y 4 / c s s

. p %//o x

40 ALLOTMENT OF WATER POLLUTION

CONTROL CONSTRUCTION GRANT F U N D S ^

*GOVERNMENT

Storage

«

'j ;~4 £. i_

KA NbAS S I A

‘N T S

>

sir

I t r Y

rlblTY

H E A R IN G S

BEFO RE TH E

SUBCOMMITTEE ON 

B g ENVIR ONMENTAL POLLUTION

: J]

' <t

OF THE

IMITTEE ON PUBLIC WORKS 

UNITED STATES SENATE

NINE TY -FO UR TH CONG RESS

SECO ND SES SIO N

S. 3037

A BILL TO EX TE ND CERTAIN AU TH OR IZA TIO NS UNDER 

TH E FE DE RA L WAT ER POLLU TIO N CONTR OL ACT, AS 

AME NDE D

MAY 25 AND 27, 1976

SERIAL NO. 94-H40

t

I ----------------

’ Pr inted for the use of the Com mittee on P ub lic Wo rks

74-536 0

U.S. GOV ERNMEN T PRINTING OFFIC E

WASHING TON : 1976
COMMITTEE ON PUBLIC WORKS

JE NNIN GS RA NDO LP H, West Virginia, Chairman

ED MUN D S. MU SKIE, Maine 

JO SE PH M. MONTOYA, New Mexico 

MIK E GR AV EL , Alaska

LL OY D BENTS EN , Texas

QUEN TI N N. BU RD IC K, North Da kot a 

JOHN C. CU LV ER , Iowa 

ROBER T MO RGAN, North Carolina 

GA RY HART, Colorado

M. Barry Mey er, Chief Counsel and Chief Clerk

Bailey Guard, Minority Staff Director

Leon G. Billings and Richard D. Grundy, Senior Professional Sta ff Members

John W. Yago, Jr., Assistant Chief Clerk; Philip T. Cummings, Assistant Chief Counsel

Harold H. Brayman, Senior Professional Staff Member (mino rity)

HOWARD H. BA KE R, Jr., Tennessee 

JAMES L. BU CK LE Y, New York 

RO BE RT T. ST AF FO RD , Vermont 

JAMES A. Mc CLURE, Idah o 

PE TE V. DO ME NICI, New Mexico

Professional and research staff; Karl R. B raithwaite, James W. Case (Assistant Counsel), Paul Chimes, 

T renton Crow, Katherine Y. Cudlipp, P aul F. Ebeltoft, Jr., George F . F enton, J r., Randolph

G. F lood, K athaleen R. E. Forcum, Ann Garrabrant, Richard T . Gre er, Richard M. Harris

(Assistant Counsel), Wesley F. Hayden, Richard E. Herod (Assistant Counsel, Minority), Veronica

A. Holland, R onald L. Katz, Judy F. P ar ent e, John B. P urinton, Jr., J ames D. Range, W. Lee

Rawls, Charlene A. Sturbitts, E . Stevens Swain, Jr., Sally W. Walke r, a nd Haven Whit esid e

Subcommittee on E nvironmental P ollution

ED MUN D S.

JO SE PH M. MONTOYA, New Mexico 

LL OY D BE NT SE N, Texas 

MI KE GR AV EL, Alaska 

JO HN C. CU LV ER , Iowa 

ROBER T MORGA N, North Carolina 

GA RY HAR T, Colorado

MU SKIE, Maine, Chairman

JAMES L. BU CK LE Y, New York 

RO BE RT T. ST AF FO RD , Vermont 

JAMES A. Mc CL UR E, Idaho 

PETE V. DO ME NICI, New Mexico
V

I C O N T E N T S

r

Muskie, Hon. Edm und S., U .S. Senator from the Sta te of Maine, opening P a g e

statem ent of__________________________________________________ 1, 105

LIST OF WITNE SSES

May 25, 1976

Adams, William R., Commissioner, Department of Environ men tal Protection, State of M aine --------------------------------------------------------------- 7

Bardin, David J., commissioner, New Jersey Depar tment of Environmental Protection----- ------ 34

Written sta tem ent------------------------------------------------------------------- 44

Dendy, William B., executive officer, Water Resources Control Board,

Sta te of California____________________________ 31

Fickessen, Jack R., staff assistant, Texas Water Quality Board -----.. ..— 24

Ledbette r, J. Leonard, director, Environmental Protection Division,

Georgia Dep artm ent of Na tur al Resources------------------------------------- 11

Written sta tem ent___________________________________________ 16

May 27, 1976

Train, Hon. Russell E., Adm inistrator, Environmental Protection Agency, 

accompanied by John R. Quarles, Deputy Administrator; Dr. Andrew 

W. Breidenbach, Assistant Adm inistrator for Water and Hazardous 

Materials; Eckar dt C. Beck, Deputy Assistant Administrator for Water 

Planning and Standard s; and John T. Rh ett, Deputy Assistant Admin istr ator for Water Program Ope ra tio ns ... --------- ------------------------ 106

AD DITIO NA L MA TERIA L

Appendix: Rep ort of th e dece ntralization task force------------------ -------145

Responses to written questions:

Ledbetter, J. Leonard, director, Environmental Protection Division,

Dep artm ent of Na tural Resources, State of Georgia------------------- 69

Fickessen Jack R., ass istant to the executive director, Texas Water 

Quality Board_____________________________________________ 74

Dendy, Bill B., executive office, S tate W ater Resources Control Board,

State of California_________________________________ 84

Ricci, Rocco D., depu ty commissioner, Department of Environmental

Protection, Sta te of New Jer sey ---------------------------------------------- 91

Adams, William R., commissioner, Department of Environmental

Protection, State of Ma ine---------------------------------------------------- 99

Environmental protection adm inistration...................... ................... — 125

S. 3037:

M As introd uced______________________________________________ - 3

As repor ted_________________________________________________ 4

State ments:

Virginia State Water Control Board------------------------------------------- 62

Association of M etropolitan Sewerage Agencies------------------------------- 129

Berle, Pete r A. A... commissioner, New York Sta te Department of

Environmental Conservation---------------------------------------------------- 135

(in)

ALLOTMENT OF WATER POLLUTION CONTROL

CONSTRUCTION GRANT FUNDS

TU ESDA Y, MAY 25, 1976

U.S. S e n a t e,

C om m it te e on P ubli c W ork s, 

Su bco m m it tee on E n vir onm en ta l P o llu tio n,

Washington, D.C.

The subcommittee met at 10:05 a.m., pursu ant to call, in room 

4200, Dirksen Senate Office Building, Hon. Edmund S. Muskie 

(chairman of the subcommittee) presiding.

Present: Senators Muskie and Domenici.

OPE NIN G STAT EMENT OF HON. EDMUND S. MU SKIE, U.S. SENATOR 

FROM TH E STATE OF MA INE

Senator M u s k ie . The committee will be in order.

I have a brief opening statement which sets out the context of these 

hearings.

The Subcommittee on Environmental Pollution is meeting this 

morning to receive testimony on an issue tha t has plagued the Congress 

since enactment of Public Law 92-500 in 1972: Allotment among the 

States of construction gran t funds.

Today we will hear from representatives from the States; on Thursday we will hear from the Administrator of the Environmental Protection Agency.

On May 13, the Committee on Public Works reported S. 3037 to 

the Senate, authorizing $5 billion for fiscal year 1977 for construction 

grants to assure that States will not run out of money, and will not 

lose momentum they have achieved in this program. After these 

* hearings, the committee will meet again to settle on an allotment

formula, which will then be added to S. 3037.

Among the States some have supported and some have opposed 

the needs based allotment formula used to distribute the 1972 act’s 

o $18 billion authorization.

Some of these States did extremely well on a needs based formula. 

They reported high needs: Usually, big States with old cities, old sewer 

systems, and lots of rainfall.

Some of the States have had difficulties with the current allotment 

formulas because they reported low needs. They had made substantial 

accomplishments prior to 1972, they underreported their needs, and 

their cities are relatively new with relatively modern sewer systems. 

These States would probably prefer a population based formula. And, 

some of the States would benefit from different formulae. But, in 

common all States need consistency in the Federal funding program. 

(1)
To assist us, we have today invited representatives of five States: 

Maine, New Jersey, Georgia, Texas, and California. The divergence 

of States represented by our witnesses today precisely illustrates the 

problems and dilemma the Congress faces. We need to resolve competing interests, while providing program continuity. We need to rise above parochial interests. We need to abandon the current effort to design a distribution formula the pri­ mary purpose of which is to maximize the amount of grants available 

to a majority of the States. This morning, we are asking you to help us. We are asking you to look beyond the narrow, selfish interests of your own State to the broader national interests. And we are asking you to help us settle on an allotment formula tha t wdll assure essential program continuity.

[The bill, S. 3037, as introduced and as reported follows:]
V

3

Wth CONGRESS 

2i> Session S. 3037

IN TII E SE NATE OE THE UNIT ED ST AT ES

F ebruary 25,1976

Mr. Muskik (fo r himself, Mr. Randolph, Mr. Baker, Mr. Buckley, Mr. Burdick, Mr. Gravel, Mr. Gary Hart, and Mr. Montoya) introduced tho 

following bill; which was read twice and refe rred to tho Committee on 

Public Works

A BIL L

To exte nd certain auth orizations under the Fe de ral Wate r Po llution Control Act, as amended.

1 Be it enacted by the Senate and House of Rcpresenla2 tives of the United Sta tes of A merica in Congress assembled,

3 Th at section 207 of the Feder al W ater Pollution Contro l

4 Ac t, as amended (8 6 Stat. 83 9) , is a men ded by striking tho

5 period at the end of the sentence and add ing “, and for the

6 fiscal year ending September 30, 1977, not to exceed

7 $7,00 0,0 00,00 0.” .

II
94th CONGRESS 

2d Session

Calendar No. 827

S. 3037

[Report No. 94 -8 70 ]

IN TH E SENA TE OF TH E UNIT ED STA TES

F ebruary 25,1976

Mr. Muskie (fo r himself, Mr. Randolph, Mr. B aker, Mr. Buckley, Mr. Burdick, Mr. Gravel, Mr. Gary Hart, Mr. Montoya, Mr. Hathaway, Mr.

Culver, Mr. H uddleston, Mr. McGee, and Mr. Mondale) introduced the

following bi ll; which was read twice and referred to the Committee on

Public Works

May 13,1976

Reported by Mr. Randolph, with amendments 

[Omit the part struck through and insert the part printed in italic]

A BILL

To extend certain authorizations under the Federal Water 

Pollution Control Act, as amended.

1 Be it enacted by the Senate and House of Representa2 lives o f the United States of America in Congress assembled,

3 That S ec tion 1. (a) Section 207 of the Federal W ater Poi4 lution Control Act, as amended (86 Stat. 83 9) , is amended

5 by striking the period at the end of the sentence and addin g

6 ", and for the fiscal year ending September 30, 1977, no t

7 to exceed $7,00 0,00 0,00 0 $5,000,0 00,00 0.”.

8 (b) Section 104(u )( 2) of the Federal Wa ter Pollu9 tion Control Act (33 U.S.C . 1254) is amended by strik10 ing out “1975” and inserting in lieu thereof “1975,

11 $7,500 ,00 0 for fiscal year 1 977”.
5

2

1 (c) Section 1 0 4 (u )( 3) of llie Federal Wa ter Pollu2 tion Control Act (33 U.S .C. 1254) is amended by strik3 ing out “1975” and inserting in lieu thereof “1975, $2,500,-

4 000 for fiscal, year 1977,”.

5 (d) Section 1 0 6 (a )( 2) of the Federal Wa ter Pollu6 tion Control Act (33 U.S.C . 1256) is amended by strik7 ing out “and the fiscal year ending June 30, 1975;” and

8 inserting in lieu thereof “and the fiscal year ending Jun e 30,

9 1975, and $75,000,000 for the fiscal year ending Septem,-

10 ber 30, 19 77 ,”.

11 (e) Section 11 2( c) of the Federal Wate r Pollution

12 Control Ac t (33 U.S.C . 126 2) is amended by inserting

13 “$25,000 ,000 for the fiscal year ending September 30,

14 1977,” immediately a fter “June 3 0 ,1 9 7 5 ”.

15 (f ) Section 2 0 8 (f )( 3 ) of the Federal Wa ter Pollur

16 tion Control Act (33 U.S.C . 1288) is amended by striking

17 out “and not to exceed $150,00 0,00 0 for the fiscal year

18 ending June 30, 19 75 .” and inserting in lieu thereof “and

19 not to exceed $150,000 ,000 per fiscal year for the. fiscal

20 years ending Ju ne 30, 1975, and September 30, 197 7.”•

21 (g) Section 304(c )( 2) of the Federal Wa ter Pollu -

22 tion Control Act (33 U.S .C. 1324) is amended by strik23 ing out “and $150,000 ,000 for the fiscal year 1975” and

24 inserting in lieu thereof “, $150,000,000 for the fiscal year

25 197 5; and $1 50,000 ,000 fo r fiscal year 1 977 .”.
6

S

1 (h ) Sec tion 51 7 of the Feder al W at er Pollution C'on2 trol A ct (3 3 U .S .C . 13 76 ) is amended by striking out “and

3 $3 50 ,00 0,0 00 fo r the fiscal yea r endin g Ju ne 30, 19 75 ,”

4 and inserting in lieu thereof “, $3 50 ,000 ,00 0 fo r the fiscal

5 year ending Ju ne 30, 197 5, and $ 35 0,00 0,0 00 fo r the fiscal

6 yea r endin g September 3,1 977.”.

*1 S ec. 2. Sec tion 2 0 8 (f ) (2 ) of the F ederal Water P ollu -

8 lion Control Act (3 3 U. S.C. 21 88 ) is amended to read as

9 follows:

10 “(2 ) For the two-year period beginning on the date the

11 first gra nt is mad e und er paragraph (1 ) of this subsection to

12 an agency, if such first grant is made before October 1,1 977,

13 the amo unt of each such grant to such agen cy shall be 100

11 pe r centum of the costs of developing an d operating a con15 jtinuing areawide waste treatment managem ent pla nning

16 process under subsection (b) of this section, and thereafter

17 the amount gra nte d to such agency shall not exceed 75 per

18 centum of such costs in each succeeding one-year period. In

19 the case of an y other grant made to an agen cy under such

20 par agr aph (1 ) of this subsection, the amoun t of such gra nt

21 shall not exceed 75 per centum of the costs of developing and

.22 operating a con tinuin g arcawidc waste treatment management

23 pla nning process in an y year.”.

24 S ec. 3. Th e second sentence of section 2 0 8 (f) (3 ) of

25 the F ede ral W at er Po llution Control Ac t (3 3 U.S.C . 12 88 )
7

4

1 is amended by striking out the period at the end thereof and

2 inserting in lieu thereof a comma and the following: “subject

3 to such amounts as are provided in appropriation Acts.”.

Senator Muskie. It is a pleasure to welcome as our first witness an old friend from my own State, which has, I am happy to say, achieved I gather at least the third best performance in meeting the objectives 

of the 1972 act among the 50 States. They are doing very well. We had one river in our State which was described, when I first took over this committee 13 years ago, as among the 10 dirtiest rivers in America. It is now producing once again fish that made it famous years ago. So we are well on our way 

of meeting the objectives. So it is with particular pride tha t I welcome the commissioner of the Department of Environmental Protection of the State of Maine. I add my compliments for the performance which he has accomplished.

STATEMENT 0E W ILLIAM R. ADAMS, COMMISSIONER, DEPARTMENT 

OF ENVIRONMENTAL PROTECTION, STATE OF MAINE

Mr. Adams. Thank you, Senator Muskie. I am William R. Adams, Jr., commissioner of the Maine Depart­ ment of Environmental Protection and chairman of the Maine Board 

of Environmental Protection. It is indeed a pleasure to appear before you this morning and dis­ cuss with you the State of Maine’s position on the appropriate level for funding the municipal construction grant program under Public Law 92-500 and the method of allotting those funds. I am sure there is no need to tell you tha t both the authorization and the allocation formula are extremely important to every State environmental official. It is these funds and the timely expenditure of them tha t will tip the scales and make the much heralded goals of 

Public Law 92-500 a reality. Fifteen months ago I appeared before this committee to discuss this same subject. At tha t time, I indicated to you that the State of Maine would be able not only to obligate released impounded funds but to have these projects under construction within a very short time, thereby alleviating serious unemployment conditions. We feel we have been successful in this effort. With the grant offers received last week, the State of Maine has obligated 89.8 percent of its share of the $18 billion authorized. This obligation has not only added a great deal to our water pollution control effort, but has served the S tate of Maine well in providing employment in a critical time. I would be remiss if I did not publicly acknowledge the cooperation and help of EP A’s region I. Region I has supported Maine’s efforts from every level of its staff. The fact tha t Maine has been able to obligate 90 percent of the funds available make it imperative tha t Congress act swiftly so that an authorization can be available to the State no later than the beginning of the next fiscal year. We cannot
8

afford to slow the momentum for correction of our Nation’s pollution 

problems.

However, my purpose here today is not to revise the successes 

and failures of the past, but to give you my views of the needs of 

the future. If I may, I will divide my presentation into three parts.

I will first deal with the allocation, then the formula to distribute 

that allocation, and third, ways to reduce paperwork. Public Law 

92-500 made great promises to the people of the United States. It 

promised that by July 1, 1977, all discharges to our waters would be 

receiving best practicable treatment. Tha t promise was cheered by 

some and jeered by others, but in Maine we took tha t promise at its 

face value and got on with the task.

In describing the results of that effort, I have some good news and 

some bad news. The good news is that industry in the State of Maine 

will meet tha t goal. With but two or three exceptions industiial 

discharges will receive best practicable tieatment, not by July 1, 1977, 

as required by Federal law, but by October of 1976.

Maine and her industries are proud of this accomplishment and 

feel tha t the State will benefit from these actions. The bad news is 

that even with the total release of impounded funds last year and the 

timely expenditure of those funds, our municipalities will not meet 

this mandated requirement.

In fact, our needs survey completed last year indicates tha t to 

provide treatment facilities, interceptors, and outfalls alone, we must 

fund 139 projects with a total cost of $321,966,0000.

If we subtract projects we can fund with moneys now in hand, we 

are left with a total of 124 projects and an estimated cost of $242 

million. This does not include all of the other items eligible for funding 

under the law.

If these are added, our estimated cost more than triples. It is 

certain that most communities in Maine cannot meet the 1977 deadline, so we must set a new target date. Realizing that money does 

not grow on trees, even in Washington, we struggled to determine a 

realistic date.

It appears to us th at the Federal Government, in order to maintain 

any credibility with at least the Maine industrial sector, must furnish 

the funds necessary for municipal facilities in the shortest possible 

time.

A report prepared in Ja nua ry of this year by our Division of Municipal Services estimates that, if Maine received Federal funds at the 

rate of $40 million annually, we will be able to complete our program 

foi the basics; tha t is, treatmen t facilities, interceptor sewers and 

outfalls, in 6 years, or in time to meet the 1983 goals for best available 

treatm ent.

It is an absolute necessity tha t the State receive this amount in 

order to complete this very minimum amount of work. Obviously, 

the amount of dollars received by the State of Maine is dependent 

not only upon the authorization but also upon the formula for 

distribution.

Not knowing which formula will be chosen, it is difficult for me to 

recommend a total authorization. However, when we review the 

various formula proposed, Maine’s share of a total national authorization varies from 0.46 percent to 0.54 percent.
9

Using these percentages, it will be necessary for Congress to appropriate between $7.4 billion and $8.7 billion annually. I must stress 

the need for a continuous funding program. Without assurance of a 

continuous funding program, the municipalities will lose enthusiasm 

and the laudable goals of Public Law 92 -5 00 will not be met.

This is an alternative tha t we cannot permit. States must be able 

to plan a program for more than 1 year at a time. Government must 

accomplish what it has required industry to accomplish.

I would also suggest th at Congress give more flexibility to the EPA 

so tha t funds originally committed to a State can be diverted to 

other States if delays ensue. Right now, Maine could use funds which 

are lying idle in commitments to other States. It seems unfortunate 

tha t money appropriated by the Congress and badly needed by the 

citizens cannot be used in a timely manner.

I will now discuss the proposed formula, but first I would like to 

give you some of my philosophy regarding a distribution formula. I 

must note tha t this philosophy has been biased and tempered by the 

situation and needs of my home State and employer, the State of 

Maine.

Public Law 92- 50 0 set out to achieve fish able and swim able water. 

In mv view, the program should be structured so tha t all State s 

arrive at this goal at approximately the same time. It makes little 

sense for a municipality in Maine to discharge raw sewage because of 

the lack of Federal funds to construct basic treatmen t facilities, while 

other States use Federal funds to construct collector sewers, storm 

water systems and other eligible, b ut less vital, facilities.

That money should be channeled to those States which still need 

basic facilities on a priority basis so that these can go on-line in the 

shortest possible time.

Therefore, we recommend tha t the formula be based upon a State’s 

needs for categories 1, 2, and 4b only. We believe that formulas which 

include categories other than 1, 2, and 4b are based upon population 

or other factors ignore the basic inte nt of the law to provide a national 

standard of water quality which is acceptable to our society.

However, should Congress feel a need to include items other than 

essential interceptors, treatmen t facilities and outfalls in the basic 

formula, I would strongly recommend that a significant portion of the 

total authorization be dedicated to those States who have yet to 

provide these basic facilities because of the lack of Federal funds.

For example, a large percentage of any authorization could be 

devoted to categories 1, 2, and 4b and the remaining portion distributed to all States on an expanded formula.

There is another funding item which I feel should be considered 

by this Congress. That is rep ayment to the States for those projects 

prefunded between 1969 and 1971. Between those dates, the State 

of Maine loaned, if you will, the Federal Government approximately 

$13 million to construct facilities required by Federal law.

To date, the State of Maine is still due $3,693,125 for this loan. I 

doubt that the Internal Revenue Service would permit such delinquency. This item has been left hanging for several years and I 

believe this is the year tha t the problem should be corrected by reimbursement to the States.

This could be especially critical to us because, as you well know, 

Maine is no t a rich State and the funds for its share of these municipal
10

projects must compete with oth er necessities. The $3.69 million would, 

if combined with the Federal share, finance over $24 million worth of 

projects. In Maine, this is a lot of construction and a lot of money.

I would like to make a final suggestion concerning funding. In 

Maine, as well as in other States, the rural nature of the communities 

and the ledge rock just below topsoil make it financially impractical 

in many areas to install the usual municipal systems.

As a result, homeowners in these areas are forced to buy individual 

systems which are not only expensive to install, but also expensive to 

operate. In many instances, these people are living on pensions or 

other fixed incomes and the capital investment required is truly 

beyond their reach.

I believe that Congress should take a look at this problem and consider expanding the present construction program to respond to this 

need. One possible approach might be the institution of a loan program 

with payback provisions keyed to average sewer charges for the area. 

I would be happy to work with your staff in developing this concept.

The third matter on which you have requested comment was the 

problem of State and Federal paperwork. The desire of everyone in 

Government to conform to the intent of the law and to avoid tha t one 

potential scandal which lurks behind multimillion dollar programs has 

resulted in a blizzard of forms, checks, and redtape which delays all 

projects and increases their cost.

The Environmental Protection Agency has implemented regulations 

concerning the construction grants program which have resulted in a 

program so complex tha t it was necessary for them to retain a consulta nt to diagram the procedure.

A foldout from Water and Sewage Works magazine, prepared for 

EPA by EcolSciences, Inc. in November 1975, describes the process 

and is appropriately entitled “Wall Chart.”

This was forwarded to me by a friend with a note which simply said, 

“Everything you wanted to know about construction grants but were 

afraid to ask.” While the objectives of EPA are understandable, I 

believe th at Congress should make it explicitly and firmly clear to the 

agency tha t the honest and intelligent expenditure of these funds lies 

with the municipality and the consulting engineer retained to design 

the project and to oversee construction.

It seems to me that both the Federal and State government must 

place a greater reliance upon the consulting engineers who, after all, 

are professionals. I t is my belief tha t the engineering profession can be 

relied upon to design and supervise construction of a treatment plant 

that solves the communities’ needs in the most economical manner.

If a firm fails to perform these tasks, then the professional competence of tha t firm should be pqblicly questioned and their professional registration withdrawn. Only such a reliance upon the municipalities and the consulting engineering profession will perm it construction of the required facilities within a reasonable time.

EPA’s role should be limited to general oversight of the program 

and to periodic audit of the program’s progress. Any other choice will 

only insure the perpetuation of an army of Federal employees and the 

paperwork tha t such an army is bound to generate.

To support these suggestions, I would relate my experience as a 

member of an EPA task force of State and Federal staff administrators
11

which recently made recommendations on the decentralization of the 

work requirements of Public Law 92-500.

My team and others in the task force traveled to States throughout 

the country to interview State officials and EPA people at headquarters and the regional offices. Almost without exception those 

interviewed agreed tha t unless there was a substantial delegation of 

authority and responsibility to the States and municipalities the 

program would not work. The resulting task force report also emphasizes that most State s 

were more than willing to accept this delegation providing EPA did 

not become a Monday morning quarterback. I have attached a copy 

of this report to my statement and I hope you will give it full attention. 

(The report appears in the appendix, p. 145.)

There has been no indication from EPA headquarters tha t these 

recommendations will be implemented. Perhaps your interest, as 

expressed in any resulting amendments, would increase their interest 

as well. In summary, I strongly recommend tha t Congress should authorize 

from $7.4 billion to $8.7 billion, each year for not less than 6 years.

I recommend tha t the distribution formula be based upon the needs 

in various States for the construction of the basics in waste water 

treatment—interceptors, treatment facilities, and outfalls only.

I also ask Congress to give a strong indication to EPA that, even 

though the Federal Government funds these facilities, the basic 

responsibility for the proper expenditure of these funds lies with the 

municipality itself and with the professional engineering firm it 

engages to design and oversee the work.

Finally, I would urge that Congress make it clear to EPA tha t the 

primary responsibility for water pollution control rests with the States 

and that, wherever possible, authority and responsibility for the 

solving of these complex problems should be delegated to them.

I thank you for the invitation to appear before you and the attention 

you have given me this morning. I would atte mpt to answer any 

questions tha t you might have.

Senator Muskie. If there is no objection, I think it might be helpful 

to have all the testimony first on the subjects represented and the 

varying points of views, and then get to the questions.

Our next witness is Mr. David Bardin, of New Jersey, who I understand is still on the Metroliner. So I will turn next to Mr. Leonard 

Ledbetter, Environmental Protection Division of the Department of 

Natural Resources from the State of Georgia.

STATEMENT OF J. LEONARD LEDBETTER, DIRECTOR, ENVIRONMENTAL PROTECTION DIVISION, GEORGIA DEPARTMENT OF

NATURAL RESOURCES

Mr. Ledbetter. Thank you, Mr. Chairman and members of the 

committee.

I am J. Leonard Ledbetter, Director of the Environmental Protection Division of the Georgia Department of Natural Resources. 

Since June 1965, I have been associated with the water pollution 

control program in Georgia.

Rather than read my statement, I will summarize some of the highlights. (The statement appears a t p. 16.)
12

To emphasize the importance of this element of the program, it 

should be noted th at over 80 percent of the major industries in Georgia 

are already in compliance with the July 1, 1977, requirements of 

Public Law 92-500.

It is anticipated tha t those industries no t now in compliance will be 

in compliance with the 1977 requirements by the deadline. Therefore, 

publicly owned systems are creating most of Georgia’s major water 

pollution problems today. To provide the needed secondary trea tment ,

facilities, more stringent treatment than secondary when needed to 

meet water quality standards, and interceptor sewers—frequently 

referred to as categories 1, 2, and 4(b) in the 1974 needs survey—

Georgia local governments must install facilities costing in excess of 

$1 billion.

Continuation of the construction grants program is absolutely essential to Georgia’s local governments as well as to the Sta te’s water 

pollution abatement efforts.

Following passage of P.L. 92-500 in October 1972, considerable 

controversy and confusion have prevailed regarding the allocation of 

the construction grant funds. The fiscal year 1973 and 1974 funds were 

allotted to the States based on an inaccurate and incomplete needs 

survey.

Seventeen States, one territory, and the District of Columbia received 71.7 percent of the fiscal year 1973 and fiscal year 1974 funds 

while 33 State s and 4 territories received only 28.3 percent of the 

funds.

Upon completion of the 1973 “needs” survey, the Congress recognized the gross inequity of the early allocation formula and enacted 

Public Law 93-243 which incorporated a formula to allocate fiscal 

year 1975 construction grant funds based on data in the 1973 needs 

survey.

The fiscal year 1975 allocation formula was more realistic; however, 

it should be noted that the 17 States, 1 territory, and District of 

Columbia referred to earlier still received 66.2 percent of the available 

funds.

If the construction grant funds were allotted according to the population of the various States, the 17 States, 1 territory, and District of 

Columbia referred to above would receive approximately 55.1 percent 

of available construction grant funds.

This can be compared to the allocation formula recommended to 

the Congress on February 10, 1975, by Mr. Russell E. Train, Admin- w

istrator, Environmental Protection (EPA). Mr. T rain’s recommendation was based on an equal 50-percent division between population 

and the EPA adjusted cost estimates from the 1974 needs survey for 

categories 1, 2 and 4(b) for use in allocating construction grant funds. «

Under the Russell Train formula recommended in February 1975, 

the 17 States, 1 territory, and the District of Columbia discussed 

above would still receive 54.9 percent of available funds. In other 

words, approximately the same as using the population only as the 

basis for our allocation.

However, it is recognized th at major water pollution problems exist 

in those areas.

After a study of the formula recommended by Mr. Train in early 

1975, we determined it to be realistic and acceptable to us. On two
13

different occasions during 1975 the Association of State and Interstate 

Water Pollution Control Administrators (ASIWPCA) had over 35 

State administrators vote to support the Russell Train formula as the 

most fair and equitable.

On September 30, 1975, Governor George Busbee of Georgia presented testimony before the Water Resources Subcommittee of the 

House Committee on Public Works and Transportation regarding this 

same subject.

Governor Busbee has strongly endorsed the Train formula as being 

realistic and equitable. Since we have seen no facts to cause us to 

change our position, the State of Georgia wishes to go on record again 

today supporting the Russell Train formula of an equal 50-percent 

division based on population and 50 percent based on the EPA 

adjusted cost estimates from the 1974 needs survey for categories 1, 

2, and 4(b). We urge this subcommittee to adopt this formula.

Excessive redtape and the earlier impoundment of $9 billion are in 

large pa rt responsible for the slow rate of gra nt obligations in the past 

3 years. More than half of the States now have more projects on their 

funding lists than they have grant allocations for and it is essential 

to keep these projects moving.

Funding of the construction grants program has been highly variable 

and unpredictable from year to year under both Public Law 84-660 

and Public Law 92-500. The effect of erratic funding of the construction grants programs by the Congress in the pa st has hindered progress 

in all factions of the water pollution control field.

Equipment manufacturers, the construction industry, consulting 

engineering firms, and State regulatory agencies and local governments 

find it very difficult to cope with “roller coaster” funding.

States, consulting engineers, contractors, equipment manufacturers, 

and EPA have spent the last 3 years getting geared up to handle the 

funds currently available, and now that tins has been accomplished 

and the grants are rolling along, there is the possibility of another 

funding cutback.

Unless the Congress proceeds in the near future with appropriations 

for fiscal year 1977.

Management decisions for current programs of States, consulting 

engineers, equipment manufacturers, and contractors have been 

based on the assumption tha t $5 to $7 billion per year would be 

available for the next 5 years on the part of many of us.

If no more funds are authorized in fiscal year 1977 and beyond, 

additional unemployment can be expected in all of these areas.

To plan effectively for the wise use of these funds, the State s need 

to know the approximate level of several years of future funding in 

advance. The funding of facilities plans and engineering documents 

for projects on the fiscal year 1976 project funding lists w ithout some 

indication tha t future funds will be available for construction of these 

projects does not promote good program planning and management 

principles.

We urge tha t consideration be given to using a 5-year authorization 

period for planning and management purposes, and that at least $5 

billion per year be appropriated.

The 1974 needs survey of cost estimates for construction of publicly 

owned wastewater treatment facilities (revised May 7, 1975), estimated the cost of secondary treatm ent, more stringent treatment, and

74 -5 36 0 - 76 - 2
14

new interceptor sewers and appurtenances (categories 1,2 , and 4(b), 

respectively) to be $46.3 billion in 1973 dollars.

The EPA guidance currently being used in the 1976 update of the 

needs survey calls for increasing the revised 1974 estimates by a factor 

of 40 percent to adjust figures to 1976 dollars. Therefore, inflation 

alone has increased the estimated needs for treatme nt facilities and 

interceptor sewers to about $65 billion.

The $223 million in construction grant allocations received by 

Georgia for fiscal year 1974, 1975, and 1976 are certainly appreciated 

by the citizens of our State, and with local matching funds, will 

generate about $300 million in construction of water pollution control 

facilities in our State.

However, $300 million is only 29 percent of Georgia’s $1.02 billion 

in needs for treatm ent plants and interceptor sewers indentified in the 

1974 needs survey, and will actually satisfy less than 21 percent of 

those needs when inflation is considered.

A funding authorization of $5 billion per y ear for 5 years and allocation of those funds by the Russell Train formula (50-percent population, 50-percent needs from the 1974 needs survey) would be required 

to satisfy Georgia’s category 1, 2, and 4(b) needs, assuming no inflation 

over 1973 dollars.

Authorization of funds in excess of $5 billion per year is necessary 

to keep pace with inflation and to satisfy water pollution abatement 

needs other than treatment plants and interceptor sewers.

In addition to a consistent level of funding for a 5-year period, a 

consistent allocation formula is needed. A constant level of funding 

at the national level will not result in constant levels of funding to 

each State if allocations are changed as a result of new needs surveys 

conducted by new guidelines every 2 years.

We suggest tha t a needs survey be conducted only a t 5-year intervals and tha t national levels of funding and State allocations for the 

following 5-year period be based on projected populations and the 

latest needs survey.

All elements of water pollution abate ment or control facilities 

should remain eligible and the States should have the authority to 

establish priorities for the use of the 75-percent construction gran t 

funds for specific projects.

In the city of Atlanta there is a significant example of the need for 

all types of water pollution control facilities to be eligible for 75- 

percent grants and the State to have the authority to establish 

priorities.

The Chattahoochee River, which is one of Georgia’s most important 

water resources and is in EPA ’s national water quality surveillance 

system, receives large amounts of treated wastewater from the metropolitan area in addition to overflows from combined sewers.

