDES permit
during three of the nineteen months from July 1998,
through January 2000; failed to monitor one or more items
in its NPDES permit during six of these months; either
failed to monitor for biochemical oxygen demand (BOD)
or exceeded the BOD permit limit, for nine of these
months; and exceeded the permit limit for ammonia
nitrogen for eight of these months. The Plant had four
operators since February of 1999, including an operator
who was fired after he attempted to bury unstabilized
sludge without a permit. The Town applied for a
temporary certification for the current operator because the
plant was a Grade 2 facility but the operator was only
certified for a Grade 1 facility. On May 12, 2000, State
Regional Office officials performed a Compliance
Evaluation Inspection and "the Plant was found to be
NonCompliant" (this emphasis was contained in the
Regional Office memorandum).
Various guidance documents envision EPA's regions
having at least a limited role in overseeing minors. For
example, on October 2, 1989, the Office of Water issued
its Revised Enforcement Management System (EMS)
guidance which identified seven basic principles that were
common to an effective EMS. The first principle was to
maintain a source inventory that was complete and
accurate. This guidance stated: "The inventory data for
majors and significant minors [emphasis added] should be
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
REGION 4 GENERALLY
DID NOT TAKE
UNILATERAL ACTION
AGAINST FACILITIES
THAT REMAINED IN
CONTINUOUS
NONCOMPLIANCE
WITH THEIR NPDES
PERMITS
entered directly into the Permit Compliance System (PCS,
the automated NPDES data base), where it exists, in a
timely manner ..." Further, 40 CFRPart 123.45
required states to report on their compliance and
enforcement activities related to minor facilities. States
were required to submit annual reports detailing the
number of minor permittees reviewed, the number of minor
permittees in non-compliance, the number of enforcement
actions taken, and the number of permit modifications
extending compliance deadlines. North Carolina has not
provided this report to Region 4 and we found no evidence
that the Region has insisted that it be provided.
If Region 4 had followed the guidance in the CFR and
EMS, it would have been aware of the problems in the two
facilities described above. Since Region 4 officials were
unaware of these problem minor facilities, they were unable
to either take unilateral action, or support the State's
efforts to bring these problem facilities into compliance
with their NPDES permits.
Region 4 generally did not overfile1, issue administrative
orders, or take other comparable actions against municipal
facility violators in North Carolina in 1998 or 1999. We
identified only one case during the period of our review
where Region 4 took comparable enforcement action
against a North Carolina facility which had violated its
NPDES permit limitations. On June 19, 1998, Region 4
overfiled and issued an administrative order against one
industrial facility with an NPDES permit, the [NC City D]
Plant of the [NC Corporation E], We identified five cases
where the State did not negotiate a SOC even though the
permittees remained in SNC from approximately six to 45
months (see Exhibit 2). In our opinion, Region 4 should
have either overfiled or made a determination that
overfiling was not necessary.
EPA's MO A with the State provided that when EPA
determined that the State had not initiated timely and
appropriate enforcement actions for permit violations, EPA
could have proceeded with any or all enforcement options
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
available under the CWA. These options included
overfiling and issuing administrative orders.
As described in the next chapter of this report, the State
did not meet EPA's guidance for obtaining SOCs timely in
the SNC cases we reviewed. Moreover, some of these
cases involved facilities that had been in continuous
noncompliance for extended time periods. For example,
[NC Town F] Wastewater Treatment Plant was in
continuous noncompliance for mercury from September of
1997 through at least March of 1999. Further, we found
no indication that Region 4 officials discussed the need for
a SOC with State officials, or that the Region considered
initiating its own action in this case.
Region 4 officials indicated that their NPDES oversight
work demands increased in recent years while their
resources remained constant or decreased. Accordingly,
their resources for overseeing the delegated NPDES
program were limited. For example, the Chief of Region
4's Water Programs Enforcement Branch indicated that
only one Regional official was assigned to oversee the
WET program and this official was unable to devote her
full time to this responsibility.
When permittees have not complied with NPDES permit
limits over an extended period of time, water quality may
have continued to be impacted. If Region 4 had overfiled
or taken comparable enforcement action in the permit
violation cases we reviewed, North Carolina's water
quality might have been substantially improved during that
period.
At the end of our fieldwork, the Region 4 PCS Manager
informed us that the State had entered WET data into PCS
during July 2000. Also, at the end of our fieldwork, the
OIG was conducting a national audit of EPA enforcement
which included issues related to nationwide enforcement of
WET violations.
CONCLUSION Region 4 needs to expand and strengthen its oversight of
North Carolina's NPDES program. The need for these
actions is emphasized by the fact that Region 4 did not have
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
reporting procedures in place which would inform them
about WET violations or continuing problems with minor
facilities. In addition, the Region did not generally overfile,
or take comparable actions, to supplement State efforts to
maintain water quality and improve the environment. Since
the Region was not aware of the WET violations we
reviewed, or the continuing problems at the minor facilities
we reviewed, the Region could not adequately oversee the
State's efforts to improve water quality. If the Region had
adequate information and had taken action when necessary,
the exceedances of NPDES permit limits that have
continued might have been reduced or eliminated with
resultant improvement in the water quality of the State.
RECOMMENDATIONS We recommend that the Regional Administrator
Develop procedures to ensure that failures to meet
WET limits in NPDES permits are recorded in the
State's QNCRs, or are otherwise recorded so that
this data may be used to monitor the progress that is
being made in resolving such violations.
Develop procedures to obtain the information
needed to exercise adequate oversight responsibility
over problem minor facilities in North Carolina.
Review the major North Carolina problem facilities
which are identified in QNCRs and the minor
problem facilities which are identified in the State's
summary records, to evaluate the need to overfile or
take comparable enforcement action when
necessary, and require that such overall evaluations
be made periodically, at least annually, for all
problem permittees.
EPA Region 4's Water Management Division Director
agreed with the facts that were contained in the Chapter
and indicated that discussions were already underway with
the State to develop an action plan to address the resolution
of the recommendations in the Chapter. However, the
Director also indicated that resource constraints would limit
the amount of oversight that the Region could devote to
EPA REGION 4
COMMENTS
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
monitoring the State's enforcement actions with minor
facilities and the Region would still have to focus its
resources on monitoring the State's oversight of major
facilities.
OIG EVALUATION We agree that EPA Region 4's resources should be focused
on monitoring the State's oversight of major facilities.
However, for the reasons we cited in this Chapter, we
continue to believe that the Region should also oversee the
State's minor facilities' NPDES enforcement activities and
should use the State's summary information already
available to accomplish this responsibility. We believe that
the anticipated joint action plan proposed by EPA Region 4
and the State, once implemented, could significantly help in
reaching this goal. We have retained our recommendations
in this Chapter pending our review of the anticipated
EPA/State joint action plan.
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
CHAPTER 3
ADDITIONAL IMPROVEMENT IS NEEDED BY NORTH CAROLINA TO
ENSURE THAT ENFORCEMENT ACTIONS ARE TIMELY AND
APPROPRIATE
State of North Carolina officials did not take timely
enforcement actions for significant daily and weekly
violations until compliance inspections were done, or until
there were violations of one or more monthly NPDES
permit limits. This practice resulted in enforcement actions
being delayed from nine to 15 months for four of the 17
major facilities we reviewed. In addition, this policy may
have delayed enforcement actions against minor facilities for
considerably longer periods, conceivably years. Also, State
officials did not always negotiate agreements with
permittees when necessary to achieve compliance because
they did not agree that such agreements were practical or
appropriate within the time frames specified in the State's
MOA with EPA. Further, when assessing penalties, State
officials did not adequately consider the economic benefits
that might have accrued to permittees from continuing to
operate without being in compliance with their NPDES
permits. Because the State did not always take timely and
appropriate enforcement actions in accordance with the
guidance in its MOA with EPA, discharges may have
continued into State waters in excess of the permit limits.
MOA REQUIREMENTS North Carolina's MOA with EPA Region 4 required that
North Carolina take timely and appropriate action against
permittees who were in violation of compliance schedules,
effluent limitations, pretreatment standards or other permit
limits. The MOA further stated that timely enforcement
action began with a written NOV to a major discharger
within thirty (30) days of the State becoming aware that a
violation had occurred, and actions against minor
dischargers were of a lower priority but should have been
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
taken as quickly as possible. Under the Timely and
Appropriate Guidance in the MO A, formal enforcement
actions, with schedules to bring noncompliant major
dischargers back into compliance, were expected generally
within 60 days of facilities first becoming in SNC on
QNCRs. A formal enforcement action for a noncompliant
minor facility was expected as soon as possible. In its MOA
with EPA, the State affirmed that it would conduct a timely
and substantive review of all self-monitoring reports
received and would evaluate the permittee's compliance
status.
State Accomplishments and The State implemented a new enforcement policy on July 1,
Enforcement Policy 1998 which appeared to have caused more facilities to come
into compliance with their NPDES permits. NCDENR
reports indicated that the overall compliance rate for
NPDES facilities rose from approximately 81 percent in
1997 to more than 87 percent during the first half of 2000.
In addition, the reports highlighted the improvement trend
by showing that during the eight-year period from 1990
through 1997, compliance rates never achieved the recent
rate of 87 percent but, instead, consistently hovered around
80 percent and were never higher than 82.07 percent.
Prior to July 1, 1998, NOVs were not necessarily issued
within 30 days after a violation was identified. Instead,
NOVs were frequently issued at the time that a compliance
inspection was done, which could be many months after a
violation occurred. In contrast, the policy that was adopted
in July 1998, required State regional water supervisors to
issue NOVs automatically for most NPDES permit
violations within 30 days after they became aware of a
violation. The policy also required that an assessment be
automatically made, in accordance with a prescribed
schedule of penalty amounts for most types of violations,
and included consideration of the percentage by which the
permit limit was exceeded.
For example, State policy specified that a $250 assessment
would be made for violations of daily and weekly permit
limits and a $1,000 assessment would be made for
violations of monthly permit limits. The policy provided
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
Importance of Taking Timely
Enforcement Action
for assessments to be increased from 25 percent to 45
percent if there were more than three violations in a six-
month period. The Director and Deputy Director of
NCDENR and the Water Quality Section Chief retained the
right to make the assessment decisions for certain types of
enforcement actions. In addition, if a State regional
supervisor felt a higher penalty was appropriate, he could
forward the case to the Director who was authorized by
Statute to assess civil penalties up to $25,000 per day per
violation of any permit limit. The State's enforcement
policy increased the number and timeliness of NOVs and the
total amount of assessments. NCDENR also put extensive
and specific NPDES enforcement related data on their
public web site. As indicated previously, there were
indications that NCDENR's initiatives caused permittees to
take actions more quickly to achieve compliance with their
NPDES permits.
The State's 1998 enforcement policy was generally less
stringent toward major dischargers than Region 4 required
because, as explained in this Report, the State did not
negotiate SOCs in accordance with the Region's guidance.
However, to the State's credit, their enforcement policy
toward minor dischargers appeared to be generally more
stringent than the Region required inasmuch as the State
issued NOVs against minor dischargers, with automatic
penalty assessments where appropriate, within 30 days after
identifying a violation. North Carolina's enforcement policy
did not differentiate between major and minor dischargers
regarding the issuance of NOVs or making penalty
assessments.
The importance of taking timely enforcement action for
exceedances of daily and weekly permit limits was indicated
in a statement, dated September 21, 1995, by the Assistant
Administrator of EPA's OECA: "... violations of the
Non-Monthly . . . [NPDES permit limits] do pose a
significant threat to the environment/public health." When
NPDES permit limits are exceeded, enforcement actions
should be taken timely to ensure that facilities are brought
back into compliance as soon as possible.
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
ENFORCEMENT
ACTIONS ARE NOT
ALWAYS TAKEN
PROMPTLY FOR
VIOLATIONS OF DAILY
OR WEEKLY PERMIT
LIMITS
North Carolina NPDES permits contained daily or weekly
limits for various elements, including mercury and cyanide
but did not contain a monthly average limit for these latter
two elements. When permit limits were tested, the values
were recorded manually in DMRs by personnel at the
permitted facility. This information was sent to the State's
central office in the State Capital with State regional offices
receiving a copy. Key data elements in the DMRs for
majors and minors were recorded in the State's compliance
monitoring system (CMS), and key data elements in the
DMRs for majors were recorded in EPA's PCS. According
to State officials, State personnel did not routinely review
the DMRs for permit violations because of resource
limitations.
The State's policies and procedures required that when a
monthly permit limit was exceeded, the DMR for the month
be reviewed by State regional officials in the field.
Accordingly, if a monthly NPDES permit limit was
exceeded at a facility in January, the facility's DMR for the
month of January should have been reviewed by State
regional officials, and all exceedances of daily and weekly
limits should have been identified. Assessments should then
have been made, where appropriate, for exceedances of
monthly, weekly and daily NPDES permit limits. However,
if there were no violations of a monthly limit, State regional
officials did not normally review the DMRs for exceedances
of daily or weekly permit limits. Therefore, these
exceedances normally went undetected until a compliance
inspection was done.
EPA guidance required that major facilities have a
compliance inspection at least once a year and minor
facilities at least once every five years. The State followed
EPA's guidance concerning performing compliance
inspections for major facilities and some State regional
offices indicated they inspected minor facilities every year.
However, at least one State regional office followed EPA's
guidance and performed compliance inspections for minor
facilities every fifth year. The State's policies and
procedures also required that a year's DMRs be reviewed
during compliance inspections. Any exceedance of a daily
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
Assessment Made 15
Months After Violation
or weekly permit limit that had not been detected before the
compliance inspection should have been detected then.
Accordingly, when compliance inspections were completed,
NOVs were issued and assessments were made, as
appropriate, for all daily and weekly violations that had not
been assessed previously for that period. Therefore, a
compliance inspection should have caused any delayed
enforcement action to have been taken retroactively, when
appropriate, at least once every year for major facilities and
at least once every five years for minor facilities.
The effect of this policy was illustrated in four of the 17
major cases we reviewed. In these four cases State officials
in the regional offices did not identify some daily or weekly
exceedances until a compliance inspection occurred. In one
of these cases, the oldest violation occurred 15 months
before the inspection, and in the other three cases, the
oldest violations occurred between nine and 14 months
before the inspection. For example, a compliance inspection
on December 4, 1998, revealed that the [NC Town F]
Wastewater Treatment Plant in [NC Town F], exceeded its
NPDES mercury limits in September 1997, 15 months
earlier. No NOV had been issued for this violation at the
time the compliance inspection began. Because of the
compliance inspection, a NOV was issued on July 14, 1999,
and an assessment of $8,979.65 was made for 26 of 32
mercury violations. However, no assessment was made for
six of the 32 violations, including the one in September
1997, because, according to an environmental engineer at
the State regional office, they were instructed not to assess
for violations that occurred more than a year before the date
on which an assessment was made. The potential
significance of the 15-month delay in issuing the NOV was
underscored by correspondence from the State Director to a
Town official, dated February 25, 2000, which stated:
The Division has identified . . . [NC Stream
G] as an environmentally-impaired stream
with designated poor water quality, non-
supporting of its intended uses. Moreover, .
. . [NC Plant F] is listed as a point source for
this environmental impact2.
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Penalty Assessments for
Violations of Daily Or
Weekly Permit Limits Were
Delayed
As illustrated above, State regional officials in the field were
not usually aware of daily or weekly violations, unless they
were accompanied by monthly violations, until compliance
inspections were done. This was true regardless of whether
the violation was by a major or minor facility. State central
office officials were similarly unaware of these type
violations for minor facilities, but they were aware of such
violations for major facilities. When DMR data from major
facilities was processed in the State's central office, daily
and weekly violations were identified and recorded in the
QNCR. However, this information was not usually made
available to State officials in the field. This condition was
illustrated by the fact that one State regional supervisor
asked us what a QNCR was.
NCDENR's central office did not take enforcement action
for the four cases mentioned above, or ensure that their field
office took enforcement action, because NCDENR did not
consider violations of daily or weekly permit limits, by
themselves, to be sufficient justification for taking
enforcement actions. They gave several reasons for this
position.