The metropolitan governments are actively pursuing programs to 

provide advanced levels of treatment for dry weather sewage flows, 

but the Chattahoochee River will not be able to meet water quality 

standards for fishing at all times unless g rant funds can be provided 

for handling of combined sewer overflows.

Georgia and other States also need the flexibility to set their own 

priorities for funding of projects in order to be responsive to the 

needs of smaller municipalities which have many residents living on
15

low and/or fixed incomes and which are not able to provide their local 

shares of construction funds unless their sewage collection systems 

can be expanded along with the necessary treatm ent plant upgrading 

projects.

Georgia alone has more than 450 communities with populations 

less than 10,000.

The Federal grant share must be kept high enough to reduce the 

financial strain of capital costs for construction and high enough to 

insure strong interest. The present 75 percent Federal share for all 

categories of needs is appropriate to accomplish these things.

Most important of all, the waters of Georgia and of the Nation 

will not be cleaned up in a timely fashion without continued Federal 

funding. Our municipalities will not be able to meet the 1977 or the 

1983 requirements of Public Law 92-500 without this support.

The Nation’s industries are expected to meet their requirements 

by the 1977 deadline, but the Federal Government, if it fails to 

participate in the gran ts program, will prevent municipalities from 

meeting their obligations under the Federal Water Pollution Control 

Act.

Thank you, Mr. Chairman.

[Mr. Ledbetter’s prepared statement follows:]
16

STATEMENT

TO

SUBCOMMITTEE ON ENVIRONMENTAL PO LLUT ION 

OF THE COMMITTEE ON PU BLIC WORKS

MAY 2 5 , 19 76

BY

J . LEONARD LEDBETTER, DIRECTOR 

GEORGIA ENVIR ONMENTAL PRO TECTION D IV IS IO N

MR. CHARIMAN AND D IS TIN G UIS HED MEMBERS OF THE CO MM ITT EE:

I AM J . LEONARD LE DB ET TE R, DIRECTOR OF THE ENVIRONMENTA L 

PROTECTIO N D IV IS IO N OF THE GEORGIA DEPARTMENT OF NATURAL RESOURCES. 

SINC E JUNE 19 65 I HAVE BEEN AS SO CIAT ED WITH THE WATER PO LLUT ION 

CONTROL PROGRAM IN GE OR GIA.

WE ARE MOST APPRECIA TIV E OF THIS OPPORTUNITY TO APPEAR BEFORE 

TH IS COMMITTEE AND PRESENT THE STATE OF GEO RG IA'S PO SIT IO N ON THE 

MATTER OF THE M UNIC IP AL CONSTRUCTION GRANT PROGRAM. THE PROPOSED 

AU TH ORIZAT IO N OF CONSTRUCTION GRANT FUNDS FOR FUTURE YEARS AND THE 

ES TA BLISHM EN T OF AN EQ UITABLE AL LO CA TION FORMULA FOR DISBUR SEM ENT 

OF THESE FUNDS TO THE VA RIOU S STATES ARE C R IT IC A L TO THE SUCCESSFUL 

CO NT INUA TION OF OUR ONGOING WATER PO LLUT ION CONTROL EFFORT IN 

GEORGIA - AND IN THIS NATIO N.

TO EMPHASIZE THE IMPORTANCE OF TH IS ELEMENT OF THE PROGRAM,

IT SHOULD BE NOTED THAT OVER 80% OF THE MAJOR IN DUS TR IE S IN GEORGIA 

ARE ALREADY IN COMPLIANCE WITH THE JU LY 1, 197 7 , REQUIREMENTS OF
17

P .L . 9 2 -5 0 0 . IT IS AN TIC IP ATED THAT THOSE IN DUS TR IE S NOT NOW IN 

COMPLIANCE W IL L BE IN COMPLIAN CE W ITH THE 19 77 REQUIREMENTS BY 

THE DEADLIN E. THEREFORE, PUBLI CLY OWNED SYSTEMS ARE CR EATIN G MOST 

OF GEORGIA 'S MAJOR WATER PO LL UT ION PROBLEMS TOD AY. TO PR OV IDE THE

NEEDED SECONDARY TREATMENT F A C IL IT IE S , MORE STRIN GENT TREATMENT 

THAN SECONDARY WHEN NEEDED TO MEET WATER QUAL ITY STA NDARD S, AND 

INTERCEPTO R SEWERS (FR EQUENTLY REFERRED TO AS CATEGO RIES I , I I , £

IV B IN THE 197 9 "N EEDS" SURVEY), GEORGIA LOCAL GOVERNMENTS MUST 

IN STA LL F A C IL IT IE S COSTING IN EXCESS OF ONE B IL L IO N DO LLAR S.

CO NT INUA TION OF THE CONSTRUCTION GRANTS PROGRAM IS ABSOLUTELY

ESSENTIAL TO GEO RGIA 'S LOCAL GOVERNMENTS AS WELL AS TO THE S TATE'S

WATER PO LLUT ION ABATEMENT EFFO RT S.

FOLLOW ING PASSAGE OF P .L . 9 2 -5 0 0 IN OCTOBER 197 2 , CONSIDE RABLE

CONTROVERSY AND CONFUSION HAVE PREVAILED REGARDING THE AL LO CA TION

OF THE CONSTRUCTION GRANT FUNDS. THE FI SCAL YEAR 19 73 AND 197 9

FUNDS WERE ALLO TTED TO THE STA TES BASED ON AN INACCURATE AND INCOMP LETE

"N EEDS" SURVEY. SEVENTEEN ST AT ES , ONE TE RR ITOR Y, AND THE D IS TR IC T 

OF CO LUMBIA RECEIVE D 71. 7% OF THE FY 73 AND FY 79 FUNDS WHILE

33 STA TES AND FOUR TE RRITORIE S RE CE IVED ONLY 28.3 % OF THE FUNDS.

UPON COMPLETIO N OF THE 19 73 "N EED S" SURVEY THE CONGRESS REC OGNIZED

THE GROSS IN EQUIT Y OF THE EARLY ALL OCAT IO N FORMULA AND ENACTED

P .L . 9 3 -2 9 3 WHICH INCORPORATED A FORMULA TO ALLOCATE FY 75 CONSTRUCTION

GRANT FUNDS BASED ON DATA IN THE 19 73 "N EEDS" SURVEY. THE FY 75

AL LO CA TION FORMULA WAS MORE R E A L IS T IC ; HOWEVER, IT SHOULD BE NOTED 

THAT THE 17 ST AT ES , ONE TE RRITORY, AND D IS TR IC T OF CO LUMBIA REFERRED

TO EARLIER S T IL L RECEIVE D 66.2 % OF THE AVAIL ABLE FUNDS.
18

IF THE CONSTRUCTION GRANT FUNDS WERE ALLOTTED ACCORDING TO

THE PO PULATIO N OF THE VAR IOUS ST AT ES , THE 17 STAT ES , ONE TE RRITORY ,

AND D IS TR IC T OF COLUM BIA REFERRED TO ABOVE WOULD RECE IVE APPROX IMATELY

55. 1% OF AVAIL ABLE CONSTRUCTION GRANT FUNDS . THIS CAN BE COMPARED

TO THE AL LO CA TION FORMULA RECOMMENDED TO THE CONGRESS ON FEBRUARY 10, 

197 5 , BY MR. RU SSELL E. TR AIN , ADMIN IS TR ATO R, ENVIRON MENTAL 

PROTECTION AGENCY (E P A ). MR. T R A IN 'S RECOMMENDATION WAS BASED ON 

AN EQUAL 50% D IV IS IO N BETWEEN PO PU LATIO N AND THE EPA ADJUSTED COST 

ES TIMA TES FROM THE 19 79 "N EEDS" SURVEY FOR CATEGORIES I , I I , AND IV B '

FOR USE IN AL LO CAT IN G CONSTRUCTION GRANT FUNDS. UNDER THE RUSSELL

TR AIN FORMULA RECOMMENDED IN FEBRUARY 1 97 5 , THE 17 ST AT ES , ONE 

TE RR ITORY , AND THE D IS TR IC T OF CO LUMBIA DIS CUSSED ABOVE WOULD S T IL L 

RE CE IVE 59.9 % OF AVAIL ABLE FUNDS. HOWEVER, IT IS RECOGNIZED THAT 

MAJOR WATER PO LL UTION PROBLEMS EXIS T IN THOSE AREAS.

AFTER A STUDY OF THE FORMULA RECOMMENDED BY MR. TR AIN IN EARLY

1975, WE DETER MINED IT TO BE R E A LIS TIC AND AC CE PT AB LE. ON TWO

DIFFE RE NT OCCASIONS DURING 1975 THE ASSOCIA TIO N OF STATE AND

INTERS TATE WATER PO LLUT ION CONTROL AD MINISTR AT ORS (AS1 WPC A) HAD

OVER 35 STATE AD MINISTR AT OR S VOTE TO SUPPORT THE RUS SELL TR AIN 

FORMULA AS THE MOST FAIR AND EQUIT ABLE .

ON SEPTEMBER 3 0 , 1975, GOVERNOR GEORGE BUSBEE OF GEORGIA 

PRESENTED TESTIMON Y BEFORE THE WATER RESOURCES SUBCOMMITTEE OF

HOUSE COM MITTEE ON PU BL IC WORKS AND TRANSPORTATIO N REGARDING TH IS

SAME SU BJEC T. GOVERNOR BUSBEE HAS STRONGLY ENDORSED THE TR AIN 

FORMULA AS BE ING R E A LIS TIC AND EQUIT ABLE . SINC E WE HAVE SEEN NO FACTS 

TO CAUSE US TO CHANGE OUR PO SIT IO N, THE STATE OF GEORGIA WISHES 

TO GO ON RECORD AG AIN TODAY SUPPORTING THE RUS SELL TR AIN FORMULA
19

OF AN EQUAL 50% D IV IS IO N BASED ON PO PULATIO N AND 50% BASED ON THE 

EPA ADJUSTED COST ES TIMAT ES FROM THE 19 79 "N EEDS" SURVEY FOR 

CATEG ORIES I , I I , AND IV B . WE URGE THIS SUBCOM MITT EE TO ADOPT

TH IS FORMULA.

THE 19 79 NEEDS SURVEY CONDUCTED BY THE ENVIRONMENTAL PROTECTION 

AGENCY INDIC ATE D A TOTAL OF $107 B IL L IO N IN NEEDS FOR CONSTRUCTION 

OF SEWERAGE F A C IL IT IE S , EXCLU SIV E OF TREATMENT AND/O R CONTROL OF 

STORMWATERS. THIS LEVE L OF NEEDS HAS ALS O BEEN CONFIRMED BY THE 

NOVEMBER 19 75 STA FF DRAFT REPORT OF THE NAT IO NA L CO MM ISS ION ON 

WATER Q UALIT Y.

THE $1 8 B IL L IO N AU TH OR IZED UNDER P .L . 9 2 -5 0 0 FOR M UNIC IP AL

CONSTRUCTION GRANTS W IL L SATIS FY ONLY A SMALL FR AC TIO N OF THESE

NEEDS. THERE ARE SEVERAL REASONS WHY IT IS C R IT IC A L FOR THE CONGRESS

TO AU TH OR IZE ADDIT IO NAL GRANT FUNDS FOR FY 77 AND BEYOND.

C R IT IC S OF THE CONSTRUCTION GRANTS PROGRAM SAY THA T SEVERAL

B IL L IO N S OF DOLLARS IN UN OB LIG AT ED FY 75 AND 76 FUNDS REM AIN . TH IS 

IS TR UE , BUT THOSE FUNDS W IL L BE SPENT BEFORE THE RES PE CT IVE DEADLIN ES 

OF JUNE 3 0, 19 76 AND SEPTEMBER 3 0, 19 77 AND MUCH MORE MONEY W IL L

BE NEEDE D. THERE ARE MANY LARGE CONSTRUCTION PROJECTS NA TIO NW IDE

WHICH ARE IN THE GRANTS PROCESS AND WHIC H W IL L BE AWARDED GRANTS

ON SCHEDULE. EX CE SS IVE RED TAPE AND THE EA RLIER IMPOUNDMENT OF

$9 B IL L IO N ARE IN LARGE PART RESPON SIB LE FOR THE SLOW RATE OF

GRANT OBL IG ATIONS IN THE PAST THREE YE AR S. MORE THAN HA LF OF THE

STATES NOW HAVE MORE PROJE CTS ON TH EIR FUN DING LIS T S THAN THEY HAVE

GRANT ALLO CA TIO NS FOR AND IT IS ESSENTIAL TO KEEP THESE PROJECTS

MO VING .
20

FUNDING OF THE CONSTRUCTION GRANTS PROGRAM HAS BEEN HIGH LY

VARIA BLE AND UNPREDICT ABLE FROM YEAR TO YEAR UNDER BOTH P .L . 8 ^ -6 60

AND P .L . 9 2 -5 0 0 . THE EFF ECT OF ER RATIC FUNDING OF THE CONSTRUCTION

GRANTS PROGRAMS BY THE CONGRESS IN THE PAST HAS HIN DERED PROGRESS 

IN ALL FACTION S OF THE WATER PO LLUT ION CONTROL F IE L D . EQUIPMENT 

MANUFACTURERS, THE CONSTRUCTION INDU ST RY, CONSULTING EN GINE ER ING

FIR M S, AND STATE REGULATORY AG ENCIE S FIN D IT VERY D IF F IC U L T TO

COPE WITH "RO LLER COASTER " FU NDI NG . IT HAS OFTEN BEEN UNKNOWN

WHETHER TH IS FIE LD WOULD BE IN A BOOM PERIOD OR A RECESSION FROM 

ONE YEAR TO THE NEXT DUE TO INCO NS ISTE NT LEVELS OF FU NDIN G. STAT ES , 

CO NSULTIN G ENGIN EERS, CONTRACTORS, EQUIPMENT MANUFACTURERS, AND EPA 

HAVE SPENT THE LAST THREE YEARS GE TTING GEARED UP TO HANDLE THE

FUNDS CURRENTLY A V A IL A B LE , AND NOW THAT THIS HAS BEEN ACCOMPLISHED 

AND THE GRANTS ARE RO LLING ALON G, THERE IS THE P O S S IB IL IT Y OF

ANOTHER FUNDING CUTBACK.

MANAGEMENT DEC IS IO NS FOR CURRENT PROGRAMS OF STA TE S, CONSULTING 

EN GINEE RS , EQUIPMENT MANUFACTURER S, AND CONTRACTORS HAVE BEEN 

BASED ON THE ASSUMPTIO N THA T $5 TO $7 B IL L IO N PER YEAR WOULD BE 

A VAIL ABLE FOR THE NEXT FIV E YE AR S. IF NO MORE FUNDS ARE AUTHORIZED 

IN FY 77 AND BEYOND, AD D IT IO N AL UNEMPLOYMENT CAN BE EXPECTED IN 

ALL OF THESE AREAS.

TO PLAN EF FE CTIVELY FOR THE WIS E USE OF THESE FUNDS, THE STATES 

NEED TO KNOW THE APPROXIMA TE LEVEL OF SEVERAL YEARS OF FUTURE 

FU ND ING. THE FUNDING OF F A C IL IT IE S PLANS AND EN GINE ER ING DOCUMENTS 

FOR PROJECTS ON THE FY 76 PROJECT FUNDING LIS T S WITHOUT SOME 

IN D IC A TIO N THAT FUTURE FUNDS W IL L BE AVAIL ABLE FOR CONSTRUCTION 

OF THESE PROJECTS DOES NOT PROMOTE GOOD PROGRAM PLANNING AND
21

MANAGEMENT PR IN C IP LE S . WE URGE THAT CO NS IDERAT ION BE GI VEN TO

USING A FIV E-Y EAR AUTH ORIZAT IO N PE RIOD FOR PLANNING AND MANAGEMENT 

PURPOSES, AND THAT AT LEAST $5 B IL L IO N PER YEAR BE AP PR OPRIA TE D.

THE 197 4 "N EEDS" SURVEY OF COST ESTIM AT ES FOR CONSTRUCTION 

OF PU BLICLY-OWN ED WASTEWATER TREATMENT F A C IL IT IE S (R EVIS ED MAY 7, 1 9 7 5 ) 

ES TIMA TE D THE COST OF SECONDARY TRE ATM ENT, MORE STRING EN T TREAT "N T ,

AND NEW INTERC EPTOR SEWERS AND APPURTENANCES (CAT EG ORIES I , I I , AND 

1V B, RESPECTIV ELY ) TO BE $ 4 6 .3 B IL L IO N IN 19 73 DO LLARS. THE EPA 

GUIDANCE CURRENTLY BEING USED IN THE 19 76 UPDATE OF THE "N EED S"

SURVEY CA LLS FOR INCR EA SING THE RE VISE D 19 74 ES TIMAT ES BY A FACTOR

OF 40% TO ADJUST FIG URES TO 197 6 DO LLA RS. THEREFOR E, IN FLATIO N

ALONE HAS INCREASED THE ES TIMAT ED NEEDS FOR TREATMENT F A C IL IT IE S

AND INTERCEPTO R SEWERS TO ABOUT $65 B IL L IO N .

THE $223 M IL LIO N IN CONSTRUCTION GRANT AL LO CA TION S RE CE IVED BY 

GEORGIA FOR FY 74, 75, AND 76 ARE CER TA INLY AP PR EC IATE D BY THE C IT IZ EN S 

OF OUR STA TE, AND WITH LOCAL MATCHIN G FUNDS, W IL L GENERATE ABOUT

$300 M IL L IO N IN CONSTRUCTION OF WATER PO LLUT ION CONTROL F A C IL IT IE S . 

HOWEVER, $300 M IL LIO N IS ONLY 29% OF GE ORG IA'S $ 1 .0 2 B IL L IO N IN

NEEDS FOR TREATMENT PLANTS AND INTERCEPTO R SEWERS ID E N T IF IE D

IN THE 1974 NEEDS SURVEY, AND W IL L ACTUALLY SATI SFY LESS THAN 21%

OF THOSE NEEDS WHEN IN FLATIO N IS CO NSIDE RED.

A FUNDING AUT HO RIZA TION OF $5 B IL L IO N PER YEAR FOR FIV E YEARS

AND ALL OCAT IO N OF THOSE FUNDS BY THE RUSSELL TRAIN FORMULA (5 0% 

POPU LA TION, 50% NEEDS FROM THE 1974 NEEDS SURVEY) WOULD BE REQUIRED 

TO SATIS FY GEO RGIA 'S CATEGORY I , I I , AND IV B NEEDS ASSUMING NO

IN FLATIO N OVER 19 73 DO LLA RS. AU TH ORIZATION OF FUNDS IN EXCESS OF

$5 B IL L IO N PER YEAR IS NECESSARY TO KEEP PACE WITH IN FLATIO N AND
22

TO SATIS FY WATER PO LLUT ION ABATEMENT NEEDS OTHER THAN TREATMENT

PLANTS AND INTERCEPTOR SEWERS.

IN ADDIT IO N TO A CO NS ISTE NT LEVE L OF FUNDING FOR A FIV E-Y EAR

PERIO D, A CONSISTENT AL LO CAT IO N FORMULA IS NEEDED. A CONSTANT

LEVE L OF FUNDING AT THE NATIONAL LEVEL W IL L NOT RESULT IN CONSTANT

LEVELS OF FUNDING TO EACH STATE IF ALLO CA TIO NS ARE CHANGED AS A

RESULT OF NEW NEEDS SURVEYS CONDUCTED BY NEW GUID ELIN ES EVERY TWO

YE AR S. WE SUGGEST THAT A NEEDS SURVEY BE CONDUCTED ONLY AT F IV E -

YEAR INTE RVA LS AND THAT NATIONAL LEVELS OF FUNDING AND STA TE

AL LO CA TION S FOR THE FOLLOWING FIV E-Y EAR PERIO D BE BASED ON PROJECTED

PO PULATIO NS AND THE LATEST NEEDS SURVEY IT IS GEORGIA ' S PROPOSAL

TH AT, SINC E THE 19 76 NEEDS SURVEY DATA CO LL ECT IO N, RE VIEW , AND

ADJUSTMENT W IL L NOT BE COMPLETED U N TIL EARLY 197 7 , THE AL LO CA TION S

FOR FY 77 THRU FY 79 BE BASED ON THE RUSSELL TR AIN FORMULA AND

197*4 NEEDS SURVEY DA TA . THE 197*4 NEEDS DATA SHOULD NOT BE USED

FOR AL LO CAT IO N FORMULAS PAST FY 79 BECAUSE FY 79 W IL L BE THE

FIF T H YEAR FOLLOWING THE 197 9 NEEDS SURVEY.

AS MEMBERS OF THE CONGRESS KNOW, THERE HAS BEEN CO NSIDE RABLE

DISCUSSIO N REGARDING PO SS IBLE CHANGES IN THE FEDERAL SHARE FOR

CONSTRUC TION GRANTS AS WELL AS RESTR IC TING THE TYPES OF PROJECTS

CONSIDERED E L IG IB L E . AL L ELEMENTS OF WATER PO LLUT ION ABATEM ENT

OR CONTROL F A C IL IT IE S SHOULD RE MA IN E L IG IB L E AND THE STATES SHOULD

HAVE THE AU TH OR ITY TO ESTA BLI SH P R IO R IT IE S FOR THE USE OF THE 75%

CONSTRUC TION GRANT FUNDS FOR S P E C IF IC PROJECTS.

IN THE C IT Y OF ATLANTA THERE IS A S IG N IF IC A N T EXAMPLE OF

THE NEED FOR ALL TYPES OF WATER PO LL UT ION CONTROL F A C IL IT IE S TO

BE E L IG IB L E FOR 75% GRANTS AND THE STATE TO HAVE THE AU TH OR ITY
23

TO ESTA BLI SH P R IO R IT IE S . THE CHATTAHOOCHEE R IV E R , WHICH IS ONE 

OF GEORGIA 'S MOST IMPORTANT WATER RESOURCES AND IS IN ERA'S 

NAT IO NAL WATER QUALITY SU RV EILLAN CE SYSTE M, RE CE IVES LARGE AMOUNTS 

OF TREATED WASTEWATER FROM THE METROPOLITAN AREA IN AD D IT IO N TO

OVERFLOWS FROM COMBINED SEWERS. THE METROPOLITA N GOVERNMENTS ARE

ACTIV ELY PURSUING PROGRAMS TO PROVIDE ADVANCED LEVELS OF TREATMENT 

FOR DRY WEATHER SEWAGE FLOWS, BUT THE CHATTAHOOCHEE RIV ER W IL L NOT 

BE AB LE TO MEET WATER Q UALIT Y STANDARDS FOR FIS H IN G AT ALL TIM ES 

UNLESS GRANT FUNDS CAN BE PROVIDE D FOR HA ND LIN G OF COM BINED SEWER

OVERFLOWS.

GEORGIA AND OTHER STAT ES ALSO NEED THE F L E X IB IL IT Y TO SET

THEIR OWN P R IO R IT IE S FOR FUNDING OF PROJECTS IN ORDER TO BE

RESPON SIV E TO THE NEEDS OF SMALLER M U N IC IP A LIT IE S WHICH HAVE MANY

RE SIDE NT S LIV IN G ON LOW AN D/OR FI XED INCOMES AND WHICH ARE NOT ABLE

TO PROVIDE TH EIR LOCAL SHARES OF CONSTRUCTION FUNDS UNLESS TH EIR

SEWAGE CO LLE CTION SYSTEMS CAN BE EXPANDED ALONG WITH THE NECESSARY

TREATMENT PLANT UPG RAD ING PROJECTS. GEORGIA ALONE HAS MORE THAN

*♦5 0 CO MM UNITIES WITH PO PU LATIO NS LESS THAN 10, 0 0 0 .

THE FEDERAL GRANT SHARE MUST BE KEPT HIGH ENOUGH TO REDUCE

THE FIN A N C IA L ST RAIN OF C A P IT A L COSTS FOR CONSTRUCTION AND HIGH

ENOUGH TO INSURE STRONG LOCAL IN TE REST. THE PRESENT 75% FEDERAL

SHARE FOR AL L CATEGORIE S OF NEEDS IS AP PR OP RIATE TO ACC OMPLISH

THESE TH IN GS.

MOST IMPORTANT OF A L L , THE WATERS OF GEORGIA AND OF THE NATIO N

W IL L NOT BE CLEANED UP IN A TI MELY FASH ION WITHO UT CONTINU ED

FED ERAL FUND ING. OUR M U N IC IP A L IT IE S W IL L NOT BE AB LE TO MEET THE

19 77 OR THE 19 83 REQUIREMENTS OF P .L . 9 2 -5 0 0 WITHOUT TH IS SUPPORT. 

THE NATIO N'S IN DUS TR IE S ARE EXPECTED TO MEET TH EIR REQUIREMENTS 

BY THE 19 77 DEADLINE, BUT THE FEDERAL GOVERNMENT, IF IT FA IL S TO

PARTIC IP ATE IN THE GRANTS PROGRAM, W IL L PREVENT M U N IC IP A L IT IE S

FROM MEETING TH EIR O BLI G ATI O NS UNDER THE FEDERAL WATER PO LLUT ION

CONTROL AC T.
24

Senator Muskie. Thank yon very much, Mr. Ledbetter.

Our next witness is Mr. Jack Fickessen, assistant to the director of 

the Wate r Quality Board, State of Texas.

STATEMENT OF JACK R. FICKESSEN, STAFF ASSISTANT, TEXAS 

WATER QUALITY BOARD

Mr. Fickessen. Thank you Mr. Chairman.

I appreciate the o pportunity to appear before you today on behalf 

of the Texas Water Quality Board and the State of Texas to discuss 

our views on the level of funds necessary for the title II construction 

grants program for fiscal year 1977 and the method for allotting those 

funds pursuant to section 205(a) of Public Law 92-500.

W e feel tha t both these topics, the level of funds and the allotment 

of them, are most important to our continued struggle for clean water 

in Texas and without congressional resolution tha t struggle will be 

greatly impeded.

Consequently, it is my hope that I can explain the problems to you 

and suggest for your consideration what we feel are possible solutions 

to them.

A L L O T M E N T OF FU N D S

On November 1, 1973, I accompanied Mr. Dick Wittington, deputy 

director of the Texas W ater Quality Board, to Washington, D.C., to 

give testimony before this subcommittee concerning the 1973 needs 

survey.

At that time, we related our concerns with the inadequacy of th at 

survey for use in allotting the title II grant funds. We felt the survey 

did not truly reflect the real needs of the Nation. The subsequent 

survey done in 1974 has with it the same problem: the inability to 

make accurate the valid estimates of needs when they must be projected for long-range abatem ent requirements.

Philosophically, we cannot argue with the use of needs as being a 

method of allotting funds, provided those needs are in fact accurate 

and valid. Until such time that the true needs of the Nation can be 

established we must oppose this as being the basis for allocation.

We believe that the act provides the mechanism for establishing the 

publicly owned treatment works needs, as contained in section 208. 

Unfortunately, due to the slowness with which this section was 

implemented, it appears that it will be at least fiscal year 1979 before 

those plans are completed which would not allow the Congress to 

have a realistic estimate of needs until fiscal year 1980.

Since we recognize this fact, we must, as we did in 1973, advocate 

a re turn to the use of population as the means for allotting construction grant funds. There are of course several arguments against such 

a return and therefore I would like to attem pt to point those arguments 

out and discuss each of them with an opposing view on why we should 

retu rn the population.

Senator D omenici. Mr. Chairman, might I ask an interim question?

Senator Muskie. Of course.

Mr. Fickessen. Yes, sir.

Senator Domenici. In the previous paragraph, the one you are on 

where you mentioned section 208, you indicate that its implementa-
25

tion was—and you used the past tense—slow in getting off center, 

therefore, we have a 2- or 3-year timespan before we can expect to 

get some accurate prioritizing under tha t kind of mechanism.

Is there anything that can be done to expedite that at this late 

date?

Mr. Fickessen. Yes; there are two things. One is the recognition 

of the fact tha t it just takes time physically to do these plans. The 

second is the need for more money.

Senator Domenici. For section 208 do you mean?

Mr. Fickessen. Yes, sir. I understand last week there was a district 

court decision which required EPA to release money for 100-percent 

financing of section 208 planning which EPA claimed had lapsed from 

the 208 program.

I don’t know what EPA is going to do, b ut for the States and the 

area planning councils, or whoever is doing the 208 planning, those 

funds are necessary so we can get wall-to-wall 208 plans throughout 

the country. Tha t is where the needs will come ultimately.

Senator Domenici. I will come back on that later to all the witnesses.

Aside from the resources need for 208 planning, is the mechanism 

set up doing the good job of doing the planning and arriving at 

solutions? Does it have th at potential or is there any structural problem with 208 itself from your standpoint?

Mr. Fickessen. From the State of Texas’ standpoint, I think the 

mechanism is there and I think we will have the answers we are 

looking for when i t is completed.

Senator Domenici. Thank, you Mr. Chairman.

Senator Muskie. Thank you very much, Senator.

PROGRAM STABILITY

Mr. Fickessen. There are those opposed to a return to population 

because of the problems surrounding the transition from one method 

to another.

Gentlemen, I don’t have to tell you of the problems encountered 

when we went from the population method to the needs method as 

you lived through them just as we have.

I do say tha t a return to the use of population would no t have the 

same effects for the following reason: Every needs survey tha t has 

been conducted shows a State-by-State change in the dollar amounts 

reported for each eligible category. The end result of this is tha t every 

time there is a new survey, and we have four in 3 years, the percentage 

of what each State receives of the grant funds allotted changes.

The uncertainty involved as to what a State will receive from year 

to year is disruptive and does not allow a State to adequately plan or 

implement completed plans because of the instability of a method 

inherent with distribution of funds based on needs. On the other hand, 

distribution of funds based upon the estimated 1990 population would 

remain stable year to year and allow each State to know exactly what 

percentage of the annually alloted funds they will receive.

The population method would provide stability for the period of 

time of about 5 years or until a more valid estimate of needs can be 

determined by the completed section 208 plans.
26

IN EQU IT IE S

There is a continuing debate over the inequities involved in any 

method used, be it population, needs, or combination of the two. Those 

who argue for the needs approach say that a stric t population method 

does not provide adequate funds to States tha t have high population 

concentrations and a resulting need for construction of sophisticated 

treatment facilities.

Those of us who advocate population do not feel the surveys are 

accurate or valid, which is why we cannot agree that needs or a combination of needs and population is the answer. We do feel th at a population method can be utilized and is not inequitable for the following 

reasons:

First, since the passage of the act, $18 billion has been allotted for the 

construction of publicly owned treatment facilities in the United 

States on the basis of needs. Those States—I think Mr. Ledbetter 

pointed them out—which supported needs have received the bulk of 

that money and many of their arguments for lack of funds for high 

density population areas are somewhat moot in tha t those areas have 

received most of those funds; and,

Second, those States which were penalized by the needs method for 

reasons such as the discriminatory way in which the surveys were 

conducted or for having done a creditable job of water pollution control in the past, which Texas is one, have had their programs slowed.

We believe the Congress agreed that a problem existed during the 

passage of the emergency public works legislation, in which the socalled Talmadge-Nunn amendment was made a part. Since the legislation was vetoed by the President, the Senate has recently reaffirmed 

the inequities, due in a large degree to Senator Muskie’s effort, in 

their recent passage of another emergency public works bill which 

also contains the provisions of the Talmadge-Nunn amendment.

I would like to deal with one other area of the inequity question— 

that of growth.

As I am sure you are aware, many States are experiencing tremendous growth due to such factors as energy, cost of living, climate, and 

quality of life, which is creating a potential environmental problem.

This growth, coupled with our belief that the cost of correcting the 

pollution of public waters resulting from the discharge of inadequately 

treated municipal wastes is almost completely a multiple of the number of people involved in producing the wastes to be treated, leads us 

to believe th at the use of population as a means of allotting funds is 

necessary to stay ahead of these potential problems.

The waters of our State are of relatively good quality, but if we 

continue utilizing the needs method and the growth rate continues, 

and it will, we are going to get further and fu rther behind in preventing water quality deterioration.

I think you will agree th at it is less costly, both in dollars and hea lth, 

to prevent pollution from occurring than it is to clean it up after it 

occurs. This is why we feel that a population formula, based on 1990 

estimated growth is necessary to insure tha t funds will be there to help 

in our fight for clean water.

The questions of how much money is needed, where and how it will 

come are all related to this and I will touch upon them later.
27

EFFORT

At the risk of emphasizing the obvious, I would like to quote a portion of Public Law 92-500. Section 101(f) states, and I quote:

It is the national policy th at to the maximum extent possible the procedures 

utilized for implementing this Act shall encourage the dra stic minimization of 

paper work and interagency decision procedures, and the best use of available 

manpower and funds, so as to prevent needless duplicatio n a nd unnecessary delays 

at all levels of government.

If in fact this is truly the national policy, I can think of very few 

sections of the act which go against it more than implementation of 

205(a). Let me provide examples of what I mean.

Minimum, paperwork

The needs survey requirement has caused the States and/or municipalities to be involved in filing our paperwork three times in 4 years. I 

am sure you have all seen copies of the various survey booklets which 

have or are presently being utilized and know how difficult it becomes 

for small municipalities to understand them.

In addition, every survey has had guidelines, each different. After 

the guidelines have been issued, changes have come out during the 

actual conduct of the survey which has caused reevaluating work tha t 

had already been completed.

Minim um interagency decision procedures

The needs surveys cause the States to question the municipalities 

over their work and then the EPA questions both the State and the 

municipalities, and then Congress questions the EPA and States and 

municipalities, which does not lend to minimizing interagency decision procedures.

Best use oj available manpower

On the point of manpower, I can only speak specifically to what it 

has taken our agency to conduct a survey—an average of 32 manmonths per survey. I am sure that our municipalities as well as the 

EPA have put in much more.

I would point out tha t the manpower expended for these surveys 

detracts from our other programs in tha t they require several people 

from other programs to assist during the conduct thereof.

Best use oj funds

These surveys continue to cost money which could otherwise be 

used in the water pollution control program more effectively. The 

amount spent thus far is incalculable by our agency but we feel the 

amount to be large.

In addition to these drains on the municipalities, States and EPA, 

other administration agencies, as well as the Congress, have had to pu t 

tremendous amounts of money and work into the process of allotting 

money by the conducting of needs surveys.

Some may argue that these problems have been eliminated by using 

outside contractors to ascertain needs, but we have found tha t it 

actually increases the problem. We at the State level still have the same 

commitments, if not more, as do the municipalities, the EPA, and the 

Congress.

In tha t we have added a new partner, tha t being the contractor, and 

we still have the same level of work as we did before.
28

PUB L IC W O R K S A SP ECTS

We feel tha t the population method of allotting grant funds has an 

additional advantage besides preventing future and reducing present 

pollution loads on our streams—it will provide a more equitable means 

for pumping money into the economy and help mitigate a portion of 

the construction industry’s unemployment rate. Continuing to allot 

by the needs survey will also help in this regard, but since we feel 

tha t our current economic problems directly impact people, the population method would allow the gran t funds to be more equitably distributed to people in need of help.

In summary, we feel that a return to the method of allocating funds 

on a basis of population will allow greater program stability, prevent 

inequities, and would be in keeping with the national policy as contained in section 101(f) of Public Law 92-500, and would provide an 

equitable distribution of funds to help a sagging economy.

Authorizations jor fiscal year 1977

We feel tha t almost everyone will agree that the $18 billion provided 

thus far is adequate to piovide only a small p art of the collection and 

treatment requirements of the act.

Since it is extremely doubtful tha t any 1977 authorization for 

municipal construction grants will equal the amount of money necessary to meet the act’s requirements and understanding that Congress 

is faced with other budgetary problems besides what level of funding 

should be authorized for construction grants, we feel tha t it would be 

rather presumptive of us to suggest an exact dollar amount. We would 

like to suggest tha t you take into consideration the following factors 

during your deliberations over this authorization, however.

IN F L A T IO N

Because of situations unique to the construction industry, we saw 

the construction cost index rise for municipal treatment plants 20 

percent and the index rise for municipal treatm ent plants 20 percent 

and the index for sewer construction 17.5 percent during 1974, while 

at the same time the cost-of-living index rose approximately 12 percent 

during the same period.

If this situation were to continue at only 10 percent per year, the 

purchasing power of the construction grant funds in fiscal year 1977 

would be reduced by 30 percent. In terms of actual dollars, it would 

mean that the same material, equipment, and labor $6 billion bought 

in fiscal year 1974 would cost approximately $7.8 billion in fiscal 

year 1977.

If the funding levels remain stable each year and inflation continues, 

it penalizes the water pollution control program in two ways:

(1) Improvements in water quality would slow; and

(2) The total effort will cost more to complete.

Of course, this situation might be mitigated if all sectors of the 

economy were experiencing the same rate of inflation, b ut this is not 

normally the case in the real world.

We understand the problems with which you, the Members of 

Congress, must deal in evaluating the impact of general economic 

conditions with different levels of funding and the economic impact
29

on particular sectors of the economy. This is why we are hesitant to 

recommend a specific level of funding for fiscal year 1977.

PROGRAM CON TINUITY

We feel that the Congress must ask itself to what extent they committed the Nation to a continuing municipal construction grant program, and how th at commitm ent affects the other programs in Public 

Law 92-500.

The impacts on the permit, planning and enforcement programs 

can vary tremendously with regard to the funding levels authorized, 

appropriated, and allotted each year. The overall success of water 

quality management in the Nation is dependent upon those programs 

operating with some degree of continuity.

PUBLIC WORKS

I touched briefly on the economic impacts of authorization levels 

when I discussed the problems of inflation and the public works aspects of using the population method for allotting funds.

In addition, we would like you to consider the major impacts of the 

indirect economic effects of these funds. Factories in all parts of the 

country producing pollution control equipment will increase production; transportation needs for moving the equipment will increase; 

there will be more consulting and engineering firms being utilized; and 

expansion of State and municipal agencies to implement the program 

all will provide additional jobs. These additional jobs allow expenditures for homes and consumer goods which further stimulates the 

Nation’s economy.

This program is vital, in our opinion, and a specific commitment to 

accelerate the approval of projects, authorize and obligate grant 

funds, start construction, would have the effect of getting people to 

work and help in preventing and reducing pollution of the Nation’s 

water.

I would like to close by discussing very briefly where we are in the 

State of Texas with regard to the municipal construction grants program. The chart before you provides a picture of how far apart the 

actual funds Texas has received since 1972 and the dollar amounts of 

projects which we have ready to approve for funding, if funds were 

available.

You will note tha t from fiscal year 1972 the gap has grown to $571 

million in fiscal year 1976. Depending on what funds are made available in fiscal year 1977, and how they are allotted, this gap could 

widen even further.

I would like to point out tha t we could do it quicker, but we feel 

tha t to have a continuing program will drag out until December.

In addition, we project Texas will have expended all of its allotted 

money by December of this year. If additional funding is not forthcoming by then the progress and success of our program will be 

severely impaired.

Than k you, Mr. Chairman. I will be glad to try and answer any 

questions you may have.

[A chart appended to Mr. Fickessen’s statement follows:]

74 -536 0 - 76 - 3
30

MIL LIO NS OP DOLLARS

TEXAS

P .L . 9 2 - 5 0 0 GRANT 

REQUIREMENT AND ALL OCA TIO N 

COMPARIS ON

_____ Pro ject Requirements

----- Allocated Funds

Senator Muskie. Thank you very much.

Our next witness is William B. Dendy, the executive officer of the 

Water Resources Control Board of the State of California.
31

STATEMENT OF W ILLIAM B. DENDY, EX EC UT IVE OFFICER , WAT ER 

RESOURCES CONTROL BOARD, STATE OF CALIFORN IA

Mr. Dendy. My name is Bill Dendy. I am the executive officer for 

the Water Resources Control Board in California.

We certainly appreciate the opportunity to participate in these 

hearings. California and the other western States, with our particular 

problems of seasonal water supply shortages, and increasing recreationists’ demands to share the use of the water, have an acute interest 

in clean water.

Your kind invitation to come here today to discuss the policy issues 

of levels of funding and allotment formulas for the municipal construction grant program under Public Law 92-500 has sparked quite a bit 

of analysis of those issues.

We even went so far as to develop a number of computer programs 

capable of comparing what the impacts of various assumed funding 

levels and allotment formulas might be in the light of the needs identified in the most recent EPA needs survey. We also built into out programs the ability to consider assumptions on inflation rates and projected State populations.

As you know, computers have an uncanny ability to generate more 

printout information than mere humans can fully assimilate. And in 

this case our results are only in terms of satisfying the needs in the 

various categories for each of the States. We don’t have anything in 

our computer tha t tells us how much improvement in water quality 

would be generated by any particular assumed expenditure. That 

kind of estimate is still in the realm of best professional judgment.

But our analyses so far indicate one thing very clearly: a definite 

need to rethink the short-term goals of the clean water grants program.

Back in 1972, when the basic national commitment to clean water 

was made, nobody knew the exact dimensions of the problem. Not 

until the later surveys did we start to get a reading on the magnitude 

of the task ahead.

To provide all the facilities which could be provided would cost well 

over $100 million for all grant eligible facilities, excluding those for 

controlling storm water runoff in separate systems.

Senator Domenici. How much was that?

Mr. Dendy. Over $100 million.

Senator Domenici. $100 billion, isn’t it?

Mr. Dendy. Over $100 billion; I am sorry. No good estimate 

for separate storm water system is yet available. It is clear tha t the 

initial $18 billion committed to the clean water purpose is inadequate 

even before it is fully obligated to projects.

An additional $5 billion per year, the amount proposed for 1977, 

will not even keep pace with inflationary increases on the remaining 

needs.

Senator Domenici. Mr. Dendy, doesn’t that depend on what the 

Federal Government’s obligation is? The statement you are making 

might be true if the Federal Government has the responsibility of 

doing all those things that you are estimating.

Mr. Dendy. That is correct.

Senator Domenici. Am I not right?

Mr. Dendy. Tha t is correct.
32

Senator Domenici. We don’t now th at tha t yet is our commitment 

by way of a law.

Mr. Dendy. My statement is true if you try to solve all these things.

Senator Domenici. All right.

Mr. Dendy. My reluc tant conclusion today is tha t we cannot 

reasonably afford in the short term to accomplish the full task tha t 

was spelled out in 1972 for curing municipal water pollution problems. 

I now believe we should focus our attention and resources for the near 

future on identifying and correcting the highest priority pollution 

control needs.

If we can do that, and establish a firm multiyear policy for implementation, I believe we can accomplish a percentage reduction in 

pollutant discharge much greater than the simultaneous percentage 

satisfaction of total dollar needs, as listed in the EPA surveys.

I mentioned a multiyear policy for implementation. Next to the 

general inadequacy of dollar commitment to clean w ater grants, the 

biggest problem to contend with has been the lack of stability or 

predictability in the program.

At first we thought the initial $18 billion would be spend according 

to the legislative schedule at $5, $6, and $7 billion per year. Then, 

of course, $3 billion per year was impounded, making available 

$2, $3 and $4 billion per year. We never really knew what to plan 

for, and neither did the municipalities or their consulting engineer.

Then, just when we had scoped our expectations and our planning 

at the lower levels, the impounded $9 billion was released, all a t once. 

We are still hustling to get tha t money obligated to projects before 

the legal deadline.

In California, all projects necessary to meet the treatment requirements for 1977 have been elevated to a fundable level on our State 

priority list.

Coupled with the variations in total money available, of course, 

have been the increasing complexities of staged application of all the 

legislative controls that govern such expenditures and the ups and 

downs of successive EPA needs surveys. From the needs viewpoint of 

the States and the municipalities, these variations in expectations 

have been almost impossible to accommodate in program planning 

and administration. The construction trades workers have shared 

our confusion.

To us, the need for stability and predictability is almost as great 

as the need for rethinking the short-term objectives. This program 

translates into jobs, and if we ever needed to bring some predictability 

into employment, it is now.

There are probably as many alternative short-term objectives as 

there are alternative allotment formulas. I believe the main requirement is tha t the two should be reasonably consistent. If investing 

in the most cost-effective facilities is the objective, then somehow 

the allotments should be made to accomplish that.

The factor that prevents simplicity in tha t approach, though, is 

tha t the particular category of facilities tha t will do the most good 

in one State is not the same as for another State.

In Connecticut, for example, collection facilities for unsewered 

communities, or perhaps storm water control projects, may give the 

greatest clean water benefit.
33

In California, the proper investment may be for advanced waste 

treatment.

I suspect, however, based on positions taken by most members 

of ASIWPCA, the Association of State and Interstate Water Pollution Control Administrators, tha t categories 1 and 2, the waste 

treatm ent needs, are promising candidates for emphasis. Category 

4-b, interceptor sewers, is closely related to treatmen t needs because 

cost-effectiveness in metropolitan areas often means abandonment 

of several small treatme nt plants in favor of central regional facilities. 

We feel that the data base for these three categories (1, 2 and 4-b) 

is much better than for the remaining categories.

Another popular position among States, though certainly not all, 

is tha t we should return to a population ratio for allotment. This 

would be a reversal from the idea of allotments based on need, bu t 

the data base for some of the needs categories is generally considered 

to be grossly inadequate and not at all representative of true needs.

The data base is also very much subject to frequent change, as 

I have indicated previously.

From the single viewpoint of California, the population based 

formula obviously has great appeal, while a formula based on total 

needs does not. A population base would give great stability and 

predictability, of course, but it lacks any short term policy guidance.

Allotment based on total needs has two problems: it gives the apf

tearance of continuing to promise tha t all facilities will, in fact, be 

unded, and the dat a base if highly questionable. Of the two, I like 

the population base much better.

What we need is an allotment formula that is based on solving high

f

>riority needs and that has stability. The form of solution I propose 

or meeting both those needs is as follows:

First of all, set a 5-year allotment formula, not a 1-year formula.

In each of those 5 years, allot half the money each year on the basis 

of projected 1990 population. This lends a degree of stability for 

all States.

Then allot the other half of the money each year in a manner that 

emphasizes treatment needs in the early years and other categories of 

needs in later years. For instance, with the 50 percent tha t would be 

allotted on needs, you could allot in 1977 all of th at 50 percent on the 

basis of the partial needs of perhaps just trea tme nt needs, categories 

1 and 2. Then decrease th at to 40 percent on the basis of partial needs 

in 1978, 30 percent in 1979 and 20 percent and 10 percent in the 

remaining 2 years of the 5-year period.

At the same time the other categories of needs (other than tre atment needs) could be improved as to data base with more complete 

surveys. You could have an increasing emphasis on those other 

categories during the 5-year period by alloting, on the basis of needs 

in the other categories, zero in 1977, io percent in 1978, 20 percent in 

1979, 30 percent in 1980 and 40 percent in 1981.

The impact of tha t kind of an approach is to give a great incentive 

to the States to solve the treatment needs by encouraging expenditures for treatment plants first.

Obviously, there are variations on this formula, such as using 1, 2 

and 4-b for emphasis in the early years.
34

Coupled with this type of formula, of course, there has to be a 

commitment to spend enough money to solve the high priority needs. 

On the order of $45 billion to $50 billion in 1973 dollars will be needed 

just for categories 1, 2 and 4-b. The Federal share of tha t is about 

$35 billion in 1973 dollars.

Some of these needs will be accommodated by money already 

allotted, but inflation has limited the impact of those initial expenditures.

In closing, I urge you to make a renewed commitment to the ultimate 

goals of Public Law 92-500, but to restate the short-term goals in 

terms of high priorities and in terms of what is realistically achievable.

Then I urge you to support your new short-term goals with a stable 

investment program tha t will maximize returns in terms of clean 

water.

Senator Muskie. Thank you very much, Mr. Dendy.

I understand Mr. Bardin has arrived, and we have our final witness 

this morning, Mr. David Bardin, commissioner of the Department of 

Environmental Protection, State of New Jersey.

STATEMENT OF DAVID J. BARDIN, COMMISSIONER, NEW JERSEY 

DEPARTMENT OF ENVIRONMENTAL PROTECTION

Mr. Bardin. Mr. Chairman, it is a pleasure to be here with you. 

I regret tha t the Metroliner does no t come within the jurisdiction of 

this august committee.

Senator Muskie. On the basis of the testimony we have had thus 

far, tha t will be no insurance of any improvement.

Mr. Bardin. Mr. Chairman, members of the committee, my name 

is David J. Bardin, commissioner of the New Jersey Department of 

Environmental Protection.

On behalf of Gov. Brendan T. Byrne, I want to express appreciation 

for this opportunity to testify today on recommended funding levels 

and allocation methods for the municipal construction grant program 

under Public Law 92-500.

I have a prepared statement. In the interest of time I request, Mr. 

Chairman, if it is permissible, tha t it be included in the record and I 

will just highlight it for the sake of the committee.

Senator Muskie. Without objection.

[The statement appears at p. 44.]

Mr. Bardin. As to how much money, I believe tha t you should at 

a minimum adopt the $5 billion tha t was reported out by this committee in S. 3037 for fiscal year 1977. I want you to know tha t New 

Jersey under the Byrne administration, which is slightly over 2 years 

old, has placed a high priority on the effective application of the 

Federal funds made available by Public Law 92-500.

New Jersey has revised regional priorities since Governor Byrne 

took office in order to emphasize the existing needs in our urban areas 

consistently, I believe, with the real in ten t of Congress.

Moreover, of the $1.3 billion allotted to New Jersey under Public 

Law 92-500, over half has been obligated, almost $700 million, and 

most of t hat obligation took place in 2 years since Governor Byrne 

was inaugurated.

The remaining $600 million will be certified by my Dep artm ent to 

EPA Region II by the end of calendar 1976, by Christmas of this year.
35

In fact, over $100 million of that amount has already been certified 

and some $200 million more will be certified this month.

So the point I have to emphasize to you very strongly, Mr. Chairman, is t hat New Jersey is on the verge of running out of obligation 

opportunities under Public Law 92-500.

If Congress fails to provide adequate authorization and appropriations this year, construction grants in New Jersey will halt just 

as the new Federal administration takes office next year.

As a result, our water quality program will undergo anguished 

months of uncertainty while the 95th Congress undoubtedly studies 

the problem.

We beg you, please don ’t let tha t happen.

If need be, we ask you to override any veto if th at is what i t comes 

to. It is absolutely essential from our point of view th at for continuity 

of our program stop-and-go funding not take place in this year or 

next in the waste w ater grants program.

New Jersey needs $300 million in additional money in fiscal y ear 

1977, assuming as I do, continuity of 75 percent funding for projects 

that are construction ready now or will be construction ready next 

year.

The formula tha t was proposed by the House committee would 

supply only $240 million in fiscal year 1977, which is 20 percent less 

than we know we need and can use in the immediate fiscal year.

To my way of thinking, tha t argues, Mr. Chairman, for more th an 

1 year at a time in a funding program, especially in the funding 

program that you are undertaking now.

So I say the $5 billion authorization in S. 3037 is a minimum. I 

would hope th at when th at gets to conference it might be considered 

for more than a 1-year program.

Senator Domenici. Can I ask you a question?

Mr. Bardin. Yes, sir.

Senator Domenici. In your first couple of minutes, you were 

pre tty firm on the notion tha t you had allocated your money on what 

you called the effectiveness approach. What are some of the characteristics tha t cause you to think yours is being effectively applied 

versus someone else’s, perhaps?

Is it purely needs or are you talking about old facilities? Are you 

talking about long-standing needs, cost effectiveness? What are you 

talking about?

Mr. Bardin. We made several revisions in the program as it was 

being administered before Governor Byrne took office. One, we 

changed our priority system and gave great weight to the population 

density.

I supplied the staff with a map of New Jersey which shows the 567 

municipalities of New Jersey in terms of population density. New 

Jersey is on the average the most densely populated State in the 

country, with approximately 1,000 people per square mile.

As you will see from the map, which is based on the 1970 census, 

which, incidentally, is the basis of all of our State policy allocations, 

there is a great deal of variation. There are extremely dense areas of 

population in the Union City area and in the great white area of the 

center. The principal areas where the population is low tha t you 

encounter almost anywhere in the country you will probably find in 

New Jersey.
36

Sena tor D om en ici. The re mus t be a v ery little piece in New Je rse y.

Mr. Bardin. It is a small piece, but those who k now it well, S enato r, 

love it and it is also a gre at source for future generation s.

One thing we did was to red irect prior itie s and say th at pri orities 

will be based no t on pop ulation bu t on density of population , which 

also happ ens to be a conven ient way, in our con text, to identify the 

old er cities, the older industries , th e ind ustries which are larg ely 

heavily de pe nd en t on municipal sew er systems.

We have some ma jor regional sew er system s in New Jerse y which 

rece ive up to 50 perce nt of the ir sewer load from industry. Of co urse, 

mu ch of this indu stry is small busines s. Mu ch of this in du stry is 

busines s th at is in trouble for many othe r reasons and sewers are very 

im po rtan t t o it.

We also pu t an end to the sewering of farmland. It wa sn’t called 

sewering of far ml and, bu t th at , in fac t, was the res ult of the wild 

spag hetti intercep tors which had bee n bu ilt in some places wi th all 

their secondary effects. We ha ve taken a v ery rigo rous view on limitin g 

sewering to existing problem s in p op ulate d areas.

We hav e scaled down the proposed size of some facilities, pa rticular ly the trea tm en t plants. We look very m uch askance at t he at te m pt 

to pro jec t ve ry high growth rat es well int o the future as the basis 

for sizing an d fun din g sewer fac ilities.

At the same time, we ha ve begun to mov e ahead int o the f undin g of 

collection syste ms as perm itte d by Publi c Law 92-500 in a nu mbe r of 

situ ations.

One, we have old com munities which are on overcro wde d and overflowing sep tic system s with an im mediat e visible, tangib le pol lution 

prob lem. Some of these big c om mu nities are now replaci ng their septic 

tank s w ith collection systems.

Two, we ha ve adv anced reg ion alization by tying the collection 

system for the com munities pa rti cipa tin g in the regio nal solution to 

the funding of t he regional tre atm en t p lan t.

Three , we hop e to st ar t replacing anc ien t colle ction syste ms th at 

exist in some of the cities of New Jer sey. Hob oke n, for example, still 

has wooden sewers— the first rou nd of sewer constru ction in the 19th 

cen tury.

I mus t ad mit th at this is a difficult pro gra m to get star te d and 

prog resses slow because you make th e engineering studie s to evalu ate 

cost effectivenes s of one solu tion as aga inst an oth er before you are 

actua lly willing to spend any Federal money on th at pro gram.

But somewh ere down the roa d—it is not in fiscal 1977—but c ert ain ly 

in thi s coming, I would hope, 5-y ear cycle of con struction, the older 

cities of this co un try will un do ub ted ly have su bs tantial rep lacem ent 

needs which seem to me to be pa rti cu larly wo rth y of and need of 

at tentio n by th e Congress.

Because these are the very comm unitie s which, by and larg e, have 

othe r fun din g prob lems, other capit al problems th at hav e ca ug ht up 

with the m, these are com munities in ma ny cases with a s tab le population, with no gro wth poten tial, even with a shrinkin g popu lat ion base 

in some cases.

Po pu latio n is often a shrink ing route for this set of people and this 

set of needs. On the o the r h and, ot he r people, even in New Jer sey, live 

in are as where the septic tank is the correc t solu tion , the econ omically
37

and environmentally preferable solution for wastewater disposable 

needs.

There is probably a growing population in New Jersey, out in the 

more rural, more ex-urban areas, where we ought to encourage septic 

tanks, where we ought to develop plans and we ought to develop 

organizations to handle the cleanup of the septic tank. We need water 

conservation plumbing for that reason, amongst others, so less flows 

into the septic tank.

The people who are on septic systems certainly should not be 

counted in a formula, or would not accurately be counted in a formula 

designed properly to allocate moneys provided by the Congress or 

others to meet the capital needs for waste water treatment.

Senator Domenici. Let me ask you two more quick questions and 

then I think we have agreed we want to let you finish.

You have told us in your prepared statement the dilemma you will 

be in if we don’t continue the funding because you have projects 

ready to go.

Are you in a position to tell us how much New Jersey thinks they 

need overall to complete what I might call here the present expectation 

level generated by the law and the formula? How many billions does 

New Jersey need?

Mr. Bardin. I can give you a small number, Senator, and a large 

number. First, let me give you the small number.

Senator Domenici. Please. Tha t will make our day.

Mr. Bardin. Our thinking has been in terms of perhaps two more 

cycles of 5 years apiece of Federal funding. T hat is our recommendation to the Congress. If we think in those terms and consider, on the 

one hand, the needs in terms of highly polluted waters, secondary 

treatment goals which are already fixed and established, plus the 

uncertainties as to what is the best solution to some other situations— 

we have hunches about the runoff of untreated or raw sewage and 

storm situations, but we are not really including tha t here—and also 

posing the constraint of construction readiness within tha t 5-year 

cycle so we don’t give you a bill for what will be needed but just will 

not be construction ready for various institutional reasons^ we come 

up with an amount in addition to the $600 million which we are going 

to certify by the end of the year.

It will be the $600 million left to us under Public Law 92-500, plus 

$1.5 billion of Federal money to match $500,000 of non-Federal money 

over the period through fiscal 1981.

If you want to ask me how about the next period, I could come up 

with figures. I would rather do it by mail than orally. But it will be 

at least an equivalent amount, because our present hunch is t hat on 

some of the highly populated, densely populated areas, after we have 

brought them up to the high quality of secondary treatm ent, the most 

effective solution for meeting the goals of the act may be separation 

or dealing with the storm and drain sewers rather than some very 

costly alternatives tha t have been considered. That is, of course, in 

the engineering phase today.

I cannot, as a prophet, as a nonengineer, accurately give that estimate to you.

Senator Domenici. You gave us the low figure. What is the high 

figure?

Mr. Bardin. Tha t is the figure for this 5 years.
38

Senator Domenici. You said you had a low figure and a high 

figure.

Mr. Bardin. The high figure will be for the next 5 years. It will be 

at least tha t amount.

Senator Domenici. I don’t think we need th at.

Mr. Bardin. We have something like $5 billion worth of unfinished 

work already identified in New Jersey to deal with secondary treatment, advanced treatm ent in some of the headwater areas from which 

we have drawn our drinking water, interceptors, replacement of collection systems, or replacement of septic systems with collection 

systems in fairly densely populated areas.

There is no allowance in this figure for the nonpoint sources. There 

is significant runoff in the cities and in places like New Jersey, but we 

have very little allowed for the storm runoff problem that gets into the 

sewers.

Senator Domenici. When New Jersey reevaluated its needs under 

the broader definition of needs—and we had tha t done in late 1974— 

what did New Jersey submit as the needs figure then?

Mr. Bardin. What did we submit?

Senator Domenici. What was the figure?

Mr. Bardin. The figure EPA used was $4.9 billion in 1973 dollars, 

$4,894 billion of total needs on a 100-percent basis.

There are pieces of this $4.9 billion which, of course, have to be 

somewhat escalated because of inflation.

But there are pieces of it which will actually not be ready for construction in the 5-year cycle I am talking about.

One of the major steps we took in New Jersey was to act on faith 

tha t Congress did not mean to drop this program, tha t Congress had 

started something in 1972 and was going to be vitally interested in 

completing it.

On that faith we have segmented projects in the sense that we do 

not set aside Federal money for many years worth of construction for 

a given project.

Perhaps an illustration will help. The biggest regional sewer system 

in New Jersey which handles a little over 20 percent of the sewerage 

in the State is the Passaic Valley Sewerage Commissioners.

They are responsible for a great tract of the metropolitan area in 

northern New Jersey. This system includes an interceptor built around 

the period of World War I, just to transfer the sewage problem from 

the Passaic River which literally stank and literally peeled off paint, 

to transfer it into Newark Bay, where the people couldn’t see it 

anymore.

That has to be revised to secondary treatment on a set of sites in 

downtown Newark. These are very large public constructions. You 

can imagine the liquid oxygen and many other things. Tha t is being 

done a piece at a time and will probably be impossible, given a compact area for workmen and contractors, to do all at once.

It is extremely costly. I t wouldn’t make sense in management and 

the job. We have funded more than $100 million of tha t project. We 

are going to fund an additional $200 million.

I have identified a little over $200 million more, which has to be 

funded. In every case, piece No. 1 is going to be useful, even if the 

last piece isn’t built.
39

We are not going to do what happened in the highway program, build a segment on the assumption tha t something else will be built and it goes from nowhere to nowhere. All these segments go from 

somewhere to somewhere. But to meet the effluent goal of secondary treatment, we have got to finish that funding. So you asked me. The full $500 million or so is included in the needs figure that EPA used, the 1974 needs figure. But it can’t all be funded out of any one piece of authorization language or contract authority t hat Congress has come up with so far.

Senator Domenici. Where does the State of New Jersey get most of 

its matched money?

Mr. Bardin. The program in New Jersey has changed. Since the purpose of Public Law 92-500 for most of the time the State put up 15 percent out of State general obligation bonds and the regional sewer authorities raised 10 percent out of their own revenue bonding. The State is now not putting up money. I t is looking to the sewer authorities to raise 25 percent on their own. It is going to cause prob­ lems for some of them and it leads immediately to certain conclusions. One, to welcome the initiative of the House committee to reactivate or substitute for the financing authority which was under Public Law 92-510 which EPA says is no longer necessary to take advantage of the 

new bank in the Department of the Treasury. And two, to create an equivalent instrumentality at the State level to try to help out to the extent tha t the Federal Government does. It seems to me*it is more realistic to keep the interest rate down and to assure these regional sewer authorities of the ability to clear the market than to try to sell general obligation bonds in the State to do 

that.

Senator Domenici. Do most New Jersey municipalities, in addition to the bonding approach to financing, also have an ongoing kind of charge tha t is related to the sewage contribution, the charge for 

sewage disposal?

Mr. Bardin. Some do and some don’t. Some of the municipalities have done it in the past. Of course, the whole sewer business is going through an evolution, a transition, as a result of the impact of Public Law 92-500 on ratemaking, business economics in relationship to the ordinary users and to the industrial user and the way in which he 

pays the sewer service. It seems to me that one of the fundamental facts, perhaps the out­ standing principle, tha t ought to be gotten across by Congress to the people and by all of us to our people, is to look upon wastewater services, the sewer service, as a utility, as a necessity in our concept of what we want in terms of public health, recreation, cleanliness of the waters and the rest. It is not a luxury. It is not mere pork barrel. It is 

a utility. If you conclude tha t it is a utility, I think many other questions assume their proper perspective. If you think it is some kind of pork barrel or some kind of amenity which you do when we have a surplus and want to get rid of it or a make-work program to put people back to work in times of dreadful unemployment, I think you are 

making a mistake. Don’t misunderstand me. We came into office 2 years ago in Trenton, N.J., at a time of a serious depression in our own economy. We under-
40

stoo d the job -creat ing po ten tial of thi s program and we were grate ful 

for it because there was nothi ng else, Senat or Muskie, as you can 

app rec iate, th at had been mad e ava ilab le.

We be nt our back s and made a ma jor effort to get the se pro jec ts 

moving. But we never pre ten ded to the contracto rs, to the con struction 

trades unio ns, to the new spapers or anybody else, th at thi s was make 

work.

These are real jobs th at had to be perform ed and thi s was 

a darned good time to do it. T hat is the way I would hope y ou would 

look upo n the program.

One of the thin gs we hav e don e in coo peratio n with EP A and its 

Assistan t Ad minis trator, Alvin Aim, is to un derta ke this ye ar to 

develop a ma nageme nt manual for these sewer autho rities . These are 

big busines s utilities which hav e had precious little guidan ce in the 

pa st as to how to run th at kind of business.

There are m any of them in New Jerse y and ma ny of them aro und the 

country, I dare say. Na tur all y, they need all the help they can get, 

telling the m how to perform.

I think th at is one of th e sources of m any of yo ur pro blems concerning how to affix the rates for sewer service. You wa nt to do it on a more 

businesslike basis in th e futu re tha n has ofte n been the case in the past.

Senator D omenic i. I don’t wan t you to de pa rt too much from your 

prepar ed sta temen t, bu t I wa nt to say for myself th at I th in k th at we 

ought to trea t sewage tre atm en t as a utility. I hav e nev er con sidered 

it pork barrel and I don’t thi nk i t has a v ery good job rela tio nship per 

dollar spen t, compared to oth er public works projects.

I thi nk you can verify th at , although perha ps its job im pacts is 

be tte r tha n we had expected.

I thi nk if i t is to be treate d as a utility, then it is som ewhat false to 

assum e th at the ca pital inve stm en t for the utility ou ght to flow tota lly 

from the F ede ral Government. T h at is why I asked the question a bo ut 

the local raising of funds.

You spe ak of it as the ma nageme nt effort. We don’t pa y for the 

wa ter facilities in most cities. The y charge money. Th ey cha rge the ir 

users or foun d some way to do it.

As I un de rst an d the his tor y of this bill, it was a ca tch up bill. We 

looked ou t in the country and said we wa nt to get clean water. We 

wa nt to help with the sewage disposal and some of the othe r very 

desp icable practices of dum ping in to our stre ams.

But as we have allowed the needs tes t with the bro ad con cepts we 

hav e com ing before us tod ay, it becom es an exp ectatio n and exp ectation s fre qu en tly do no t generate the kind of local plans, the kin d of 

local comm itm ent, the kind of local m anagem ent.

If it is a utility, then it appears to me we ought to also be hea ring 

from yo ur people on how the local com mun ities and the States are 

arrangin g to defer the expense of those thin gs th at you do n’t think are 

fed w ith in this utility syste m.

But we aren ’t h earing very mu ch of th at. Perha ps it is n ot relevant 

tod ay, but it is releva nt to me because it does seem to me the end is 

going to come and the definitio n is going to be squeezed.

If we are leav ing the exp ectation th at we are going to have a 5-, 15- 

or 20-year prog ram a t $8 or $10 billion a year, I am no t q uite sure th at 

this Congress fully u nders tan ds th at . I thi nk there is going to be a long-
41

term commitment. But you have claimed your State has budgetary 

problems. Senator Muskie and I sit on the Budget Committee and we have 

some monstrous Federal budgetary problems. We are hoping to be 

balanced in a couple of years. I don’t necessarily throw th at out for you 

to respond in detail but I think it is one of real concern.

When you figure needs against the pot and you ask States to go 

figure their needs, I have serious question whether you are ever going 

to get a relevant needs evaluation. We had one State, Senator Muskie, as you recall, in our very early 

healings tha t sent in a needs evaluation with a west coast State and sent us two. It said, “If we are assuming real needs, it is $1% billion. If 

we are assuming New York and some of the other States, they are 

going to load it up with every kind of expectation, then we would 

submit $3% billion.” I can verify that. Those figures are off, but that is the kind we got. 

It was not California, incidentally.

Mr. Dendy. It didn’t sound familiar.

Mr. Bardin. I think, if you will check, Senator, you will find New 

Jersey, since it was a previous administration, I can’t accept any 

credit, made a very realistic effort in terms of available information.

It was whittled down and changed very little in the course of 

analysis. What is much more important is what would 1 do if 1 were 

sitting where you are sitting or where Mr. Train is sitting: the obvious 

answer is tha t these estimates should not be made once for all times. 

They should not be made under blank check guidelines to the State 

to ju st put in your wish list.

The needs analysis should ultimately become, should more and more 

be, a carefully controlled economic analysis device.

The third go-around, which is now underway in EPA, as it has been 

explained to us, involves EPA’s retaining outside consultants to prepare their estimate while many of us have given our own estimate and 

we will have a crack at it and try to correct it. But we will not be 

putting in the wish list, if it is a wish list, the first time around.

Moreover, if you want this business looked upon as utilities, there 

are all the problems th at you can get into here—ethical problems, cost 

effectiveness problems, timeliness problems, and the rest.

To g et it to be an effectively managed utility you have to bring to 

bear a kind of economic analysis which is analogous to what goes into 

all the debates on how we should price electricity services, how much 

we should invest in nuclear power or coal generating plants in Four 

Corners, or anything else.

There are disciplines available to us which I don’t practice and 

which I assume few people on the other side of this dais personally 

practice. But there is expertise out there which has not been brought 

to bear yet and ought to be over the years.

Look at the population formula. If you give me a population 

formula it tells me no ma tter what needs to be done, no matter 

what is the priority of the Senate, no matter what is the priority of 

the State of New Jersey or the priority of the executive branch of the 

Government, we are going to get so many dollars.

That is not the way Congress has undertaken other managerially 

successful major capital programs.
42

The outstanding example perhaps of the other way of doing it is 

the interstate highway program, which is not analogous, I have to 

admit, for several reasons. But it is analogous to the extent tha t if 

there is a national decision made wisely or unwisely undertaking a 

major capital program, the Federal Government decided what tha t 

program was. It committed itself to a total dollar amount, not in 

dollars but in action, sufficient to get the job done.

Then whatever it meant for a given State, it meant for a given State. 

If it m eant more miles in New Mexico than in New Jersey, so if th at 

is the way they wanted the highways built, it didn’t matter tha t we 

had a lot of people in New Jersey in terms of our allocations under 

the highway program.