First, NCDENR officials indicated that most of the time, a
daily or weekly violation would not have occurred by itself,
but would have been accompanied by a violation of a
monthly permit limit. This consideration suggests to us that
NCDENR believed the problem was too rare to warrant
changing their current practices. However, all 17 of the
permits we reviewed contained items that had only daily or
weekly NPDES permit limits and four of the 17 cases we
reviewed (23.5 per cent) experienced at least one violation
of a daily or weekly permit limit, without a violation of a
monthly permit limit.
Second, NCDENR officials indicated that if the facility was
a municipality, it probably administered its own
pretreatment program, was aware of the problems and was
taking steps to resolve them. We noted that the violations
in the four cases cited above continued for extended periods
of time and were still being experienced by three of the four
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
facilities at the end of our fieldwork. Further, in our
opinion, the existence of a pretreatment program did not
offset the State's obligation to issue NOVs, or take other
enforcement actions, as appropriate, to ensure compliance
with NPDES permits.
Finally, NCDENR officials indicated that some of the permit
parameter items that only have daily or weekly permit limits,
such as mercury, are difficult to measure. False positives
appear due to problems with sampling and testing
techniques. In our opinion, the merits in this consideration
did not preclude the issuance of a NOV, perhaps without a
penalty assessment, if appropriate, or the commencement of
other enforcement actions, as necessary. If there were valid
reasons for establishing a daily or weekly NPDES permit
limit, these same reasons provided a valid justification for
taking enforcement action as soon as an exceedance was
identified.
We believe that the State's practice with regard to
enforcement of daily and weekly permit limits appears to be
inconsistent. We question the State practice that requires
an assessment to be made for a violation 12 months after it
occurred, but would not make the same assessment for the
same violation when the State first identified the violation
over a year earlier. In our opinion, any valid reason for not
making an assessment during the first month after a
violation was identified would generally be equally valid a
year later. However, in the four cases we reviewed, State
central office officials knew that violations of a daily or
weekly permit limit had occurred because this information
appeared in the QNCR, but they did not take enforcement
action as soon the violations were identified. Instead, State
central office officials waited until a compliance inspection
was performed by State regional office officials who, in
some cases, issued NOVs for multiple violations that
occurred over the preceding 12 months and made
assessments for those violations. We believe taking
enforcement action as soon as a violation is identified is
more effective than taking the same enforcement action for
the same violation a year later.
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NCDENR's Central Office
Did Not Provide Its QNCRs
To Its Field Offices
NCDENR's central office did not provide QNCRs to State
regional offices, or otherwise apprise State regional officials
of violations of daily and weekly permit limits by major
permittees about which the field offices were unaware. It
appeared that State regional officials generally maintained
periodic contact with the permittees and may have been able
to use this information informally in their ongoing
consultations to advise permittees how to solve their
problems and, in general, to encourage permittees to
achieve compliance.
Potential Exists for
Extensive Delays in
Enforcement Actions
Against Minor Facilities
In the four minor permittee cases we reviewed, multiple
monthly violations were experienced and, therefore,
violations of daily or weekly permit limits were identified.
However, as described previously, daily and weekly
violations at minor facilities which occurred without an
accompanying monthly violation, could have remained
unidentified until a compliance inspection was performed.
This conceivably might not have occurred until years after a
violation since minor facility compliance inspections might
only have been conducted once every five years. In our
opinion, NCDENR's practice of delaying enforcement
actions for daily and weekly permit limit violations, as
discussed above, did not fulfill its responsibility for taking
timely and appropriate enforcement actions to protect the
environment by ensuring compliance with its NPDES
permits.
IMPROVEMENT IS
NEEDED IN FORGING
AGREEMENTS WHICH
BRING ABOUT
COMPLIANCE WITH
NPDES PERMIT LIMITS
The State did not follow EPA's guidance for taking formal
enforcement actions because State officials did not agree
that this guidance was appropriate in many situations. As a
result, State agreements with permittees which required
permittees to achieve compliance with their NPDES permits
were either not reached, or not reached timely.
Consequently, the elimination or reduction of pollutants in
the State's waters may have been delayed.
EPA Guidance Called for
An Agreement to Achieve
Compliance
EPA Region 4's MOA with the State of North Carolina
indicated that by the time a major permittee first appeared
on a quarterly report of noncompliant permittees, the State
was expected to have already initiated enforcement actions
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Agreements to Achieve
Compliance Were Either
Not Obtained Or Were Not
Obtained Timely
to reach compliance. Further, before the permittee
appeared on the next quarterly report for a violation of the
same permit limit, the State should have taken a formal
enforcement action. The MOA defined a formal
enforcement action as an agreement that required actions to
achieve compliance, specifies a timetable, "... contours
consequences for noncompliance that are independently
enforceable without having to prove the original violation,
and subjects the person to adverse legal consequences for
noncompliance ..." The MOA further defined a formal
enforcement action by the State of North Carolina as either
a SOC with the permit violator or a Notice of Continuing
Penalty. There were no issuances of Notices of Continuing
Penalties for any case we reviewed. When we asked five of
the State's seven regional supervisors what type of
enforcement actions they considered, no one mentioned this
Notice. The EPA and State officials whom we interviewed
either were not familiar with this Notice or did not believe
this action was as useful as other enforcement actions.
The State was authorized to issue Special Orders Without
the Consent (SOWC) of the permitted facility (North
Carolina G.S. 143-215.2). However, State officials
indicated that their general enforcement approach was to
assess repeated fines where violations occurred and obtain
SOCs when needed. They indicated that the issuance of
unilateral orders could result in protracted court
proceedings thus delaying compliance and tying up valuable
staff time.
During our review of case files for 17 major permittees, we
did not find a case where the State met EPA's guidance for
obtaining a SOC 3. We found that SOCs should have been
obtained for 13 of the 17 major permittees, according to the
criteria in the MOA. At the time we completed our field
work, SOCs were still needed, according to these criteria,
but had not been obtained for three of these 13 permittees.
Of the remaining 10 permittees, four permittees came back
into compliance and six permittees entered into SOCs.
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
When SOCs Were
Obtained They Were Not
Obtained Timely
In an example of a case where a needed SOC was not
obtained, the State did not negotiate a SOC with [NC Town
F] even though file documents indicated that mercury had
been identified as a continuing problem in its wastewater
flow since 1985. Further, the Town experienced
exceedances of its NPDES permit limits for mercury in 20
consecutive months from August of 1997 through February
of 1999. The enforcement actions that were taken because
of these violations consisted of issuing two NOVs which
assessed approximately $9,000 for violations during the ten-
month period from May 1998 through February 1999. A
file document entitled "ENFORCEMENT CASE
ASSESSMENT FACTORS" contained the following
statements:
The mercury violations noted may be
considered intentional due to the facility
having knowledge of the violations, yet
taking several years to adequately address
the cause of the high mercury levels in the
wastewater, and adequately remove the
sources or remove the mercury from the
effluent. . . . The Town has been relatively
cooperative in recent dealings, however, as
mentioned above, this problem could have
been solved a long time ago if appropriate
action had been taken in a timely manner.
Moreover, the State Director identified this Plant as "... a
point source . . . " for an " . . . environmentally impaired
stream ..." (this is the same plant discussed previously in
this chapter where the State Director was quoted).
Of the 17 major permittee cases we reviewed, six
permittees negotiated SOCs with the State. One of the six
cases was more than seven years old and we could not
locate the data to evaluate whether the SOC was negotiated
timely. None of the remaining five4 SOCs were obtained
within the time period specified in North Carolina's MOA
with Region 4 (See Exhibit 2 for details). For example,
[NC Town H] reported mercury concentrations in excess of
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
State Officials Believed
Following SOC Guidance
Was Sometimes Not
Appropriate
its permitted limits every month for nearly three years
before the Town applied for a SOC. Moreover, the Town's
application made it clear that legal actions taken by a
consumer group, rather than negotiations with the State,
caused the Town to apply for the SOC.
In the application for a SOC, the Town Manager wrote:
Through this period the State has been
diligently working with [NC Town H] and it
was felt that a Special Order by Consent
would not be necessary. However ... It was
felt that due to the pending civil action [from
a consumer group] and the continued
detection of effluent levels of mercury, that it
would be in order for the Town to apply for
a Special Order by Consent.
When agreements which require permittees to achieve
compliance with their NPDES permits are not reached
timely, the elimination or reduction of pollutants in the
State's waters may be delayed. In the case of [NC Town H]
if the SOC had been negotiated approximately two years
earlier, as required by the MO A, mercury levels in those
impaired waters may have been reduced earlier.
North Carolina officials did not agree that EPA's guidance
for obtaining a SOC was appropriate in all situations. The
North Carolina regional supervisors whom we interviewed
gave various reasons for not negotiating a SOC with a
permittee. For example, if they thought a permittee was
making a significant effort to eliminate a violation and was
making material progress toward this goal, they did not
think that a SOC was necessary even if violations were
continuing. In addition, they believed that a SOC was not
usually appropriate when State and permittee officials were
not reasonably certain about the cause of a permit limit
violation because they would not be able to provide
reasonable milestone dates in a SOC for attaining
compliance. Further, North Carolina officials noted that a
SOC required the consent of both the State and a permittee.
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If the permittee did not want a SOC, regardless of the
merits of such an agreement, the State could not force the
permittee to sign it. Finally, State officials indicated that
State Statutes did not allow for the issuance of SOCs when
noncompliance was a result of poor operation. Per North
Carolina Administrative Code, Title 15 A, Subchapter 2A,
Section 1206:
Requests [for SOCs] will not be evaluated
unless it is demonstrated by the permittee to
the satisfaction of the Director that
noncompliance is not due to failure by the
permittee to properly operate, manage and
maintain the wastewater treatment system.
None of the State files we reviewed contained a statement
(or other type of notation) which indicated that a SOC was
not pursued because the permittee was not operating the
facility properly.
State officials also believed that the time table for obtaining
a SOC was not realistic. They maintained it would take at
least three months, and usually five or six months, to obtain
a SOC under the best of circumstances when there were no
questions or disagreements between any parties. State
officials emphasized that extensive SOC negotiations may
have occurred between the time that the permittees we cited
first came into SNC and the date that the SOC was actually
signed (see Exhibit 2). The time required to process a SOC
was indicated by the State's Standard Operating Procedures
for Water Quality Section SOCs, dated April 23, 1997,
which stated:
Once the State and a permittee have agreed on a
draft SOC, it will be sent directly to public notice
during the next available public notice period.
Public Notice will be given at least forty-five days
prior to any final action regarding the Consent
Order.
A public hearing may be required before entering
into a SOC.
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NORTH CAROLINA DID
NOT ADEQUATELY
CONSIDER ECONOMIC
BENEFIT OF
NONCOMPLIANCE
WHEN ASSESSING
CIVIL PENALTIES
If there is no comment, or inadequate comment is
received to justify a public hearing, the SOC will be
routed fifteen days following the close of the
comment period to the State Deputy Director and
then to the Director for final review.5
In our opinion, when the State did not negotiate SOCs with
applicable permittees, the State did not meet their
obligations under their MOA with EPA. In particular, their
enforcement actions, other than SOCs, did not commit
permittees to specific, tangible efforts to achieve compliance
in the future in accordance with a timetable that had been
accepted both by the permittee and the State.
The July 1998 change in North Carolina's penalty
assessment policy resulted in more timely penalty
assessments for facilities that violated their permit limits.
However, the penalty amounts assessed may not have been
sufficient to bring repeat violators into compliance timely.
On July 1, 1998, the State's Water Quality regional
supervisors were delegated the authority to assess penalties
in accordance with a schedule of penalty assessments. Set
penalty amounts were established for specific violations.
Fines of $1,000 per monthly violation and $250 per weekly
violation were issued if the permit limits were exceeded by
20 percent. The assessed penalty amounts could be
escalated, up to a maximum of 45 percent, if there were
more than three violations in a six-month period. However,
the escalated assessed penalty amounts did not take into
consideration the fact that some violators might have
obtained an economic benefit by paying the penalty and
avoiding or delaying measures to bring the facility into
compliance. In some cases, the remedies could have cost
millions of dollars if new plants or extensive rehabilitations
of sewer collection systems were needed.
North Carolina's policy for assessing penalties was not
consistent with its MOA with EPA. The MOA required
that economic benefit be considered when penalties were
assessed. The MOA, dated May 9, 1994, stated:
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
The determination of a penalty amount (or
equivalent sanction) should be based on
factors such as the seriousness of the
violation(s), any history of noncompliance,
any good faith effort to comply with
applicable requirements, the amount of
economic benefit resulting from the
violation, the economic impact of the penalty
on the violator, and such other factors as
justice may require . . .
The interim CWA Settlement Policy, dated March 1, 1995,
stated that the objective of the economic benefit calculation
was to place violators in the same financial position as they
would have been if they had complied on time.
According to the State's Chief of the Water Quality
Section, the assessment of economic benefit would have
been beneficial in some cases. However, it wasn't part of
the State policy to have regional supervisors assess a
penalty following a violation of a monthly permit limit.
According to the Chief, economic benefit calculations
would have slowed their penalty assessment process and the
instances where it would have been beneficial were rare.
Also, the State indicated it had other enforcement
mechanisms, such as sewer moratoriums for municipalities.
In addition, the State indicated they didn't have anyone on
staff who was familiar with EPA's Economic Benefit of
Noncompliance (BEN) model used to calculate economic
benefit.
The State penalty assessment files we reviewed contained a
one page preprinted form that listed eight factors which
were to be considered when determining the penalty
assessment amount. One of the eight factors was "The
amount of money saved by noncompliance." The form also
contained the same five potential answers, ranging from
"not significant" to "extremely significant" for each of the
eight factors. We did not locate any document that showed
an actual State computation of the violator's potential
savings from noncompliance. We were informed by EPA
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
Region 4 officials that the BEN model used to calculate
economic benefit from noncompliance has been used
successfully throughout the country for many years.
The policy of not using economic benefit in determining the
amount of assessed penalties may have reduced the
incentive for some repeat violators to enter into SOCs with
schedules for coming into compliance. For example, we
identified a Wastewater Treatment Plant in [NC Town A]
that was assessed repeatedly for failing to meet the WET
limits in its NPDES permit. The Town failed eight of 10
tests for toxicity in 1998, 9 of 10 tests in 1999, and the last
nine tests it took through March 2000, the last month
shown in the summary record we reviewed. Further, the
Town has not passed a test during the fourth quarter since
1994, and failed at least one test each year since 1990. The
State issued NOVs and assessed penalties for seven months
of violations in 1998 and six months of violations in 1999.
The State's regional office tried to get the Town to
negotiate a SOC, but the Town had not done so at the time
we completed our field work. The State's environmental
specialist who works with the Town stated:
. . .the staff of the Department of Water
Quality suspects the Town believes that
paying the fines is cheaper than paying for a
TRE.. .
(TRE: toxicity reduction evaluation - a study to determine
the cause of toxicity levels, which typically would be
required in a SOC).6
We also identified two cases in which violating facilities
paid the penalty assessments but did not agree to a
compliance schedule in SOCs. For example, [NC County
I] had been assessed penalties eleven times totaling $29,395
for permit violations at its [NC County I] Wastewater
Treatment Plant from May 1998 through January 2000. In
another case, the [NC City J] Plant was assessed penalties
five times totaling $5,084 for permit violations from April
1999 through January 2000. At the time we completed our
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
field work, penalty assessments were pending for violations
for February, March and April 2000 at the [NC City J]
Plant. Neither permittee had a schedule for compliance
despite a history of noncompliance. Neither permittee was
assessed penalty amounts that took into account the
economic benefit of delaying actions needed to come into
compliance.
CONCLUSION North Carolina improved the timeliness of its penalty
assessments in recent years but further improvement was
needed in its NPDES enforcement efforts in three areas.