Senator Domenici. You did all right in my way also.

Mr. Bardin. I don’t really look upon i t-----

Senator Domenici. I understand. I don’t really think I want to 

argue the point

Mr. Bardin. You know, Senator, it is a doing-all-right program, if 

there is a total dollar amount tha t you are going to make available 

to be much less than what is really needed for what you want us to 

do. But in my way many people in my State think we did too well 

and they are still resisting the construction of some of the interstate 

highways. But tha t is not the point.

The Congress saw to it tha t there would be enough money to do the 

job. If it is your intention, for example, to see to it that the municipalities in this country have enough money to build a first goaround 

of secondary treatm ent plants, whatever tha t takes, you are going to 

know a lot bette r now and next year and a year from now than you 

did back in 1972 as to what t ha t is going to take.

But if that is your judgment, then it is a question of how do you 

administer the program, how do you feed out the dollars, how fast 

can you afford to do it in terms of all the budgetary constraints which 

you so correctly mentioned?

We have managed to touch on the question of allocation, Mr. 

Chairman. So let me ju st go very quickly to the point. I think I have 

given away the philosophical predisposition to which I have come.

I have mentioned to you my view, on the one hand, that the management of these funds is a utility function and should be so regarded 

both in the Congress and at the receiving end.

The social goal, of course, is what is called improvement. This is 

the point Chairman Muskie made 10 months ago in the debate on the 

Talmadge-Nunn amendment.

I have given you two illustrations I want to touch on lightly. The 

septic tank portion of our population, perhaps 20 percent nationally, which really isn’t the population tha t needs to be served by 

sewer investment in many, many cases but in most cases i t is.

On the other, you have the industrial use of sewers in the Passaic 

Valley Sewage Commissioners and the Middlesex Sewage County, two 

of our largest systems.

This is a very large fraction of, as I say, 50 percent of the total 

volumes flowing through. Many of them are small businessmen, who 

are least able to sustain the first round costs of upgrading sewer 

facilities and whose needs tend to be overlooked in the Rockefeller 

Commission staff analysis and in other analyses which seem to focus 

so much on the very large industries tha t self-treat or self don ’t.
43

I mentioned the problems peculiar perhaps to the northeast and the 

northern rim of States, but serious problems exist in the country as a whole in terms of our energy and long-term allocation of resources. Population is shrinking in many areas which have very serious water 

pollution control problems. I particularly urge you against any use of 1990 population guesses 

as to what the population might be in 1990 or some point far in the future as the means of dividing up the dollars that are going to be put 

to work today and next year and the year to come. I want to emphasize that where we in our own New Jersey alloca­ tions and priorities lists have given effect to population factors amongst 

other, particularly the density populations, we have looked at the 1970 census as the hardest facts we could get. We have not looked at 

some wild blue yonder estimates. The criticisms against a formula or principle or any particular 

needs formula application seems to me to really go to the accuracy with which needs are measured, to the improvement of the needs analysis; they ignore the fundamental point tha t Congress ought to 

know what the needs are in any event. You ought to act this year and next year in terms of an appreciation 

of what it will cost the country to accomplish a given level of effort, 

such as the secondary treatm ent.

Thank you very much, Mr. Chairman.

[Mr. Bardin’s prepared statement follows:]
44

STATEMENT OF

NEW JERSEY COMMI SSIONER OF ENVIRONMENTAL PROTECTION 

DAVID J. BARDIN

BEFORE THE

UNITED STATES SENATE 

COMM ITTEE ON PUBLIC WORKS 

SUBCOMMITTEE ON ENVIRONMENTAL POLLUTION 

Washington, D.C.

May 25, 1976

Mr. Chairman, members of the Committee, my name is 

David J. Bardin, Commissioner of the New Jersey Department 

of Environmental Protection. On behalf of Governor Brendan

T. Byrne I want to express appreciation for this opportunity 

to testify today on recommended funding levels and allocation 

methods for the municipal construction grant program under

P.L. 92-50D.

As to how much money, I believe that an authorization 

of at least $5 billion in FY 77, as was reported by this 

Committee in S.3037, is es sential if we are to maintain the 

momentum and keep our c ommitment to clean up our nations'

wa te rs .

New Jersey under the Byrne Administration has placed 

high priority on effective application of federal funds 

for construction of was tewater projects. We have revised 

our regional priorities to em phasize existing needs in our 

urban areas. Of the $1.3 billion allotted to New Jersey 

under P.L. 92-500 almost $700 million has been obligated, 

most of that amount in the two years since Governor Byrne 

took office. The remaining $600 million will be c ertified
45

by my Department to EPA Region II by the end of calendar 

year 1976. If Congress fails to provide adequate authorizations and appropriations this year, construction 

grant s in New Jersey will halt just as the new federal 

Administ ration takes offi ce next year and our wate r 

quality program will undergo anguished months of uncertainty 

as the 95th Congress studies the problem. ,Please don't 

let that happen.

Stop and go funding is no way to run a multi-b illion 

dollar program. Effi cient and effective m anag ement of this 

vast public works and pollution control program must rely 

upon an orderly de velopment of projects. This includes the 

curr ent group of projects finally starting const ruction 

after satisfying the many changes in the federal requiremeryts. Other projects for construction start over the next 

five to ten years must now begin the pre liminary studies and 

complete the necessary const ruction drawings and specifications.

New Jersey needs $300 million in additional, FY 77 

federal funds (based on a seventy-five percent federal 

grant) for projects that are or will be c onstruction 

read y next year. The formula currently proposed by the 

House Public Works and Tran sportation Committee woul d supply 

only $240.5 million, 20% less than we need.

I urge that Congress authorize sufficient funds for FY 

77 and for the longer ter m of five years to enable this 

progra m to continue m ovi ng forward.

74 -5 36 0 - 76 - 4
Development of these new facilities cannot proceed in 

an orderly manne r without knowledge of the basic factors for 

these projects, including c ontinued a vailability and level 

of federal financing.

A five year (1977-1981) national program should be 

established. It should include:

(a) Firm commitment of mon ey for each fiscal year.

(b) Fixed allotment formula for distribution of funds 

to the states.

(c) Seventy-five percent federal grants.

The second question I was asked to address was how the 

authorizations should be allotted. I feel that funds should 

be allotted to maximize state and local governments' ability 

to meet the goals and objectives of the Federal Water 

Pollution Control Act. There should be continuity from year 

to year, consistent with the necessi ty for long-range planning under the Act. The allotment of funds should also be 

flexible, to be responsive to changing conditions. The 

allotment must be based on a met hod that has legitimacy, 

that is accepted as valid and fair in concept as well as 

application. In the view of the State of New Jersey, an 

allotment formula based on "needs," as provided in P.L.

92-500, best accomplishes these objectives.

The Congress and the Environmental Protection Agen cy 

determined, in 1972, that allocat ions based on population 

were not related to the real needs of the states and localities 

and that the municipal cons truction grant program funds
47

should be based on an EPA-developed, Congressionally-approved 

needs formula. While a population-based formula may provide 

what a ppears to be greater equa lity among states an ab solutely 

equal distribution based on population figures ignores the 

central issue of water quality improvement. Water quality 

needs are not related solely to population. The growi ng 

recognition of limits to federal spending ability forces us 

to be ever so much more watchful that our scarce federal 

dollars go where they are need ed to accomplish the law's 

purpose.

As the Chairman of this Subcommittee, Senator Muskie, 

stated some 10 months ago d uring the debate on the NunnTalmadge Amendement which amended the formula to retroactively apply on a 50% popul ation-50% needs basis:

The population portion of the Nunn—Talmadge formula 

assumes a capacity to use money for projects which 

is unrelated to water pollu tion problems. It was 

this inadequacy of the population formula which 

caused us to reject population as the basis for 

allocation in 1972. Some States could not use 

the moneys that were allo cated to them on the 

basis of population, so we chose instead to 

allocate funds on the basis of needs.

(A population-based formula) will have States 

which will not be able to use the money because 

they do not have the demand, and we will have 

States that will not be able to use the mo ney
because they are not p repared for the new infusion 

of Federal funds. And then, we will have States 

who are fully prepared to use every penny of the 

available money on the basis of their anticipation 

of that allocation. So, on the one hand, we will 

have stopped progress, and on the other hand we 

will not be able to move forward, and the loser 

will be the environment and the working man, who 

needs the job.

As your statement so aptly recognized, Mr. Chairman, 

the construction grants p rogram should secure real benefits 

for our country. We should concentrate the effort where 

there is a job that needs doing and needs doing now.

For example, in some parts of the country, septic tanks 

are prefera ble to sewers. Even in New Jersey, the most 

densel y populated state in the country, we conclude that 

for significant portions of the state and its population 

the environmentally and econo mically correct solution will 

continue to be septic tanks for the foreseeable future.

Thus a portion of our population in rural and ex-urban 

areas does not represent a ne ed for sewer capital (although 

it does represent an important need for water quality 

planning, controls and ser vic es) . A population-based 

alloc ation formula would exaggerate the real capital need.

Moreover, many of our older industrial facilities 

are served by municipal sewers. For such industries 

survival in the crowded Northeast may depend on sewer
49

utility service amongst other factors. Industries contribute 

up to half of the total mun icipal sewer load of some of New 

Je rs ey ’s largest regional systems. The capital needs for 

bringing these regional systems up to secondary treatment, 

the national effluent standard for the present term, is the 

most pressing capital need in N ew Jersey. Yet a populationbased allocation formula w ould disregard the large industrially 

generated fraction of that capit al requirement.

The critical policy judgment for America is to recognize 

wastewater treatment as an essential utility in our urbanized 

and suburbanized life: Not a luxury, not mere pork barrel, 

but a utility. The most urgent need is to complete the 

cons truction of facilities that will at least satisfy the 

short term national effluent standard so that we can progress from there. Until we have achieved that standard 

(which Congr ess first hoped to attain by 1977), it would 

be a grave mistake to turn our back on the capital costs 

of m eeting the actual needs.

You should also consider the particularly regressive 

effect of federal failure to allocate sufficient funds for 

the u pgra ding to the secondary treatment level in the case 

of those urba n communities which have generally hit hard 

times. Some of these urban centers have stable, or even 

declining populations. Some of them have an ef fectively 

stable or shrinking tax base. Many of them need to 

rehabilitate their existing sewer collection facilities.

When the investment in secondary treatment facilities is 

added to the other burdens, it ma y be difficult to raise
even 25% of the facility’s cost.

We also urge ret ention of a needs formula to maintain 

continuity of the funding program. The next Congress is 

expected to undertake a major review of the Federal W ater 

Pollution Control Act. Therefore, now is not the time to be 

making major changes in the w ay funds are alloted under that 

Act. We desperately need funds to keep us going through 

next year - we don't need a new formula.

The 1972 Amendments created an integrated approach to 

cleaning up the nat ion ’s waters. Congress should not now 

tinker with the Act on a piece-meal basis, but rather should 

examine the allocation formula issue in the over all c ontext

of a comprehensive review of P.L. 92-500. A new formula 

now, with the possibility of chang e again next year, will 

bring more disruption and instability to this important program.

A needs formula also pro vides greater flexibility and 

responsiveness than one based on population. Updated every 

two years, it can take into c onsideration short-term pop ulation shifts, new technologies, changing economic conditions 

and other factors that affect total needs. Population alone 

is a lead weight, out of place in a program as dynamic as 

the municipal construction grant program must be.

Of particular concern is a population formula base d on 

1990 population projections. This would further discriminate 

against industrialized states that have been losing populat ion
51

but whose water quality problems remain. It also adds a 

speculative element into the formula. A primary objective

* of the 1972 Amendments was to deal with existing pollution 

problems, and the use of funds for population grow th was 

severely proscribed. The Act was not intended to pay now

for speculative, distant, future growth. From the perspective 

of New Jersey, enco uraging further p opulation sprawl at the 

expense of urban centers is not a wise investment of scarce 

public resources, and that is precisely what a 1990 population 

formula would encourage.

The most fundamental criticism against a needs formula 

is that it lacks "legitimacy." The answer is not replacement 

of the needs formula, but rather a good-faith effort by 

states, localities, and EPA to refine it. We have the 

opportunity in the legislative review next year and the 

1977 EPA needs study now being prepared. We c an wait at 

least that long before maki ng significant changes.

In conclusion, we need more m oney to carry our 

moment um through to n ext year, as least $5 billion for FY 

77. It is not the r ight time to make a majo r revision to 

one of the major elements of the Federal Wate r Pollution 

Control Act Amendme nts of 1972 by changing the prese nt needs 

formula for allotting mu nicipal construction g rant funds.

Any changes should await next year's major review of the Act 

and the recommendations of the National Commission on Water 

Quality. It is the posi tion of the State of New Jersey that

• no change in the formula is necessary or de sirable. We 

should be putting our efforts where the needs are by retaining 

the needs basis for allocations.
52

Senator Muskie. Let me make a couple of observations.

First of all, the Congress, as Senator Domenici correctly pointed 

out, does not provide in Public Law 92-500 for the funding of growth. 

That section was definitely discussed and not enacted. In the present 

law, growth as a p art of the formula is not a relevant consideration, 

as I understand it.

Secondly, I think there was an assumption in the law, which has 

been stated, tha t once this backlog was dealt with, the burden of 

responsibility shifts, or should shift, to State and local governments 

to meet the needs from then on.

Again that was not mandated, but it was the assumption. As a 

matter of fact, the administration at that time—several administrations I think—strongly urged a one-shot Federal role even more 

restricted than tha t funded by the Federal Government. This was the 

nature of the issue that arose as between President Nixon and the 

Congress which had the veto of the 1972 law and the override of th at 

veto, the impoundment of the funds and the delay of it, which was a 

Supreme Court decision.

So when you talk about growth and a continuing 15- or 20-year 

commitment, tha t is an issue tha t has been discussed, raised, and 

resolved in terms of one-shot, massive aid assistance to the State s to 

catch up on the backlog.

Tha t is what we dealt with.

Also, with respect to continuity of funding, as this issue has 

developed, if it develops any time the majority of Senators can somehow find the ingenuity in their staffs or among themselves to persuade 

the majority of their colleagues th at their States will get more money 

out of some change in the formula, it is tha t majority who decides 

what the formula is going to be.

This has happened.

I doubt very much if you people in your statements this morning 

have explored the full range of possible ingenious formulas tha t could 

be contrived for tha t purpose. How ab out the square miles of water in 

your States?

It is waters that we are treating, after all, we in Maine wouldn’t 

do too badly. We have 2,500 miles of coastline, 2,500 streams, 2,500 

lakes and ponds. So if we use waterways, square miles of waterways 

as a formula, what is wrong with that? That is what we want to get 

clean. Tha t is the objective.

Senator Domenici. I don’t like it. The waterways run 1 week o ut 

of a year.

Senator Muskie. Or you take miles of water tha t meet minimum 

standards. The minimum standards you could use could shift the 

eligibility. You have to use a computer to figure them all out.

Would you use what a trout can breathe? Or would you use what a 

salmon could breathe or what a catfish could breathe? Or would you 

use swimability or fishability? What would you use?

There are miles of water th at doesn’t even meet a certain minimum 

standard and that standard would be set not in terms of any biological 

analysis but by the number of votes you can get on the Senate floor 

to support the change, if you like that.

It seems to me that what we have done here and what this committee 

is struggling with is not just a biological test or an economics test or a 

water qualities test but a political test. How are we going to get the
53

votes in the Senate to support the allocation formula and the distribution that that implies?

As the witness from Georgia referred to the Nunn-Talmadge amendment in conference, the response to that conference was not based upon 

anything but pure politics. How can we buy off those votes tha t the 

Nunn-Talmadge amendment accrued in the Senate to change the 

current formula? That was the basis. No other basis, tha t was pure 

and simple.

So tha t was a paym ent we made to get those votes for the overall 

legislative package, which included some other very important public 

interest needs.

That is not to say that any one of you doesn’t have a rational case 

based upon your thoughtful analysis of your own State’s requirements 

with the position you take on formula allocation.

I am simply saying to you tha t we have tried it over 15 years now, 

going back before I came to the Senate, back to 1956. We have tried it. 

You may remember the 1956 law provided for a maximum g rant to 

any State of, I think, 15 million and a maximum for eligible cities to 

125,000 population.

If you want to go back and find discrimination, the 1966 law was the 

first one tha t broke away from t hat. So tha t we have never y et succeeded—even as we increased the Federal commitment, increased the 

Federal dollars to try to find needs tests, population tests—we have 

never yet succeeded in making everybody happy long enough for continuity of planning and long enough to assure funding.

We haven’t heard anything new this morning. We appreciate your 

testimony. It reflects once again the diversity of views. But I don’t 

think we have found an answer.

Let me ask you some short questions.

Twenty-two States, I gather—unless I am wrong—would require 

some additional funding in order to continue on with this year’s program. So what are your options? Your options are 1 year, simple extension of some amount. The other option is to try to find something 

on a permanent basis.

If you try the second, which is the nature of our support, then w hat 

we do is attr act a lot of other suggestions for addition to the legislation 

and you get a lot of other problems connected with the water problem 

approach.

If we go tha t route, it seems to me there is a strong prospect for such 

delay in the legislative process th at we may get nothing by the way of 

supplementary funding or answers to this question of equities among 

States tha t have real differences of position. We understand the differences.

In Maine, talking abo ut the highway program, we have half the land 

there in New England, but we didn’t get half of the legislative money. 

And at least a third of our State has no public roads at all.

With the crowding of the centers in our country could we make a 

case—not tha t we would want it—for the colonization of areas to send 

more road money into those areas? Well, we took the Federal Governmen t’s judgment and took all we were entitled to.

With some resistance in 1956 to add 40 miles, just 40 miles to at 

least give to the northern tip of our State—and we have been unsuccessful.
54

We get about 0.45 percent or less of the entire State money, which is 

less than our percentage of the population, which is about 0.54 percent. 

What we are getting for water is 0.56 percent you say, which is at the 

top of the range, Mr. Adams. T hat is only 0.2 above our share of the 

population and yet the majority of the Senate, when the Nunn Talmadge amendment was offered, said we were getting too much. We 

were getting our fair share.

If Nunn-Talmadge had stuck, our allocations for this year would 

have been cut in half. Isn’t tha t right? So it is not easy. When we 

write this formula we are not going to be looking at the very legitimate 

considerations you gentlemen offer. We are going to be looking at 

where the votes are. And our judgment on tha t may be changed next 

year, when circumstances change and the majority shifts to some other 

criteria.

Is that what you consider continuity? Th at is simply to make a very 

practical point.

I appreciate your testimony. I am going to let Senator Domenici 

continue questioning on some of the details and try to fill in behind 

him on some other matters.

Incidentally, I might invite each of you to comment. I think Senator 

Domenici in his discussion made some points t hat were very relevant. 

It seems to me if any others want to comment on any point tha t was 

raised in this discussion, you have this opportunity to do th at.

You won’t recall every question probably, but if there is anything 

that strikes you tha t you ought to say in response to questions that 

Senator Domenici has raised or tha t Mr. Bardin responded to, at 

this point I would be delighted to have you make any comment you 

would like.

Otherwise, I yield to Senator Domenici at this point and then I will 

follow his questioning with whatever is left over.

Senator Domenici.

Senator Domenici. Than k you, Mr. Chairman. I am going to be 

brief. I know the chairman is just recovering from his illness and I 

don’t think I want to delay the hearings tha t require your presence 

for an untoward amount of time.

I did want to add one thing to what Senator Muskie said. I think 

some of you have been in Government long enough to know this 

but, actually, the explanation of changing formulas is no t exaggerated 

at all.

In fact, my first year in the Senate I was amazed that in an educational grant bill someone came to the floor with a set of States tha t 

would benefit if we kept the old formula. The new formula would cut 

maybe 26 of them a little bit.

Would you believe, we sit around and criticize the Office of Education for its bureaucracy and what we did on the floor of the Senate 

and couldn’t resolve that issue—it was sort of a tie vote. So we said 

we will have both formulas in effect. Those States tha t get more under 

the old law will use the old one and those tha t get more under the 

new one will use the new one. And we sent it down there to be effective 

for 2 years and they have not allocated the money.

Let me change to one area that I have been rather concerned about 

in the overall technology sense. It appears to me that, regardless of 

whether the Federal Government is the prime mover in capital
55

expenditures, especially in sewage disposal trea tme nt as a general 

term, whether it is us or whether it is you, we are looking at a huge 

expenditure of dollars over the next 15 or 20 years.

« Senator Muskie. Would you yield just a minute?

Senator Domenici. Surely.

Senator Muskie. The staff has proposed some excellent questions 

related to the practical considerations for legislation this year. I 

t think, rather than take each of you separately and put the questions

to you separately, we will submit these questions. They are not tha t 

numerous. They are not like an EPA form.

If you will each submit your answers to these questions, it will save 

us some time this morning and a lot of repetition and give us some 

valuable factual information. I don’t think we need to take your time 

or our time to go to each of you seriatim to get it out this morning.

If you have no objections to tha t approach, I sub mit those questions 

to you. I think it will make a very useful comparison.

[The questions and answers appear at p. 69.]

Senator Domenici. We have a similar set we will coordinate with 

the majority staff and get them into some sequence so we don’t have 

duplication, and ask that they be answered in the same manner.

Let me just ask this one question, if the chairman will permit, and 

we will get the answer to the basic questions from our written ones. I 

have grave concern about the development of new approaches to 

waste treatment, new technology, new chemical means, new thrusts.

I think the law, the way i t is written and the way it is being admistered by EPA with reference to demonstration programs for the 

application of new technology is extremely inhibitive, rather than 

productive of experimentation on demonstration type work.

As an example, it appears to me tha t we ought to permit local 

entities to get demonstrations funding and not necessarily charge that 

against his formula allocation, unless it works, but to promote it from 

the standpoint of reasonable applied demonstration technology.

As I look down the line, many of you said let’s use the engineers a 

little bit more and let them have a little more discretion. It does seem 

to me there is a vacuum in terms of the kind of R. & D. effort, basically 

because plants are being drawn by engineers who basically have one 

school of thought.

I am looking for ways to get the ingenuity of the American marketplace more involved in new approaches to waste treatment and new 

• technologies.

Could you just comment on that for me quickly?

Mr. Dendy. Senator, in California we are trying to do some of 

what you say. For instance, we are giving demonstration grants 

» through the construction gran t program. We don’t call them demonstration grants but they are designed to show new technology.

I don’t think there has been a significant improvement in the 

municipal waste treatmen t for at least 40 years.

Probably you will have to go back before that to see when the 

activated sludge treatment process was invented.

We have one project going in Orange County in southern California 

nowr tha t takes an entirely different approach to treating municipal 

wastes. We have great hopes for it. We have a 1 million gallon per day 

demonstration plant in operation now.
56

Th e Cal Tec h La bo ratory is d oing the work and NASA is app lying 

some of its tech nolo gy.

Th e pro blem with trying to do new technolo gy dev elo pm ent now 

is th at it will come too late— the mo ney will basically be sp en t on 

second ary trea tm en t with exis ting techno logy—b y the time the se new 

processes can be developed .

Fu rth ermore, the na ture of the pro gra m really pre vents us from 

inv esting in new technology. The rea son for th at is, and I guess the 

sim plest way to say it, is th at the re is a $10,000 fine for vio lating the 

waste disp osal permit.

It is ve ry difficult for municip alities to inv est in the new technologies 

which might work when the y can inve st in the establish ed technologies 

which the y un derst and and know will work and know th at the y 

wo n’t vio late the permit.

Senator D om enici. Do you have any thou gh ts on wh eth er or no t 

we ought to pro vide some flexibility in th at are a of san ctio ns w here new 

technology fails to work? We did th at in the Clean Air Act. If there 

was a new technology, the com plia nce schedule , based upon certif ica ­

tion th at i t was a new technology wi th a reasonable cha nce of succe ss, 

as I recall, Mr. Chairma n, we gav e it a 2-year extension bey ond the 

com pliance schedule th at we are building into the new law.

Mr. D endy. Some kind of an extens ion to try the new techno logy 

would be a good idea, I thi nk.

Se nator D omenici. Or some kind of enforcement wa iver perh aps.

Mr. D end y. Yes.

Senator D om enici. Does any one else have any comm ent s on this?

Mr. Led be tter. I will agree with Mr. De ndy of Ca liforn ia. We 

need to cre ate as much incentive an d flexibility as possible. One good 

exam ple is in some pa rts of the co un try , of course, for ma ny years we 

actua lly h ad some re luctance and opposition on the p ar t of the r eg ulatory agencies influencin g the Fe de ral people on land app lications.

Now we are beginnin g to move in th at directi on. It is a cost-effective 

appro ach in ma ny cases in whi ch we have situatio ns, such as the 

gentlem an from New Jer sey cited. T hat is n ot an appro ach.

So w ha t we really need are those ince ntiv es, including the flexibility 

of the $9 billion itself, as well as the app lication of some cons tru cti on 

gr an t fun ds to go out and cre ate some new technologies, because I 

agre e wi th him , we hav e seen very little in the last 40 years .

Se nator D omenici. Any other com ments?

Mr. Adams. I agree with both of the gen tlem en at m y side. I think 

one of the problems in getting into the research and develop me nt of 

new tech nology is th at somehow Go vernme nt is never e xpected to fail.

Ev er y proje ct is expe cted to be a winner. I think an y legislation 

th at enc ourage s it has got to reco gniz e th at all of these un de rta king s 

will no t be successful. So th at there is a be tte r chance th at people 

will try som eth ing and no t be afr aid of ge tting stu ng with a failure.

Se na tor D om enici. That is a very good point. The po int I should 

ha ve m ade is t hat pr obabl y one o f t he real problem s in new tech nolo gy 

and R. & D. thrusts is th at the natio nal EP A makes the decision on 

whe ther o r no t it could be trie d.

I th in k you might be sug ges ting th at you are the re where the 

pro ble ms are and a little bit more of the risk tak ing ou gh t to be 

placed on yo ur back wi thou t significantly penalizing you for making 

th at individu al judgm ent.
57

We could not do tha t with immunity because there was a chance 

of politics and other things intervening. But it seems to me we can 

consider in the final markup some better balancing of where the risk 

> ought to be placed and therefore the decision to move ahead with a

new R. & D. effort.

I am pleased to remind you of that. I don’t have t hat in my amendment for this bill.

? Mr. Bardin. We should get credit for some innovation. The adaptation of mass production of liquefied oxygen seems to me at least a 

nice development which is actually under construction in the Middlesex plant and under construction in Linden and will be in the Passaic 

Valley.

Second, between EPA Washington and ourselves and other regions, 

one has been occasionally critical of lack of regional supervision. 

I think you should know that in region II they are pushing very hard 

for innovations in the case of sludge disposal.

Th at is an area, the area of sludge disposal, the disposal where 

planning has been funded by EPA and gives every indication tha t 

region II is anxious in the next few months to sta rt some sort of 

demonstration project and test at least one sludge disposal method.

I think one of the areas you might consider are innovations which 

are not capital intensive construction. Of course, in many of our 

Government programs, State as well as Federal, there is some glamor 

in putting up a lot of money to build something.

I mentioned septic systems. There is a large area in the country, 

and a large minority fraction of the population which can be served 

very well by septic systems, particularly if on the one hand you reduce 

the amount of wasteful water consumption in water rich places like 

New Jersey, as well as in arid places, and we can competently develop 

an operating mechanism to clean out those septic tanks on a timely 

schedule.

Th at requires manpower, foresight and management, but very little 

capital funds as compared to operating funds.

Similarly, the analogy of the sources of water pollution. People made 

enormous estimates of construction projects fairly well in the open, to 

deal with nonpoint runoff of city streets.

The question was raised tha t maybe it would be cheaper to sweep 

the streets. That was initially pooh-poohed as a possibility by the 

EPA experts, who want very much capital and high engineering 

» oriented projects. Yet there is low technology which perhaps ought

to be brought back into focus on a low capital basis to deal with some 

of our problems which are going to remain even after the first round 

of secondary treatment construction, which is very well.

* Senator Domenici. I think tha t is an excellent observation.

I would have one further comment and see if any of you agree with 

this. We are not having as much difficulty getting demonstration 

grant programs where it is purely an R. & D. thrust as we are for a 

demonstration program in the field for a part of the implementation 

of an ongoing program.

For instance, Mr. Chairman, there is a very exciting project in the 

State of New Mexico with one of our nuclear laboratories funded by 

three agencies: Agriculture, EPA, and ERDA. They are going to 

experiment with the use of nuclear radiation. They have done it in a
58

lab and they will take our sewage effluent, run it over radioactive 

materials and it will come out absolutely 100 percent clean from the 

standpoint of health.

The product then becomes usable for two things: fertilizers and v

literally for the feeding of animals.

They have funded this. It is an extremely optimistic one. But the 

point I make is that after they have demonstrated it in a small $15,000 

project, we run into the snag that when the city of Albuquerque or one »

of you were to try for $1.5 million grant to use this as part of a large 

facility, you cannot.

Tha t is when you run into the extremely traditionally oriented 

experts who won’t let you take the gamble. I think it is in that area that 

we have got to mandate some flexibility.

I have one last question. The gentleman from Georgia indicated 

tha t for rural areas, as I recall your statement, where you couldn’t 

afford the difficult municipal treatment sewage system, and the like, 

tha t you would like to see us get involved in a loan program. I think 

you mentioned fixed income people, and the like, and you probably 

couldn’t capitalize under the typical bonding approach.

Your statement seemed a bit inconsistent because then you said a 

loan program tha t would be geared to a reasonable charge to defer the 

loan. It seems to me th at if the charge would defer the loans, unless 

the loans are at some unusually low rate of interest, tha t you really are 

asking us to substitute for the lack of local ingenuity in forming the 

financing district to put together this kind of rural system. Did I read 

you right or wrong?

Mr. Adams. That was me. I was referring to those communities 

where a municipal system just cannot be economically developed.

People are now discharging into the waterways. State and Federal 

law both require that they treat. Cost of this treatm ent is extremely 

expensive. The capital investment for many of the small homes is too 

high.

My point was tha t perhaps we ought to look at some way to allow 

States to use some of their construction grant funds to finance individual systems and tha t the payback of this—I think it should be a 

payback—should be tied to what the people in the community are 

paving for their services. That would be the rate.

It would be some sort of a mortgage tha t goes with the property so 

tha t there would be assurance of getting it back but tha t the interest 

would be low, perhaps nonexistent, long-term and the amount being «

paid back would be comparable to what they would be paying if they 

were within a municipality there where capital investment is settled 

over 25 years by the municipality.

Senator Domenici. Why can’t the State of Maine do that? *

Mr. Adams. We can’t do it with construction grant funds.

Senator Domenici. Why not?

Mr. Adams. Because the community then would have to own the 

facility. I am not sure the community wants to own it, but rather just 

to give some sort of help to those people who need it to construct 

their own.

Senator Domenici. I have one last question, if you will permit me,

Mr. Chairman.

My present intuition—and tha t is all it is—is to support a 1-year 

$5-billion extension based upon a politically acceptable formula and
59

seriously consider the use of the 208 planning mechanism on an accelerated basis to mandate the planning and prioritizing by the States 

under some definition of what we would expect. The 208 planning

• mechanism would then feed back to us a kind of plan to prioritize 

need in the 208 planning region.

Does the notion make any sense? I was somewhat set back by the 

indication from the gentleman from Texas t hat this 208 planning has 

r not proceeded very rapidly for a number of reasons. Perhaps you

could comment on that as a concept. Maybe it has no relevance at all, 

but I would appreciate some comments on it.

Mr. Dendy. I don’t know about the others, but I would be verv 

disappointed to see you go back to a $5 billion level. But if that is all 

there is then that is all there is, of course.

From our standpoint we would like not to see you wait for 208 

planning to be done. Maybe we are further ahead than some, as far as 

the facilities planning aspect but tha t would just constitute a further 

delay and further inflationary costs. That we really don’t need to 

experience now.

On our basic needs for waste treatment, we know w hat we need in 

those areas.

As far as the other categories of needs for combined sewers and 

nonpoint source pollution, perhaps waiting for the 208 planning results 

would be of some help.

Back to the other subject you mentioned about rural systems. 

California has a lot of people. We are generally considered to be an 

urban State, but about 10 percent of our people don’t live in cities. 

Two million people have to be accommodated in rural settings. Th at 

is more than a lot of States have altogether.

We have the same kind of problem as other States of people not 

being able to afford collection systems. The collection system often 

costs two or three times as much as the treatment p lant to service it.

We are entering into a demonstration project this year in which we 

hope to look at alternatives to collection systems and alternatives to 

septic tanks in those areas. A lot of them are in the mountain areas 

where there is poor soil cover and septic tanks jus t don’t work very 

well. The result is t hat the septic tank development has had to take 

place in places where there is good soil classified as class I agricultural 

land.

We have several incentives for trying alternative collection systems.

• We hope that we will be successful in the next year or so in demonstrat- . 

ing that.

Mr. Ledbetter. Senator, if I may respond to a couple of points 

tha t you raised.

• We would be very reluctant and concerned about systems if 208 

were no t extended. For example, in our State where we have four of 

our estimates designated, yet they were not funded. EPA ran out of 

funds prior to funding those.

So at this point in time we really are just beginning to get prepared 

to deal with the 208 effort.

With the end of 1978 as a target date for EPA to renew, and so 

forth, we see using tha t approach on an interim basis as very much a 

problem for us in being able to proceed with the continuity we were 

talking about this morning.
60

Th e oth er thing, if I may touch on also the fuel aspects, first of all, 

for the benefit of the record , Senator Muskie , it migh t be good to 

po int ou t since I am from Georgia and our distinguished Se na tor’s 

am endm ent has been referred to this mornin g—inte res tin gly enough 

no t by me—I think if you will look at my stat em en t in the rec ord, 

my colleagues m ay have referred to th at , bu t I think it is u nfort unate 

the re has been some misunders tan din g regarding th at , in th at the 

formula for the actu al allo cation s formula itself in the T alm adge-N unn 

am endm ent originally—of cours e, th at am endm ent was chan ged 

along the way as well—th at was b ased on Mr. Tra in ’s form ula, which 

was 50 percen t on the b asis of population and 50 p ercent on the basis 

of categories 1, 2 and 4(b ), as he reco mmended it to the Congress in 

Fe br ua ry of 1975.

T hat was my rec om me ndation of our Governo r, which is very much 

akin to the type of for mula th at the gent lem an from Califo rnia recomme nded and the one, of course, th at AS IWPCA gro up has gone on 

rec ord as sup portin g the Tra in form ula.

B ut the problem we see on the local sit ua tio n is th at we hav e, as I 

me ntioned, over 450 local c ommu nities, we are now dea ling w ith those 

same com munities with the Federal Drink ing W ate r Act.

Th ey are faced with cons iderable de mands on them for their watering 

sewage systems. In ma ny cases, we are looking on the rep ort of those 

com mu nities for a minim um wa ter and sewer bill wi th a $20 or $30 

per mon th minimum in order to tak e care of the 25 perce nt Federal 

requ ire men t under the law an d get 25 perce nt and then get the ir 75 

perce nt Feder al gr an t and th en make the impro veme nts required to 

their w ater systems.

We are talk ing ab ou t minim um of $20 or $30 a mon th in Georgia 

mo st of those 450 comm unitie s who hav e 50 perce nt are minorities. 

We have ma ny older people who live in those com munities. All these 

groups have a very low fixed income . So when we tal k ab ou t a m inim um 

of $10, $20, $30 p er mo nth of water and sewer bill for the m to get the 

revenu es dow n in order to fina nce their share, I do n’t think th at the 

traffic will bear much more th an th at .

So it does require than we analy ze those situ ations very closely when 

we are looking at local governm ents in those kinds of situa tio ns and 

try to help them provide the sam e conveniences and nee ds and clean 

wa ter for the ir living as we do in situatio ns such as we do in At lanta 

or some of the more heavily po pu lat ed areas.

Se na tor M us ki e. Incid en tal ly, m ay I sa y with res pect to the N unnTalm adge am end me nt, I challenged the rig ht of my colleagues who 

served the inter est of th eir S tates, which is often an issue of th at k ind.

One of the difficulties of th at am endm ent was th at the com mitme nts ha d alread y been ma de to the State s for the c ur rent fiscal y ear. 

In States like Minneso ta, it is made.

So if you can only get half as mu ch as you were allo tte d, it struck 

me as ass erting the power of th e majo rit y a little harsh ly. It wa sn’t 

a change in the form ula down the road. I am no t pre jud ice d in wh at 

the Con gress ma y do in res pect to the res t of the formu la down the 

road, but its impact im me dia tely seemed to me to be a ra th er harsh 

applicat ion of the powe r of the majo rity.
61

On the num ber s, th at was Senat or Dominic i’s question, let me make 

this point. This pro gra m is growing very slowly. I can rem ember when— 

it wa sn’t so long ago—we were able to per sua de the Appr opriations Committee to come up with as much as $1 billion a yea r. At the pre sen t 

time, we are obligating at the rate of ab ou t $5 billion a yea r, and at 

the end of this fiscal ye ar we will have obligate d, with th at rate of 

obligation this year, the first $9 billion of the $18 billio n; $9 billion 

will be uno bligated. We are act ual ly exp end ing at the rate of $3.5 

billion, liquid ating those obligations at $3.5 billion a year this year.

So th at we are far behind the full comm itm ent of the original $18 

billion.

W ha t we are pro posing is add ing $5 billion to the uno bligated $9 

billion, which is $14 billion. So we hav e the quest ion n ot only how we 

allo cate the 5, bu t conceiv ably how we allocate the $14 billion and 

for over how long a period. Because th at $9 billion is in the period for 

which the program ha s expired, as y ou gen tleme n know.

We had autho rized $18 billion for 4 ye ars; 1975 was the last year, 

so the period for which th at $9 billion was origin ally autho rized has 

expired and we are sim ply spen ding it ou t un de r pressure from us at 

the fas tes t rate th at you can spend it ou t an d still make leg itima te 

and professionally justifi ed projects.

There has been an acceleration, bu t th at acc elerati on still leaves us 

with $9 billion of the original $18 billion unobligated. The annu al 

spending rate has been at the level of $2.5 billion. I think those are 

numb ers the comm itte e will take into con sidera tion. The staff tells m e 

th at those numb ers are som ewhat soft. I th ou gh t you might be in te reste d in havin g th at pers pec tive . Tho se are no t hard num bers.

Gentle men, we have had a good hea ring . I would like to hope th at 

each of you would ma ke yourselves available and help us as we proceed with the problem of try ing to find a via ble formula for allo cation 

and a sensible am ou nt of add itio nal au thorization and resolve the 

question to keep us going until we can ge t some of those question s 

answ ered. That is the na ture of the pro ble ms we face.

This is a Presi dential election year which has been cho pped up by 

two political con ven tions and subs tan tia lly reducing the leg isla tive 

time availab le to us. All of us hav e to tak e all of th at i nto account as 

we try to do wh at we must do min imally to keep this going.

I think all of us here presen t this mo rni ng sha re the co mmitm en t 

of keeping this thi ng m oving along wi thou t ab ru pt i nterruption att ri b ­

utable to a sit ua tio n in which we find ourselv es.

I un derst and th at the re is also a st at em en t of the witness fro m 

Virg inia to be included in the record at this po int . W ith ou t objec tion, 

it will be entered.

[The statem en t refe rred to and resp ons es to wr itten qu estio ns 

follow :]

74 -536 0 - 76 - 5
62

S T A T E M E N T

FOR TH E

CO MM ON WEALTH OF VIRGINIA “

TH E VIRGINIA ST AT E WA TE R CONTROL BO AR D IS VI TA LL Y

C O N C ERNED WI TH THE FO RM UL A US ED FO R ALLOC AT IO N OF FU ND S FO R

C ONSTRUCTION OF MUNICIPAL SEWERAGE SY ST EM S. THE C OMMONWEALTH

HA S M OVED RA PI DL Y TO CO NSTRUCT MU NICIPAL SE WE RA GE SYSTE MS AN D

IS CONCERNED TH AT TH IS MOM E N T U M NO T BE DI MI NI SH ED . A TA BL E

SHOWI NG TH E ST AT US OF V IRGINIA'S CO NSTRUCTION GR AN TS PROGRAM

IS S HOWN IN TA BL E NO. 1 ATTAC HE D. VI RG IN IA , UN LI KE SO ME 

OT HE R ST AT ES , HA S HA D REASONABLY GO OD SU CC ES S IN PROCESSING 

A P P L ICATIONS TH RO UG H THE ENVIRONMENTAL PR OT EC TI ON AG EN CY (E PA ) 

AN D ANTICIPATES TH AT AL L FU ND S WI LL BE CO MMITTED BY S E P T E M ­

BER 30, 197 6.

SE VE RAL ALLOCA TI ON FORMULAS HA VE BE EN PR OP OS ED DU RING

THE PA ST FE W YE AR S, EA CH OF W HICH WO UL D BE SUPPOR TE D BY SOME " 

ST AT ES AND RE JE CT ED BY OT HE RS . IN MA NY IN ST AN CE S IT HA S

SE EM ED TH AT THE CR IT ER IA USED FO R JU DG IN G TH E FO RM UL AS WA S

"H OW MUCH WI LL WE GE T? " STATES MU ST BE FO RG IV EN FO R TH IS 

AT TI TU DE , FOR AL TH OU GH PU BL IC LA W 92 -5 00 SE TS NATIONAL GO AL S,

EA CH ST AT E IS PR IM AR IL Y C O N C ERNED WI TH THE RESOLU TI ON OF

PR OB LE MS WI TH IN ITS OW N BO RD ER S, AN D KN OW S TH AT TH ER E WI LL NOT

BE M O N E Y EN OU GH FOR AL L PR OJ EC TS .

TH E ST AT E WA TE R CONTROL BO AR D OF VI RGINIA HA S MA IN TA IN ED ,

AN D CONTINUES TO SU PP OR T, TH E PO SI TION TH AT TH E ALLOC A T I O N

” PnepaAed by th e V ir gin ia S ta te Uatea Co nta ot Boand &on the. o ^ i e l a t

he al in g le eo id , Se na te Pub lic Uoaki Committee Hea ling on a ll o c a ti o n

6onmula& (Joa zeweaage con& tnuc tlo n g ia n ti funding to ita te a ,

Way 25, 1976.
63

COMMONWEALTH OF VI RG INIA

FORMULA SH OU LD , ID EA LL Y, BE BA SE D ON TH E NE ED S ASSESS M E N T AS 

PROVIDED IN SE CT IO NS 205 A ND 516 OF PL 92-5.00 (T HE AC T) . TH E 

NE ED S ASSESSMENT SH OU LD C O N TINUALLY PR OV ID E UPDATED ESTIMA TE S

OF CONSTRUCTION CO ST S FOR C OMPLIANCE WI TH TR EATMENT RE QU IR EMENTS 

IN TH E ACT. TO PR OD UC E A V A L I D NE ED S AS SE SS ME NT , TH ERE MU ST

BE RE AD Y AC CE SS TO AP P L I C A B L E DATA. PL AN NI NG EF FO RT S U N D E R ­

TA KE N BY TH E ST AT ES HA VE A DIRECT BE AR IN G ON TH E O UTCOME OF

TH E NE EDS AS SE SSMENT IN TH AT TH EY PR OD UC E TH E NECESSARY DATA.

IF PL ANNING EF FO RT S SU CH AS TH OS E DE SC RI BE D IN SECTIONS 208

AN D 30 3( E) OF TH E AC T AR E NE GL EC TE D, TH E DA TA PRODUCED IN THE

NE ED S ASSESSMENT IS NOTHING MORE TH AN A GU ES S. ON TH E OT HE R

HA ND , IF A ST AT E HA S A GOOD PL ANNING SY ST EM , SU CH AS VI RG IN IA 'S ,

TH E SU RVEY PR OV ID ES A RE A S O N A B L Y GO OD IN DI CA TI ON OF WH AT IS

NE ED ED A ND WHEN.

IN TH E RE AL WO RLD OF WA T E R PO LL UT IO N CO NT RO L, IT HAS

BE CO ME APPARENT TH AT NO T AL L ST AT ES HA VE DE VELOPED TH EI R

PL ANNING PR OC ES SE S TO A PO IN T WH IC H WI LL SU PP OR T A RE LIABLE

"N EE DS ASSESSMENT." TH E ST ATE EF FO RT S TO CONSTRUCT RE LIABLE

NE ED S ESTIM AT ES HA VE BE EN FURTHER FR US TR AT ED BY EP A WORK

SC HE DU LE S, UN WI EL DY FO RM S, IN FL AT IO N, CO NFUSION OV ER MINIMUM 

TREATMENT LE VE LS , AN D ABSENCE OF A MEANINGFUL DECISION ON

HA NDLING OF TO XI C AN D H A Z ARDOUS SU BS TA NC ES . EV EN TH E CO NG RE SS

CONTRIBUTED TO TH E GENERAL CONFUSION TH RO UGH HR 1192 8, WH IC H

RE QUIRED TH AT ST AT ES "ESTIMATE" TH E CO ST OF TR EATING URBAN RU NO FF .

EA RL Y IN THE YE AR 19 75 TH E ASSOCIATION OF ST AT E A N D IN TE RST AT E WA TER PO LL UT IO N CONTROL ADMINISTRATORS GA VE SUPPORT TO A

FO RM UL A, WH ICH AL SO HA D EP A' S SU PP OR T, WH IC H WOULD A L L O W A 50% 

FACTOR BASED ON Tr E POPU LATIO N OF THE STAT E ANL A
COMMONWEALTH OF V IR G IN IA

50% FA CT OR BA SED ON CA TE GO RI ES I, II, AN D IV- B OF THE 197 4 

NE ED S ASSESS ME NT . THIS FO RM UL A WA S PROPOSED FO R US E UN TI L

198 0 WH EN A NEW NE ED S ASSESS ME NT W OULD BE CO ND UC TE D. THE

VI RG IN IA WA TE R CO NT RO L BO AR D O FFERED ITS SU PP OR T FOR THIS

PR OP OS AL IN MARCH OF 1975 , R E C OGNIZING TH AT IT WA S AN ACCEP T A B L E

CO MP RO MI SE . TH E BO AR D HAS NO T CHANGED ITS PO SI TI ON .

VIRGINIA WO ULD AL SO SU PP OR T A PR OPOSAL SU CH AS TH AT

IN CO RP OR AT ED IN HR 956 0, CURREN TL Y UN DER HO US E CO NS ID ER AT IO N.

TH E HO US E FORMULA IS BA SE D 25% ON TO TAL NE ED S (N EE DS SU RV EY 

CA TE GO RI ES I, II, I 11-A, III-B , IV-A, IV-B, AN D V), 50% ON 

PA RT IA L NE EDS (N EE DS SU RV EY CATEGORIES I, II AN D IV-B) , AN D 

25 % ON PO PU LA TI ON . WE WO UL D HA VE LI TT LE QU AR RE L WI TH AN Y 

FO RM UL A WH I C H GA VE NO MO RE TH AN A 50 % FA CT OR FOR PO PU LA TI ON .

IT IS EXPECTED TH AT OV ER TH E NE XT SEVERAL YE AR S TH E GR AN TS

PR OG RA M WILL SH IF T GR AD UA LL Y FR OM A POLLUTION-ORIENTED TO A

POPULATION-GEARED SY ST EM AS MAJOR POLLUTION PR OB LE MS AR E

RE SO LV ED . FO R TH IS RE AS ON , A FORMULA WH IC H GI VE S SO ME WEIGHT 

TO POPULATION WI LL AL LO W PO LLUTION AB AT EM EN T, IN OR DE R OF 

CR IT IC AL IT Y, UN TI L WA TE R QU AL ITY GOALS AR E ME T AN D AL LO W

POPULATION TO BE CO ME THE PR IM E FACTOR AF TE R TH AT TIME. IT

MA Y AL SO BE NO TE D TH AT VIRGINIA'S PR IO RI TY SY ST EM FOR D I S T R I ­

BU TI ON OF FU ND S AT THE LO CA L LE VE L IS AL SO GE AR ED TO TH IS

SA ME SH IFTING OF PR IO RI TI ES .

IT HA S BE EN ST AT ED TH AT WE FA VO R A FORMU LA WI TH TH E

MAJORITY OF WE IG HT GI VE N TO NE ED S. HO WE VE R, WE SA Y TH IS WI TH

TH RE E RESERV AT IO NS :
65

COMMONWEALTH OF VIRGI NIA

1. IF THE NAT ION IS TO USE A NE ED S- WE IG HT ED FORM ULA,

WE MU ST BE REALI STI C AND REQU IR E RELIA BLE UP DA TI NG

OF DA TA FRO M ALL STAT ES.

2. NEE DS DA TA SHO ULD NOT INC LUDE ES TI MATED COS TS FOR

CO RR EC TI ON OF URB AN RUNO FF. THE TEC HNICAL BAS ES

FOR NE EDS ESTIM ATE S IN THIS AR EA ARE NOT YET

SU FF IC IE NT LY PRE CIS E TO PR ODUCE UNI FORM ESTIMA TES .

3. NE EDS DA TA SHO ULD REFL EC T THE COS TS OF REMOV AL OF

TOX IC AN D HAZ ARDOUS SU BS TANCES IN M UNICIPAL WAS TE

STR EAM S. WE SUG GES T AN AD DI TI ON AL NEEDS CAT EGO RY

FOR THI S ELEM ENT.

IN SUP PORT OF THE THI RD PR OP OS AL ABO VE, VI RG IN IA HAS

DEV ELOPED PR EL IM IN AR Y DAT A TO ILLUS TRA TE THE COS TS FOR RED UCI NG

EFF LUE NT TO XI CI TY AS COMP AR ED WIT H OTH ER NEEDS. VIRGINIA'S 

TOT AL NEE DS TH RO UG H 1990 (197 9 NEE DS SURV EY ) EQU AL $1.9 BILL ION. 

CAT EGO RIE S I, II, AN D IV-B TOT AL $907 MI LL IO N FOR THAT SAME 

TIME FRAME. THE FY 1976 305( B) REP ORT (WATE R QUA LITY INV ENT ORY ) 

FOR VI RGINIA REPO RT S CONS TR UC TI ON FUN DIN G NE EDS OF $823 MILL IO N 

THROU GH 1985 (SEE TA BL E NO. 2 ATT ACH ED) . OF THIS TOTAL,

$622 MI LLION IS NE ED ED TO FUND TO CO MP LE TI ON ON-GOING PRO JEC TS 

AN D $201 MILL IO N IS NE ED ED FOR NEW PRO JECTS TO MEE T RE QU IR EM EN TS 

OF THE ACT (THE $823 MI LL IO N EXC LUDES SCHOO LS, STA TE FAC ILI TIE S, 

TRI CKLING FILT ERS, AN D ST AB IL IZATION PONDS, EX CEPT TO MEET 

WAT ER QUALI TY LI MITED STA NDA RDS ). IN COM PARISON, ACH IEVEMENT 

OF NON-T OXI C EFFL UE NT GOA LS WOU LD INC REASE CO STS IN V IRGINIA 

BY ABO UT $900 MIL LION. THE SE COS TS INVO LVE UP GR AD IN G EXIST ING
COMMONWEALTH OF V IR G IN IA

M UNIC IP AL PLANTS WITH MORE THAN 5 0 0 ,0 0 0 GALLONS PER DAY FLOW 

TO ADVANCED WASTE TREATMENT WITH MINE RA L AD D IT IO N , CO AGULATION , 

FIL TR A TIO N AND CARBON AB SO RP TION . V IR G IN IA ’ S EXPERIE NCE WITH 

KEPONE IS CERTAIN LY SUGGEST IVE OF THE NEED FOR CAREFUL CONSID ER ATI ON OF TH IS ASPECT OF WATER PO LLUTION CONTROL.

THE NA TIO NA L WATER QUALITY COMMISSION HAS RECOMMENDED 

THAT TO X IC IT Y CONTROLS BE IMPLEMENTED NO LATER THAN OCTOBER I , 

1 9 80. EPA IS DEVELO PING TREATMENT STANDARDS FOR TO XIC 

ELEMENTS AND W ILL PROBABLY COMPLETE THEM BEFORE 19 79. EARLY 

DEVELOPMENT OF NEEDS DATA FOR CONTROL OF TO XIC SUBSTANCES SEEMS 

A R E A LIS T IC AND PRUDENT UN DE RT AKING.

IN SUMMARY, THE COMMONWEALTH OF V IR G IN IA WOULD FAVOR AN 

AL LO CA TION FORMULA WITH PRIME CO NSIDE RATIO N GIVE N TO NEEDS AND 

SECONDARY WEIGHT FOR PO PU LA TION . THE STATE WATER CONTROL BOARD 

HAS HIS TORIC ALL Y SUPPORTED TH IS CONCEPT, AND WOULD EN TH USIAS ­

TIC ALL Y SUPPORT A FORMULA SUCH AS THAT INCORPORATED IN HR 9 5 6 0 , 

WHICH WOULD GIV E CATEGORIES I , I I AND IV -B OF THE NEEDS DATA 

THE GREATEST WEIGH T. THE REASON FOR TH IS PREFERENCE IS THAT 

THE COST ESTIM ATES FOR THESE THREE CATEGORIES ARE THE MOST 

RELIABLE OF THE SEVEN BECAUSE OF THE A V A IL A B IL IT Y OF LONG-TERM

DATA. WE PROPOSE THAT A NEEDS CATEGORY BE ES TA BL ISHE D FOR

CORRECTION OF TOXIC ELEMENTS TO BE USED IN THE NEXT NEEDS SURVEY 

UPDATE. WE SUGGEST THAT MORE AT TE NTION BE GIVE N TO ACCURATE 

UPD ATING OF THE B IE NN IA L NEEDS SURVEY. WE OPPOSE INCLU SIO N OF 

COSTS FOR URBAN RUNOFF CORRECTION IN THE NEEDS ASSESSMENT U N TIL 

ACCURATE NA TIO NW IDE DATA IS A V A IL A B LE .
~Tfi£X£ NO. I

FUTURE FUNDING NEEDED

TO COMPLETE CURRENT

OM-GOING projects

Current

Project Status** No.

Total Estimated

Project Costs*

Previous Funding

Provi ded*

Future Funding

Needs*

Step I 63 $ 351.5 $ 7. 9 $399.1

Step II 17 110.8 12 .0 98 .8

Step III 11 598.1 369.0 179.1

TOTALS 91 $1 ,010 .9 $388.9 $622.0

In mill ions-of-dollars

Projects on FY 1976 

PRIORI TY LIST
//ABLE Ho. 2-.

PR IO R CO NS TRUC TIO N COST AND FUTURE HEEDS

BT STATE KATER CONTROL BOARD REGIO NAL OFFIC E

N o r th e r n
JOE D. TANNER

Commissioner

Department of Natura l Jlesourres

E N V IR O N M E N T A L P R O TE C TIO N D IV IS IO N

27 0 WASHINGTON STREET S W 

ATLANTA GEORGIA 30 334

J. L E O N A R D LEDBETTER

Division Director

June 11, 1976

Honorable Edmund S. Mu skie, U.S.S.

Chairman, Subcanmit tee o n E nv ironmental Pol lut ion 

Un it ed States Senate

Cann it te e on Public Wor ks 

Was hington, D. C. 20510

De ar Sena tor Muskie:

We s inc erely a pprec iat e th e opp ort unity of testif yin g b efor e your suboo rmittee o n Ma y 25, 1976, on t he s ubject of allo tting the $5 b il li on for 

construction grants aut horized by the Public Wor ks Cannittee.

Att ached is Georgia's re sp on se t o the list of qu es tions p re pa re d b y your 

staff on this subject. In a dd it io n to t hese questions, my st aff rec eiv ed an 

additional que sti on by telep ho ne f ro m Mr. Jo hn Fresh ma n o n J un e 2, 1976. That 

qu es ti on is: What is Geo rg ia 's reactio n t o the allocation of t he a uthorized 

$5 b il li on on a first cane, fi rs t ser ved basis?

In response to that, we mu st say tha t Ge orgi a is o pp osed t o such an 

arrang em en t beca use it wo ul d b e exc eed ingly inequitable. Th e al lotment of funds 

wo ul d n ot be based on needs, no r population, nor a co mb ination there of; it wo uld 

be bas ed almos t enti rel y o n e ac h Sta te' s r ead iness to proce ed wi th Step 3 grants. 

Re adiness d oes not ref lec t t he fa ct th at ma ny Sta tes hav e seri ous, legi timate 

wa te r p ollution con trol nee ds wh ic h can, should, and wi ll be serv ed if suf ficient 

time is given to satis fy the req uirements of the grants r egulation s. Readiness 

does n ot reflect the fact tha t th e g ran ts reg ulations, guidel ine s, an d p olicies 

are n ot administered evenly by EPA from Reg ion to Region, wh ic h h as res ult ed in 

san e Sta tes bein g ab le to mov e proj ec ts to rea din ess for S te p 3 grants more 

qu ic kl y than others. A fi rst can e, first served al lot ment pro ce du re wo ul d igno re 

the fact that Sta te agen cies, co ns ul ti ng engi nee rin g firms, eq ui pm en t 

manufac tur ers , and construction com pan ies h ave pr ogr anmed t o mo ve the grant s and 

ge t tre atment facilities built o n ce rta in sc hedules a t ce rtain levels of funding, 

and that there must be sta bility i n t his enti re pro cess for i t to function 

pro perly. A fir st ccme, fir st se rv ed al lot men t woul d b ring chaos t o t hese 

elemen ts of the econo my in many a re as of the country.

We hope tha t ou r o aim ent s w il l be of use t o you and y our sta ff in 

de ve lo pi ng a fair and eq uit able allo tm en t system. Aga in, we ap prec ia te the 

opport un it y t o make the se car men ts. If we can be of a ny f urt her assista nce, 

pl ea se do not hesit ate to c on ta ct us.

Sincerely,

a.

h/^i JTJ.:mdg 

5®® Enc losure

Direct or

Ledbetl
70

GEORGIA'S RESPO NSE TO CttW TIT EE ST AFF QU ESTIONS 

FO LLOWING HEARIN G OF MAY 25, 1976

Issue 1 : Adequacy of the $5 Billion Construction Gr ant Author iza tio n

A. "What will be t he effect under the vario us for mul ae that have bee n 

pro pos ed o n your State? Hew will that e nable yo u to continue, increase 

or diminish t he pace of your program? "

Three bas ic formul ae have be en pr oposed: all otm ent bas ed 100 % o n

Catego ry I, II, and IVB needs; allot men t based 100% on 1990 popula tion; 

and allotme nt 50% on needs and 50% on pop ulat io n (Russell T rai n fo rmula). 

Geo rgi a has 2.2% of th e n atio n's I, II, an d T VB nee ds an d 2.2% of the 

nation's 1990 popu lation; therefore, its all otment will b e es sen tia lly 

the same under all thr ee formulae. We still fee l tha t the R uss ell Train 

formula is m ost fair and equi table to all States. Georgi a's grant pr ogr am is pr esently geared t o obligate appro xim ate ly $125 mil lio n per year, 

so the $110 million we wou ld receive (2.2% of $5 billion) wo uld a llow us 

to c ont inu e the pace o f t he progra m wit h sli ght dimin ishme nt.

B. "Will y ou use al l o f y our allotment un der the se form ulas ? Und er whic h 

formulas wi ll you not use all your a llo tme nt? "

Al l o f G eorgia's allotment will be use d und er an y of the prop ose d 

formulae.

C. "If yo ur allotment is inadequate to ma in ta in you r pres ent pace how muc h 

more wou ld be ne ede d? Is there ano the r wa y of giv ing your Stat e an 

adequ ate allotment rath er than rais ing th e total ?"

Georg ia' s a ll otment und er the formula e n am ed in A. above wo ul d gene ral ly 

be ad equate for F.Y. 1977. We mus t r eit era te th at an aut hor iza tio n of $5 

to $7 billion per ye ar for five year s woul d b e nee ded t o satisfy our Categ ory 

I, II and IVB needs. We could expand t he p ro gr am to obliga te at the rate 

of about $150 mil li on pe r year if m ore mo ne y wer e availa ble. Ade qua te allot ­

ment ca n be rrade by funding the program for se ver al m ore years.

D. "How muc h enp loyment wil l b e g ene rat ed in yo ur state b y your al lot men t 

of the $5 bill io n do lla rs ass uming the for mul a in ex istence now?"

It is our understan ding from EPA and the Utility Cont ractor s As soc iat ion s 

tha t on a n ation al average, about 2 5,000 p ri mary jobs (on-site) are cre ate d 

by ea ch bil lio n dollars of expenditure, and an oth er 25,00 0 jobs are cre ate d 

off -site as secondary effects. Assum ing th e for mul a i n exi ste nce no w for 

all ocation of F.Y. 1976 funds, Georgi a would rec eiv e $65.4 million. This 

amoun t p lus the local share o f funds w ou ld cr ea te a total of about 4350 jobs.
71

E. "What is the curr ent rate of infla tio n o n the constr uct ion i ndu str y in 

your state? Do yo u ex pec t that rate to con tin ue at that level ? Fo r 

ho w l ong? Ho w will that aff ect your abil ity t o cons tru ct projects ?"

The current ra te o f i nfl ation in t he c ons tru cti on indust ry in Geor gia 

is 9.0%. We e xpect it to continue at that level inde finite ly and to pro portiona tel y hinder o ur ability to construc t projects.

Issue #2 : Vali di ty of Needs and Po pulation as Basis for Al lot men t

A. "How reliable do you consider the fig ure s that yo u subm itt ed to the 

Env iro nmental Pro tect ion Age ncy i n a cco rda nce with eac h of th e nee ds 

surveys tha t have been conduc ted s ince pa ssa ge o f the 1972 A ct? Wh at 

were t hese figure s base d upon?"

The 1974 N eeds Survey f igures submi tte d are qui te reli abl e for ur ban 

are as (Cities an d counti es with p opulation exc eed ing 10,000) and ar e less 

rel iab le for sma lle r ccmrnmities. Ma ny of the figur es for larger ccm nun iti es 

were based on rep ort s a nd asses sme nts b y the c ons ult ing engine ers of those 

comm unities, wh il e those for smaller cc mnu nit ies were pre par ed b y State 

staff eng ine ers usi ng E PA guidanc e a nd cost curves. The survey d ata are 

as goo d as the EPA guidance an d cost curves.

B. "Did yo u make an effor t to submi t onl y actual needs w hich met t he cri teria 

for c ost-ef fec tiv ene ss of Sectio n 201 of the Act? "

Yes, such an effor t was made, insofar as it co uld b e done wi th av ail abl e 

res ources a nd within EPA guidance. As c ost -ef fec tiv ene ss is de fin ed today, 

none o f t he work done in th e pr evi ous tw o ne eds su rvey s wo uld qual if y a s a 

true cost-ef fec tiv ene ss analysis. Again , tha t is a f unct ion o f E PA guidance.

C. "Do you feel that all otment of the funds on the basis of population would 

pro vide some state s with more mo ne y than they eit her nee d or c ould use?

Do y ou feel that allotment on t he basis of needs wou ld provi de Sta tes 

wi th mor e money than they eit her n ee d o r c an use? If in fact th e needs 

sur vey s that ha ve been don e are unrel iab le how ca n a formula wh ic h us es 

th em in p art be justified?"

Ou r di scussions with other St ate s an d our rev iew of p ast ne eds surv eys 

make us be lieve that every Stat e can use all the mo ney it is allotted u nder 

any reasonable formula. If pa st needs surv eys are unrel iable , the ir use can 

be j ust ifi ed b y usi ng onl y the m ost reliabl e porti ons t hereof (generally 

conceded to be Cat egories I , II, IV B) , and by using those nee ds as o nl y p art 

of the for mula (such as the Train f or mu la ).

D. "Ho w ha ve yo ur yearly all otm ent s cha nge d in t he four yea r ex perience wit h 

the 1 972 Ac t? What has cause d these changes?"

Georgia's allo tments have i ncr eased eac h year ($19.5 mil lion i n F.Y. 1973 

$29.2 mi ll io n in F.Y. 1974, $76.2 mi ll io n in F.Y. 1975, and $117.8 milli on 

in F.Y. 1976) but have been unpredictable . This va ria bil ity has be en due, 

obv iously, to the earlie r impoun dme nt o f funds by the Pr esi den t a nd to the 

cha nging a llotment formulas.
72

Issue #3 : Dis tri bution of Rema ining F.Y. 1976 Funds If No Addi tio nal Fu nds 

Are A uthor ize d for F.Y. 1977.

A. "If no ne w auth orization is m ade av ailable vrould yo u f avo r real lot men t 

among the Stat es? Wha t formula wo ul d yo u propo se b e u sed for tha t 

reallo tme nt? Wou ld you pref er using th e u nob lig ate d mon ey to be d istri but ed to specific projects o n a fi rst c cme/fi rst serve basis?"

Geo rgia do es no t favor a r eallotm ent amo ng the Sta tes if no n ew autho rization is m ad e available, and unob ligated mo ney sh oul d not be d istri but ed 

to project s o n a first come, first ser ve d basis. The F.Y. 1976 all oca tio ns 

are, by existing Federal regulations, av ailable to the States un til the e nd 

of F.Y. 1977 an d must remain so. The fa ct th at m os t St ate s ha ve no t ye t 

obl iga ted all the ir F.Y. 1976 a llo catio ns an d wi ll no t ha ve com ple ted t hat 

task until the lat er part of F.Y. 1977 is no t t he fault of the S tat es or the 

gra nt applicants. It takes two to four ye ars to move a project , dep ending 

on complexity, fr om the prea pplication c onf erence to the S tep 3 awa rd due 

to exoess ive EPA red tape. Pla nning for c urrentl y av ail abl e funds needed 

to begin tw o to four years ago, bu t in ma ny cases thi s c oul d n ot be d ene 

du e to the inp oun dment of funds and u ncertainty of futur e funding levels. 

Variability of EP A's adm ini stration of t he g ran ts p rog ram fr om Regi on to 

Reg ion also gi ves some States an u nfa ir advanta ge o f r eadines s o ver others, 

if a f irst come, first served a ppr oac h is used. Giv en until the en d of 

F.Y. 1977, we be lieve that all States wil l obl iga te c urr ent ly ava ila ble 

funds. A reallotment at this tine w ou ld b e insane - th is progr am has had 

too many shock s already.

Issue #4: Pro blems w it h Ge tti ng Ou tla y Fu nd s to Pay Gran tee s

A. "Are y ou exp eriencing a shortage of fun ds to mak e p ayme nts to con tra cto rs? 

Fo r wh at re asons?"

Yes, Ge orgia is e xperie nci ng a shortage o f funds to ma ke grant payments.

The r eason is that EP A Reg ion IV is a pparently o ut of mo ney .

B. "Has EP A co ntacted cities in you r St ate to ask th em to wit hhold ma king 

paymen ts or to tell yo u that the y a re go in g to wit hho ld making paym ent s 

on contracts ?"

Yes.

C. "Do you hav e an y indication that th e o utlay figure s sug ges ted by E PA will

be ade quate for y ou in the c omi ng mo nth s, esp eci all y be twe en n ow an d June 30? 

Bet ween June 30 and Octob er 1? Af ter Oct ober 1?"

No.

D. "How can similar pr oblems be p rev ented i n the future?"

Simila r problems ca n be av oided b y b et te r pl anning on the part of EPA, 

the Tre asury D epartment, and the Congress. Th e Congr ess s houl d auth ori ze a 

set level of funding each yea r for a pe riod of several years, and the funds 

should be allocated by one equit abl e for mul a for as many of those yea rs as
pos si bl e. EPA, with the co op eration of the S ta te s, can then sch edu le a n ti ­

ci pa te d gr an t payment le v els , and th e budget fo r th e program can be se t from 

th es e pro je ct io ns. No nan ip ul at io ns of the auth ori za tions, allo tm en t 

formula, and budget should be allow ed by any par ty .
TEXAS WATER QUAL ITY BOARD

J DOUGLASS TOOLE

CHAIRM AN

M E FROST

FRAT1S L. DUFF .M D

CLAYTON T GARRISO N

REN RAMSEY

JAMES M ROSE

HUGH C YA NTIS. JR

EX EC UT IVE DIR ECT OR

PH (SI 21 4TB-2RBI

1700 NORTH CONGRESS AVE

PO BOX 13246 CA PIT OL ST AT ION 7B711

AU STIN. TE XA S

Ju n e 2, 19 76

S e n a to r Edmund M us ki e 

C hair m an, Subco m m itte e on 

E n v ir o n m e n ta l P o ll u tio n 

S e n a te P u b lic Works Com m itte e 

W a s h in g to n , D.C . 20 51 0

D ear S e n a to r M usk ie :

Tha nk yo u fo r th e k in d re m a rk s in y o u r l e t t e r o f May 26, 1976, 

w it h re g a r d to th e S ta te o f T e x a s ' te s tim o n y b e f o r e th e Su bc om ­

m itte e on E n v ir o n m e n ta l P o l l u t i o n . I ho pe t h a t we c o n t r i b u t e d 

so m ew ha t in th e d e l i b e r a t i o n s underw ay w it h r e g a r d to th e l e v e l 

o f fu n d in g f o r th e T i t l e I I c o n s t r u c t i o n g r a n ts pro gra m d u rin g 

f i s c a l y e a r 19 77 an d th e a llo tm e n t o f th o s e fu n d s .