First, North Carolina needed to change its practice of not
taking enforcement actions against major permit violators
for violations of daily or weekly permit limits until a
compliance inspection was done, or there was a violation of
a monthly NPDES permit limit. Further, North Carolina
needed to develop procedures for ensuring that daily and
weekly exceedances of NPDES permit limits by minor
facilities were identified within 30 days. Second, North
Carolina needed to improve its enforcement practices by
timely obtaining agreements from permit violators to
achieve compliance. Agreements to obtain compliance were
either not obtained, or not obtained timely. This was due to
the fact that State officials did not believe such agreements
should be obtained, in every situation, within the time
frames specified in the State's MOA with EPA. State
officials also believed other enforcement actions were
sufficient to bring about compliance with NPDES permit
limits in some cases. Third, economic benefit was not
adequately considered when penalties were assessed, or
other types of enforcement actions were contemplated, due
to the fact that State officials believed using this concept
would have slowed the penalty assessment process. If
improvements in State enforcement efforts are not made,
exceedances of NPDES permit limits are likely to continue
and State waters will continue to be polluted.
RECOMMENDATIONS We recommend that the Regional Administrator ensure that
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
North Carolina:
changes its current practice of not taking
enforcement action within 30 days for violations of
daily and weekly permit standards which are not
accompanied by violations of monthly standards
provides QNCRs to NCDENR field officials or
otherwise apprises them of violations of daily and
weekly permit limits by major facilities
detects exceedances of daily and weekly NPDES
permit limits within 30 days after receipt of DMRs
from minor facilities. In the absence of CMS
software enhancements, or other better means of
identifying such exceedances, we recommend that
the Regional Administrator encourage the State to
require that DMRs be manually reviewed for daily
and weekly exceedances of NPDES element limits
when DMRs do not have monthly permit limits.
uses SOCs, as appropriate, when permit violations
persist and State waters are being polluted and that
the State accounts for the delays in reaching
agreements with permittees, where appropriate, for
achieving compliance.
incorporates adequate consideration of economic
benefit by permit violators in penalty assessments
against repeat offenders, and
provides training to North Carolina officials on how
to use the BEN model.
STATE COMMENTS The State indicated their willingness to take unilateral
actions where possible and work with EPA Region 4 to
resolve issues raised in this Report Chapter. The State also
indicated that DWQ would provide copies of the QNCRs to
each of the State field offices and they would work with
EPA to evaluate the need to update the language in its
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
MOA. We believe these steps and the DWQ plan to work
closely with EPA Region 4 could resolve all pending issues.
The State also indicated that they thought we suggested that
every violation must be addressed with a formal
enforcement action. The State's response suggested that an
undetected violation of a non-monthly limit will be a rare
occasion, an isolated single violation. The State's response
also indicated that a manual review of all DMRs was not
practical or desirable. The State indicated that their
enforcement policy against violators had changed since
1997 and that this had resulted in increased compliance
rates. The State added that SOWCs were not a wise use of
their resources. North Carolina also indicated that they
believed that factoring economic benefit of non-compliance
more thoroughly into their assessments would detract from
the timeliness of their assessments. Further, the State
indicated that our report seemed to challenge the fact that
SOCs cannot be issued for instances of noncompliance that
are operational in nature. Finally, the State's response
asserted that their enforcement policy fulfills the
commitment they made in their MOA to take formal
enforcement actions.
OIG EVALUATION We did not suggest that that every violation must be
addressed with a formal enforcement action. The MOA did
not require a formal enforcement action after every
violation. In accordance with their MOA, we believe every
violation that was reflected in a DMR should have been
identified by a State representative. Our report addressed
violations of non-monthly permit limits that were not
accompanied by violations of monthly permit limits, not
violations of non-monthly permit limits that were
accompanied by violations of monthly permit limits. We
believe that undetected violations of non-monthly limits are
not rare. Such violations went undetected from nine to 15
months in four of the 17 major cases we reviewed (23.5 per
cent). The State's MOA with EPA required the State to
conduct a timely and substantive review of all self-
monitoring reports received and evaluate the permittees'
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
compliance status. We acknowledged the State Code
which prohibits SOCs from being issued for instances of
noncompliance that are operational in nature in our draft
report and did not "challenge" that Code. We also made the
point that none of the State files we reviewed contained a
statement (or other type of notation) which indicated that a
SOC was not pursued because the permittee was not
operating the facility properly.
In response to the State's comments that their enforcement
policy had changed in 1997 and this had resulted in
increased compliance rates, we added related information to
the final report which we were able to evaluate. With
regard to the State's discussion of their non-use of SOWCs,
our draft report statements related to this issue mentioned
only that the State had the authority to use this enforcement
tool but that the State's approach, instead, was to assess
fines and obtain SOCs when needed.
The State was required by their MOA to factor in an
evaluation of the economic benefit of non-compliance in
their penalty assessments. Such evaluation could be done
on a case by case basis, concentrating on more severe and
repeated violations, as provided for in the MOA.
We continue to disagree with the State's assertion that their
enforcement policy fulfilled the MOA commitment to take
formal enforcement actions. The State's enforcement
actions, other than negotiating SOCs, did not obtain the
permittees' commitment to take specific, tangible actions to
achieve compliance by a specific time in the future.
In our opinion, the other points raised in the States response
were already fully addressed in the draft report.
Accordingly, we did not change the wording in this Chapter
of our report.
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CHAPTER 4
NORTH CAROLINA NEEDS TO IMPROVE ITS STORMWATER
COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM
North Carolina's NPDES compliance monitoring activities
were generally sufficient to detect instances of non-
compliance, excluding daily and weekly limit violations.
Except for stormwater sites, State on-site inspections of
NPDES point sources were performed at required intervals
during the period July 1998 through June 2000, and
permittee violations of monthly discharge limits were
generally detected in a timely fashion. However, the State
had not developed a compliance monitoring strategy and
program for NPDES stormwater permits. State
management officials told us that resource constraints
prevented them from developing a compliance monitoring
program for stormwater permits. Although water quality
data indicated that stormwater was a significant contributor
to surface water impairment in North Carolina, the State and
EPA did not have assurance that facilities with stormwater
permits were complying with their permit requirements or
taking all required measures to reduce pollution from
stormwater run-off
NPDES STORMWATER In 1987, Congress amended the CWA to require
REQUIREMENTS implementation, in two Phases, of a national stormwater
permit program. Regulations implementing Phase I were
promulgated on November 16, 1990, in the Federal
Register (55 FR. 47990). Phase I required NPDES
permits for stormwater discharges from large and medium
municipal separate storm sewer systems (MS4) generally
serving populations of 100,000 or more, construction sites
that disturb five or more acres of land, and certain other
industrial sites (e.g., landfills). The Final Rule for Phase II
of the Federal stormwater program was published in the
Federal Register on December 8, 1999, and was effective
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
February 7, 2000. Phase II expanded the storm water
permit program to include small MS4s (those serving
populations under 100,000), and construction sites that
disturbed one to five acres. EPA's final rule for Phase II
stormwater permits discussed the water quality concerns
posed by stormwater runoff as cited in various impact
studies and assessments. In general, stormwater runoff can
cause or contribute to exceedance of water quality
standards by changing natural water flow patterns,
accelerating stream flows, destroying aquatic habitat, and
elevating pollutant concentrations.
Stormwater permits differed from other NPDES point
source permits in that the permits required best
management practices (BMP) instead of discharge limits.
NPDES permits required that these BMPs be outlined in a
pollution prevention plan prepared by the facility.
Stormwater permits generally required monitoring and
sampling of discharges during specified storm events for
certain parameters of concern. These sampling results were
used to evaluate loadings (i.e., the amount of pollutants)
entering receiving waters. Since the stormwater permits did
not contain discharge limits, these sampling results were not
evaluated for compliance against permit limits as was done
for other NPDES point sources. According to a key
Region 4 enforcement official, EPA is moving toward
requiring that stormwater permits contain discharge limits.
40 CFR Part 123.25 required that states with EPA
approved NPDES programs implement the stormwater
programs described in Part 122.26. North Carolina's FY
2000 CWA Section 106 Grant Workplan contained a
commitment that the State develop a stormwater
enforcement strategy for prioritizing stormwater inspections
and enforcement. However, the State did not agree to this
commitment because of stated concerns about the
availability of resources to conduct this work.
Within North Carolina, the DWQ was responsible for
issuing all NPDES stormwater permits and monitoring
compliance with NPDES permits for MS4s and industrial
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stormwater sites. The State's Division of Land Resources,
as part of the State's Erosion and Sediment Control
Program, oversaw construction activity and had
responsibility for conducting inspections of construction
sites and determining sites' compliance with BMPs. If the
Division of Land Resources' inspection found a violation of
BMPs or other NPDES requirements, they notified DWQ
of these violations, then DWQ could initiate an enforcement
action for NPDES stormwater violations (e.g., for failure to
comply with monitoring requirements).
State Stormwater Initiatives Both State and EPA Region 4 officials cited various
accomplishments that the State had achieved in regard to
their overall stormwater program including both NPDES
and State initiated programs. For example, EPA Region 4
noted that despite resource challenges, North Carolina had
demonstrated effective and innovative use of stormwater
requirements to address illegal ditching and draining
activities in its coastal wetlands. According to the Region,
this ditching initiative required both EPA and North
Carolina to contribute resources toward enforcement
actions that have resulted in restoration of wetlands and
deterrence of future violations. We also noted that the
State had recently completed its web page on the
stormwater program. This web page provided the public
with important information on the State's overall
stormwater program including both the federally required
NPDES program and the State stormwater initiated
programs. For example, information could be found on
State workshops conducted to explain the requirements of
the NPDES Phase II program and to solicit local
government feedback on the implementation of Phase II.
The web page also discussed a stakeholder process
convened to develop a framework for a comprehensive
statewide stormwater management program. State officials
also noted that they had developed a stormwater
management program to control the input of nutrients into
the Neuse River Basin. According to State officials, this
effort had resulted in a model stormwater management plan
for nitrogen control.
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COMPLIANCE WITH
STORMWATER
REQUIREMENTS NOT
ROUTINELY
MONITORED
State officials told us that they had not established a
comprehensive compliance monitoring and enforcement
program for stormwater permits. Specifically,
stormwater industrial sites were not routinely
inspected but were generally inspected on a
complaint basis or in conjunction with other NPDES
inspections,
stormwater self-monitoring reports were not
reviewed to determine whether sites were complying
with their monitoring requirements,
inspections of non-construction stormwater sites
were not tracked and monitored, and
the State did not develop adequate guidance for
conducting stormwater inspections
As of April 2000, North Carolina had issued six MS4 and
3,421 industrial stormwater permits. All MS4 permits
contained monitoring requirements and 2,747 of the
industrial permits potentially required the facility to monitor
and analyze stormwater discharges and report these results
to the State. All of these permits required the permittee to
qualitatively (i.e., visually) monitor all stormwater outfalls.
State officials were unable to tell us how many of these
industrial sites were inspected during the last two inspection
years. Regional inspectors told us that in most cases they
only inspected stormwater sites if a citizen's complaint was
received or in conjunction with inspections of other NPDES
permits for that facility.
Data indicated that construction sites with NPDES permits
were frequently inspected by the Division of Land
Resources. However, these inspections focused on the
sites' implementation of BMPs and did not evaluate
compliance with NPDES monitoring requirements. The
number of active construction sites was variable, but State
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officials estimated that they had approximately 2,800
construction sites under its general construction permit, as
of April 2000. According to Division of Land Resources
officials, their Division had conducted approximately 5,300
inspections during the 12-month period July 1998 through
June 1999, and approximately 3,500 inspections during the
10-month period July 1999 to April 2000.
MINIMAL RESOURCES North Carolina officials told us that their stormwater
WERE DEVOTED TO compliance monitoring efforts had been limited due
STORMWATER resource constraints. North Carolina had not designated
COMPLIANCE any positions primarily dedicated to compliance monitoring
and enforcement of NPDES stormwater permits. The
DWQ's Stormwater and General Permits Unit consisted of
seven positions, including a supervisor. All of these
positions were responsible for NPDES stormwater permit
review and issuance, as well as supporting the State's non-
NPDES stormwater programs and issuing General
wastewater permits. Regional offices were responsible for
conducting inspections of all NPDES facilities. However,
none of the regional office staff was primarily dedicated to
performing stormwater compliance oversight. The Raleigh
Regional Office told us that they have one person assigned
responsibility for conducting NPDES stormwater
inspections, however, stormwater inspection was only one
of her responsibilities.
State officials indicated that the NCDENR Water Quality
Division's Basin Wide Information Management System,
once fully implemented, should provide the necessary
tracking of stormwater self-monitoring data. However,
State officials told us that the final implementation date of
the system was contingent upon the availability and timing
of adequate funding for the project.
Without a stormwater compliance monitoring program, the
State and EPA did not have assurance that facilities were in
compliance with their stormwater permits or taking all
required measures to reduce pollution from stormwater
runoff. State water quality reports indicated that pollution
related to stormwater runoff was a likely cause of
impairment in a significant number of impaired surface
STORMWATER
CONTRIBUTES
SIGNIFICANTLY TO
STREAM IMPAIRMENT
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waters in North Carolina. State water quality reports
indicate that pollution related to stormwater runoff is
a potential cause of impairment in a number of impaired
surface waters in North Carolina. The State's 2000 §
303(d) list indicates that 19% of the State's impaired stream
miles listed for sediment and/or turbidity are potentially
impacted by construction, development, urban runoff, and
non-urban runoff.
We could not determine the extent of NPDES stormwater
permit violations occurring statewide because that
information was not available. However, we observed that
the stormwater related inspections the State regional offices
had performed resulted in the detection of violations and
enforcement actions in some instances. For example, one
State regional office had recommended a $50,975 civil
penalty assessment against a developer for repeated failures
to comply with the monitoring requirements of his NPDES
stormwater permit. This action was initiated after the
Division of Land Resources had inspected the site and
found it to be in violation of its sedimentation and erosion
control plan. In another case, an inspection of an asphalt
plant found indications of oil spills. The inspector noted
that plant employees present during the inspection could not
produce a copy of its pollution prevention plan even though
the permit required that it be kept on-site. In another
example, as part of an investigation of a fish kill, a State
regional office inspector found that an NPDES stormwater
permittee was discharging, via a storm drain, high levels of
pH7 (measure of how acidic or alkaline a substance is) into
the creek where the fish kill had occurred.
CONCLUSION EPA studies, referenced in the Federal Register (55 FR.
47990), as well as State water quality data, showed
pollution resulting from stormwater runoff in North
Carolina to be a significant water quality concern. Further,
the State's regional inspectors found instances where
permittees were not complying with their stormwater permit
requirements. Although water quality data indicated that
pollution from stormwater runoff was a significant water
quality concern, State officials indicated that a lack of
resources had prevented them from developing and
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
implementing a stormwater compliance strategy and
program. Implementation of Phase II of the stormwater
program will significantly increase the number of
stormwater sites requiring NPDES permits and compliance
monitoring. We believe the State and EPA should evaluate
the State's current NPDES compliance activities and
resource allocation to determine whether sufficient
resources can be obtained to implement an adequate
stormwater compliance program.
RECOMMENDATION We recommend that the Regional Administrator provide
assistance and guidance as necessary to assist North
Carolina in evaluating their current NPDES enforcement
strategy and related resource allocation. This evaluation of
the State's NPDES enforcement strategy and resource
allocation should determine whether an adequate
stormwater compliance monitoring program can be
provided by reallocating existing resources. We further
recommend that the Regional Administrator consult with
the State on this evaluation and assist the State, to the
extent feasible, in devising a plan to incorporate an adequate
stormwater compliance monitoring program in their
enforcement strategy and resource allocation.
EPA REGION 4 EPA Region 4 noted in their response that stormwater
RESPONSE regulation implementation was an issue that challenges
Region 4 and its states, and that this stormwater
requirement has put a heavy demand on CWA resources
that are already being strained from other emerging issues
(e.g., Total Maximum Daily Loading (TMDL)
requirements). The response also noted North Carolina's
significant accomplishments in addressing illegal ditching
and draining activities in the State's coastal wetlands.
NORTH CAROLINA The North Carolina DWQ concurred that pollution
RESPONSE resulting from stormwater runoff is a significant water
quality concern in North Carolina. The State noted that
the stormwater runoff problem is greater in scope than
what can be addressed by Phase I and II of the NPDES
Stormwater program. In recognition of the scope of the
stormwater problem, the State responded that they
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administer a State Storm water Management program that
regulates development activities within its 20 coastal
counties as well as development activities that affect
Outstanding Resource Waters and High Quality Waters.
The response also noted that the DWQ administers a
Water Supply Watershed Protection Program and has
implemented buffer rules and stormwater management
requirements in the Neuse, and Tar-Pamlico river basins.
In regard to the draft report's recommendation, DWQ
responded that the diversion of resources from other
aspects of the NPDES program was not an alternative that
they believed would protect water quality. DWQ
responded that it in the past it has attempted to obtain
additional funding for stormwater compliance and
enforcement activities from federal grants and the State
legislature, and will continue to seek additional funding
from these sources. DWQ also indicated that it will
continue to work with the State's Division of Land
Resources to improve coordination of compliance
monitoring activities. During our exit discussion with
State officials, these officials told us that they interpreted
our draft recommendation to suggest that they divert
resources from other NPDES activities to the Stormwater
program.
OIG EVALUATION Based on our discussions with EPA Region 4 and State
officials we revised the wording of the draft report's
recommendation to clarify that we are not recommending
that the State reallocate resources to the stormwater
program. However, we are recommending that EPA and
the State conduct an evaluation to determine whether it
makes sense to reallocate existing resources to the
stormwater program. Both EPA Region 4 and the State's
response to the draft report indicated that the State and
Region 4 will be collaborating to prepare a joint action plan
for addressing the issues and recommendations presented
in the draft report. Pending our receipt and evaluation of
the joint action plan, we revised the draft report's
recommendation and included the revised recommendation
in this Chapter.
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CHAPTER 5
TEST METHODS USED BY NPDES FACILITIES WERE NOT ALWAYS
SENSITIVE ENOUGH TO DETERMINE COMPLIANCE WITH PERMIT
LIMITS
Test methods used by North Carolina's NPDES permitted
facilities to analyze discharge samples were not always
sensitive enough to produce reporting levels that were
below the maximum NPDES discharge limits for total
residual chlorine and mercury during 1999. In the case of
total residual chlorine, some minor facilities did not use the
most sensitive test methods available, but instead used a less
expensive and less sensitive method to analyze samples. For
mercury, a test method capable of producing reporting
levels below the discharge limits for this pollutant was
approved by EPA in June 1999. The use of these new and
more sensitive methods by NPDES permitted facilities had
not been phased in at the time of our review. When the test
methods used to analyze discharge samples were not
capable of accurately reporting pollutant concentrations at
levels below the permit limit, the State and EPA could not
determine whether the facility was in compliance with its
permit discharge limits, and could not fully evaluate the
potential harm to the environment these discharges might
have created.
NORTH CAROLINA
NPDES TESTING
REQUIREMENTS
North Carolina required all permits to contain a standard
clause regarding the type of testing that a permittee must
use when testing its effluent. This clause stated that:
...all test procedures must produce
minimum detection and reporting levels that
are below the permit discharge requirements
and all data generated must be reported
down to the minimum detection or lower
reporting level of the procedure. If no
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approved methods are determined capable
of achieving minimum detection and
reporting levels below permit discharge
requirements, then the most sensitive
(method with the lowest possible detection
and reporting level) approved method must
be used.
The minimum detection level referred to in the NPDES
clause was also referred to as the limit of detection. Limit
of detection was defined by the American Chemical
Society, as " . . . the lowest concentration the analytical
process can detect. . . and by the International Union of
Pure and Applied Chemistry as " . . . the concentration or
amount derived from the smallest measure that can be
detected with reasonable certainty for a given analytical
procedure ..." The minimum reporting level referred to
in the NPDES clause was also known as the quantitation
limit or limit of quantitation. The limit of quantitation was
defined as the minimum concentration in an analyzed
sample that can be reported with statistical certainty.
For analytical results below the limit of detection, presence
of the analyte cannot be confirmed or denied with
certainty. For analytical results falling in the range between
the limit of detection and the limit of quantitation, the
analyte is present, but the concentration of the analyte
cannot be reliably reported. Amounts reported above the
limit of quantitation can be reliably reported with a high
degree of statistical certainty. Per an April 1999 State
Policy Memorandum, North Carolina's policy was to
interpret test results below the quantitation limit as zero for
compliance purposes. For example, assume a test method
for a particular pollutant had a quantitation limit of 10
micrograms per liter (ug/1) and a permit contained a
discharge limit for that same pollutant of 5 ug/1. A test
result of 9 ug/1 would be interpreted as zero and not
considered in violation of the 5.0 ug/1 permit limit because
of the uncertainty associated with the accuracy of the 9
ug/1 test result. We did not question this practice, since
test results below the quantitation limit are statistically
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SOME MINOR
FACILITIES DID NOT
USE THE MOST
SENSITIVE TEST
AVAILABLE FOR
TOTAL RESIDUAL
CHLORINE
uncertain (i.e., an estimate), and cannot be directly
compared to a permit limit.
When writing a permit, North Carolina determined whether
or not a discharge limit was needed for a given pollutant
based on a "reasonable potential analysis." This technique
used a statistical analysis for each parameter (pollutant) of
concern that had either a state or federal water quality
standard. Essentially the objective was to determine the
maximum allowable concentration of the parameter in the
waste stream which would not result in a violation of the
water quality standard for that parameter in the receiving
water.
Generally, when facilities used a chlorination process to
treat wastewater, the State's NPDES permit contained a
discharge limit for total residual chlorine. Four of the 11
minor facility permits we reviewed contained total residual
chlorine discharge limits. These four permits required a
monitoring and testing frequency of either two or three
times a week and all contained a daily maximum discharge
limit of 28 ug/1. Discharge monitoring reports indicated
that two of these four facilities used test methods for total
residual chlorine that could not reliably report test results
below 100 ug/1. Whenever these facilities' daily total
residual chlorine tests indicated effluent levels below 100
ug/1 they were reported as "< 100 ug/1" on their monthly
DMR. Accordingly, these test results were considered
compliant with the daily maximum permit limit of 28 ug/1
even though the true concentration of the discharge was
unknown and could have exceeded the 28 ug/1 permit limit.
North Carolina's policy was to require that analyses of
wastewater discharge samples be performed in a state-
certified laboratory. Major NPDES permitted facilities
normally had an on-site laboratory to perform this analysis.
However, according to State officials, minor facilities did
not have on-site laboratories. Further, State officials
indicated that it was not feasible for these minor facilities
to send these samples to an off-site contract laboratory for
analysis since EPA required that chlorine samples be
analyzed within 15 minutes of collection. As a result,
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these minor facilities were granted waivers to the
laboratory certification requirement and conducted tests for
chlorine in the field as opposed to conducting the test in a
laboratory. State officials indicated that minor facilities
have commonly used a relatively inexpensive field
instrument for testing chlorine which was not capable of
accurately reporting total residual chlorine concentrations
down to the permit limit. We did not determine the
number of minor facilities Statewide that did not use the
most sensitive test available. Based on data obtained from
North Carolina's CMS, as of July 2000, the State had
approximately 310 active minor NPDES permits with total
residual chlorine discharge limits.
Based on our discussions with EPA chemists, EPA-
approved methods for laboratory analysis could achieve a
quantitation level of 50 ug/1. The EPA-approved
laboratory methods required minimal laboratory space and
equipment and were simple to perform. No expensive
equipment was required but a modest indoor space was
required at the wastewater treatment plant where lab
equipment could be stored and tests performed. Improved
field instruments may present another alternative to
achieving lower quantitation limits than 100 ug/1. The
manufacturer of the inexpensive field instrument used by
many minor facilities made other more sophisticated, and
expensive field instruments. We discussed the sensitivity of
one of these instruments with a State Laboratory official.
The instrument we discussed costs around $2600. This
official stated that this instrument has demonstrated
quantitation levels as low as 10 ug/1 in the field. He
cautioned that quantitation levels could vary between
facilities and not all operators could achieve this low
quantitation level. Therefore, his office was more
comfortable with a quantitation limit of 20 ug/1 for this
instrument.
However, State officials expressed concerns that this more
expensive instrument may not be able to obtain the lower
quantitation limits in day to day operations. State officials
indicated that this machine is delicate and requires all of
the set-up procedures that would normally be required for
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NEW TEST METHOD
SHOULD PROVIDE
NEEDED SENSITIVITY
TO EVALUATE
COMPLIANCE WITH
MERCURY LIMITS
an in-house laboratory test. A potential alternative to the
more expensive instrument is to utilize the matrix-matched
standard addition technique developed by U.S. EPA's
Region 4 Science and Ecosystems Support Division. This
technique allows the analyst to overcome the difficulties
associated with the detection of total residual chlorine at
concentrations at or near the method detection limit. This
technique was approved for use in NPDES testing by the
Director, Office of Water Analytical Methods Staff in a
June 8, 2000-memorandum. The memorandum indicated
that this technique did not require formal approval as an
alternate NPDES test procedure because the chemistry of
the method was not changed.
State officials indicated that the State had not consistently
required all facilities to use the more expensive and
sensitive instruments as required by their permit. Some
State regional office officials told us they were addressing a
facility's failure to use the most sensitive instrument
available during the annual compliance inspection for the
facility. However, as a matter of policy, the State had not
required these facilities to use the most sensitive methods
available.
Depending upon the results of the State's reasonable
potential analyses, an NPDES permitted facility could have
a daily mercury discharge limit as low as 0.043 ug/1. For
most of the period covered by our review, the only EPA
approved analytical methods for mercury were Methods
245.1 and 245.2. Since these methods had quantitation
limits of .2 ug/1 they did not possess the required sensitivity
to determine compliance with mercury limits of .043 ug/1.
Information obtained from the State's CMS indicated that,
as of July 2000, North Carolina had 66 active NPDES
permits with discharge limits for mercury.
Effective June 8, 1999, EPA approved method 1631
Revision B for mercury. This analytical method has a
published method detection limit of .0002 ug/1 and a
quantitation limit of .0005 ug/1. In a 1999 policy
memorandum on quantitation limits, the State expressed
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concerns about the ability of this new method to accurately
quantify mercury concentration in complex wastewater. In
order to address this concern, we reviewed the results of
the EPA Method 1631 Interlaboratory Validation Study
(dated March 1998). We also discussed the method's
performance with Region 4 laboratory personnel, and with
one of the commercial laboratories that participated in the
EPA Validation Study and performed method 1631- Rev.
B on a commercial basis. The consensus opinion was that
the wastewater matrix would, at worst, raise the
quantitation limit of Method 1631 from 0.0005 ug/1 to
between 0.001 and 0.010 ug/1. This elevated quantitation
limit would be four times more sensitive than the State
required 0.043 permit limit.
A potential impediment to implementing the new method
for mercury is possible increased costs due to the required
sampling procedures and the need for an ultraclean
laboratory in which to conduct the test. The added
expense of performing the new procedure in-house would
be considerable since it would require the development of
an ultraclean laboratory. However, obtaining these
services on a contract basis did not appear to cost-
prohibitive based on our analysis. Commercial laboratories
generally charge approximately $60 per sample for analysis
using methods 245.1 and 245.2. We contacted two firms
that perform the newly developed Method 1631 Rev. B on
a commercial basis. The cost per sample for the new
method ranged from $55 to $97.50 based on the level of
quality assurance and documentation requested by the
client. The North Carolina NPDES permits we reviewed
that contained mercury limits, required testing on a weekly
or less frequent basis.
Implementation of the new mercury method does present
technical issues related to sampling. The composite
samplers used to collect discharge samples may potentially
contaminate the effluent sample with mercury at the very
low detection levels provided by Method 1631 Rev. B.
Twenty-four hour composite sampling8 is usually required
by most NPDES permits. However, the method
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STATE AND EPA
UNABLE TO EVALUATE
PERMIT COMPLIANCE
AND POTENTIAL
IMPACT OF
DISCHARGES ON THE
ENVIRONMENT
documentation for Method 1631 Rev. B only addresses the
use of grab9 samples. Therefore, the permittee is left to
develop and demonstrate acceptable performance of the
composite sampling process through the collection and
analysis of field blanks10. However, due to the sensitivity
of the new method, field blanks will probably also show
mercury contamination. For example, assume that the
permit limit is .043 ug/1, test results on the effluent
discharge indicate .050 ug/1 of mercury, and test results on
the field blank indicate .020 ug/1 of mercury. Should the
discharge sample concentration be reported as .050 ug/1
and in violation of the permit? Or should the field blank
value of .020 ug/1 be subtracted from the discharge
sample's test result to give a result of .030 ug/1 which
would be determined to in compliance with permit? We
believe this is a national policy issue that should be
addressed by EPA's Office of Water. In the meantime,
however, we believe that implementation of acceptable
new testing methods should proceed as appropriate.
We discussed the implementation of this new mercury
method with the North Carolina Water Quality Section
Chief. The Chief indicated that the state was looking into
the possibility of using the new method for mercury.
However, there were not any labs in the general vicinity of
North Carolina using this method. The Chief indicated that
the State had discussed upgrading their laboratory to be
able to perform the new method. However, this would
require them to build a new laboratory which would be
costly and the Chief indicated that it was unlikely that
funding would be made available.
The State and EPA Region 4 were unable to determine a
facility's compliance with permit limits when the tests
used were not capable of accurately reporting test results
down to the limits specified in the permit. Information on
permit violations was also used by the State to determine
potential sources of impairment for streams, estuaries, and
lakes. For example, impaired streams which received a
discharge from a facility that was significantly out of
compliance with its permit limits may have caused that
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facility to be listed as a potential source of pollution on the
CWA Section 303(d) List of impaired waterbodies.
Damage to the environment could occur from discharges
of pollutants beyond the concentrations allowed by permit
conditions. For example, chlorine is immediately toxic to
aquatic life at low levels. Federal criteria guidance
recommended that in-stream concentrations not exceed 19
ug/1 as an acute value and 11 ug/1 as a chronic value.
Chlorine does eventually dissipate through natural
volatilization. Mercury is toxic to aquatic life at low levels
but is a greater concern as a threat to human health.
Mercury is bio-accumulative meaning that it is retained in
the bodies of organisms that consume nutrients or other
organisms containing mercury. Fish tissue sampling is
routinely conducted in waterbodies known to have mercury
contamination, and health advisories are issued when fish
contain mercury levels too high to be considered safe for
human consumption. In humans mercury can affect organs
such as the spleen, brain, and liver. Federal criteria
guidance recommended that in-stream mercury
concentrations not exceed 0.05 ug/1 to be protective of
human health.
According to State officials mercury was an important
issue with regard to the quality of the State's waters. For
example, fish tissue testing in North Carolina has shown
mercury to be a problem. As of February 2000, ten
separate fish consumption advisories were in effect for the
State with regard to mercury. In addition, the State's final
draft "North Carolina's 2000 §303(d) List" of impaired
waters included 25 separate waterbodies (included
rivers/streams, lakes, and areas of the Atlantic Ocean) as
requiring TMDL for mercury; and the potential source of
the pollution either (1) included NPDES point sources; or
(2) was unknown. Additional waterbodies were listed on
the §303(d) List as impaired by mercury, but the source of
pollution for these segments was identified solely as
atmospheric deposition.
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Not using the most sensitive test methods could also
impact the implementation of new Federal water quality
rules. EPA has recently issued requirements for reporting
of TMDL in waterbodies. Use of the most sensitive
methods available for analysis relates to this process in
much the same way it relates to the NPDES permit
process; the more accurate and sensitive the method used,
the more closely reports will reflect the actual quality of
the waterbody being measured. In addition, there is a
potential for inaccurate reporting if the State's NPDES
data interpreted as "zero" for compliance purposes is
interpreted as "zero" when averaged with other data to
produce daily loading of waterbodies. This practice would
result in reports of incorrectly low loadings and
waterbodies would be reported as cleaner than the
measurements indicate.
CONCLUSION The test methods used by NPDES permitted facilities were
not always sensitive enough to determine compliance with
permit limits. Improved test methods were recently
developed which were more sensitive than the methods
used by NPDES permittees. The use of the most sensitive,
available test methods was critical to the success of the
NPDES permit program. The usefulness of permit limits
was significantly diminished if the tests being used by
NPDES facilities were not capable of determining whether
the permittee was in compliance with these limits. In
addition, the accuracy of water quality analysis and reports
can be affected if the most sensitive and accurate discharge
data is not available.