I am e n c lo s in g t h i s A g e n cy 's r e s p o n s e to th e w r i t t e n q u e s tio n s 

w hic h yo u re q u e s te d be a n sw e re d an d ho pe t h a t th e y p ro v id e som e 

i n s i g h t in t o o u r s i t u a t i o n h e re in T e x a s.

A g a in , th a n k yo u f o r th e o p p o r tu n i ty yo u gav e us in a ll o w in g 

o u r te s tim o n y to be h e a rd by th e S u bcom m it te e. I f I can be o f 

an y f u r t h e r a s s i s t a n c e , p le a s e do n o t h e s i t a t e t o c a l l on me.

S in c e r e ly ,

jff ack R. F ic k e s s e n 

A s s i s t a n t t o th e 

E x e c u ti v e D ir e c to r

E n c lo s u re
75

TEXAS

1. ISSUE: Adequacy of the $5 billion dollar construction grant

authorization.

EPA initially requested from OMB $7 million dollars for construction

grants based upon the amount available for allotment (release of impounded funds) in FY 1976. The Committee settled on $5 billion with

tKe understanding that it would provide sufficient funds to each State

T5r them to continue their program at the present pace during FY 19777

Question: What will be the effect under the various formulae that

have been proposed on your State?

Answ er: The State would receive the following percentages under the 

various formulae:

1. 1990 population — 5.33% of total 2. 50% population/50% needs (Cat. 1, 2, 4b) — 4.85% of total

3. 50% partial needs (Cat. 1, 2, 4b), 25% total needs,

25% population — 4.27% of total

4. 100% partial needs (Cat. 1, 2, 4b) — 4.33% of total

5. 100% all needs — 1.53% of total

Question: How will that enable you to continue, increase or diminish

the pace of your program?

Answer: Because of the small amount of funds Texas has been allotted

since the passage of PL 92-500, any of the funding mechanisms other 

than 100% of all needs (Categories 1 - 6 ) would provide an increase 

in funds utilizing a total of $5 billion.

Question: Will you use all of your allotment under these formulas?

Under which formulas will you not use all your allotment?

Answer: Yes, we currently have in excess of $750 million in projects

on our priority list and could use all of any allotment up to that amount 

of money. None of the proposed formulas would give Texas enough to 

meet the projects which we have on our priority list.

Question: If your allotment is inadequate to maintain your present

pace how much more would be needed?

Answ er: As was explained earlier, any allotment formula except 100%

of all needs would provide enough money to maintain our present pace 

because it has slowed so much; however, it would not come close to 

meeting our priority list of projects.

Question : Is there another way of giving your State an adequate

allotment rather than raising the total?

Answer: Yes, a reallocation of the unexpended $9 billion which was

allocated to the States in January by the EPA.
Question: How much employment will be generated in your state by your 

allotment of the $5 billion dollars assuming the formula in existence 

now?

Answ er: None, because the present allotment formula would not increase

the amount of dollars to the State. In fact, because of inflation, it 

would be less than what we have received in the past.

Question: What is the current rate of inflation on the construction 

industry in your state?

Answ er: The current rate of inflation for the construction industry, 

is approximately 10% per year in Texas.

Ques tion : Do you expect that rate to continue at that level?

Answer: It is expected to remain at that level.

Quest ion: For how long?

Answ er: The expected continuance of the 10% rate is unknown.

i

Question : How will that affect your ability to construct projects?

Ans wer: If the funding levels remain stable each year and inflation

continues it will penalize our program in two ways:

1. improvements in water quality would slow, and

2. the total effort will cost more to complete.

ISSUE: The proposals that have been offered for allotment of the

$5 billion dollars are either needs-based or population-based o r~

some c o m fa^n a ti°n .thereof. Much of the discussion of the witnesses

will center on the validity of the needs approach and the validity

of the population approach. In that regard the 1972 Act represented

a departure when it moved to a needs based formula from all of the

pre-existing acts which distributed money on the basis of population.

Question: How reliable do you consider the figures that you submitted

to the Environmental Protection Agency in accordance with each of 

the needs surveys that have been conducted since passage of the 1972 

Act? What were these figures based upon?

Answer: The 1973 Survey conducted by the EPA did not reflect the 

true needs due to the limitations placed upon the reporting entities 

in the guidelines. The 1974 Survey allowed the maximum possible 

needs without specific consideration of developed basin/areawide plans.
77

Question; Did you make an effort to submit only actual needs which met the criteria for cost-effectiveness of Section 201 of the Act?

Answer: The survey guidelines required the cost-effective analysis and Texas complied to the best of our ability. It is not felt that this requirement would significantly change th ^ cost of the needs 

reported except under Category 6.

Question; Do you feel that allotment of the funds on the basis of population would provide some states with more money than they either 

need or could use?

Answer: At some point in time it would possibly occur that this might hap pen; however, the same situation could exist under the needs approach. In either case, the law has a provision for reallotting 

unobligated funds if they are not used.

Question: Do you feel that allotment on the basis of needs would provide States with more money than they either need or could use?

Answer: This is a possibility — the same as could exist by allotting funds on a population basis. In fact, we feel that a portion of the $9 billion which was allotted in January on the basis of "needs" will be subject to reallotment because in some cases, states which received the bulk of that money will not be able to spend it fast enough.

Questio n: If in fact the needs surveys that have been done are unre liable, how can a formula which uses them in part be justified? 

Ans wer : The State of Texas feels that it cannot be justified.

Question: How have your yearly allotments changed in the four years experience with the 1972 Act? What has caused these changes?

Answer: Attached is a chart indicating the funds Texas has received under PL 92-500 and a comparison of what the state has in required projects on the priority list. There are two reasons for the change in the dollar amounts: (1) the amount of funds available to be allotted and (2) the Congressional changes in the allotment formulae.

3. ISSUE: Given the political difficulties associated with the House

amendment and the Admi nistration1 s opposition to any new funding for

the construction grant program it is entirely possible that no new authorization will be provided by the Congress this year. Maybe~then the Committee will have to consider alternative approaches. Among the alternatives are reallotment at the end of FY 1976 of whatever

funds have not been obligated (should be approximately $9 billionT to the States. Another opinion is to authorize the Administratorto distribute these funds to specific projects without making an

74-536 0 - 76 - 6
78

TEXAS

P.L. 92->00 GRANT 

REQUIREMENT AND ALLOCATION

COMPARISON

MILLIONS OF DOLLARS

FISCAL YEARS

_____ Project Requirements

---- Allocated Funds
allotment to the States — on a first come/first served basis.

Both of these would insure that the money that is available will

get to the States and the projects that are ready to use them.

Questio n; If no new authorization is made available, would you 

favor reallotment among the States?

Ans wer : Yes, if no authorization is made.

Questio n; What formula would you propose be used for that 

reallotment?

Answer : A formula based upon the projected 1990 population of

each State .

Question: Would you prefer using the unobligated money to be distributed to specific projects on a first come/first serve basis?

Answer: No, definitely not on a nationwide basis by EPA. The problems

of deciding who was first, as well as politics entering into those 

decisions, does not lend itself to a program such as this. We have 

witnessed what can happen with political pressure with regard to 

EPA's handling of grant funds in February, 1973, when millions of 

dollars in grants were awarded to projects in order that they could 

be funded before user charge requirements were mandatory.

ISSUES: Recently a problem arose with the Appropriations Committee outlay ceilings. Many States apparently are in a serious bind in

getting their outlay funds to pay off their contractors, and have

been requested by EPA to hold off in payment on the large projects

until beginning of our next fiscal year?

Questio n: Are you experiencing a shortage of funds to make payments

to contractors? For what reasons?

Answer : Yes, due to limitations placed on outlay payments by EPA.

Most cities cannot realign their funds to support non-payment of 

the Federal share, or are limited in their ability to realign their 

funds. We are attaching a letter which was sent to Mr. Russell Train 

expressing our concerns over this problem.

Questio n: Has EPA contacted cities in your State to ask them to withhold making payments or to tell you that they are going to withhold 

making payments on contracts?

Answer: Yes.
80

Question: Do you have any indication that the outlay figures

suggested by EPA will be adequate for you in the coming months, 

especially between now and June 30? Between June 30 and October 1? 

After October 1?

Answ er: Between now and June 30 we know that the funding levels in 

Texas will be inadequate in that EPA has requested approximately 25 

cities to withhold submission on payment requests until after that 

date. Between June 30 and October 1, we have no idea of what will be 

requested by the Administration for appropriation levels. We have 

heard rumors to the effect that the level of requested appropriations 

during this period of time may fall short by some S75 million, which 

could create the same problems in September that cities are presently 

experiencing.

Question: How can similar problems be prevented in the future?

Answ er: By the Congress taking a more active role in determining 

the level of funds needed to liquidate their contractual obligations.

5. ISSUES: The 1975 needs survey submitted by the States added combined

sewer overflow and stormwater treatment costs and resulted in many

instances in greatly inflated needs. In order to avoid the skewing

of state allotment ratios the EPA adopted regulations allotting half

of available funds on a specifically limited formula — the partial

needs categories.

Question: Is "the partial needs" concept an effective or equitable

method of controlling the compilation and use of stated needs?

Answer: As stated earlier, Texas does not feel that any method which 

incorporates needs is effective because there is no mechanism to 

determine the true needs. We do think that if needs must be used, the 

partial needs concept is a much more equitable method.

Question: Should "total needs" continue to be employed in allotment

formulas?

'Answer: No.

Question: Can you suggest a more effective or equitable method of

compiling needs and allocating funds using the needs concept?

Answer: Yes, areawide planning under Section 208 of the Act will 

provide a mechanism for establishing needs.

Question: Excluding toxics, after the 1977 technological goal of

secondary treatment is achieved (at whatever d ate,, would it be 

feasible to allot further construction grant funding on the basis of 

what is needed to attain the 1983 "fishable-swimmable" standard?
81

Answer : Yes, provided that the so-called ”fishable-swimmable

standard" could be achieved by using those grant funds.

Questio n: Would such an approach better focus our municipal sewage

construction effort toward the goal of improving water quality?

Ans wer: Yes, provided that funds are available to insure that

municipalities who discharge to streams which are already "fishableswimmable" are not precluded from receiving funds to insure those 

waters are not degraded.

Questio n: Could Section 208 planning be used as a basis for determining 

these water quality needs over the long-range?

Ans wer: Yes.

Question: What steps is your State taking to utilize less capitalintensive solutions to municipal waste treatment, for example physicalchemical methods and improved land application, instead of conventional 

primary-secondary-tertiary engineering works?

Ans wer: The State currently utilizes the facility plans developed

under a Step I grant to insure that cost-effective solutions are 

utilized. In the future, the State will utilize Section 208 areawide 

plans to insure cost-effectiveness.
82

TEXAS WATER QU AL ITY

4 DOUGLASS TOOLE

CHAIR MAN

► RANK II I.KWIK

VICE CHAIRMAN

M F FROST

FR AT IS L. DU FF. MU

BOARD

CLAYTONT GAR RISO N •

IO N RAMSEY

JAMES SI ROSE

HUGH C. \ ANTIS. JH

EX EC UT IVE DIRECTOR

PH. (S I 2) 475-2651

1700 N d kT II ( (INGRESS AVE

P.O IIOX 13246 CAI'ITO I. STATION 7H7 11

AUSTIN. TEXAS

May 20 , 1976

Mr. R u s s e ll T r a in , A d m in is tr a to r 

U. S . E n v ir o n m e n ta l P r o t e c t i o n Ag en cy 

401 M S t r e e t SW

W ashin gto n, D.C . 20 46 0

D ea r Mr. T ra in :

R e p r e s e n ta tiv e s fr om th e S t a t e o f L o u is ia n a have c o n ta c te d me r e ­

g a rd in g th e c a s h -f lo w c ru n c h t h a t now e x i s t s in th e C o n s tr u c tio n 

G ra n ts P ro gra m . P r o j e c t s in L o u is ia n a , l i k e th o s e in th e o th e r 

s t a t e s in t h i s r e g io n , a r e b e in g a d v e r s e ly im p a c te d . I u n d e rs ta n d 

th e la r g e se w ag e tr e a tm e n t f a c i l i t y p r o j e c t in New O r le a n s , in p a r ­

t i c u l a r , i s b e in g s e v e r e ly im p a c te d an d c o n s tr u c t io n i s now sto p p e d 

o r w i l l hav e to be s to p p e d .

The r e p r e s e n t a t i v e s fr om L o u is ia n a hav e a sk e d me, a s th e mem ber o f 

th e S ta te - F e d e r a l W at er P ro gra m s A d v is o ry C om m itte e fr om t h i s 

r e g io n , to chec k i n t o w h at can be done a b o u t t h i s p ro b le m — b o th in 

te rm s o f th e im m ed ia te p ro b le m an d in te rm s o f p r e c lu d in g a r e c u r ­

r e n c e . As we u n d e rs ta n d th e s i t u a t i o n , th e r e i s an i n s u f f i c i e n t 

am ou nt o f c a sh re m a in in g in th e 1976 f i s c a l y e a r b a la n c e to pa y on 

a ti m e ly b a s is o b l i g a t i o n s a s th e y o c c u r , th u s n e c e s s i t a t i n g a 

d e f e r r a l o f pa ym en t u n t i l th e s o - c a l l e d t r a n s i t i o n q u a r t e r . From 

t h i s u n d e rs ta n d in g , we d e r iv e s e v e r a l c o n c e rn s : (1) I s th e c ash 

s h o rta g e a n o n - r e c u r r in g e v e n t w hic h w i l l n o t o c c u r a g a in ? ,

(2 ) How a r e we s u re t h a t an a d e q u a te c ash a u t h o r i z a t i o n i s f o r t h ­

co m in g f o r th e t r a n s i t i o n q u a r t e r an d bey o n d ?, an d (3 ) I s th e 

p ro b le m on e o f p r e d i c t i n g c a s h -flo w a nd, i f s o , can th e s t a t e s h e lp 

EPA in mak in g mo re a d e q u a te c a s h -f lo w p r o je c tio n s ?

In Tex as o u r co m m u n it ie s hav e b een a b le , by w o rk in g w it h R eg io n V I, 

t o ac co mmod ate t h i s p ro b le m . A p p a re n tl y , t h i s h as n o t been th e 

c a s e in L o u is ia n a . We hav e no know le dge o f th e s e v e r i t y o f th e 

im p a c t o f t h i s pro b le m i n o th e r s t a t e s an d a re a s o f th e n a tio n . In 

an y e v e n t, in Tex as we h a v e a p p ro x im a te ly 25 c o m m u n it ie s w hic h w i l l 

be p a id o n ly a b o u t 10 t o 15 p e r c e n t o f th e am ou nt du e u n t i l J u ly 1, 

1976, when th e new t r a n s i t i o n q u a r t e r co mmen ce s. I f t h i s i s a o n eti m e e v e n t, Tex as co m m u n it ie s ha ve b een in c o n v e n ie n c e d b u t n o t 

s e v e r e ly harm ed. S h ould t h i s r e c u r , I am s u re o u r co m m u n it ie s w i l l 

have a c o n s id e ra b ly le s s e n e d i n t e r e s t i n w o rk in g o u t th e p ro b le m on 

an a m ic a b le b a s i s .
Mr. R u s s e ll T r a in 

May 20, 19 76 

P a ge 2

I am t h e r e f o r e r e q u e s t in g t h a t yo u a d v is e me as q u i c k ly a s p o s s i b l e 

w h a t ca n be do ne a b ou t th e im m ed ia te p ro b le m , an d w h at th e s t a t e s 

ca n do t o h e lp a v o id f u t u r e p r o b le m s . In t h i s c o n n e c t io n , I th in k 

i t w o u ld be w o rth w h il e t o c a l l im m e d ia te ly a m e e ti n g o f th e S t a t e - 

F e d e r a l W ate r Pro gr am s A d v is o r y Com m itte e t o d d lv e i n t o t h i s p r o b ­

lem an d i t s r e s o l u t i o n .

A co p y o f t h i s l e t t e r i s b e in g s e n t t o P r e s id e n t Ford so t h a t he w i l l 

be a p p r is e d sh o u ld h i s o f f i c e be r e q u ir e d t o r e s o lv e th e p ro b le m .

f u l l y ,

P r e s id e n t G e ra ld R. Ford 

S e n a to r L lo y d M. B e n ts e n 

S e n a to r P e te V . D om en ic i 

S e n a to r Jo sep h M. M on to ya 

R e p r e s e n t a t iv e Ja mes C . W rig h t 

R e p r e s e n t a t iv e Ray R o b e rts 

R e p r e s e n t a t iv e D ale M ilf o r d 

R e p r e s e n ta tiv e Jo hn B . B re a u x 

R e p r e s e n t a t iv e Jo hn P a u l Ha mmersch midt 

Mr . S . La dd D a v ie s , D i r e c t o r D epart m en t o f P o l l u t i o n C o n tr o l & E c o lo g y , A rk a n sa s 

Mr . R o b e rt L a f l e u r , E x e c u t iv e S e c r e t a r y 

Str eam C o n tr o l C o m m is sio n , L o u is ia n a 

Mr. Jame s F . C o e r v e r , D ir e c t o r 

B ure au o f E n v ir o n m e n ta l H e a lt h L o u is ia n a H e a lt h & Human R e so u rc e s A d m in is t r a t io n 

Mr. Jo hn W r ig h t, C h ie f o f W ate r Q u a lit y D iv is io n

E n v ir o n m e n ta l Im pro ve m en t A g e n cy , New M ex ic o 

Mr . C h a r le s Ne wton

D ep ar tm en t o f H e a lt h , Ok lah om a 

Mr. Jo hn C. W h it e , R e g io n a l A d m in is t r a t o r

E n v ir o n m e n ta l P r o t e c t i o n A ge ncy - R egio n VI .

Mem bers o f th e S t a t e - F e d e r a l W ate r P ro gr am s A d v is o r y Com m itte e
STATE or CAIIEOENIA—THE (ESOUKES AGENCY

STATE WATER RESOURCES CO NT RO L BOARD

MWJEMMKJEKKK^XMCKSWmMWOEK

P . 0. Box 100 

S ac ra m en to , CA 95801 

(9 16 ) 44 5-79 71

JUN 1 8 1976

84

In R ep ly R efe r 

to : 5 4 0 :AW

EDMUND O. EEOWN JE.,

H on or ab le Edmund S. M us kie, Chairman 

Su bc om mittee on E nvir onm en ta l P o llu tio n 

Co mm itte e on P u b li c Works

U nited S ta te s S en ate 

W as hi ng to n, D.C . 205 10 

Dea r S en ato r M us kie:

Tha nk yo u f o r y o u r May 26, 19 76, l e t t e r re q u e s tin g re sp o n ses 

to co m m itte e q u e s ti o n s co nce rn in g a ll o tm e n t o f th e a u th o riz e d 

fu nds f o r c o n s tru c tio n g ra n ts . My re sp o n se s a re a tt a c h e d 

fo ll o w in g th e is s u e and q u esti o n to w hi ch th e y a re a d d re ssed .

I ha ve fo rm u la te d th e s e re sp o n ses on th e b a s is o f two m aj or 

p re m is es. They a r e : ( l) th e amount a u th o riz e d f o r a llo c a tio n 

w ill be $5 b i l l i o n , and (2 ) F edera l e l i g i b i l i t y c r i t e r i a w ill 

re m ain e s s e n t i a l l y un ch an ge d. The C a lif o r n ia W ater R es ourc es 

C ontr ol Bo ard has some f l e x i b i l i t y w it h i t s p o lic ie s co ncern in g 

c o lle c to r se w er s and se co nd g ra n ts f o r c a p a c it y . T his f l e x i ­

b i l i t y wo uld h elp u s co pe w it h lim ite d p e r tu rb a tio n o f th e 

ab ov e two " fix e d " p a ra m ete rs .

I a p p re c ia te t h i s o p p o rtu n it y to o f f e r my re sp o n se s to th e s e 

q u e s ti o n s . I f I ca n p ro v id e an y a d d itio n a l in fo rm a ti o n , p le a s e 

l e t me know.

S in c e re ly ,

B ill B. D en dy/ 

E xecu ti v e O f fic e r

A ttac hm en t
85

ATTACHMENT

1 . Ad eq ua cy o f th e $5 b i l l i o n c o n s tr u c tio n g ra n t a u th o r iz a tio n . EPA i n i t i a l l y re q u e ste d from OMB $7 m illio n f o r c o n s tr u c tio n g r a n ts base d upon th e am ou nt a v a ila b le f o r a ll o tm e n t ( r e l e a s e o f im po un de d fu nds) in F. Y. 1976 . The Co mmittee s e t t l e d on $5 b i l l i o n w it h th e u n d e rsta n d in g t h a t i t wo uld p ro v id e s u f f i c i e n t fu nds to ea ch s t a t e f o r the m to c o n ti n u e t h e i r pro gra m a t th e p re s e n t p ace d u rin g F.Y. 19 77 .

a . What w ill be th e e f f e c t u n d e r th e v a rio u s fo rm u la e t h a t ha ve be en pro pose d on y o u r s ta te ? How w ill t h a t e n a b le yo u to c o n ti n u e , in c re a s e o r d im in is h th e pace o f your

pr og ra m ?

None o f th e fo rm ula e wou ld sl ow o u r p ace d u rin g F. Y. 19 77 so lo n g as th e $9 b i l l i o n r e le a s e d by th e Sup rem e C ourt re m ain s a v a ila b le an d i s n o t r e a llo c a te d among th e s t a te s , Form ula e whi ch wo uld a l l o t l e s s to C a li f o r n ia wou ld sl ow C a li f o r n i a ’ s pace a f t e r O c to b er 1, 19 77 .

b. W il l yo u use a l l o f y o u r a ll o tm e n t un d er th e s e fo rm u la s? U nd er whi ch fo rm u la s w il l yo u n o t use a l l y our a ll o tm e n t?

We p la n to u se o u r t o t a l a ll o tm e n t u nder ev ery fo rm u la . We w i l l be mov ing a t a p a ce to com mit th e maximum am ou nt , an d we w i l l b u ild up a b a c k lo g o f a p p ro v ab le p r o j e c ts i f a s m a ll e r a ll o tm e n t i s ma de .

c-. I f y o u r a ll o tm e n t i s in a d e q u a te to m a in ta in y o u r p r e s e n t p a ce how much more wo uld be ne ed ed ? I s th e r e a n o th e r way oT g iv in g y our S ta te an a d e q u a te a ll o tm e n t r a th e r -tha n

r a i s i n g th e to ta l ?

A ll o tm e n ts re c e iv e d to d a te , in c lu d in g th e fu n d s r e c e n tly r e le a s e d by th e Supre me C o u rt, a re ad eq u ate to m a in ta in C a li f o r n i a ’ s p r e s e n t p ace u n t i l O cto ber 1, 19 77 . F u tu re a n n u al a u th o r iz a tio n s o f $8 b i l l i o n to $9 b i l l i o n w i l l be n e c e s s a ry , as su m in g C a lif o r n ia w ill r e c e iv e a p p ro x im a te ly n in e p e rc e n t o f t h i s am ou nt to s u s ta in th e p r e s e n t p ace in C a lif o r n ia . A u th o riz a ti o n s o f t h a t am ount a re a ls o re q u ir e d , a cc o rd in g to th e i n f l a t i o n m u ltip lie d f ig u r e s from th e 19 74 need s su rv e y t o a ch ie v e se co n d ary tr e a tm e n t 

by 19 82 .
86

d. How much emplo ym ent w ill be g e n e ra te d in your S ta te by

y o u r a ll o tm e n t o f th e $5 b i l l i o n d o l la r s as su m in g th e

fo rm u la in e x is te n c e now?

As suming C a lif o r n ia wo uld re c e iv e 9-3 2 p e rc e n t o f 

$5 b i l l i o n , 4,1 40 jo b s wou ld be c r e a te d in th e co ns t r u c ti o n in d u s try . T h is f ig u r e r e p re s e n ts o n ly 

c o n s tr u c tio n w ork ers a s a c t u a l l y re p o rte d on F e d e ra l 

EEO fo rm s. From a stu d y do ne by a C a lif o r n ia s t a te 

ag ency, a f ig u re o f 2 .5 to 1 h as be en develo ped to 

r e f l e c t th e a c tu a l nu mber o f p e rso n s em ploy ed . T his 

wou ld be 10,3 50 jo b s an d wou ld in c lu d e ev er yone con n ecte d 

w it h th e p r o je c t in c lu d in g l a b o r e r s , fo re m en , s u p e r in te n ­

d e n ts , p r o je c t m an ag er s, s e c r e t a r i e s , p a y r o ll p e rs o n n e l, 

s a f e t y o f f i c e r s , EEO o f f i c e r s , e tc . I t wou ld n o t in c lu d e 

o f f - s i t e eq ui pm en t m a n u fa c tu re rs o r o f f - s i t e co m m erci al 

m a te r ia ls s u p p lie r s (c o n c r e te , a s p h a lt c o n c re te , e t c .) 

an d t h e i r d e li v e ry tr u c k d r i v e r s .

e. What i s th e c u r re n t r a te o f i n f l a t i o n on th e c o n s tr u c tio n

in d u s tr y in your s t a t e 1? Do yo u ex p ect t h a t r a te to c o n ti n u e

a t t h a t le v e l? F or how lo ng? How w ill t h a t a f f e c t y our

a b i l i t y to c o n s tru c t p r o je c ts ?

Bas ed on th e E n g in eeri n g New s-Rec ord C o n str u c ti o n C ost 

In d ex es f o r C a lif o r n ia , c o n s tr u c tio n c o s ts a re e s c a la tin g 

a b o u t 13 p e rc e n t a y e a r. I t i s a n tic ip a te d t h i s r a t e w i l l 

c o n ti n u e f o r th e s h o rt te rm . W hi le govern m enta l p o l ic i e s 

may re d u ce m onet ar y i n f l a t i o n in th e f u tu r e , an im pr ov ed 

ec on om ic c li m a te wo uld in c r e a s e c o n s tr u c tio n a c t i v i t y an d 

r e s u l t in in c re a s e d c o n s tr u c tio n c o s ts du e to h ig h e r dema nd. 

L ong-t erm c o n s tru c tio n c o s t e s c a la tio n cannot be p r e d ic te d , 

b u t i t wo uld be ex p ecte d t o fo ll o w n a tio n a l tr e n d s in c o s ts . 

I n f l a t i o n re duces o u r a b i l i t y to c o n s tr u c t p r o je c ts by 

e ro d in g th e v alu e o f d o l la r s a ll o t e d to p o llu tio n c o n tr o l. 

W at er p o llu tio n c o n tr o l bo nds appro ved by C a lif o r n ia v o te r s 

in 19 74 w i l l now p u rc h ase 20 p e rc e n t l e s s w aste w ate r t r e a t ­

men t f a c i l i t i e s th a n a t th e ti m e o f e le c tio n .

2. The p ro p o s a ls t h a t ha ve be en o f f e r e d f o r a ll o tm e n t o f th e

$5 b i l l i o n d o lla r s a re e i t h e r n e ed s-b a se d o r p o p u la ti o n -b a s e d 

o r some com b in ati o n th e r e o f . Much o f th e d is c u s s io n o f th e 

w itn e s s e s w i l l c e n te r on th e v a l i d i t y o f th e need s app ro ach 

and th e v a l i d i t y o f th e p o p u la tio n appro ach . In t h a t re g a rd 

th e 1972 Act re p re se n te d a d e p a rtu re when i t moved to a need s 

base d fo rm u la fro m a l l o f th e p r e - e x i s t in g a c ts w hi ch d i s ­

t r ib u t e d money on th e b a s is o f p o p u la tio n .
87

How r e l i a b l e do you c o n s id e r th e f ig u r e s t h a t yo u su b m it te d to th e E nvir onm enta l P r o te c tio n Agency in acco rd an ce w it h eac h o f th e nee ds su rv e y s t h a t ha ve be en conducte d s in c e p a ssa g e o f th e 1972 Ac t? What wer e th e s e f ig u r e s b ase d

upon?

In o u r e x p e rie n c e , c a te g o ry I an d I I c o s ts ( tre a tm e n t) a re v e ry r e l i a b l e . C ate g o ry IV c o s ts ( c o ll e c t o r an d in te r c e p t o r se w ers ) a re somew ha t l e s s r e l i a b l e , b u t s t i l l a c c e p ta b le . The re m a in in g c a te g o r ie s — I I I : i n f i l t r a t i o n - i n f l o w c o r r e c tio n and se w er sy st em r e h a b i l i ­ t a t i o n , V: c o r re c tio n o f co mbi ne d se w er o v e rfl o w s, and VI : tre a tm e n t and c o n tr o l o f st orm w a te rs — a re e x tr e m e ly d i f f i c u l t to e sti m a te w it h o u t e x te n siv e s tu d ie s o f eac h in d iv id u a l sy st em . Mod els o r o th e r g e n e ra li z e d c o n c e p ts p ro v id e u n a c c e p ta b le a c c u ra c y . C a lif o r n ia has a h ig h le v e l o f c o n fid e n ce in th e r e s u l t s o f th e 1973 need s s u r v e y .. The r e la x a tio n o f r e p o rtin g ,r e q u ire m e n ts p e rm itte d d u rin g th e 19 74 su rv ey le s se n e d th e r e l i a b i l i t y o f th e d a ta c o lle c te d f o r t h a t su rv e y . R e li a n c e up on g e n e ra li z e d c o s t e s tim a ti n g p ro c e d u re s r e s u l t s in l e s s r e l i a b l e f i g u r e s th a n th o se w hi ch can be o b ta in e d by c o n ta c tin g p e rso n s ex p eri en ced w it h a g iv e n lo c a tio n . C a lif o r n ia wa s a b le to u t i l i z e th e l a t t e r appro ac h d u rin g th e 1973 su rv e y an d ho pe s to u t i l i z e s im ila r in p u t f o r th e 19 76 

su rv e y .

Did yo u make an e f f o r t to su b m it o n ly a c tu a l n eeds w hic h mee t th e c r i t e r i a f o r c o s t - e f f e c t i v e n e s s o f S e c ti o n 201

o f th e Ac t?

The q u e sti o n i s u n c le a r a s t o c o s t e f f e c tiv e n e s s ; how ev er , th e p u b li s h e d su rv ey i n s t r u c t i o n s were fo ll o w ed . C ost e f f e c tiv e n e s s a n a ly se s have n o t y e t bee n com ple te d in nu m er ou s a re a s whe re w a te r q u a lity pro ble m s r e q u ir e p o l lu t i o n abat em ent m easu re s. Ne eds re p o rte d f o r th e s e a r e a s w er e bas ed up on a n a ly s e s whi ch ha ve bee n co m ple te d 

f o r s im il a r a r e a s .

Do yo u f e e l t h a t a llo tm e n t o f th e fu nds on th e b a s is o f p o p u la tio n wo uld p ro v id e some s t a t e s w it h mo re money th an th e y e i t h e r ne ed o r co u ld u se ? Do you f e e l t h a t a ll o tm e n t on th e b a s is o f n eeds wou ld p r o v id e 'S ta te s w it h mo re money th an th e y e it h e r ne ed o r can use ? I f in f a c t th e n e e J s su rv e y s t h a t ha ve be en do ne a re u n r e lia b le , how ca n a fo rm u la whi ch u ses them in p a r t be j u s t if i e d ?

C a lif o r n ia h as ad eq u ate n e ed s an d s t a f f i n g to a ll o c a t e fu n d s a ll o t e d on e i t h e r b a s i s . An a ll o c a t io n b ase d s o le ly on p o p u la tio n wo uld n o t i n i t i a l l y p ro v id e e x ce ss fu n d s
88

to an y s t a t e . E v e n tu a ll y , ho w ev er , s t a t e s w it h p o p u la ­

t io n c o n c e n tr a tio n s which p e rm it c o ll e c t io n and tre a tm e n t 

ec on om ie s o f s c a le may ha ve e x ce ss fu nds in co m par is on 

to more r u r a l s t a t e s . A llo c a tio n s base d on nee ds sh ould 

be appro ac hed w it h c a u ti o n c o n ce rn in g th e a ccu ra cy o f 

th e re p o rte d need s. C a lif o r n ia ’ s p o s itio n i s t h a t nee ds 

su rv eyed in c a te g o r ie s I , I I and IVB ha ve re a so n a b le 

r e l i a b i l i t y an d sh ould co n ti n u e to be u t i l i z e d as b a s e s 

o f a ll o c a t io n .

d. How ha ve y o u r y e a rly a ll o tm e n ts ch an ge d in th e fo u r y e a r

e x p e rie n c e w it h th e 197 2 Ac t? WViat nas cau se d th e s e

ch anges?

C a lif o r n ia ’ s a llo c a tio n s , and th e b a se s th e r e f o r e a re 

su mmarized be low:

F. Y. 1973 — $196,3 52,0 00 (9.817 6% o f $2 b i l l i o n a llo te d 

fro m T ab le I I I o f House P u b li c Works Com mittee P r i n t 

#92-5 0)

F.Y. 1974 — $294,5 28,0 00 (9 .817 6% o f $3 b i l l i o n a llo te d 

fro m T ab le I I I o f House P u b li c Works Co mmi tte e P r i n t 

#92-5 0)

F.Y. 197 5 — $457,4 20,1 00 (1 1.63 40 % o f $4 b i l l i o n a llo te d 

50% from T ab le I and 50% fro m T ab le I I o f House P u b li c 

Works Com mittee P r in t #93-2 8)

F. Y. 1976 — $945,7 76,8 00 (b ase d up on a r a th e r in v o lv ed 

p ro c ed u re do cu men ted in th e F e d e ra l R e g is te r,

Vol. 40 , No. 40 — Thurs day , F e b ru a ry 27 , 19 75 )

3. Given th e p o l i t i c a l d i f f i c u l t i e s a s s o c ia te d w it h th e House

amendment an d th e A d m in is tr a ti o n ’ s o p p o s itio n to an y new fu ndin g 

f o r th e c o n s tr u c tio n g ra n t pro gra m , i t i s e n t i r e l y p o s s ib le 

t h a t no new a u th o r iz a tio n w ill be p ro v id e d by th e C ongre ss 

t h i s y e a r. Maybe th e n th e Co mmittee w i l l ha ve to c o n sid e r 

a lt e r n a t iv e ap p ro ac h es. Among th e a lt e r n a t i v e s a re r e a l l o t ­

ment a t th e end o f F.Y. 197 6 o f w h a te v e r fu nds ha ve n o t be en 

o b lig a te d (s h o u ld be ap p ro x im ate ly $9 b i l l i o n ) to th e S ta te s . 