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RECOMMENDATIONS We recommend the Regional Administrator provide
guidance and direction as necessary to ensure that North
Carolina:
Develops a plan to phase in the use of instruments
with the lowest reporting limits for analyzing total
residual chlorine concentrations, and
Develops a plan to phase in the use of EPA
method 1631 Rev. B for analyzing wastewater
effluent concentrations of mercury.
EPA REGION 4 AND The EPA Region 4 response did not specifically address
STATE COMMENT this Chapter's findings and recommendations. However,
EPA Region 4 noted in its response that both Region 4 and
North Carolina senior officials have met to discuss
resolution of many of the recommendations contained in
the draft report. Further, agreements have been made to
collaboratively construct an action plan to address or
clarify issues in North Carolina's implementation of the
program and EPA Region 4's oversight role.
The North Carolina DWQ expressed concerns about the
reliability of the newer field instruments for testing total
residual chlorine when used in day to day field operations.
DWQ also noted that implementation of the new mercury
method will require specialized training of analysts as well
as special laboratory conditions before the method can be
performed correctly. Accordingly, DWQ proposed to
work with EPA to develop a plan to (1) implement any
new methodology for analyzing total residual chlorine as
appropriate, and (2) phase in the use of the new mercury
test method as appropriate.
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OIG EVALUATION We recognize the State's concerns about implementation
of the new instruments and methods cited in this Chapter
and concur that their use will require a phase in period,
especially in regard to the new mercury method. Both
EPA Region 4 and the State responded that they will be
collaborating to develop a joint action plan to address the
issues and recommendations in the draft report. Pending
our receipt and evaluation of the joint action plan, we are
retaining the draft report's recommendations in this
Chapter.
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CHAPTER 6
NORTH CAROLINA'S ANIMAL FEEDING OPERATIONS SHOULD BE
PERMITTED UNDER NPDES REQUIREMENTS
North Carolina's enforcement officials indicated that North
Carolina had begun to take a more pro-active stance with
regard to animal feeding operations (AFO) enforcement
penalties. NCDENR conducted annual inspections of all
AFO facilities in our sample. North Carolina indicated they
were assessing additional penalty levels based on whether or
not the facility had a past history of violations and the
number and severity of violations. North Carolina had
begun assessing a civil penalty amount, generally $1,000, in
those cases where the facility failed to self-report a
discharge or violation.
However, the State of North Carolina did not issue NPDES
permits to facilities that met applicable federal CAFO
regulations. During the period covered by our fieldwork,
North Carolina had approximately 1,123 AFOs which
exceeded the applicable federal NPDES CAFO threshold
(see next page for threshold criteria). North Carolina did
not issue NPDES permits to applicable AFOs because they
believed their permit program was more appropriate than
the NPDES permit program. North Carolina contended
that their permit program was more stringent than the
NPDES program. According to EPA Region 4 officials, the
State repeatedly resisted EPA's efforts to induce them to
issue NPDES CAFO permits in addition to their State AFO
permits. When compared to NPDES CAFO permit
requirements, North Carolina's AFO permit conditions did
not contain Federal enforceability, adequate third party
lawsuit coverage, sufficient public notice, and EPA
oversight.
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NPDES/CAFO Livestock production has been a major industry in North
REGULATORY Carolina and has also been a source of pollution in its rivers
BACKGROUND and streams. Pollution from livestock waste could be
classified as either non-point source or point source. Non-
point source pollution occurred when precipitation washed
contaminants from tracts of land to surface and ground
water. Congress, in the CWA, and EPA, in its regulations,
categorized pollution from CAFOs as point source
pollution, therefore requiring an NPDES permit. NPDES
regulations imposed a "no discharge" effluent limitation on
CAFOs, meaning that except under a chronic and
catastrophic rainfall event at a properly constructed and
operated facility, all runoff from animal confinement areas
must be captured in a containment structure such as a
lagoon.
The CWA gave EPA the authority to regulate point source
discharges into waters of the United States through NPDES
permitting. The CWA made it unlawful for any person to
discharge any pollutant from a point source into navigable
waters unless an NPDES permit had been obtained under
the Act. 40 CFR Part 122.23 states that CAFOs were
point sources subject to the NPDES permit program. An
AFO, according to 40 CFR Part 122.23, Appendix B, was
considered a CAFO if either of the following criteria were
met:
• More than 1000 animal units11 were confined; or
• From 301-1000 animal units were confined and it
also met one of the specific criteria addressing the
method of discharge:
(1) Pollutants were discharged into waters of the US
through a man-made ditch, flushing system, or other
similar man-made device; or
(2) Pollutants were discharged directly into waters
of the US that originated outside of and pass over,
across, or through the facility or came into direct
contact with the confined animals.
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In addition, under 40 CFR Part 122.23(c), AFOs could be
designated as CAFOs on a case-by-case basis by the
NPDES authorized permitting authority if they determined
they had been or still were significant contributors of
pollutants to waters of the United States.
STATE AFO AFOs were agricultural enterprises where animals were kept
PERMITTING and raised in confined situations. The State of North
Carolina issued general and individual permits to AFOs
under their State permit program. Although these permits
prohibited the discharge of waste water to waters of the
United States, they did not include all of the applicable
CWA and NPDES regulatory provisions and, therefore,
were not NPDES permits. North Carolina reported, in
their quarterly reports, 104 AFO discharges from October
1, 1998 until September 30, 1999, of which 29 discharges
reached North Carolina surface waters. Surface water
discharges could cause major water quality impacts and
threaten public health. Depending upon the number of
animals housed at these facilities, the facilities responsible
for these discharges may have met the CWA definition of a
CAFO and may, therefore, have been required to have
NPDES permits.
According to EPA Region 4 officials, the State resisted
EPA's efforts to persuade them to issue NPDES permits.
Furthermore, North Carolina officials indicated that they
believed the NPDES permit structure would cause
confusion among the facility operators who they thought, if
issued an NPDES permit, might have believed that
discharges were allowable.
North Carolina's AFO permit program appeared to be more
stringent than the NPDES CAFO program in some areas.
For example: (1) issuance of State general permits to all
facilities with 250 or more hogs, (Federal regulations
required an NPDES permit if the facility had 2,500 or more
hogs, or smaller numbers under certain conditions); and (2)
the State inspected AFO facilities at least once a year,
(Federal inspection guidelines recommended all CAFOs be
inspected within three to five years). We agreed that the
State AFO permit program was more stringent in some
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areas, however, 40 CFRPart 123.25(a) specifically stated
that:
While State's may impose more stringent
requirements, they may not make one
requirement more lenient as a tradeoff for
making another requirement more stringent...
On September 29, 1999, North Carolina requested that EPA
Region 4 grant them "functional equivalency" to continue
their program as is. According to EPA Region 4 officials,
EPA could not grant "functional equivalency" to the North
Carolina AFO program because of both programmatic and
regulatory constraints. EPA regulations required, prior to
approval of a state program, that it meet the requirements at
40 CFR Part 123, including the no less stringent and
jurisdictional scope provisions. Region 4 officials indicated
that, programmatically, they also had issues with the
submission, including, 1) insufficient public notice and
public comment provisions, 2) lack of federal enforceability
of the proposed general permit, 3) less stringent effluent
limitations in the general permit, and 4) that a rule change
may be necessary as CAFOs were not specifically included
among the areas to be covered by "general permits" in the
NPDES program as originally approved. EPA Region 4
had not officially responded to North Carolina's request for
functional equivalency as of the end of our fieldwork.
POTENTIAL Livestock operations can cause environmental degradation
ENVIRONMENTAL of surface and ground waters unless the resultant waste is
IMPACT OF CAFO collected, stored, and utilized or disposed of in an
DISCHARGES environmentally sound manner. Although it is difficult to
determine the exact contribution of any particular nonpoint
source on a national basis to water quality, it is widely
recognized that AFOs can pose a number of risks to both
water quality and public health, mainly because of the
amount of manure and waste water they generate. Manure
and waste water from AFOs have the potential to contribute
pollutants such as nitrate and phosphorus, organic matter,
sediments, pathogens, heavy metals, hormones, and
ammonia to the environment. Excess nutrients in water
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(i.e., nitrogen and phosphorus) can result or contribute to
low levels of dissolved oxygen (anoxia), eutrophication, and
toxic algal blooms. These conditions may be harmful to
aquatic life and human health and, in conjunction with other
circumstances, have been associated with outbreaks of
microbes such as Pfiesteria piscicida. Moreover,
improperly managed or sited AFOs may produce odors that
nearby residents find objectionable. North Carolina
reported in their Fiscal Year 2000 CWA Section 303(d) List
of Impaired Water Bodies that six waterbody segments
may have been impaired due, in part, to AFO pollution.
The United States Department of Agriculture, EPA, and
North Carolina have recognized the many potential
environmental impacts associated with AFOs. The amount
of manure and other waste material generated by CAFOs
was so large that a spill while handling manure or a breach
of a storage system could have released large quantities of
manure and waste water into the environment. This release
may cause major water quality impacts and threaten public
health. EPA's position was that most AFOs with more than
1,000 animal units probably have discharged in the past or
had a reasonable likelihood to discharge in the future and,
therefore, should have applied for, obtained, and operated
under an NPDES permit.
NORTH CAROLINA'S
AFO PROGRAM DID
NOT ADEQUATELY
ADDRESS FOUR KEY
NPDES PROVISIONS
Due to the potential for major environmental impacts
caused by discharges from AFOs, it was important that the
State's permits and permit program included all applicable
NPDES provisions. North Carolina's AFO permit program
hindered the enforcement ability of EPA and did not
adequately inform the public since it did not include
adequate provisions for:
Federal enforceability,
Third party lawsuits,
• Public notice or
• EPA oversight
Federal Enforceability EPA had the authority under the CWA to take enforcement
actions against point source discharges. Applicable permit
data relating to North Carolina AFOs and related point
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source discharges was not required to be inputted into PCS
due to the fact that North Carolina had not issued NPDES
CAFO permits. Therefore, EPA Region 4's ability to
enforce against pollutant discharges was hindered by a lack
of information on CAFO operations. In addition, if NPDES
permits had been issued, EPA would have had the ability to
enforce against violations of all permit conditions. For
example, State permitted AFO facilities were required to
ensure and maintain proper lagoon free board levels at all
times. The freeboard is the level from the top of the lagoon
to the waste that allows for normal periods of rain or storm
without causing an overflow or discharge.
Since NPDES permittees were required to design,
construct, and operate an NPDES CAFO facility in order to
prevent a discharge, except for catastrophic and chronic
rainfall events, EPA had the authority to take enforcement
actions for violations such as inadequate freeboard levels.
However, because North Carolina's AFOs were not issued
NPDES permits, EPA could not take enforcement action
against violators of freeboard level limits in North Carolina.
Third Party Lawsuits Under federal provisions, if a member of the general public
believed that a facility was violating its NPDES permit
conditions, that member could have independently started a
legal action against the violator, unless EPA or the state
regulatory agency had already taken an enforcement action.
North Carolina's AFO program had provisions only for law
suits in the case where a person was directly affected by
siting requirements per North Carolina Senate Bill 1217.
This siting limitation greatly hindered the ability for the
general public to bring suits against violators.
Public Notice NPDES federal regulations required that a 30-day public
notice period be given prior to a facility being issued a
permit. However, the North Carolina AFO permit program
did not have this requirement. North Carolina statutes did
provide that the Director of the DWQ, might at his
discretion, allow for public notice or comments, however,
we were told this option was rarely used. The only other
North Carolina statutory requirement for public notice
applied specifically to swine farms. Under North Carolina
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House Bill 515, Part IV, Section 106-805, the provisions
require that the permit applicant:
...notify all adjoining property owners and all
property owners who own property located
across a public road, street, or highway from
the swine farm . . .
In contrast, under Federal requirements, if a facility had
applied for an NPDES permit, the permitting authority (i.e.,
State of North Carolina) must have provided notice in a
major local newspaper, usually in the legal section of the
classified ads, or in an official publication such as the
Federal Register.
EPA Oversight The State of North Carolina received authorization to run
the NPDES program within the State in 1975. However,
EPA, through Region 4, maintained NPDES oversight
responsibilities. Because North Carolina had not issued
NPDES CAFO permits, EPA did not have direct access to
either North Carolina's AFO facility or enforcement
information. EPA's inability to directly access North
Carolina's AFO permit and program information had a
significant impact on EPA's ability to oversee the program
and to ensure that AFO's had a minimum impact on both
public health and overall water quality. During our
fieldwork, North Carolina had approximately 1,123 AFOs
that met the federal definition of a CAFO. However, the
EPA did not have direct access to any of these facilities'
data. In addition, of the universe of 24 facilities with
reported discharges during the period of October 1998
through August 1999, eight of these facilities met the
federal definition of CAFOs due to their size alone. Had
those eight facilities been operating under NPDES permits,
EPA would have been aware of the discharges and,
therefore, could have taken enforcement actions against the
violators.
CONCLUSION The State of North Carolina did not issue NPDES permits
to facilities that met applicable federal CAFO regulations.
According to EPA Region 4 officials, the State repeatedly
resisted EPA's efforts to induce them to issue NPDES
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RECOMMENDATION
EPA REGION 4
COMMENTS
STATE COMMENTS
CAFO permits. North Carolina's AFO permits did not
adequately address the following key provisions when
compared to NPDES CAFO permit requirements: Federal
enforceability, adequate third party lawsuit coverage,
sufficient public notice, and EPA oversight. Manure and
waste water from AFOs have the potential to contribute
pollutants such as nitrate and phosphorus, organic matter,
sediments, pathogens, heavy metals, hormones, and
ammonia to the environment. Due to the potential for
major environmental impacts caused by discharges from
AFOs, it was important that these facilities be regulated
under fully enforceable NPDES permits.
We recommend that the Regional Administrator ensure that
North Carolina issue NPDES permits to all facilities that
meet the federal CAFO definition. If no such agreement can
be reached, we recommend that the Regional Administrator
consider withholding an appropriate portion of Section 106
Water Grant funding relating to State permitting activities.
Region 4 officials indicated that factual clarification was
necessary for certain statements in this chapter and provided
us with suggested revisions.
North Carolina asserted that they did not resist EPA's
efforts to induce them to issue NPDES CAFO permits. In
addition, North Carolina stated that when requesting
functional equivalency, they were not trying to resist federal
regulatory prohibitions against having less stringent
requirements than those specified in Federal Rules. They
added that they were asking for interpretation of the U.S.
Department of Agriculture and U.S. EPA Unified Strategy
for Animal Feeding Operations. In response to our
assertion that EPA's ability to enforce against discharges
was hindered due to lack of PCS data, North Carolina
stated that they have repeatedly offered to authorize access
to EPA of all the State's AFO permitting and compliance
databases. The State also indicated that it provided
adequate notice of its AFO permitting by its Public Notice
for the Animal Waste General Permit issuance before 1997.
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North Carolina took exception to our reference to the 24
discharges reported from October 1, 1998 through August
31, 1999. They added that EPA reviewed hundreds of files
and did not report any incident of inadequate enforcement.
In addition, North Carolina stated that they have completed
enforcement actions on almost all of the 24 discharges.
The State also took exception to our draft report statement
concerning the extent of State waters which may have been
affected by CAFO pollution.
OIG EVALUATION We generally agreed with EPA Region 4's suggested
revisions and incorporated them into the final report.
According to several key EPA Region 4 officials, North
Carolina has resisted efforts to issue NPDES CAFO
permits. We recognize that EPA Region 4 had not
responded formerly to North Carolina's request dated Sept.
29, 1999. However, EPA Region 4 had informally informed
North Carolina that EPA would not grant North Carolina
functional equivalency. Specifically, the Region's FY 2000
Midyear review of North Carolina's Water Programs
reported that the State continues to pursue approval of their
State-based CAFO permitting program as "functionally
equivalent" to the NPDES Program while EPA continues to
inform the State that this course of action is not feasible. In
addition, North Carolina's original request for functional
equivalency was based on North Carolina's current program
which did not incorporate all of the necessary NPDES
requirements. We recognize that the North Carolina permit
program may be more stringent in areas outside of the two
examples cited in our report. However, this does not relieve
North Carolina from the requirement of issuing permits that
include all applicable regulatory provisions.
In response to the State's objection to our draft report
statement concerning the extent of State waters which may
have been affected by CAFO pollution, we revised that
statement to more accurately reflect the supporting
evidence.
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With regard to the lack of Federal enforceability against
pollutant discharges by AFO's in the State, we recognize
the State's offer to authorize EPA Region 4 access to the
State's AFO permitting and compliance databases.
However, this does not preclude the State from issuing
NPDES CAFO permits and entering the required permit
data in EPA's PCS database. Regarding the State's
assertion that it provided adequate public notice of its AFO
permitting, we recognize that the State issued the Public
Notice for the Animal Waste General Permit before its
issuance in 1997. However, this action did not satisfy the
NPDES requirement that a 30-day public notice period be
given prior to each facility being issued a permit.
The universe of 24 discharges used in our review was
obtained from North Carolina's DWQ. We reviewed ten
farm and enforcement files. Due to the fact that State AFOs
were not part of the NPDES program and, therefore, not
subject to NPDES enforcement by EPA Region 4, we did
not assess the adequacy of AFO State enforcement actions.
However, we found that the State had not taken
enforcement actions on several AFO discharges as of the
completion of our field work.
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OTHER MATTERS
NORTH CAROLINA'S A pilot program was established under North Carolina
AFO PILOT PROGRAM House Bill 1160, Part III, in 1997, which impacted the
MAY NOT HAVE BEEN annual inspections of AFOs subject to North Carolina's
EFFECTIVE permit. During the period of our review, North Carolina
had three counties designated as pilot counties: Jones,
Columbus, and Brunswick. Under the pilot program,
North Carolina's Division of Soil and Water Conservation
(S&W) conducted inspections at least once a year of all
animal operations subject to North Carolina permits.
Within these pilot counties, S&W was the only regular
inspection presence for all AFO facilities. However,
NCDENR DWQ officials told us they generally did not
take any enforcement actions based solely on S&W
inspection results. We were informed that it was
NCDENR DWQ's practice that they only considered
taking enforcement actions when NCDENR DWQ
inspectors also observed the S&W reported discharges. If
these AFOs had been operating under NPDES CAFO
permits, EPA could have taken enforcement actions based
solely on S&W inspection results.
NCDENR DWQ did not have a regular monitoring and
enforcement presence within these three pilot counties,
therefore, facilities in these counties may not have been
adequately inspected, the results of the inspections may not
have been conveyed to the Department, and effective
enforcement actions may not have been taken. Since
DWQ did not take enforcement actions based solely on
S&W inspection results and had no authority to conduct
annual inspections unless called in by S&W or a citizen
complaint, this program may not have been operating
effectively. Additionally, S&W inspectors generally took
less stringent enforcement positions with farmers. S&W
was viewed by the farmers and the Department as there to
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North Carolina Uniform
Guidance, Criteria, and
Training for AFO
Inspectors May Are
Inadequate
assist the farmer more than to monitor and enforce AFO
discharges which was viewed by the State as more the role
of the Department.
DWQ officials could not provide us with evidence of
uniform guidance, criteria, and training for regional AFO
inspectors. Regional AFO inspectors told us that they did
not have specific guidance or criteria on the types of
violations which would have triggered recommendations
for enforcement actions and civil penalty assessment.
Additionally, the regional inspectors indicated that they did
not have guidance or criteria on how to prepare a formal
enforcement package.
We found inconsistences among enforcement actions taken
in response to pollution discharges into waters of the State.
For example, in some cases the documented discharges
resulted in assessed civil penalties, but for others the
regional inspector claimed to have reinspected the facility
via an undocumented "informal inspection" and determined
no enforcement action was necessary. We discussed the
lack of guidance with North Carolina enforcement officials
and were told they were in the process of developing
guidance, but neither draft guidance nor a future date for
planned issuance of that guidance was available.
Additionally, we noted that DWQ inspectors may not have
received specific or uniform training with regards to
conducting AFO inspections, identifying violations, or
preparing enforcement packages. The DWQ regional
inspectors told us training generally consisted of quarterly
inspector meetings where certain stated topics of interest
were addressed. In addition, we were told that, in lieu of
formal training, regional inspectors relied heavily on
experience and on-the-job training.
If sufficient guidance and training were developed, it
would have ensured more consistent field inspections,
complete inspection reports, and uniform enforcement
actions. We suggest that NCDENR DWQ finalize and
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NORTH CAROLINA'S
DATA IN EPA'S PCS
WAS INCOMPLETE IN
KEY AREAS
issue uniform guidance and consider developing uniform
training for its AFO Inspectors.
North Carolina's permit enforcement action data was not
maintained in EPA's PCS as agreed upon between the State
and EPA Region 4 in the State's CWA Section 106 FY
1999/2000 Water Grant Workplan. In addition, North
Carolina did not enter the results of monitoring for facilities
WET testing requirements. North Carolina maintained a
separate data system for enforcement actions and WET
permit monitoring that was not linked to PCS. North
Carolina's maintenance of an adequate level of data quality
in PCS was imperative in order to enable EPA Region 4 to
track key components of the State's NPDES program.
Without this data quality EPA Region 4 could not
adequately fulfill its Congressionally-mandated oversight
role related to the State's water quality.
The PCS was EPA's central nationwide database that
supported the NPDES program at the state, regional, and
national levels. EPA Region 4 used PCS to track key
NPDES components including monitoring, inspection, and
enforcement actions and to monitor the compliance status
of each facility according to the requirements in the
individual NPDES permit. EPA also relied on the accuracy
of data in PCS for its use in generating key oversight
reports such as the significant noncompliance reports, the
Recap National Report, and reports to Congress. These
reports summarized the key components of NPDES
program activity by state and were used by state and
Federal officials to assess the effectiveness and efficiency of
the NPDES program. According to an Office of Water and
OECA joint Memorandum dated February 22, 1999, PCS
directly supported a key Congressionally-mandated EPA
priority related to the Government Performance Results Act
(GPRA). Maintaining a level of data quality in the system
was imperative in order to determine if the Agency was
meeting its commitments under GPRA.
For example, one of the GPRA goals for water programs
related to reductions in pollutant loadings from point
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sources. Reliable and comprehensive baseline data in PCS
was necessary in order to determine whether that goal had
been met. EPA Region 4 also used PCS data to prioritize
national activities based on various analysis of the data.
This analysis was used to determine geographical areas in
which to prioritize facilities for inspections, permit reviews,
and enforcement activities. In addition, PCS data was used
in compiling and targeting areas related to environmental
justice activities.
There were 41 PCS data entry requirements within North
Carolina's FY 1999/2000 Section 106 Grant Workplan. Of
these 41 requirements, 12 related to State enforcement
actions and penalties. These Workplan commitments
included data reporting requirements related to quarterly
noncompliance report (QNCR) enforcement data; State,
judicial and administrative penalty orders including assessed
and collected dollar amounts; administrative orders or
equivalent actions; and, formal enforcement actions in
response to violations of NPDES permit effluent
limitations. However, data related to State enforcement
actions, specifically penalty dollars assessed and collected,
and WET testing, was not maintained in PCS.
We also noted that discharge data which had been entered
in PCS were not always accurate. We reviewed DMR data
for seven major facilities to determine whether permit
violations were reported. We compared the results of our
review to EPA IDEA Detailed Facility Reports as of May
2000 which were generated from data in PCS for the period
January 1999 through September 1999. We found
discrepancies between the actual discharge results as
reported on the DMR versus the reports generated from
PCS for four of the seven facilities (refer to Exhibit 3 for
details). State officials told us when their DMR data was
uploaded into PCS, daily maximum readings were
sometimes uploaded incorrectly into the weekly average
field in PCS. This could have caused PCS to flag a weekly
average violation when, in fact, there was not a violation.
The QNCR review process would have normally prevented
these errors from occurring on the final QNCR; however,
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reports generated from PCS, such as the Detailed Facility
Report we reviewed, could have included incorrect
information and mislead users.
Although PCS data entry had been a continuing problem for
North Carolina for the last several years, it appeared that
the State had recently improved the completeness of State
data entered into PCS. For example, five of eight active
SOCs for major facilities were recorded in PCS. Also,
according to EPA Region 4 officials, North Carolina met its
FY 1999/2000 Section 106 List of Commitment PCS data
entry requirements for DMRs during the first quarter of FY
2000. Further, North Carolina's FY 2000 First Quarter
QNCR was submitted to EPA in a timely manner.
However, from the period October 1, 1998, through April
1, 2000, PCS reflected no penalty dollars assessed and
collected in North Carolina, even though, according to the
State's records, North Carolina assessed approximately
$135,000 in penalties for major facilities during this period.
Until approximately four years ago, North Carolina's
database for enforcement actions was linked to PCS
allowing State information to be uploaded. Since then,
North Carolina had manually entered enforcement action
and penalty information into PCS. According to State
officials, North Carolina did not have adequate resources to
devote staff to this PCS data entry responsibility.
North Carolina maintained an automated tracking system
for all applicable NPDES permit data related to WET limits
and monitoring. However, North Carolina did not enter
results of its WET testing in PCS and, instead, maintained
this information in the State database. According to North
Carolina officials, 550 facilities within the State, including
both major and minor permittees, had toxic monitoring
requirements. These facilities submitted approximately
2,400 self-monitoring reports last year related to these
monitoring requirements.
The lack of NPDES monitoring and enforcement related
information in PCS hindered the ability of EPA to
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adequately oversee the NPDES program. Without adequate
or accurate PCS data, the Agency could have under-
reported or incorrectly reported data related to GPRA
commitments. In addition, EPA managers could have made
incorrect planning and targeting decisions based on reports
generated from inaccurate PCS data.
Although PCS data entry had been a continuing problem for
North Carolina for the last several years, it appeared that
the State had recently improved the accuracy and
completeness of State data entered into PCS. However
North Carolina's permit enforcement action data and the
results of monitoring for facilities WET testing requirements
were not maintained in the PCS as required by the Section
106 FY 1999/2000 Grant Workplan. North Carolina's
maintenance of an adequate level of data quality in PCS was
essential in order for EPA Region 4 to track key
components of the State's NPDES program. Without
reliable data EPA Region 4 might not have adequately
fulfilled its oversight role on the NPDES program, which
includes monitoring inspections, enforcement actions, and
compliance status of each facility.
At the end of our fieldwork, the Region 4 PCS Manager
informed us that the State had entered WET data into PCS
during July 2000.
OECA recognized problems with the usability of PCS and
associated problems with state input of data into PCS.
OECA had been working on a new application software to
upload state NPDES data into PCS. The OIG's national
audit of EPA enforcement activities, underway at the end of
our fieldwork, will address this area further in that separate
review.
We suggest that the Regional Administrator ensure that
adequate NPDES enforcement data be entered into the
PCS by North Carolina, or, in the alternative, that Region 4
officials take adequate interim steps to obtain the
enforcement data necessary to fulfill their oversight
responsibilities over North Carolina's NPDES program.
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OFFICIALS NEED TO
PROTECT THE
ENVIRONMENT WHEN
INTERPRETING
DIFFERENT SPLIT-
SAMPLE RESULTS
[NC Town A] sometimes used split sampling to determine
whether their effluent was in compliance with the WET
limits of their NPDES permit. When this was done, part of
the test sample was sent to one laboratory for analysis and
another part of the same test sample was sent to a second
laboratory. When State officials received both a "pass" and
a "fail" from a split sample, their policy was to recognize
the "pass" and ignore the "fail." As stated by the
Supervisor of the State's Aquatic Toxicology Unit: "...it has
been our policy to accept and record the result which lies in
favor of the discharging facility. A result of 'pass' has been
recorded for the . . . [specified] toxicity test." According to
Region 4's WET Coordinator, she discouraged the State
from following this policy, but the issue was not addressed
by regulations or any EPA policy, and she was not able to
dissuade the State from continuing its policy.
We believed if there was reasonable doubt concerning the
meaning of data, it should have been interpreted so that any
error was made on the side of public health and a better
environment. Accordingly, we believed a "pass" and a
"fail" from a split sample should have been interpreted as a
"fail" and appropriate action should have been taken to
improve the water quality. Therefore, we suggest the
Regional Administrator incorporate this principle into the
next MO A with the State. We further suggest that the
Regional Administrator ensure that this principle is
reaffirmed to the State before the next MOA is negotiated
and that other appropriate means be considered for
encouraging the State to change its policy.
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EXHIBIT 1
SCOPE AND METHODOLOGY
To determine the timeliness and appropriateness of enforcement actions against NPDES
permittees, we reviewed North Carolina DENR Water Quality Section enforcement, permit, and
discharge monitoring report files located in both the Central Office in Raleigh and in the State's
Asheville, Raleigh, Washington, Wilmington, and Winston-Salem Regional Offices. We also
interviewed officials from the Water Quality Section's Central Office and from the State's
Regional Offices in Asheville, Raleigh, Washington, Wilmington, Winston-Salem, and
Mooresville. We primarily reviewed enforcement actions taken against permittees in violation of
their permit limits in Federal Fiscal Years 1998 through 2000 year to date. We also reviewed
permittee compliance with the State's formal enforcement actions (i.e., SOCs) by reviewing the
enforcement histories of selected facilities.
Our review of the timeliness and appropriateness of the State's enforcement actions was based on
a sample of 21 NPDES permittees known to be in violation of their permit limits. This sample
included 17 major facilities and four minor facilities. We used several sources of information to
select a sample of major facilities to review. For major facilities, we selected NPDES permittees
that were either: (1) listed on Region 4's Active Exception List for the 4th quarter of FY 1999; (2)
considered in non-compliance for five or more quarters in FYs 1998 and 1999 according to the
PCS SNC Tracker Report; or (3) assessed seven or more civil penalties since the initiation of the
State's penalty policy in June 1998. For minor facilities, we selected the only four facilities that
had nine or more civil penalty assessments since June 1998 and also had a permitted discharge
limit of 50,000 gallons or more a day.
In order to evaluate compliance monitoring activities we selected a sample of 18 facilities (this
sample did not include any of the permittees selected in the sample discussed in the preceding
paragraph). We reviewed inspection reports conducted for the inspection periods July 1998
through June 2000, and discharge monitoring reports for Fiscal Year 1999 for the 18 facilities in
our sample. We determined whether inspections were conducted on an annual basis for major
facilities and once every five years for minor facilities. We discussed the results of these
inspections with appropriate State regional officials. We reviewed DMRs to determine whether
violations reported on DMRs were detected by the State during its compliance review. Our
compliance monitoring sample included seven major facilities and 11 minor facilities. For major
facilities we selected the largest facility (in terms of design flow) for each of the seven State
regional offices. For minor facilities, we selected the largest 10 minor facilities (in terms of
design flow) excluding water plants. We excluded water plants from our minor sample since they
would have a relatively minimal effect on water quality as compared to other facilities. We
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selected one additional minor facility to ensure that a facility from all seven regional offices was
included in our sample.
To determine whether North Carolina's AFO permits contained all required NPDES regulatory
provisions where applicable, we interviewed officials from EPA Region 4's Environmental
Accountability Division and Water Division and officials from North Carolina's DWQ. We also
reviewed State and Federal regulations pertaining to animal feeding operations, the CWA, and
North Carolina's general permit for animal feeding operations. We also performed a limited
review of State enforcement actions against animal feeding operation facilities known to have
discharged to waters of the State. The review of enforcement actions was based on a sample of
10 documented discharges to State waters during the period October 1998 through August 31,
1999. We reviewed the State's enforcement actions for these discharges, reviewed inspection
reports for these facilities, and discussed the results of the inspections and the enforcement actions
taken against these facilities with State inspectors.
In order to evaluate the adequacy of State NPDES data entered into EPA's PCS we interviewed
officials from EPA Region 4's Water Division, and North Carolina's DWQ. We obtained
information on enforcement actions from the State and reviewed PCS to determine whether this
information was entered into PCS. We also compared the results of our review of DMRs for
major facilities to PCS reports to determine whether violations disclosed by our manual review of
DMRs were reflected in PCS.