A noth er o p ti o n i s to a u th o riz e th e A d m in is tr a to r to d i s t r i b u t e 

th e s e fu nds to s p e c if ic p r o je c ts w it h o u t mak ing an a ll o tm e n t 

to th e S ta te s — on a f i r s t c o m e /f ir s t se rv ed b a s is . Bo th o f 

th e s e wo uld in s u r e t h a t th e money t h a t i s a v a ila b le w i l l g e t 

to th e S ta te s an d th e p r o je c ts t h a t a r e re ad y to u se them .
I f no new a u t h o r i z i t i o n i s mad e a v a i l a b l e w ould yo u f a v o r

r e a l l o t m e n t among th e S ta tP S . Wh at fo rm u la w ould yo u p ro p o s e be u se d f o r t h a t re a llo tm e n t? Would you p r e f e r u sin g th e u n o b li g a te d money to b e d i s t r ib u t e d to s p e c if i c p r o j e c ts on

a f i r s t c o m e /fir s t se rv e b a s is ?

C a li f o r n ia would s tr o n g ly oppose a re a llo tm e n t o f th e $9 b i l l i o n re le a s e d by th e Suprem e C ou rt . We wo uld ev en mo re s tro n g ly op po se th e d i s t r i b u t i o n o f u n o b li g a te d money to s p e c if ic p r o je c ts on a f i r s t c o m e /fir s t serv ed b a s i s . In C a lif o r n ia , p u b li c h e a rin g s a r e h e ld by a R eg io n al Boa rd and th e n by th e S ta te Boa rd b e fo re th e p r i o r i t y l i s t i s f i n a l l y ad o p te d by th e S ta te B oar d. The C a li f o r n ia p r o j e c ts on whi ch th e S ta te sh a re o f th e $9 b i l l i o n w ill be sp e n t e n te re d th e 

p la n o f stu d y phase mo re th a n a y e ar ag o, f a c i l i t y p la n s f o r m os t p r o je c ts w er e s t a r t e d 9 m on ths ago an d m os t p r o j e c ts a re in to th e d e sig n s ta g e . By Ju ne 30 , 19 76 , p r e s e n t sc h e d u l­ in g sho ws t h a t $300 m illio n o f th e C a lif o r n ia a llo tm e n t w ill hav e bee n co m m itt ed an d th e S ta te w ill ha ve f u l l comm itm ent p r i o r to th e Sep te m be r 30 , 1977 , d e a d li n e . A co m pre hen si ve s t r a te g y h as be en develo p ed by th e C a lif o r n ia S ta te W at er R eso u rc es C o ntr ol Boa rd to a s s u r e f u l l co mm itm en t; th e r e f o r e , C a lif o r n ia wo uld s tr o n g ly oppose d is r u p tio n to o u r pro gra m 

a t t h i s l a t e s ta g e .

4. R e c e n tl y a pr oble m a ro se w ith th e A p p ro p ria ti o n s Com mittee o u tla y c e i l in g s . Many S t a te s a p p a re n tl y a r e in a s e r io u s bin d in g e tt i n g t h e i r o u tla y fu n d s to pa y o f f t h e i r c o n tr a c to r s , an d hav e be en re q u e ste d by EPA to hold o f f in pa ym en t on th e la r g e p r o je c ts u n t i l b e g in n in g o f o u r n e x t f i s c a l y e a r.

a . A re you e x p e r ie n c in g a s h o r ta g e o f fu n d s to ma ke p ay m en ts

to c o n tra c to rs ? F or w hat re aso n s?

Yes , la c k o f F e d e ra l c ash has be en a co n ce rn . EPA, Reg io n IX fu n d s, a cc o rd in g to o u r c a l c u l a ti o n s , w er e f u l l y ex pe nd ed on Ma rch 23 , 19 76 . Th ey re c e iv e d a re a llo tm e n t o f $2 m il lio n from o th e r EPA re g io n s in e a r ly A p ril an d made a lim ite d nu mber o f paym ents . The re m ain d er o f th e F e d e ra l pa ym en ts (3 5 g ra n te e s ha d a t o t a l o f n e a rly $12 m illio n w it h h e ld ) 

w er e made A p ril 22 and 23, so some g ra n te e s ha d pay m en ts w it h h e ld f o r about 30 d a y s. However, a s f a r as we know, 

th e s e pa ym en t d e la y s ha ve cau se d no m ajo r d i f f i c u l t i e s 

f o r C a lif o r n ia a g e n c ie s.
90

Has EPA c o n ta c te d c i t i e s in y o u r S ta te to as k them to

w it h h o ld making pa ym en ts o r to t e l l you t h a t th e y a re

go in g to w it h h o ld ma king pay m en ts on c o n tr a c ts ?

No.

Do yo u ha ve any in d ic a tio n t h a t th e o u tla y .f ig u r e s

su g g e ste d by EPA w ill be a d eq u a te f o r you"i n coming

m onth s, e s p e c ia lly be tw ee n now an d Ju ne ^0? Betw~een

Ju ne 30 and O cto ber 1? A fte r O cto b er 1?

From th e p r e s e n t th ro u g h Ju ne 30 , th e o u tl a y w ill be i n ­

a d eq u a te sin c e Reg ion IX was o u t o f fu nds a s o f Ju ne 9 th 

Pa ym en ts to C a li f o r n ia a g e n c ie s wer e lim ite d to $3 00 ,0 00 

p e r p r o j e c t fro m A p ril 24 , 1976, u n t i l May 15, 19 76 , 

an d to $1,5 00,0 00 p e r p r o j e c t s in c e th e n . Any pa ym en ts 

lim ite d to th e $3 00 ,0 00 w ere , o f c o u rse , p a id up to th e 

$ 1 ,5 0 0 ,0 0 0 on May 15 . O nl y on e ag en cy has bee n a f f e c te d 

s in c e th e in c re a s e to $ 1 ,5 0 ^ ,0 0 0 , b u t n o rm all y s e v e ra l 

pay m en ts o f t h a t am ount a re mad e ea ch q u a r te r .

We c an n o t comment on th e o u tla y f ig u r e s f o r th e f u tu r e 

a s we do n o t know th e p r o je c te d am ou nt s.

How c..n s im ila r pro ble m s be p re v e n te d in th e fu tu re ?

I f a co n ti n g en cy fu nd o f some ty p e could be e s ta b lis h e d 

to c o v e r u n fo re see n e x p e n d itu re s , i t wo uld g r e a tly ease 

th e pro ble m . A ccura te p r o je c tio n s a re v ery d i f f i c u l t 

a s F e d e ra l pa ym en ts in C a lif o r n ia ha ve ra nged fro m a lo w 

o f l e s s th an $4 m illio n p e r mon th to a h ig h o f n e a rly 

$27 m illio n in th e l a s t two y e a r s . Ther e seem s to be 

no lo g ic a l se a so n a l o r o th e r v a r ia tio n t h a t ca n be 

a c c u r a te ly p re d ic te d . How ever, i t ca n be ex p ecte d t h a t 

th e r e w i l l be a s i g n i f i c a n t in c r e a s e in re q u e s ts f o r 

pa ym en t in th e n e a r f u tu r e s in c e a nu mber o f v e ry la r g e 

p r o j e c ts a re in th e c o n s tr u c tio n b id d in g s ta g e .
S t a t e o f N e w J e r s e y

D e pa r t m e n t of En v ir o n m e n t a l P ro t e c tio n

DA VID J. B AR DIN , C O M M IS S IO N E R 

P. O BOX 139 0 

TR EN TO N, N .J . 0 8 6 2 5 

6 0 9 - 2 9 2 - 2 8 8 5

June 24, 1976

Honorable Edmund S. Muskie 

United States Senate 

Chairman, Subcommittee on 

Environmental Pollution 

Committe on Public Works 

Washington, D.C. 20510

Dear Senator Muskie:

At the request of C ommissioner Bardin, I am enclos 

ing detailed answers to the questions you posed on the 

construction grants program.

We appreciate this opportunity to aid in your 

deliberations. Please do not hesitate to co ntact me 

if you should require any additional information.

Very truly yours

Rocco D. kicci, P.E 

Deputy Commissioner

Enclosure
92

Response of New Jersey 

Department of Environmental Protection

Questions on Auth orizatio n and Allotment 

As Requested May 26, 1976 by 

U. S. Senate Commit tee on Public Works 

Subcommittee on Environmental Pollution

Issue I - Adequacy of a $5 Billion Construction Gr ant

Authorization

a) What will be the effect under the various formulas that 

have been proposed on your State? How will that enable 

you to continue, increase or diminish the pace of your 

program?

b) Will you use all of your allotment under these formulas? 

Under which formulas will you not use all your allotment?

c) If your allotment is inadequate to mainta in your 

present pace how much more would be needed? Is there 

another way of giving your State an adequate allotment 

rather than raising the total?

New Jersey an ticipates using all funds currently 

available by the end of calendar year 1976. We would 

require an allotment of $300 million in fiscal 1977, 

over and above funds currently available, to maintain 

our current pace. None of the proposed allotment 

formulas, applied to a fiscal 1977 authorization of 

$5 billion, will provide this adequate level of funding.

Our actual needs for fiscal 1977 would amount to six 

percent of the proposed $5 billion Senate authorization. 

The various formulas (using the 1974 needs survey where 

relevant) would result in lesser allotments to New 

Jersey as follows:

Formula % of National

Totals

1. 100% partial needs 

(Categories I, II and IV-B)

5.62

2. 100% total needs 4.56 r

3. 50% total needs +50% 

partial needs

5.09

♦
93

Formula % of Nat ional 

Totals

4. 25% 1990 population +50% 4.81

partial needs +25% total

needs

5. 50% 1990 popu latio n +50% 4.53

partial needs

6. 50% 1990 popu latio n +50% 4.00

total needs

7. 100% 1970 populati on 3.54

(U.S. Census)

8. 100% 1990 popul atio n 3.44

Reallotting all funds which have not be en obligated by 

states by the end of fiscal 1976 might give New Jersey 

an adequate allotmen t without raising the total 

authorization depe nding on the amount of money that is 

available for reallot ment and on the formula used to 

reallot these funds.

d) How much employment will be generated in your state by 

your allotment of the $5 billion dollars assuming the 

formula in exis tence now?

The $254.4 mill ion which New Jersey would receive under 

the current formula, applied to an author izati on of $5 

billion, would contribut e 75% of total project costs of 

$339.2 million. Using data from the state Department 

of Labor and Indust ry this construction would generate 

approximately 18,500 jobs.

e) What is the current rate of inflation on the construction industry in your state? Do you expect that 

rate to continue at that level? For h ow long? How 

will that affect your ability to construct projects?

According to the New Jersey Utility Contractors Association the curren t rate of inflation in New Jersey on 

the utility constructi on industry is currently 5 to 6% 

per year and is expected to continue at a rate of 5 to 

8% per year over the next two years.

74-5 36 0 - 76 - 7
Issue II - Proposals Offerr ed for Allotment of $5 Billion

a) How reliable do you consider the figures that you 

submitted to the En vironmental Protection Agency in 

accordance with each of the needs surveys that have 

been conducted since passage of the 1972 Act? What 

were these figures based upon?

The degree of reliabilit y is dependent upon the stage 

of development of each project. The 1973 and 1974 

needs surveys reflected, in many cases, estimates 

based upon early stages of development. For these 

projects, the degree of reliability was not as great 

as it was for proje cts where the plans and specifications were completed. The 1976 Needs Survey which 

has recently gotten underway will reflect a higher 

degree of reliability since a greater percent age of 

projects will have procee ded to a later stage of 

development.

Figures were supplied by consulting engineers for the 

sewerage agencies, w hich then were evaluated by state 

and EPA staff. EPA cost curves were used to assist in 

assessing these estimates.

b) Did you make an effort to submit only actual needs 

which met the criteria for cost-effectiveness of 

Section 201 of the Act?

An effort was made to submit "actual" needs in accordance with the cost-effectivene ss requirement of 

Section 201 where 201 studies were completed.

c) Do you feel that allotment of the funds on the basis of 

population would provide some states with m ore money 

than they either need or could use? Do you feel that 

allotment on the basis of needs would provide States 

with more money than they either need or can use? If 

in fact the needs surveys that have been done are 

unreliable, how can a formula which uses them in part 

be justified?

Distribution of funds on the basis of population 

figures may result in some states receiving m ore money 

than they need or could use. Absolute population 

figures do not neces sarily correlate with water pollution abatement needs (although the use of pop ulation 

density and urbanized area population probably correlate more accurately to water pollution prob lem s).
Segments of the populati on live in rural and ex-urban 

areas which do not need sewers for the fores eeable 

future because septic tanks are more appropriat e for 

sewage disposal. Including these people in the population base thus exag gerat es the capital needs of the 

state for wastewater facili ty construction.

The use of population a lone does not take into account 

the need to treat industrial effluent discharged 

through municipal systems. In New Jersey there are 

many industries w hich disch arge their wastes in this 

manner. The need to treat this industrial segment of 

the wastewater is obvious but is ignored by a population based formula.

If a population based formula is used a populatio n 

which is served by pr ojects which already have been 

built will again be counted toward figuring the state 

allocation. Thus, the needs of a state wo uld be 

overestimated.

It is possible that va riables in the needs surveys 

could result in some states receiving surplus money. 

However, it might be desi reabl e to control the variables 

in the surveys and use the results for the long-range 

financial planning of facilities.

d) How have your yearly allotments changed in the four 

year experience with the 1972 Act? What has caused 

these changes?

Since the passage of P. L. 92-500 New Jersey has been 

allotted: $154.1 million in fiscal 1973, $231.1

million in fiscal 1974, 254.7 million in fiscal 1975 

and $660.8 million in fiscal 1976. The changes in 

allotments were caused by changes in the formula and by 

the release of funds former ly impounded by the President

Issue III - Proposed Use of Avail able Funds on First Come/

First Served Basis

a) If no new authorization is made available would you favor reallotment among the States? What formula would 

you propose be used for that reallotment? Would you 

prefer the unobligated mo ney to be distributed to 

specific projects on a first come/first serve basis?
96

If no new authorization is made, only reallotment to the 

states could provide the needed funding continuity for 

the grants program. All funds not oblig ated (or 

certified to EPA) by the end of fiscal 1976, including 

fiscal 1975 funds, would "return" to EPA for reallotment. The concept of first come/first served set forth 

by the question has much merit if approp riate ly implemented. Implementation could appro priately rely upon 

New Jersey* s successful experience with an analogous 

"construction readiness" system to allocate all 

available funds. This first come/first served system 

is equally applicable to any new authoriza tion of funds 

or to a reallotment of existing funds.

Prior to each fiscal year the New Jersey Department of 

Environmental Protection establishes a Project Priority 

List based upon relative pollution abatem ent needs.

The methodology is described in Appendix A of the 

enclosed draft NJDEP Water Pollution Con trol Program 

for fiscal 1977.

The Priority list also separates the needed projects 

into two categories: (a) those projects which are 

expected to be ready to initiate construct ion during 

the fiscal year, and (b) those projects which will be 

ready in subsequent fiscal years. The first category 

represents New J ersey’s actual funding requirements for 

that fiscal year. During the fiscal year the progress 

of projects to be funded is reviewed quarterl y to 

determine if the projects are making sufficient progress 

to receive a federal grant by the end of the fiscal 

year. Deviation from an acceptable implementation 

schedule will result in deferral of a project's funding 

to a later fiscal year. Each deferral releases funds 

to be used for other projects which will be ready to 

proceed within the fiscal year. This first come/first 

served concept is detailed on page A-ll of the enclosed 

draft NJDEP Water Pollution Control Program.

This system can be adapted to allot constructio n grant 

funds to the states. Congress could require all states 

to submit to EPA a list of their actual needs for the 

ccming fiscal year together with p roject implementation 

schedules for listed projects. Funds should be tentatively alloted for the year to meet antic ipated actual 

needs with EPA policing on a quarterly basis to assure 

readiness in fact.
97

Where projects are not ready to proceed, EPA could allot 

funds to other projects within a state where there is a probability that the schedule for a specific project will not be met, or to allot funds to another state if 

no other projects within the state will be able to utilize the a vailable funds. Step 1 and 2 projects should also be included on the list for funding on the 

basis of readiness to proceed.

Issue IV - Outlay Funds

a) Are you experienc ing a shortage of funds to make payments to contractors? For what reasons?

b) Has EPA conta cted cities in your State to ask them to withhold m aking payments or to tell you that they are 

going to with hold making payments on contracts?

c) Do you have any indication that the outlay figures suggested by E PA will be adequate for you in the coming 

months, espec iall y between now and June 30? Between 

June 30 and October 1? After October 1?

At the present time there does not appear to be a 

significant s hortage of funds to make payments to contractors in Ne w Jersey. While EPA has not contacted grantees in the State requesting them to withhold 

payments, nor have they told us that they intend to withhold payments, EPA has indicated that outlay funds 

may not be adequate in the coming months.

d) How can similar problems be prevented in the future?

These problems could be prevented in the future by better manag emen t and monitoring of project imple­ mentation sched ules by all levels of government. This will greatly assis t in calculating when expenditures will be neces sary and will assist EPA in requesting 

appropriations.

Issue V - Use of Needs in Allotment Formulas

a) Is "the partial needs" concept an effective or equi­ table method of controllin g the compila tion and use of 

stated needs?

b) Should "total needs" continue to be employ ed in allotment formulas? Can you suggest a more effective or equitable method of compiling needs and allocating 

funds using the n eeds concept?
We propose that total needs be used as the basis for 

long-term financial planning. However, actual needs, 

as determined annually on the basis of readiness to 

proceed, should be the basis for annual funding. This 

proposal is discussed under Issue III.

Issue VI - Funding to Achieve Water Quality Standards

Excluding toxics, after the 1977 technological goal of 

secondary treatment is achiev ed (at whatever date ), 

would it be feasible to allot further construction 

grant funding on the bas is of what is needed to attain 

the 1983 "fishable-swimmable" standard?

a) Would such an approach better focus our municipal 

sewage construction effort toward the goal of improving 

water quality?

By the time all municipal dischargers are providing 

secondary treatment, w ater quality manage ment planning 

may be advanced to the point where we can determine 

what is needed to meet the 1983 "fishable-swimmable" 

standard. In any event, New Jersey requires considerably more than one year funding to achieve secondary 

treatment for all dischargers.

b) Could Section 208 plann ing be used as a basis for 

determining these water quality needs over the longrange?

Section 208 planning perhaps could be used as the longrange planning tool whi ch will help to provide information as to where our resources will best be placed to 

solve our long-range water pollution problems. However, 

the 208 planning timetable makes it virtually inconceivable that this tool really could help in making 

construction funding decisions before fiscal 1979.

Issue VII - Alternative Waste Management Techniques

What steps is your State taking to utilize less c apital-intensive solutions to municipal waste treatment, 

for example physical-chem ical methods and improved land 

application, instead of conventional primary-secondarytertiary engineering works?

The DEP will be looking to Section 208 plann ing to 

determine those areas of the state best served by 

septic tanks. The planni ng will look to the establishment of septic tank disposal districts for regulation 

and management.

At the present time N ew Jersey has several modest land 

disposal projects. They are being used to develop 

design and operating criteria for such projects statewide. Additionally, the DEP is exploring alternative 

methods of sludge disposal.
STATE OF MAINE , ♦ * * * * %

WILLIAM R AQAMS. JR

n»» it

Jj Dep artm en t of Environme nta l Pro tec tion

ITRATIVE SERVICES Ju n e 9 , 1976

R QUALITY CONTROL

LANO QUALITY CONTROL

2SS2111

WATER QUALITY CONTROL

2(9 7591

LABORATORY SERVICES

2(9 MH

OIL POLLUTION CONTROL

2R9K27

H o n o ra b le Edmund S. M us kle 

C hair m an, S ubc om m itte e on 

E n v ir o n m e n ta l P o llu tio n 

U n it ed S t a te s S en ate 

W ash in g to n , D.C . 2051 0

D ea r S e n a to r M usk le :

REGIONAL OFFICES

31 CENTRAL STREET

BANCOR 0«401

S4HMS

«1S CONGRESS STREET

TORTLANO 04101

775(5(7

(34 MAIN STREET

(RESCUE ISLE 047(1

7(4 3237

Oil (OLLUTION CONTROL

40 COMMERCIAL STREET

RORTLANO

7734491

OIL Kill RETORTS ONLY

(TOLL FREE) ISOM (J-0777

CITIZENS' ENVIRONMENTAL

ASSISTANCE SERVICE

(TOLL TREE) 1000«S2 1(42

Th an k yo u f o r yo u r l e t t e r o f May 26 an d th e o p p o r tu n ity to 

t e s t i f y b e fo re your su b co m m it te e on th e b e s t m et ho d f o r a l l o t t i n g 

th e f iv e b i l l i o n d o l l a r a u th o r i z a t io n f o r c o n s tr u c tio n g r a n t s . I 

w i l l a tt e m p t to answ er th e q u e s tio n s r a is e d on th e v a rio u s i s s u e s 

w hic h w er e a tt a c h e d to y o u r l e t t e r .

1 . ISS UE : Ade qu ac y o f th e $5 b i l l i o n d o l l a r c o n s tr u c tio n 

g r a n t a u t h o r i z a t i o n .

A $5 b i l l i o n d o l l a r a u th o r i z a t io n w i l l mea n 

t h a t Main e m ust re d u c e i t s c o n s tr u c tio n g r a n t pro gra m 

no m a tte r wha t fo rm u la f o r d i s t r i b u t i o n i s u s e d . Th e 

fo rm u la b ased on c a t e g o r i e s 1 , 2 an d 4b i s th e m os t 

a d v a n ta g e o u s to th e S t a t e o f M ai ne. Th e t a b l e bel ow 

i n d ic a te s th e p e rc e n t o f t o t a l g r a n t an d th e d o l la r 

am ou nt to be r e c e iv e d by th e S t a te o f M ai ne f o r s e v e r a l 

d i f f e r e n t fo rm u la e .

F e d e ra l F u n d in g Form ula e 

Bas ed on $5 b i l l i o n

50Z Nee ds 

(C a t. I , I I , IVB) 

50Z P o p u la ti o n

0. 5174Z

$ 2 5 ,8 7 0 ,0 0 0

Ne ed s

(C a t. I , I I , IVB)

0. 58 92 X

$ 2 9 ,4 6 0 ,0 0 0

Ne ed s 0. 53 60 0X
100

P o p u la ti o n

(1 99 0)

0.4 457 Z

$ 2 2 ,2 8 5 ,0 0 0

Nee ds

75Z ( I , I I , IVB) 

25Z P o p u la ti o n

Nee ds 

75Z (I -V ) 

25Z Po p.

50Z ( I , I I , IVB) 

25Z (I -V )

25Z P o p u la ti o n

0.5 533 Z

$ 2 7 ,6 6 5 ,0 0 0

0.5 134 Z

$ 2 5 ,6 7 0 ,0 0 0

0.5 400Z

$ 2 7 ,0 0 0 ,0 0 0

The S t a te o f M ai ne w i l l be a b le t o u s e a l l o f 

I t s a ll o tm e n t u n d er an y o f th e fo rm u la e p ro p o se d .

Th e S t a te o f M ai ne sh o u ld have $4 0 m illio n 

d o l la r s p e r y e a r I n o r d e r to m a in ta in th e p r e s e n t p a c e o f 

o u r pro gra m . At even t h i s r a t e o u r c o n s tr u c ti o n pro g ra m 

w i l l e x te n d to 1983. One way o f i n c r e a s in g th e a llo tm e n t 

to s t a t e s w ith an a c t u a l need wou ld be to d i s t r i b u t e th e 

fu n d s b ased on th e n e e d s l i s t e d i n c a te g o r y 1 , 2 an d 4 b . 

Th e a b i l i t y f o r EPA to r e a l l o t d o l l a r s n o t s p e n t i n o t h e r 

s t a t e s m or e p ro m p tl y w ou ld a ls o be b e n e f i c i a l .

The e s tim a te s f o r em pl oy m en t g e n e ra te d by th e 

pr og ra m used by EPA w ould p ro b a b ly h o ld t r u e i n th e S t a te 

o f M aine w ith th e e x c e p tio n t h a t em pl oy m en t m ig h t b e above 

t h a t e s ti m a te d by EPA d ue to th e l a r g e am ou nt o f wor k 

in c lu d e d in e a ch p r o j e c t w hic h i s i n e l i g i b l e f o r f e d e r a l 

fu n d s.

The c u r r e n t r a t e o f i n f l a t i o n I s a b o u t 8Z p e r y e a r 

f o r m a t e r i a ls . H ow ev er , r e c e n t b id s on se w er c o n tr a c ts 

have bee n l e s s th a n e n g in e e r s e s tim a te s b e c au se o f th e 

ec on om ic c lim a te i n t h e c o u n tr y a t th e p r e s e n t tim e . Th e 

tre a tm e n t p l a n t s and pump s t a t i o n s b id s have b een c lo s e to 

th e e n g in e e rs e s ti m a t e . We have no id e a how lo n g th e 

p r e s e n t b id r e s u l t s w i l l c o n tin u e . I f th e econo my im p ro v es 

th e b id s may n o t b e a s f a v o r a b le in th e f u tu r e .

2 . ISSUE: A ll o tm e n t o f $5 b i l l i o n b ased on n e e d s , p o p u la tio n , 

o r c o m b in a ti o n o f n e e d s an d p o p u la tio n .

I t i s o u r v ie w t h a t o f a l l o f th e fo rm u la e p ro p o se d f o r 

d i s t r i b u t i o n o f th e fu n d s th e fo rm u la b a sed s t r i c t l y on b a s ic 

need s i s m os t e q u it a b le on a n a ti o n w id e b a s i s .
We believe that the numbers submitted by us to EPA

are very reliable. The numbers submitted by the State of 

Maine were generated from preliminary engineering reports 

on file in our office.

We were not able to submit only actual needs which 

necessarily met the criteria for costs effectiveness of 

Section 201 of the Act as many of the preliminary reports 

used had been completed prior to October 1972.

We believe that the allotment of funds based upon 

population is unfair and Inequitable to states like Maine.

We believe that needs is the only equitable way to provide 

funds to clean up the nations' waterways by basing the needs 

formula upon categories I, II, and IVB. We do not believe 

that the needs surveys that have been done are as unreliable 

as EPA, Washington would have Congress believe.

Our percentage of the national allotment has decreased 

each time a needs survey was done, Maine's percentage of the 

national allotment in FY 73 and 74 was 0.9675 percent and in 

FY 75 was 0.6870 percent. The FY 73 allotment was $19,350,000; 

the FY 74 allotment was $29,025,000; FY 75 allotment was 

$26,227,000; and the release of the impounded funds provided 

$78,495,000. The changes have been caused by President Nixon's 

Impoundment and the results of the 1973 and 1974 needs survey.

ISSUE: Reallotment of funds.

If no authorization is made available, we would favor 

a reallotment among the states. We propose that the needs formula 

for categories I, II, and IVB, be used for the reallotment. We 

would not prefer the unobligated money to be used for specific 

projects on a first come, first serve basis, because it would 

be hard to convince municipalities to appropriate their share 

of the project costs unless they were assured they would receive 

the Federal funds. States also would not be able to plan their 

projects ahead on a haphazard basis.

ISSUE: Outlay funds.

We have not experienced a shortage of funds to make 

payments to contractors.

EPA has not contacted cities in our State to ask them 

to withhold making payments or to tell us that they are going 

to withhold making payments to contracts.

We have no indication that the outlay figures suggested 

by EPA will not be adequate between now and October 1.

The "partial needs" concept is not an equitable method of 

controlling the compilation and use of stated needs. Total needs 

should not be used in allotment formulas. Categories I, II, and 

IVB needs would be more equitable.
102

It would be feas ible to allot fur ther con struction grant funding

on the bas is of ob taining the 1983 "fisha bl e— svi mma ble " standard.

(a) Such an approa ch may b ett er foc us the m unici pal sewag e

const ruc tio n effor t towa rd the goal of Impr ovi ng wat er quality. 1

(b) Sec tion 208 pla nnin g cou ld be used as a basis for determi nin g

the wat er q uality n eeds over the lon g— range.

Lan d trea tme nt as an a lt er native to a lake d ischa rge Is bei ng

given m or e consider at io n by our State. •

Aga in, let me thank you for the op po rt un it y to testi fy and

answ er you r que stions. Shou ld you hav e an y furth er questions , ple ase feel

free to call.

Sin cere ly,

'w illiam R. Adam s, Jr., Com mis sioner I r

Dep art ment of E nvi ron men tal Protectlo XJ

WRA: rlc

1
103

Senator M us kie. Ma y I express m y appre ciation to all of you for 

excellent testim ony, for yo ur cand or and fran kness. I hop e th at you 

will come up with a clearer view of some of o ur fru str ations a s we t ry 

to accommodate all of you r needs. It is bad enough to have 5 children, 

bu t we h ave 50. I t is p re tty ha rd to be equ itable to all of them.

[Whereupon, a t 12:20 p.m., the sub com mittee recessed, to reconvene 

10 a.m. Th ursday, May 27, 1976:]

ALLOTMENT OF WATE R POLLUTION CON TRO L 

CONSTRUCT ION GRANT FUNDS

T H U R SD A Y , MAY 27 , 19 76

U.S. Se n a t e,

C om m it tee on P ubli c W o r k s, 

Sub co m m it te e on E nvir onm en ta l P o l l u tio n,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to recess, in room 4200, Dirksen Senate Office Building, Hon. Edmund S. Muskie (chairman 

of the subcommittee), presiding. Present: Senators Muskie, Buckley, and Domenici.

OPENING STATEMENT OF HON. EDMUND S. MUSKIE, U.S. SENATOR 

FROM TH E STATE OF MA INE

Senator M u s k ie . The committee will be in order.

I have a brief opening statement. Two weeks ago this committee reported legislation authorizing $5 billion in construction grant money for fiscal year 1977. On Tuesday, we heard testimony from five State water pollution control officials on the adequacy of this amount and on alternative methods of d istributing these funds among the States. Today, Administrator Train will discuss these same issues. This committee is faced with a difficult problem. We need to establish a formula for allocating construction grant funds which represents 

sound public policy and assures program continuity. Our job is to resolve competing interests. The divergence of opinions expressed by our witnesses on Tuesday precisely illustrates the 

problem we face. While the scope of these hearings is necessarily limited, there are other water pollution issues which have been raised in the Congress. These include the administration’s proposed amendments, the recom­ mendations of the National Commission on Water Quality, and legislation reported by the House Public Works Committee. The specific issues include amendment of section 404, the dredge- and-fill permit program administered by the Army Corps of Engineers; restriction of eligibility and reduction of Federal share for construc­ tion grants; reduction of the hazardous spills liability and delaying of the toxic pollutant control program; assumption by certain States of the construction grant program; and extension of the 1977-78 time requirements for secondary treatment for municipalities. The subcommittee has not had an opportunity to investigate these issues. So we need to know whether it is essential tha t we deal with 

any of these issues this year.

(105)
106

The situation, of course, is complicated by the fact that we are now 

approaching the first of June. We are also approaching the summer 

when legislative time will be substantially reduced by two political 

conventions and the fall which will be preoccupied with the election 

itself.

So we have to be, I think, realistic about gaging the legislative 

possibilities of dealing with a fairly wide range of controversial issues.

Frankly, it is my own instinct to do nothing more tha n to provide a 

1-year extension of the construction grant money on some basis and 

postpone the consideration of the other issues. I am sure we will be 

more thorough and comprehensive next year.

As you gentlemen know, the committee has been preoccupied for 

over a year with the Clean Air Act amendments and we are going to 

continue to be preoccupied with floor action on those, on the Senate 

side, and on the House side, presumably, following the Senate action, 

and then conference.

So the time available for us to do a really comprehensive reexamination of all the issues related to the Water Pollution Act is very 

limited. That is the problem I want to present to you, get your reaction to, and ask specific questions as we get into this.

I have also explained to Mr. Train .that I may be drawn out of the 

hearing at 11 o’clock hopefully for a brief time. I am delighted to have 

Senator Domenici here to continue the hearing until I can get back 

because I doubt very much t ha t 45 minutes is sufficient time for me to 

explore all the questions that I would like to explore.

With that, Mr. Train, it is a pleasure to welcome you again before 

the committee as a longstanding friend, with the same commitment 

tha t we have, with the objectives which we are trying to advance with 

these major programs.

STATEMENT OF HON. RUSSELL E. TRAIN, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY, ACCOMPANIED BY JOHN R.

QUARLES, DEPUTY ADMINISTRATOR; DR. ANDREW W. BREIDENBACH, ASSISTANT ADMINISTRATOR FOR WATER AND HAZARDOUS MATERIALS; ECKARDT C. BECK, DEPUTY ASSISTANT

ADMINISTRATOR FOR WATER PLANNING AND STANDARDS; AND

JOHN T. RHETT, DEPUTY ASSISTANT ADMINISTRATOR FOR

WATER PROGRAM OPERATIONS

Mr. Train. Thank you, Mr. Chairman, and Senator Domenici. I 

am accompanied by Mr. John Quarles, Deputy Administrator at 

EPA; I might add, Mr. Quarles has been following many of these 

issues very closely and I think between us and the others with me, we 

can address most of the issues that the committee will be interested in.

On my left is Dr. Andy Breidenbach, the Assistant Administrator 

for Water and Hazardous Materials; and Deputy Assistant Administrator Chris Beck, and Deputy Assistant Administrator Jack Rhett.