In order to assess regional oversight of North Carolina's NPDES program we interviewed EPA
Region 4 Water Division officials and reviewed various oversight related documents including
CWA Section 106 Grant midyear and end of year evaluations, EPA's MOA with North Carolina,
the EPA/North Carolina Performance Partnership Agreement, QNCRs, and Active Exception
Lists.
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Exhibit 2
SCHEDULE OF TIME REQUIRED TO OBTAIN SOCs
Entity
Noncompliant
Item
Date in
SNC *
Date
SOC
Obtained
Months to
Obtain
SOC
1
[NC Town H]
Mercury
3-94
1-16-98 **
41
2
[NC City K]
BOD & NH3-N
5-93 ***
3-26-97
***
3
[NC City L]
Fecal Coliform
2-94
9-15-96
30
4
[NC City M]
WET & Mercury
6-93
1-94
6.5
5
[NC Town N]
Mercury
11-95
2-98
26
* Date in SNC or equivalent (date of second exceedance within six months;
exceedances being greater than 20% over permit limit, or 40% over permit
limit, etc., as appropriate for the different permit items).
** Date Town signed SOC.
*** Files were not readily available before 1996. However, documentation
indicates the City violated its BOD limit 610 times and its NH3-N limits
428 times between January 1993 and October 1996. The City was in SNC
in May 1993.
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Exhibit 3
DISCREPANCIES BETWEEN MONITORING REPORTS
AND PCS REPORTS
Facility
Violations Reported on the DMR
but not on the Facility Report
False Violations Reported on the
Facility Report
(i.e., no violation per the DMR).
Pollutant
Time Period
Pollutant
Time Period
[NC County 0]
Cyanide
Sep. 99
Aug. 99
CBOD
Jul-Sep 99
[NC County P]
None
Fecal coliform
Jan-Mar 99,
Apr-Jun 99,
Jul-Sep 99
[NC City Q]
None
Fecal coliform
Jul-Sep 99
[NC City R]
None
Fecal coliform
Jan-March 99
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Exhibit 4
ENDNOTES
1. EPA defined overfiling as taking an enforcement action in addition to one a state had
already taken for the same violations. Some states and members of Congress referred to
overfiling as EPA taking any action against a company or other entity, even if the state
decided not to take an action or if it was for different reasons.
2. As explained in an Office of Wastewater Management document, states and territories
identify impaired waterbodies, i.e. those not meeting water quality standards. Lists of
these waterbodies are provided to the public and EPA every two years. States then
establish TMDLs for waterbodies on the list. TMDLs specify the reductions needed to
meet water quality standards and allocate those reductions among the sources in the
watershed. TMDLs can take up to 15 years to establish.
3. As noted in the scope and methodology section of this report, our sample was oriented
toward facilities with long term compliance problems and included facilities where
available information indicated a SOC had not been taken.
4. Six of the permittees we reviewed obtained SOCs. We evaluated the timeliness in which
five of these permittees obtained their SOCs. In the sixth case, the SOC was obtained in
1995 and the available file documentation did not enable us to determine whether the SOC
was obtained timely.
5. The appropriateness of existing EPA guidance for taking "timely and appropriate action"
when a permittee is in significant noncompliance will be addressed in a separate OIG audit
report on the EPA's national NPDES Enforcement program.
6. This Wastewater Treatment Plant is also discussed in Chapter 2 of this report.
7. pH stands for "potential of hydrogen" and is a measure of how acidic or alkaline a
substance is. Acids have pH values over 7.
8. North Carolina NPDES permits define a composite sample as either "a series of grab
samples collected at equal intervals over a 24 hour period of discharge..." or "a series of
grab samples of equal volume collected over a 24 hour period with the time intervals
between samples determined by a preset number of gallons passing the sampling point..."
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or "a single, continuous sample collected over a 24 hour period proportional to the rate of
flow."
9. North Carolina NPDES permits define grab sample as "...individual samples collected over
a period of time not exceeding 15 minutes; the grab can be taken manually. Grab samples
must be representative of the discharge or the receiving waters."
10. An aliquot of reagent water (or other neutral reference material) known to be free of the
analyte being tested which is treated as an environmental sample in that is exposed to all
aspects of the collection and analytical process in both the field and the laboratory.
11. The term animal unit is defined as "...a unit of measurement for any animal feeding
operation calculated by adding the following numbers: the number of slaughter and feeder
cattle multiplied by 1.0, plus the number of mature dairy cattle multiplied by 1.4, plus the
number of swine weighing over 25 kilograms multiplied by 0.4, plus the number of sheep
multiplied by 0.1, plus the number of horses multiplied by 0.2."
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Appendix 1
EPA REGION 4 RESPONSE TO THE DRAFT AUDIT REPORT
September 14, 2000
MEMORANDUM
SUBJECT: North Carolina's NPDES Enforcement and Region 4 Oversight Draft Audit
Report
FROM: Beverly H. Banister, Director
Water Management Division
TO: John M. Bishop
Audit Manager, RTP Regional Audit Office
Southern Audit Division
Region 4 has carefully reviewed the draft audit report sent to us on August 14, 2000.
There are three areas that EPA would like to make additional comments/suggestions: storm
water, Combined Animal Feeding Operations (CAFO) and oversight of minor NPDES facilities.
Additionally, EPA would like to inform you of the actions already underway to address these
concerns.
Storm water
Storm water regulation implementation is an issue that challenges Region 4 and its states.
This additional requirement has put a heavy resource demand on Clean Water Act resources that
are also strained with other emerging issues like Total Daily Maximum Loading (TMDL). EPA
has been aggressively working with all our states to assist them in making improvements to their
storm water programs. EPA would be remiss in not mentioning that North Carolina
demonstrated effective and innovative use of storm water requirements. Specifically, North
Carolina used storm water enforcement to address an important environmental problem involving
illegal ditching and draining activities in coastal wetlands. This initiative required a resource
commitment from both EPA and the State, and has resulted in restoration of wetlands and
deterrence of future violations.
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CAFO
After reading Chapter 6 of the draft report, EPA feels additional factual clarification is
necessary. It appears that some of the basic issues have been lost in the editing process. For
simplicity, Attachment 1 is a redline/strike out that is representative of EPA.
Minor NPDES Facilities
In Chapters 1 and 2, the recommendation for EPA's increased oversight of minor facilities
is troublesome. EPA's ability to oversee the state's regulation of minor facilities is limited by
available resources as well as Clean Water Act regulatory and policy. EPA must maintain a focus
on majors, but we will address minors as resources permit through a variety of tools, such as
random sampling during file reviews and requests to the state for pertinent information on
violations and enforcement actions.
Action Plan
EPA and North Carolina senior officials have already met to discuss resolution of many of
the recommendations contained in the draft report. Agreements have been made to
collaboratively construct an action plan to overcome and or clarify issues in North Carolina's
implementation of the Clean Water Act program as well as EPA's role in oversight of a delegated
program.
Thank you for a final opportunity to comment on the report. If any of our comments need
clarification, I will make my staff immediately available to assist in meeting any deadline you may
have. If I or my staff can be of further assistance, please contact me at (404) 562-9326.
Attachment (Auditor's Note: Region 4's attachment contained editorial corrections. It was
not attached to this final report but is available upon request.)
cc: Tommy Stevens, NCDENR
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Appendix 2
NORTH CAROLINA DENR'S RESPONSE TO THE DRAFT AUDIT
REPORT
NCDENR
North Carolina Department of
Environment and Natural resources
September 13,2000
Division of Water Quality
James b. hunt jr.
Governor
Bill Holman
Secretary
KERR T. STEVeNB
DIRECTOR
MEMORANDUM
To: John Bishop
Audit Manager, RTP Regional Audit Office
Southern Audit Division
From: Kerr T. Stevens'
Director, NC Di'
m of Water Quality
Subject: Office of Inspector General Audit report
Staff of the North Carolina Division of Water Quality (DWQ) have reviewed the
draft Office of Inspector General (OIG) audit findings and wish to offer the
attached comments on its contents and findings. Included within our comments
and summarized at the end of this document are our responses to the
recommendations of this draft report.
It is unfortunate that additional time could not have been provided to allow formal
combined comments to be provided jointly by this agency and Region IV, EPA.
There are recommendations within the draft report with which we have concerns
and the additional time would have allowed us and EPA to provide more
constructive comments, and to more fully consider the potential impacts of the
recommendations on the program, program resources and water quality in North
Carolina. Staff from the DWQ have had initial discussions with EPA Region IV
staff and will work to develop a plan to address the issues raised in the draft audit
report.
We note that the draft report does not document any actual adverse water quality
impacts as a result of the identified deficiencies. In addition the report does not
evaluate the potential benefits to be gained by implementing the recommendations
in relation to the impacts on program resources and the impacts on other water
quality programs.
We are also somewhat disappointed that the report does not recognize any of the
accomplishments of the water quality program which EPA considers to be a
performer in Region IV and proactive in many areas. Certainly, North Carolina
has aggressive and very active NPDES and CAFO compliance monitoring and
enforcement programs when compared to most other States. Significant program
resources are directed toward these efforts. The release of this document without
the acknowledgment of the positive aspects of the program, is not fair to the
program, and promotes the use of the information provided in the report out of
context.
i Equal ©pppbtunj-f
1017 Mail s«rvice cent®*, Raleigh, north Carolina
wabsite: h2o enr.slale.nc us phowb oi »-73a*so«3 pax »r9-7«9-&9l 9
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
If you have any questions about this matter please do not hesitate to contact Mr. Bill Reid at
(919) 733-5083 ext. 519.
CC: Beverly H. Banister
Robin Smith
Coleen Sullins
Bill Reid
Dennis Ramsey
Jeff Poupart
Kim Colson
Bradley Bennett
Shannon Langley
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With regard to the State needing to improve its NPDES Enforcement Efforts we would offer the
following comments.
I. Enforcement actions are not always taken promptly for violations of daily or weekly
permit limits
The overall impression of this section seems to suggest every violation must be identified
and addressed with a formal enforcement action. This would go beyond EPA guidance
and we would like to get their input on the recommendation for this finding. We would
suggest from our conversations with surrounding states both in EPA Region 4 and in
other EPA regions that North Carolina's NPDES program is more aggressive and, in
most cases, far more aggressive than any other state in identifying and addressing
NPDES permit effluent violations through enforcement actions in a swift and consistent
manner.
Most of the OIO's concerns can be more than adequately addressed by an understanding of the
current enforcement policy. Each month, the DWQ identifies all facilities that violate monthly
averages. That screening initiates the full review of the DMR that results in identification of
violations other than non-monthly average violations. Appropriate enforcement will follow if
policy thresholds are exceeded.
It will be a rare occasion when a facility has weekly violations of a chronic nature and does not
violate the monthly average (because non-monthly limitations are higher than the monthly limit).
Therefore, our policy will pick up most daily/weekly violations of this type. If the monthly
average is not exceeded, consistent with EPA policy, associated non-monthly limit violations are
not considered SNC (and, therefore would not require an enforcement response). Therefore, the
only instance when a daily maximum or weekly average violation will not be identified in a
timely manner by the state is for an isolated single violation. The OIG recommendation to
prevent isolated violations from going unnoticed is to begin manually reviewing all DMR's. A
manual review of all DMR's in an attempt to find all rare and isolated daily and weekly average
limit violations would be a tremendous misuse of resources and provide no environmental benefit
This recommendation becomes even more troubling as you read further into the draft audit
recommendations that suggest the state needs to redirect resources towards stormwater
compliance and enforcement activities. The Division is pursuing several avenues to obtain
staffing assistance for these compliance/enforcement activities at these sites. This will be
discussed in greater detail further down in our comments. To recommend technical staff perform
manual administrative reviews to identify an isolated violation of a daily maximum effluent limit
on one hand and then to recommend on the other hand that staff need to be redirected towards
stormwater compliance and enforcement activities and away from "less critical activities" is
contradictory.
The MOA between the state and EPA says that
"Timely enforcement action is defined as responding wick an initial action against a
major (emphasis added) discharger within 30 days of becoming aware that the following
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violations have occurred (actions against minor dischargers should be given a lower
priority but should be taken as quickly as possible),"
a. failure to submit a date related report
b. failure to submit a self monitoring report
c. failure to meet an effluent limitation
The state currently identifies and addresses all violations with the same frequency and
timeline. Nine out of ten enforcement actions we take against NPDES facilities for limit
violations are against minor facilities.
In order to ensure that regional offices are more quickly aware of daily and weekly
violations that constitute SNC, the DWQ central office will provide copies of the
QNCR to each regional office for review at die same time they are submitted to
EPA.
The State will work with EPA to evaluate if there is a need to update the language in
the December 1983 MOA between the state and EPA to formally recognize It's
civil assessment process.
H. Improvement is needed in forging agreements which bring about compliance with
NPDES permit limits
The DWQ considers an. NPDES permit to be the documentation erf a covenant between
the permittee and the State. Non-compliance is not the expected condition and when it
occurs, enforcement, not a timetable, is typically dispensed. State enforcement actions
actually do, in essence, include a timetable. We expect the timetable for compliance to
be immediate. If the problem is operational in nature or result of an isolated event and
compliance does not require the construction of additional treatment/disposal facilities,
giving the permittee a timetable for corrective action is not appropriate.
We believe that DWQ's enforcement policy works like a Notice of Continuing Penalties
(NCP) for a chronically repeating violator. The DWQ would provide as proof that this
procedure and policy has had positive benefit, the fact that die overall compliance rate for
NPDES facilities has risen from 81 % in 1997 to 87% so far in calendar year 2000.
(Current enforcement policy was implemented in 1998). Prior to the introduction of the
monthly enforcement policy, compliance rates consistently hovered around 80% and
were never higher than 82.07%.
Hie audit report seems to challenge the fact that SOCs cannot be issued for instances of
noncompliance that are operational in nature. This is clearly spelled out in North
Carolina Administrative Code 15 A NCAC 2H . 1206 (b)(!) which states
"Requests will not be evaluated unless it is demonstrated by the permittee to the
satisfaction of the Director that noncompliance is not due to failure by the permittee to
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properly operate, manage and maintain the wastewater treatment system and that the
existing wastewater treatment system is being operated in such a -may as to attain the
highest degree of treatment possible under the existing conditions. The demonstration
must also evaluate all reasonably available low-capital-cost interim improvements, even
though they may not be directly related to the final treatment option. This demonstration
must be made in the form of a report prepared by an independent consultant (a
professional with expertise in wastewater treatment)."
North Carolina Regulations do not allow for the issuance of SOC's when the non-
compliance is a result of poor operation. It is not a question of whether or not it would be
"appropriate." The OIG discussion alludes to this but siill seems to challenge its validity.
Clearly in this situation the use of technical assistance and existing enforcement programs
are more effective in obtaining compliance than simply establishing a compliance date.
The OIG report cites the state's non-use of Special Orders Without Consent, even though
they are permitted in the statutes. Our experience has shown that these types of orders
are not a wise use of our resources. Such an administrative order can not be signed by
the Division Director and would thereby be required to be acted upon by the fuli
Environmental Management Commission. Any such order could not be specific with
regard to actions to be undertaken, as that would make DWQ potentially responsible for
plant performance and its compliance or non-compliance. And, as stated in the report, it
is subject to review in the OAH. The State makes every effort to enter into agreements, if
such agreements are warranted, which are both aggressive and realistic. Meaningful and
achievable timelines are something that you simply must incorporate into SOC's if they
are to be useful. Special orders without consent could not contain these detailed plans of
action as evaluated by an experienced third party consultant and would do little more than
allow non-compliant facilities additional time.
In addition, the report's discussion regarding NC's adherence to "EPA SOC Guidance"
does not accurately portray the State's SOC timeline. You must take into account the
negotiation that goes on before a draft SOC is prepared when evaluating the timeline for
obtaining an SOC. In many instances, DWQ staff from regional offices, our technical
assistance and certification unit and other staff are consistently working with facilities in
order to identify potential remedies to compliance problems. This time consuming effort
always occurs before an SOC is entered into and should be appropriately acknowledged
by the audit report. This time is highly variable and dependent upon the individual
situation.
State action to be taken
The State will continue to pursue SOC's with non-compliant fadtities where they
are warranted and allowed by North Carolina law as a means of obtaining
compliance.
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HI. North Carolina did not adequately consider economic benefit of noncompliance
whew assessing civil penalties
"The amount of money saved by non-compliance" is a NC assessment factor that is
usually not found to be significant when considering a penalty amount. When evaluating
non-compliance at wastewater treatment plants often there is no economic benefit that
can be quantified, because all routine practices are being followed at the time of the
violations. If the construction of wastewater improvements is necessary to achieve
compliance, then in any event these costs must ultimately be bome by the permittee.
Delays in these situations rarely result in cost savings. Standard DWQ civil assessments
are designed to offset any costs savings from missed sampling events.
If you couple this with the aggressive number of enforcement actions the State takes
against NPDES facilities (over 1250 separate cases in the last rwo yeare), while an
economic benefit factor may be consistent with the "appropriate" criticisms in the draft
audit report, it would play havoc with the "timely" goal.
We also feel there is a still a misunderstanding in the area of the States delegated
enforcement process. There are prescribed dollar amounts that regional office supervisors
are delegated to assess for violations of NPDES permit limits and monitoring frequency.
However, in any case where the regional office supervisor feels a higher penalty may be
appropriate to address an instance of non-compliance, the regional office may forward a
case to the Director for consideration. The Director is authorized by Statute to assess
civil penalties of up to $25,000 per day, per violation of any permit limit
State action
The State will consult with SPA to evaluate the effect that performing an economic
benefit analysis would have on its compliance and enforcement prop-am and
proceed accordingly.
IV. Test methods used bv minor facilities were not sensitive enough to determine
compliance with total residual chlorine limits:
The issue here is that the smaller facilities (e.g. MHP's, schools, etc.) usually do not have
onsite laboratories. The holding time for these samples Is 15 minutes. This often
necessitates the use of a field method. There is a field method that, in theory, will yield
results approaching or down to the cited permit limits. The apparatus, although portable,
is quite delicate. All of the set-up procedures required of in-house laboratory testing are
required of this equipment in order to get an accurate analysis. It should be noted that
there is an ongoing technical debate as to whether or not this method in day to day field
use will reliably provide detection limits lower than the less expensive field test (the price
noted for this equipment is around $2000). At this time we do not believe it can.
Therefore, the state would propose to work with EPA to develop apian for
implementation of any new methodology as appropriate.
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V. Test methods used for mercury were not precise enough to determine compliance
with NPDES Permit limits:
The permil limit for mercury was established to protect water quality and human health,
and was not linked to the technologic ability to analyze to that level.
Only with the approval of the referenced EPA method 1631 Rev. B is there a way to test
to below permit limits. However, this is a brand new method that requires a clean room
and sterile technique. Specialized sampling/collection techniques are also required for
this method and training of all appropriate staff will have to take place before it can be
performed correctly. Before a facility can report using this method, a laboratory will first
have to be able to test using the method and will have to be certified by our laboratory
section. Individual laboratories will have to decide whether it is in their economic
interest to spend the money to construct facilities to do the testing (it will be very
expensive). Furthermore, it will take some time for analysts to become competent with
the new method. The DWQ Chemistry lab has investigated cost of developing a mercury
clean room and is proposing a capital improvement project to implement and an
expansion of 4 staff to man the mercury analyzer.
The state proposes to work collaboratively with EPA In order to develop a plan to
phase in the use of this test method as appropriate.
VI. COMMENTS ON CHAPTER 4 - NORTH CAROLINA NEEDS TO IMPROVE ITS
STORMWATER COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM.
Comments specific to the conclusions and recommendations of this chapter
The DWQ concurs that pollution resulting from storm water runoff is a significant water quality
concern in North Carolina. The State's 2000 303 (d) list indicates that 19% of the State's
impaired stream miles listed for sediment and/or turbidity are potentially impacted by
construction, development, urban runoff, and non-urban runoff. Sediment in these cases could
refer to sedimentation, bank erosion, channelization, lack of riparian vegetation, etc. This
problem is larger than Phase I or II of the NPDES Stormwater program. Recognizing this, the
DWQ administers a State Stormwater Management program that regulates development
activities within our twenty coastal counties, and development activities draining to Outstanding
Resource Waters (ORW) or High Quality Waters (HQW). The DWQ also has a Water Supply
Watershed Protection program that has required all local governments having land use
jurisdiction within water supply watersheds to adopt and implement water supply watershed
protection ordinances and management plans. Additionally the DWQ has implemented buffer
rules and stormwater management requirements in the Neose, and Tar-Pamlico river basins.
The report recommends that the State and EPA evaluate the State's current NPDES compliance
activities and resource allocation to determine whether resources should be diverted from other,
"potentially less critical NPDES compliance activities" to implement a storm water compliance
program. The diversion of resources is not an alternative that we feel will protect water quality.
Our review of discharge monitoring data from facilities with NPDES wastewater permits, the
routine inspection of these facilities, providing technical assistance, and the development of
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SOCs and enforcement actions are critical components of a NPDES wastewater discharge
compliance program. Over the years these activities have resulted in significant documented
increases in compliance rates. The diversion of resources from these activities to storm water
compliance is not recommended from a water quality protection standpoint and would adversely
impact the effectiveness of the wastewater discharge compliance program. The draft report, in
Chapter 3, recommends changes to the NPDES wastewater compliance program, which would
require additional staff resources to implement. There are simply not extra resources available to
divert to the storm water program. The report should acknowledge that additional funding is
necessary for the implementation of a comprehensive stormwater compliance program.
In recent years the DWQ has increased compliance and enforcement efforts associated with
construction sites and our State stormwater program using existing staff. We concur that
additional compliance and enforcement work, is needed. As indicated during the audit
investigation, the DWQ has attempted to obtain additional funding to these activities from the
state legislature and federal grants. The DWQ will continue to seek funding from these sources.
In addition, the DWQ will continue to work with the Division of Land Resources to improve
coordination of compliance monitoring activities and thus maximize the water quality benefits of
their field presence at construction sites. As water quality problems from specific sites are
identified we will continue to use available resources and enforcement/compliance mechanisms
to require corrective actions and prevent future problems.
Recommended corrections to errors noted in Executive Summary and Chapter 4
• The text associated with the statement "State Needs to Develop a Stormwater Compliance
Program", in the Executive Summary, should be moved to the right side of the page.
• Chapter 4, under "NPDES Storm Water Requirements":
> The report states that sampling results (associated with the permit self-monitoring
requirements) were not evaluated for compliance against permit limits, but were used to
evaluate loadings entering receiving waters. The wording of this statement is confusing in
the context of the paragraph, since the stormwater permits require BMPs and do not contain
discharge limits.
> The report includes the statement" The State's Division of Land Resources, as part of the
State's Erosion and Sediment Control Program, oversaw construction activity and issued
NPDES permits for storm water." Note that the DWQ issues the actual permit and maintain
NPDES authority. Land Resources transmits the permits to the permittees for our Division.
In addition the statements that following this sentence should note that Laid Resources will
notify DWQ if an inspection notes potential violations of NPDES requirements.
> Chapter 4, under "Compliance with Stormwater Requirements Not Routinely Monitored"
states that all MS4 permits contain monitoring requirements and 2,747 of the industrial
permits potentially required the facility to monitor and analyze stormwater discharges and
report these results to the State. Please note that all NPDES Stormwater permits require
qualitative monitoring of all outfalls.
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Oenerai comment';
There are several areas throughout the report where the OXO cites permit enforcement action and
Whole Effluent Toxicity data as being inaccurate on the PCS system. These are issues that the
State has been working on for several years. The enforcement action issue has been remedied
with a temporary interface until the states new BIMS system is operational. As for the WET
data, the BWQ PCS contact is working with the EPA Region 4 PCS contact to ensure the WET
data we upload into PCS can be correctly evaluated.
In summary, the State will talce the following actions as a result of the OIG audit
recommendations:
1. The State will provide copies of the QNCR to regional offices at the same time they are
submitted to EPA Region 4 to ensure identification of daily max and weekly average
violations that constitute SNC.
2. The State will evaluate and development a plan for phasing in the requirements for more
sensitive test methods for certain parameters with guidance from EPA Region 4 and in
association with other Region 4 States.
3. The State is currently working with EPA Region 4 staff to assure that WET data that is
routinely uploaded into PCS is correctly evaluated by PCS.
4. The State will continue to evaluate ways to increase presence and activity at permitted
storm water facilities. The State will also continue to seek funding from various sources
(state legislature, 104(b)(3) grants), to permanently obtain staff and resources to dedicate
to stormwater permitting, compliance and enforcement activities.
5^ The State will work with EPA to evaluate if there is a need to update the language in the
December 6, 1983 MOA between the state and EPA to formally recognize it's civil
assessment process.
6. DWQ will continue to work with the Division of Land Resources to improve
coordination of compliance monitoring activities and thus maximize the water quality
benefits of their field presence at construction sites. As water quality problems from
specific sites are identified we will continue to use available resources and
enforcement/compliance mechanisms to require corrective actions and prevent future
problems.
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VII. Chanter 6 State AFO Permitting
Their is a an apparent grammatical eiror on page 51 first paragraph. There is a quote about the
number of discharges (29 to WOS) through
September 30, 1999 but on page 56 EPA Oversight section the report references only 24
discharges though August 1999. The auditors during their discussions indicated that in
deference to Floyd's devastation they would not include September 1999 data. The list provided
to them is attached. Even on the 24 reported discharges listed several should not have been listed
including: 3 that did not hit WOS , 1 discharge wasn't wastewater but irrigation water, 1 was
runoff from a drystack, 1 was just evidence of past discharge 1 was caused by a Tornado (Acts of
God).
The contention that North Carolina has repeatedly "resisted" EP A's efforts to induce them to
issue NPDES permits is inaccurate. On September 29, 1999, North Carolina appealed to Region
IV after discussions with senior EPA Officials to apply to have its current program evaluated in
relation to U. S. Department of Agriculture and U. S. EPA Unified Strategy for Animal Feeding
Operations dated March 9, 1999 (Section 5.0 Strategic Issue #3 Action l,B.).to date no formal
response has been received. In fairness this should not be framed as "resistance" on North
Carolina's part.
The third paragraph states that North Carol)nas permit is more stringent that the NPDES CAFO
permit in only two areas. Comparison of the permit should have indicated at least five areas in
¦which North Carolinas permit is more stringent. Areas in which the Not Included in the list are :
the ahilitv to rtanlrt groundwater monitoring:. (2) the requirement Fnr a Certified Operator for the
treatment system: and C3) a more comprehensive Anim?| Wast*- jyTawa^mgat Plan ^Emergency Rtspome.
Odor. Mortality and Insect Cnntroft
In the paragraph bf-tHnning "Despite this Federal regulatory prohibition ..." the report is not
accurate in its implication. In apply for "functional equivalency" North Carolina was not trying
to purposefully thwart federal regulation against being less stringent than Federal Rules but was
in fact asking for interpretation of the U. S. Department of Agriculture and U. S. EPA Unified
Strategy for Animal Feeding Operations dated March 9. 1999 1999 (Section 5.0 Strategic Issue
#3 Action l.B.t.
Potential Rnvimnmanial Tmr
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North Carolina NPDES Enforcement and EPA Region 4 Oversight
North Carolina AFO Program Lacks Four Key NPDES Provisions
Federal Enforceability
The report contends that EPA's ability to enforce against AFO pollutant discharges was hindered
by the fact that the State does not input data into PCS. The State has repeatedly offered to
authorize access by EPA to all the State's AFO permitting and compliance databases.
The input into the PCS database of permit and inspection data would give some insight into AFO
actions in the state. However, the example given of freeboard violations was irrelevant as
freeboard data does not have afield in PCS would not be reported to us on a DMR and there is
not a Federal Requirement to maintain freeboard.
Public Notice
North Carolina did issue Public Notice for the Animal Waste General Permit before its issuance
in 1997 and a list of the animal operations subject to the permit has been available on the Internet
for several years. Public Notice is issued when before issuance of an individual permit.
EPA Oversight
The State was actually delegated the NPDES program back in the 1970*s not 1994. The State has
repeatedly offered to authorize access by EPA to all the State's AFO permitting and compliance
databases. The number of discharges offered in the report for the covered period "24" is correct.
However, as previously stated the 24 reported discharges include several that should not have
been listed including: 3 that did not hit WOS , 1 discharge wasn't wastewater but irrigation
water, 1 was runoff from a drystack, 1 was just evidence of past discharge ane 1 was caused by a
Tornado (Acts of Qod). As an aside North Carolina has completed enforcement action on almost
all of the discharges. EPA reviewed hundreds of files and did not offer in the report even one
specific example of an incident which the EPA did not feel adequate enforcement was taken.
Third Party Lawsuits
Senate bill 1217 should properly be cited as General Statute 106-803
State Action to be taken
North Carolina will continue to issue individual NPDES CAFO permits when an individual
permit is necessary and to issue general NPDES CAFO permits beginning in January 2002, This
date is appropriate for several reasons'; 1. It corresponds to the completion of the first five-year
cycle of CAFO permits statutorily required in North Carolina General Statute 143-215- 10C to
begin January 1, 1997. 2. It will take time for North Carolina to draft a general NPDES CAFO
permit acceptable to the EPA and affected stakeholders and to publicly notice that permit. 3.
Administrative Rule and or statutory changes may be required for implementation and the
drafting and enactment of these potential changes will take time.
Other Matters
North Carolina AFO Pilot Program May not be effective.
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North Carolina General Statute 143-215.10E specifically states "that any employee of a Stale
Agency or local government lawfully on the premises and engaged in activities relating to the
animaj operation who observes any of the following violations shall immediately notify—and
the Division [of Water Quality (DWQ)})" The violations include " Any direct discharge of
animal waste into waters of the State... While it is true that only DWQ personnel can initiate
an enforcement action information from Soil and Water personnel inspections can and has best
used in enforcement actions.
State Action to be Taken
During the next Animal Waste System Inspectors meeting on October 6, 2000 we will reiterate
that information gathered from any credible source can be used to initiate an enforcement action.
A representative from the Attorney General's Office, Mary Dee Carraway gave a presentation, at
the last meeting on July 18, 2000 on information needed for an enforcement cases this may have
already rectified the issue brought forward in the report.
North Carolina Lacked Uniform Guidance, Criteria and Training for AFO Inspectors
DWQ contends that our AFO Inspectors are the most highly trained inspectors in the country.
In the last two and half years forty six (46) separate training events (list attached) have been held
for and attended by North Carolina's AFO inspectors. They have been issued instruction to the
inspection form, manuals, rules, statutes and guidance and policy memos. They have also
received specific checklists on the preparation of enforcement cases, (sample copies attached).
State Action to be Taken
A comprehensive document outlining the actions to be taken for all the areas on the inspection
form (copy attached) was signed on September 6, 2000. An updated extremely comprehensive
Animal Inspection Manual was given out at the July 18, 2000 meeting to replace previous
manual. We seek EPA's guidance as to what additional training they feel is necessary
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Appendix 3
Report Distribution List
Office of Inspector General
Inspector General (2410)
Deputy Assistant Inspector General for Internal Audits (2421)
(Audit Control file-3)
Divisional Inspector General for Audit, Southern Audit Division
Audit Followup File)
Divisional Inspectors General for Audit
Audit Managers, Branch Offices
Headquarters Office
Assistant Administrator for Enforcement and Compliance Assurance (2201 A)
Assistant Administrator for Water (6101)
Comptroller (2731)
Associate Administrator for Regional Operations (1100A)
Associate Administrator for Congressional and Intergovernmental Relations (1301 A)
Associate Administrator for Communications, Education, and Media Relations (1101 A)
Agency Audit Followup Official (2710)
Agency Followup Coordinator (2724)
EPA Region 4
Regional Administrator
Director, Water Management Division
Chief, CWA/SD Water Enforcement Branch, WMD
Director, Environmental Accountability Division
Audit Followup Coordinator
Public Affairs Office
State of North Carolina
Secretary, Department of Environment & Natural Resources
Director, Division of Water Quality
State Auditor
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