I have a fairly short statement, Mr. Chairman, which I will read. It 

is directed particularly to the allocation formula issue which you 

raised in your letter of invitation to testify, but I know the committee 

wishes to get into the kind of broader questions which you mentioned in 

your opening statement.
107

Thank you for the opportunity to appear before the committee to discuss allocation formulas for the municipal construction grant pro­ gram under the Federal Water Pollution Control Act as well as the question of additional funding for fiscal year 1977. Although allocation of funds is largely a matter for Congress, we believe that the allocation formula should in general distribute funds in 

accordance with priority needs. We further believe tha t some stability should be built into the formula from year to year so tha t States have an idea in advance of how much money they can anticipate receiving from future authorizations. Under the Federal Water Pollution Control Act of 1972, Congress authorized $18 billion in contract authority to municipalities to con­ struct publicly owned treatm ent works for fiscal years 1973, 1974 and 

1975. These funds were to be allotted to the States on the basis of “needs,” as defined in estimates prepared by the Environmental Protection Agency. For the first 2 years of the act, fiscal year 1973 and fiscal year 

1974, $11 billion was authorized. Following the issuance of regulations on February 25, 1975, alloca­ tion of tha t amount was completed in accordance with the 1971 needs 

estimate. A new needs estimate was required by the act to distribute funds to the States in fiscal year 1975. In Public Law 93-243, Congress directed tha t the remaining $7 billion be allocated according to the 1973 “needs” 

survey. The formula used for allocating these funds provided tha t 50 percent of each State’s share was based on the ratio of the individual State’s total construction needs to the total of all States determined in the 1973 survey, and 50 percent on the basis of needs for treatmen t plants and interceptors only [categories I, II and part of category IV]. The formula also stipulated tha t no State would receive less than 

it received in fiscal year 1972. Besides providing an allocation formula for fiscal year 1975 funds, Public Law 93-243 also directed tha t EPA conduct the 1974 needs survey to obtain new estimates from the States as a possible basis for allocation of construction grant funds beyond the current $18 

billion authorization. The results of tha t survey were submitted to the Congress on February 10, 1975, along w ith several conclusions and recommendations. First, the costs reported were of limited value for allocation pur­ poses because the assumptions, the levels of effort, and the quality of data used in preparing these estimates varied widely from State to 

State. Second, if the 1974 needs estimates, were to be used to allocate funds, they should be tempered with population data. EPA recom­ mended the allocation formula be based 50 percent on population and 50 percent on needs. Population would add an element of stability 

and predictability. And third, we" recommended in the 1974 survey report tha t only needs reported for treatment plants and interceptors—categories I, II and IVB—should be used in the allocation formula. Needs reported
108

for othe r categories were considered less com par able and would in 

gen eral result in less pol lution reduction per dollar expended than 

cate gories I, II and IVB.

Th e form ulas used for fiscal years 1973, 1974 and 1975 have enabled 

us to allot the entire $18 billion among the Sta tes . Over $9 billion has 

been obligated to date. In lig ht of this, Mr. Ch air ma n, one final 

po int made in the 1974 ne eds survey cannot be igno red.

Th e need s surv ey estim ate d the cost of needed trea tm en t works at 

$444 billion— 1975. While we thi nk this est imate is high, the costs of 

needed facilities curre ntl y eligible under the law is non etheles s consid era bly larger than the cu rre nt autho riz ation of $18 billion.

I guess th at is ra th er an extrem e un derst ate me nt.

Se na tor Mus kie. I notice you gulped th at when you said th at .

Mr. r

I rai n. With ou t the fut ure alt erati on of eligibilities and 

prior itie s in the constru ction gran ts program the needs rep orted 

will clearly exceed any fu ture fund ing capac ity. A nd, as yo u m ay know, 

the admi nis tra tio n has ind ica ted th at it will oppose any extension 

of th e grants program w ith ou t changes in either eligibilities or p riorities

I must, therefore, res pectfull y urge con sideration of the pro gram 

chang es proposed in the dra ft bill su bm itted with mv lette r to the 

comm ittee on Ja nu ar y 29, 1976, and introd uced as S.'3O38.

Th e purpose of th e pro posed am endm ents was to br ing the u ltima te 

Federal cost of the co nstru cti on grants pro gram wi thin reasonable 

reach of Fed eral bu dg etary resources by red uci ng or elim ina ting the 

Fe deral share for certain categ ories of facilities.

Th e am endm ent s pro posed in my lette r would also insure th at 

gr an t fun ds are used for fac ilities mo st critical to red ucing po llu tant 

discha rges from mu nicipal wa ste wa ter system s. A ha rd look at the 

pe rcen t of Federal sha re and eligibilities along the lines we hav e 

sug gested will f aci lita te decisions on the am ou nt of addit ion al funding 

ap prop ria te for the gr an ts pro gra m.

Th is concludes my prepared rem arks. I will be pleased to answer 

an y quest ion s the comm ittee ma y hav e.

Se na tor Mus ki e. I s the estim ate of $444 billion relate d to ca tegories I, II and IVB?

Mr. T rain. The $444 billion goes well beyond tho se three ca tegories. I t inclu des all of the various cate gories, includ ing storm 

water runoff.

Se na tor Mus ki e. W ha t w’ould the est im ate s be for cate gories I, 

II an d IVB?

M r. T rai n. I believe, su bj ec t to correction here at the table, th at 

the to tal is som ething in th e neig hbo rhood of $44 billion.

Mr. R hett. In 1975 dollars, it would come up to ab ou t $65 billion.

Se na tor M us ki e. W ha t are the majo r ite ms in a dd ition to that which 

are includ ed in the $444 billion?

Mr. R hett. Mr. Ch airm an , $305 billion is for sto rm wa ter and is 

the major elem ent.

Se na tor Domenici. You said $305?

Mr. R het t, es, ou t of the $444. The needs su rvey figures have 

been escalated to 1975 dollar s, Se nator Dom enici.

Se na tor Domenici. We ha d $200 and som eth ing w hen you testified 

befo re.

Mr. R hett. Tha t was in the 1973 dollars. W ha t we have done and 

wha t the Ad mi nis tra tor wa s talkin g ab ou t is usin g 1975 dollars.
109

Senator Muskie. So $305 is the first?

Mr. R hett. $305 billion is for storm water, collector sewers is $22 

billion and $9.2 billion is for major sewer rehabilitation. The base figures that we were talking about referred to categories I, II and IVB. Basic treatment plants was $37.8 billion.

Senator Muskie. Basic treatment plants?

Mr. R hett. Right. We have included infiltration inflow in this 

* since it is an integral part, a tradeoff with the trea tme nt plants which is $6.7 billion; and the interceptor sewers are $22.6 billion. We can furnish you a table for the record on this, with the escalated 

figures.

[The table referred to follows:]

IMPACT OF PROPOSED AMENDMENTS TO PUBLIC LAW 92-500 ON FEDERAL SHARE 

OF ESTIMATED COSTS OF PUBLICLY OWNED TREATMENT WORKS

|ln billions of dollars)

Total 

needs •

Federal

share

(X 0.75 )

Anticipated

obligation

of

currently

available

fu nd s2

75 percent 

Federal 

share 

remaining 

after 

obligation 

of

curren tly

available

funds

Reduction 

due to 

proposed 

amendments’

Federal

share

remaining

1 and I I. Treatm ent plants___________ $37.8 $28.4 $8.0 $20.4 <$6 .6 $13.8

ll l- A . Correction of infiltratio n/inflow. 6. 7 5.0 .5 4.5 _ 4. 5

Il l- B . Major sewer rehabilitation_____ 9.2 6.9 .1 6.8 ’ 6.8 .

IV-A. Collector sewers_______ ____ 22.1 16.6 1.0 15.6 ’ 15.6 .

IV-B. Interceptor sewers___________ 22.6 16.9 4.5 12.4 • 4.2 8.2

V. Control of combined sewer overflows...................................... ............. . 40.4 30.3 1 .) 29.3 •5 .8 23.5

VI. Control of discharges from separate

storm se wers,................... . ............... 305 .5 229.1 0 229.1 ’ 229.1 .

To tal.............. ............................. 7

 444. 3 333.2 15.0 318.1 7

 268.1 50 .0

> From 1974 needs survey in 1975 do'lars.

2

 $18,000,000,000 current authorization minus $3,000,000,000 obligated as of July 1, 1974 (th e tim e of the 1974 needs 

survey). ’ Amendment allowing case-by-case extension of the July 1, 1977, deadline for publicly owned works is not expected 

to affect the Federal share required in constant (1975). « Includes $2,500,000,000 reduction for amendment lim iting funding of stringent treatm ent levels, and $4,100,000,000 

for amendment eliminating eligibility of reserve capa city for future population.

’ Amend ment reducing or elim inating elig ib ility for Federal funding. •

« Am ndm ent elim inating eligibility of reserve capacity for future population.

7

 The total needs estimate, and therefore the reduction in Federal share due to the proposed amendments, is overstated. Estimates in categories I, II, II I, and IV may be somewhat hi fch because of the incentive to report high costs in the 

needs survey. The accuracy of category V is d ifficu lt to assess, but the category VI estim ate is th ought to be high. The es ti­ mates in category VI are based on capital-inte nsive control techniques, whereas noncapital intensive techniques w ill 

probably be more cost effective in many cases.

Senator Muskie. Focusing on the—we appreciate tha t table— focusing on that $65 billion, does that represent the same capacity 

tha t was to deal with the backlog tha t was assumed in the 1972 law? In other words, does this figure have growth in needs beyond 1972?

Mr. Rhett. Yes. This includes growth. The growth reduction as 

proposed in the amendment tha t the administration has offered would reduce these figures down to about $50 billion for the Federal 

share. The administration amendments limit the growth factor, cut the combined sewers to 60 percent, and eliminate the Federal share for 

collectors and storm water.

74 -536 0 - 76 - 8
110

Senator M uskie . The 1972 ac t makes the assu mption th at it is 

projected to deal with the backlog then, no t grow th. Now wh at you 

are telling me, I want to be sure, is y ou are telling me the $65 billion 

figure repres ent s no t only increases due to inflation or othe r reasons *

in cost, bu t also grow th in ca pa city beyond wh at was assu med as 

back log in 1972.

Mr. R he tt. Yes, sir. Bu t, Mr. Ch airma n, there is a provisio n in the 

act th at shif ted funding from stra ig ht back log to con sidera tion of a 

reasonable growth projection. T hat is the prov ision in the law which 

says th at adequate reserve capa city mu st be considered. Th at, I 

believe, was added in conference. So the ground rules have really no t 

been changed here.

Mr. T ra in. Mr. Chairm an, if I could interje ct here, I think you 

hav e called attention to an im po rta nt con ceptual concern here and it 

is one of the foundation s, ratio nal, for the ad minist ratio n’s eligibility 

proposa ls to the Congress.

On the basis th at the pro gra m was conceived and rea lly should be 

conceived and carried out from the s tand po int of correcting a b acklog 

problem , th at has grown up o ver m any years, and th at if the program 

is ration alized in th at way, th at i t becom es a manag eab le pro gram in 

terms of availab le resources and th at it is impo rta nt that t he Congress 

address the problem of eligibilities th at go beyond the backlog 

ration ale. I ju st w anted to ma ke th at point.

Senator M us kie. How mu ch reserve is assum ed in the $65 billion?

Mr. R he tt. The figure is $4.1 billion; the reduct ion in ju st reserve 

capacit y would be $4.1 billion.

Senator M us kie . I s th at g eared to some date in the futur e?

Mr. R he tt. Th at is geared to the population at the tim e the pla nt 

would come on line.

Senator M us kie. It is a difference?

Mr. R he tt. Yes, sir, ra th er t ha n pro jecting up to 1990, the 20-year 

life o r som eth ing of th at n atu re.

Senator Mus kie. You would make the date neare r to 1980 than 

1990?

Mr. R he tt. Under the prop osed amend ment, it would be about 

1980.

In fac t, th at would be a good average.

Senator M us kie. The $65 billion, if we would get the $65 billion, 

would it tak e us beyond 1980?

Mr. R he tt. Yes, it would take us up to projection s for 20 years.

Se nator D omenici. Mr. Ch air ma n, could I clarify a figure? Where 

do you pu t the com bination sewer system, storm and sewer, in those 

figures you gave us? Whe re are com bined sewers?

Mr. R he tt. The com bined sewers. There was some $40.4 billion •

in com bined sewer, catego ry V, which under the prop osed administ ration am endm ents we w ould fund at 60 percen t ra te r th an 75 percen t.

Senator D ome nici. When yo u were brea king down the last needs 

survey , where you gave us 305 a nd 22, wh at did you do w ith combined 

storm sewer and regular sewer in th at s ummation ?

Mr. R hett. The $305 billion figure is str ictly sto rm water, 

no t combine d.

Senator Dome nici. Not c ombined?

Mr. R he tt. Tha t is rig ht. Fo r combined sewers, you add anoth er 

$40 billion. I need to clarify one thing with reg ard to gro wth . The $4
Ill

billion tha t I was talking about is for treatmen t plants. There is another $4 billion of reserve capacity for interceptors. So in total, there is an $8 billion potential savings in Federal funds by cutting back the Federal funding of reserve capacity under the administration’s amendments, and by just picking up the backlog.

Senator Muskie. One further question on reserve capacity. I think 

what the Congress had in mind in the revision which was deferred is provide reserve capacity in existing plants and not for new growth in 

new areas of the country and so on. Do you make a distinction in your analysis based upon that? In other words, what we intend to say was that as you built the plants to meet the backlog tha t you should build in some reasonable reserve 

capacity in those plants for the future. Th at is something different than programing that would respond 

to the growth of the country generally.

Mr. Train. We have in practice built in a reserve capacity factor 

as the chairman suggests. The administration is now proposing, in order to bring the program again into a more manageable condition budgetwise, tha t tha t reserve capacity be limited to the population need as estimated as of the time tha t the plant would come on line; in other words, not at the time of the design getting underway, but as of the time it is projected to be completed and on line.

Th at is the amendm ent which has been submitted.

Mr. Rhett. Mr. Chairman, one addition. We figure reserve capacity 

now by taking the existing population and adding the population projections into the future. These population figures are then related to the other provision of the act which deals with the most cost- effective way to build and to structure the project. In some cases this might project reserve capacity further out, and in some cases it 

might bring it in. So the two provisions of the act—the most cost effective solution and adequate reserve capacity—are tied together to make sure tha t the overall dollars going into the plant are the most efficient use for 

those dollars.

Senator Muskie. With respect to the legislative program as it 

relates to this particular problem, what would be your feeling if we were to provide the $5 billion additional authority with no change at this point on eligibility criteria or the standard Federal role pending a more comprehensive review of the questions we have been discussing

and others?

Mr. Train. I think the administration’s position is very clear on this, 

Mr. Chairman. The administration strongly recommended tha t there be no additional authorization until such time as the Congress 

addressed and acted on the problem of eligibility. So to specifically answer your question, I feel certain tha t the administration would oppose a straight authorization without consideration of the eligibility issues.

Senator Muskie. As a practical matter with respect to the $9 

billion tha t has already been obligated, have the eligibilities gone beyond I, II, and IVB to any major extent? Has the program gone 

beyond that, the project gone beyond that, to what extent?

Mr. Train. I don’t believe to any significant extent, Mr. Chairman.

Mr. Rhett. Except in one area. In funding combined sewers where 

the problem has been more critical than, let’s say, a treatmen t p lant
112

one—there has been some funding of collectors. When you look at 

the overall program, however there have been very few instances.

Senator Aius kie. Would you exclude tha t kind of exception in the 

future on the present policy change proposals?

Mr. Rhett. No. For combined sewers, the administration recommends 60 percent rather than 75 percent funding. This was done no t 

only to reduce Federal costs, but also to force the priorities to where 

we feel the greatest needs are normally—the treatmen t plants and 

interceptors.

Funding of combined sewers has an extremely high priority at 60 

percent. The better projects will bubble up anyway, but the ones on 

the margin will drop out and come behind the treatment plant.

Mr. Quarles. One of the problems is th at in the earlier days of the 

program the basic treatment facilities were the obvious first needs 

and tha t has been what the States and municipalities have addressed.

As time has gone along, some of those first needs have been met or 

are being met. Other needs in these other categories are coming to 

the surface and the danger is that pressures are building to move the 

funding into these other categories.

Senator Muskie. The question I want to pu t is this: Making a 

distinction between the policy changes as it would affect future programs and as it would effect, or as it would have changed programing 

up to now, if the $5 billion additional authorization is provided on the 

basis of simply continuing the program assumptions tha t have been 

pu t in place, p ut in practice and have been funded, without changing 

in the law for the moment the other eligibilities which we are concerned 

about and which produce this $444 billion figure, is tha t an option 

that the administration would be inclined to look at favorably?

Mr. Train. I think the administration would be of the view tha t 

it isn’t simply a m atter of limiting the eligibilities to categories I, II, 

and IVB. There are other issues tha t are addressed by the administration’s amendments such as the reserve capacity for future growth 

problems. The administration feels very strongly tha t they should be 

addressed and these are the issues which cut across all of the various 

categories.

Senator Muskie. Could I ask you at this point without asking for 

a commitment to look at the possibility—I am trying to minimize 

legislative hurdles—look at the possibility of continuing the present 

program at its present level, with the practical application tha t it has 

had, for the next year under the $5 billion additional authorization 

in order to minimize the budgetary levels tha t might be represented 

by some of the other aspects of'your recommendation without prejudicing them?

Mr. Train. I certainly appreciate tha t suggestion. I can assure 

you tha t the administration will look at it, certainly.

Senator Muskie. I don’t know its implication myself. I am simply 

probing for some practical way to get this, keep this thing on track 

without prejudicing the administration’s recommendations and 

without making final commitments tha t are unrealistic.

Senator Domenici. Mr. Chairman, would you yield on that point?

Senator Muskie. Yes.

Senator Domenici. Mr. Train, I join the chairman in asking 

serious thought be given to that. I have one question with reference
113

to it tha t I think yesterday’s experts, those from the States tha t run 

the program, lodged in my mind. I think as you analyzed the relevancy of continuing for an addi­ tional year with the $5 billion authorization, tha t you ought to also analyze what the States have pending by way of their applications as those pending requests might change the amount of money tha t is in I, II, and IVB, because I gather that many of them are waiting for funding for things beyond tha t, and tha t might very well even change our thinking as to whether the $5 billion with a continuation 

based on partial needs is the best approach. I think what we are groping for is a clean approach and to the extent tha t a maximum of the $5 billion would be within the I, II, 

and IVB, categories, we would like to know that. I think tha t would be relevant to the administration because we might be fighting a ghost if as a matter of fact we are really going to be spending most of the money on a 1-year extension in the way t hat 

you are recommending in your amendment anyway. Then I think we have to consider the political ramifications of not going with a 1-year extension because we are apt to get something 

far different. I think also the amount of money, the $5 billion, is a relevant figure. You have not indicated whether the level of funding at $5 billion is significantly objectionable to the administration, but you have indicated that the overall failure to address the eligibility issue is as 

significant as the dollar figure as I understand it.

Is tha t correct?

Mr. Train. I think tha t is correct. I am not in the position to say 

at this time tha t assuming the Congress addressed the eligibility question so tha t it was no longer an issue with the administration, tha t $5 billion is acceptable or $3 billion or $7 billion or whatever. But I do agree, Senator Domenici, with your suggestion tha t we look at the real world, so to speak, and evaluate what is involved in the pending applications that would be funded by an extended authorization. The suggestion is a good one and we will do that. While I certainly recognize that the chairman can’t give any indication of what congressional action on these various issues might be in the future, I think it might be helpful in the consideration of this issue to know what the committee’s plans are in terms of con­ sideration of these eligibility matters as well as other water quality 

issues in the next Congress.

Senator Muskie. It is our plan to give the Water Act as high a 

priority in the next session as we have given the Clean Air Act in the last year and this year; comprehensive in view of all of the issues tha t have been raised and there are many and consideration and resolution will take tha t kind of attention on the part of the committee, as the Clean Air Act will be behind us, hopefully.

Mr. Train. I share th at hope.

Senator Muskie. At least as a legislative problem and we can address it and we intend to. If we can to any extent resolve this funding question relatively soon in this session, we might even be able to begin 

hearings on the broad questions in this session. This, of course, depends upon what the House insists upon. We may not be able to get this limited and clean legislative package this year,
114

but we think that the desire is to do a comprehensive job next year. I 

will commit myself right now to that.

Mr. Train. That would include consideration of the Administration’s proposals?

Senator Muskie. Yes; no question.

Mr. Train. Thank you, Mr. Chairman.

You have just raised another point by reference to the pending 

legislation in the House, H.R. 9560. Since you have raised it, I will take 

the occasion to point out that some elements that are included in th at 

bill in its present form raise very substantial questions tha t bear upon 

the matters we have been discussing. The so-called Roe amendment 

would give States complete control over priorities and as I understand 

it, little or no review on the part of EPA. This would really exacerbate 

the kinds of problems we have been talking about.

As I see it, the Roc amendment would eliminate the kind of assurance which the committee appears to be seeking. If there were 

an extension of the authorization or a new authorization, it would 

be used along the lines of present practice and present policy. As I 

read that particular amendment in the House bill, that would pretty 

well remove all of the underpinning for our present priority system; 

making the construction grants program a public works program 

rather than an environmental program.

Senator Muskie. Yes. As a m atte r of fact, tha t was going to be my 

next question. Let me ask you this. Over $9 billion has been obligated, all $18 billion has been allotted. With that as background, 

the fact is that States are running out of their allotments at different 

rates.

Do you have an analysis of that? We have been saying lately tha t 

22 States are about to run out of their share of the $18 billion.

Do you have an analysis which confirms or modifies tha t and do 

you have an analysis that further flags the rate at which other States 

would begin to run out?

I would like to see how this thing is moving down the road; $9 

billion is left unobligated.

Does that mean that there are some funds that are likely to lie 

idle for a considerable period in the future because States would 

not be able to meet their program needs up to their full share of the 

$18 billion?

I would like to have some kind of analysis of t ha t sort so we can 

follow it. We have got to get votes for whatever we report out.

At this point, 22 States clearly would like to see some more legislation and maybe others will be around next year. Others will be 

around 2 years from now and we don’t have any clear picture, I 

don’t think, at this point in the committee of what that is.

Mr. Train. I believe tha t we can confirm the committee analysis 

as to the 22 States. That is our best analysis of the numbers of States 

which will be running out. We can provide a list of those States to 

the committee, if we haven’t already done so. This analysis is based 

on the assumption, of course, tha t the States would continue to 

submit applications as presently planned and as they have been doing. 

Obviously, if they don’t subm it applications they won’t run out. 

But 22 States is our best picture at the present time.

[The list of States referred to follows:]
115

Sta tes W hic h May R un Out of F un ds

Twenty-two States are in this category of probably running out of funds from their allo tment of the $18 billion. These are listed in the attachm ent. The Tal­ madge/Nunn Amendment, if passed, would help many of th ese States. However, even with these funds, six Sta tes would still run out of funds. Following is Atta chm ent I which lists States which will run out of FY 76 funds six months prior to the end of FY 77. Also is Attachm ent II, a listing of States which will run out of FY 76 funds early even with the proposed $1.4 billion Talmadge /Nun n increases. Also is a list of States and the amounts th at the y will gain if the Talmadge/Nunn Amendment becomes law. Maine, Delaware, and Virginia are due to run out of funds before September 1977, and would not be benefited by Talm adge/Nunn. In addition, Hawaii, Nev ada and Oregon would receive funds under Talmadge/Nunn bu t would still 

run out of funds early.

STATE S WHICH WIL L RUN OUT OF FISCAL YEAR 1976 FUNDS 6 MO. PRIOR TO THE END OF FISCAL YEAR 1977 ‘

Transition quarter, July to Fiscal year 1977, October to

Fiscal year 1976, January to June September March

Region I ......................................................................................................................................................

Region I I ........ ............................................................................................................................ ...............

Region I I I ..................................................................................................................................................

Region IV ._ ..............................................................................................................................................

Region V .....................................................................................................................................................

Region V I._ .......................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Region V II.................................................................................................................................................

Region V II I ______ North Dakota, Wy oming................... Montana, South Dakota, U ta h ...

Region IX ................ Hawaii, Nevad a.....................................................................................................

Region X ....................................................................................................................................................

Ma ine.

Delaware, Virg inia .

Alabam a, Florida, Mississippi,

North Carolina.

Texas.

Missouri.

Colorado.

Arizon a, Pacific Islands.

Alaska, Idaho, Oregon.

1

 Estimates based on most recent project development information obtainable from State priority lists. Above lis t may

change depending on future project estimates received.

Senator M uskie. The States are going to run out in this calendar 

year?

Mr. Train. Fiscal year.

Mr. R hett. Four of them this calendar year, two during the 

transition quarter and the rest of them during 1977 or from October to March of 1977. As of September 30, 1977, under the law there is an automotic reallocation of the moneys that are not expended by 

then. The bulk of the State s will be running out during the October to March period, although six of them will run out of funds by the end 

of the summer.

Senator Muskie. So as a practical political matter, we face the 

problems of the 22 who are going to run out, plus x number whose 

allotments may be reallocated if they haven’t obligated their allotments by September of 1977. So those States, too, presumably will be interested in anything we 

do this year to protect their interests. Do you have any idea now 

many of those there are?

Mr. Rhett. There is somewhat a difficult one. It varies.

Senator M uskie. I won’t ask you to identify the States.

Mr. Rhett. Under those conditions probably seven or eight 

State s are pretty critical and some of these look almost impossible 

right now. Having identified these, our regions are working directly with them 

now to try to assure that they do not lose money by September 30, 1977. But there are really anywhere from 5 to 10 States tha t are on 

the wire.
116

Senator Muskie. Certainly there is going to be pressure from the 

22, to get some of th at money for the 7 or 8 and I know there will 

be pressure from the 7 or 8 to protect their future eligibility. So now 

we have 50 Senators who ought to be able to get some legislation this 

year.

Let me ask you this: I gather we are actually spending out now at 

the rate of about $3.5 billion a year.

Mr. Train. I think that is correct. It may be a little bit higher than 

that by the end of this particular fiscal year, closer to $4 billion.

Mr. R hett. $4 billion. I guess part of the question is, Are we 

talking about obligations or outlays—paying bills or obligating?

Senator M uskie. I guess we need both figures.

Mr. Rhett. Obligations this year will be in the neighborhood of 

about $4 billion while outlays this year will be in the neighborhood 

of about $2.5 billion.

Senator Muskie. Are those likely—are either or both of those 

figures likely to rise?

Mr. Rhett. The outlays will go up considerably, because construction is on an S curve and we have passed the knee of the curve. 

The outlays are beginning to rise very, very rapidly. The obligations 

are dependent upon the local situation, the ability to generate the 

local share and other factors, obligations are somewhere in the $4 

or $5 billion range. It could probably go; from $4 to $6 billion.

Senator Muskie. A lot of the States, I think all of the States, 

testified, and I gather others have also testified that they have complained about administrative lag and administrative delay.

Have we reached the point where tha t has been smoothed out 

where the administrative process consumes less time? Could you give 

us a picture of what has happened there?

I would think initially there might be more of that kind of thing 

than later. I wonder if we are at the later stage and if there can be 

some reassurance?

Mr. Train. I think we have made, if I may say so, a very substan tial improvement in the administrative picture as far as the 

program is concerned.

In part, this is a ttributable to the fact tha t the program has matured and experience has been gained. But the flow of funds has been 

very substantially improved from the obligations over recent months.

I think this does speak to improved administration and improved 

relationships with the States. My own impression is—I won’t say 

the complaints have all gone away, I don’t suppose they ever will, 

bu t I hear a good deal less now than a year ago or two years ago. I 

think the program really is going quite well.

Jack, can you add?

Mr. Rhett. There has been considerable reduction of time for 

administrative processing. Not only has EPA been maturing and learning and getting all the regulations but the municipalities and the 

consultant engineers have also been improving their skills and understanding. Understanding of the new law, 92-500 has improved. It is a 

very complex law and the water programs are moving, in my opinion, 

very, very smoothly, considering the amount of money tha t is going 

out.

Obviously, we can’t afford to hastily obligate funds. Physical and 

fiscal integrity have to be watched.
117

So I person ally think th at it is in very, ve ry good shape now.

Se na tor M us kie. I have used my time. Se na tor Dom enic i will 

hav e que stio ns. But l et me ask ju st a few more quest ion s. But pursu ing the sam e questio n, we have been told th at man y cities have been req ueste d by EP A regional offices to hold off from liq uidatin g the co ntr acts on large pro jec ts th at they have underway until the beg inning of the ne xt fiscal year bec ause of ou tla y ceilings 

th at w ere set by the Ap prop ria tio ns C om mittee. Is th at actua lly ha pp ening ? Is th at a real problem? If so, are you still ex periencing a shortage of fu nds wi th which to l iquida te co ntract s?

Mr. T ra in. I think it is fair to say th at we have been experiencin g 

a tigh t sit ua tio n on ou tla ys. We hav e had the ou tla y ceiling on old law expenditu res lifted com ple tely. So the re is no pro blem there at 

the pr esen t time. As to the 92-500 outlays, th at is tig ht, but we do n’t see any ha rd ­ ship cases at the prese nt tim e. I do n’t believe I could ha ve made th at stat em en t several weeks ago. I think thi s is the reason for the w ork of the regional offices th at y ou r efe rred to. Th ey ha ve tri ed to assure th at 

the re were no real ha rdship case s arising. Jack , do you w^ant to give an y fuller pictu re on the o ut lay situation?

Se na tor Mus ki e. I un de rsta nd th at the A pp ropriatio ns C om mittee 

has raised the ou tla y ceiling by $300 million. Is th at not true?

Mr. R he tt. T hat is the liq uidatio n au th or ity un de r Public Law 

92-500. T hat w as d one ab ou t a month ago, and it relieved the sit uatio n 

un de r new law proje cts very, very much. Th e reason w hy we are tight in liq uid ation au th or ity is we hav e had a run on the b ank . All of a s udden the b ank looked like it was r unnin g ou t of mo ney and everyb od y came rus hin g in to p u t in their bill to 

ma ke sure the y got paid first. So we do have betw een n ow and J un e 30 a tigh t s itu atio n in 92-500. Projects like the New Or lea ns one th at have had mu ch publi city, are no longer prob lems. The y have been paid. Th ey are old pro jects. As of Ju ly 1, anoth er $600 million worth of liq uida tin g au thor ity wall be ma de availab le. So w’e will be able to pa y ev erything off. In addit ion , the re is no rea l ceiling. 0M B has offered no ceiling du rin g the tra nsition q ua rter on all old law’ pro jec ts. We will probably come in for anoth er su pp lem en tal of liq uidatin g au th or ity durin g the tra ns ition qu arter , ju st to ass ure th at the re are no pro ble ms. Once we get int o 1977 there is ad eq uate liq uida tio n au thor ity . 

The pro blem has been the 1976 tra ns ition qu arter.

Se na tor Mus ki e. One fu rthe r que stio n and then I w’ill yield to 

Se na tor Dom enici. With resp ec t to the reim bu rse men t to the States in the 1966 law, wha t is th e stat us of th at program ? Th ere are still 

ou tstand ing obligation s, I ga ther.

Mr. R he tt. T hat one is alm ost wr apped up ex cept for pro jec ts 

th at are un der constru cti on th at we are reimb urs ing as they go along. Th e obligation portion of it is ab ou t 1.8 ou t of the $1.9 billion. The pa ym en t p ortion—I may be off $100 billion here or th ere— is somewdiere ma ybe $1.2 billion to $1.4 billion. But the rest of the se are under con­ str uc tio n, being paid as the brick and m or ta r go into the gro und .

T hat pro gra m is in very, ve ry good shape.

Se na tor Mus kie. Se na tor Buckl ey ha s arr ived an d I will yield to 

him firs t.
118

Mr. Train. I assure the committee we don’t round off our programs 

in the $100 billion lots.

Senator B uckley. Thank you, Mr. Chairman.

I am sorry I couldn’t have been here at the outset of your presentation, but there is one area that I am terribly concerned about. Presumably, it is our national purpose to see th at the funds tha t can be 

mobilized to clean up our waters are focused where they will do the 

most good, where we get the most pollution abatement per dollar 

expended.

Past recommendations that your agency has made on allocation 

formula has used needs as the major component. The needs used in 

computations with these formula were assessed in needs surveys 

conducted by your agency.

These surveys have been criticized in many circles for leading to 

inequitable allocation for the construction grant funds.

Do you feel that the criticism has been justified?

Mr. Train. To some extent, yes. I think to some extent the 

criticisms were inevitable. We have had to rely upon State assessments 

of fairly open ended eligibility. So you have a problem coming from 

two directions.

While we have tried to do a close analytical job on the reports 

tha t we have received from the States, there is a limit to our abilitv 

to clean, launder, if you will, the estimates satisfactorily.

Senator B uckley. Do you believe tha t you are improving your 

capacity to do so?

Mr. Train. Yes. That is correct.

Senator Buckley. I ask t ha t because to the extent that you are 

able to foreclose these criticisms or a t least keep them at bay, to tha t 

extent we are less apt to have floor action tha t will turn these surveys 

upside down and come up with a misallocation of funds.

Mr. Train. I am not sure I would share tha t (minion. I would 

presume that it would improve the situation in the Congress, b ut no 

matter how you design a needs survey, some States are going to get 

more and others are going to get less and some are going to get more 

or less than they got previously.

Those responsible for representing those States are apt to have 

some concern about any allocation formula, I believe.

Senator B uckley. Presumably as we clean up the waters in any 

given area, there should be a scaling down. But is it your belief tha t 

the needs approach continues to represent the most equitable and 

effective means of allocation funds?

Mr. Train. With some qualification, yes. Certainly, it is hard to 

argue with the concept of need as the basic foundation for the allocation of funds. I would say particularly if the eligible needs can be 

kept in manageable dimensions, b ut I would say tha t it has been our 

experience that a population factor provides a stabilizing influence 

with which to temper an allocation formula otherwise based entirely 

upon need.

We know for a fact that human populations are in terms of numbers 

very much proportional to pollution problems in terms of water 

pollution.

So a population factor with a 50 percent or something of tha t sort, 

can, as I said, introduce an impo rtan t stabilizing effect.
119

Senator Buckley. Would it also be accurate to say tha t pollution is more the result of the concentration of population than tne population itself?

Mr. Train. Yes; I think tha t is probably true.

Senator Buckley. Tha nk you very much.

Senator Domenici. Thank you, Senator Buckley. I don’t think we are going to be very long, Mr. Train. We have some written questions that I am going to submit for you to answer 

in the record.

Senator Domenici. Let me explore with you a few thoughts based on the assumption that we are talking about a 1-year extension at $5 

billion. The thing tha t concerns me most about that approach is that hearing from the States yesterday, they all want continuity, they all want longevity, and th at puts me to speculating that out in the field the States have some very grandiose plans that they are in the process of developing; I use the word not by way of criticism, but really using the broadest scope of what their expectations might have been. It seems to me that we might consider the $5 billion, 1-year ex­ tension with a requirement tha t the moneys be used only for I, II 

and IVB type projects. The reason I suggest that is because it seems to me tha t if we are going to commit to the American people, the taxpayer, tha t we are going to redo the eligibility then we have to minimize the momentum of what we have set in motion in previous years; the funding of pro­ jects th at we ought to continue and thereby prejudicing any real needs eligibility study because we started in motion those tha t are well beyond what we m ight have envisioned. Could you discuss with me what you people feel the impact of not only the $5 billion 1-year extension b ut of limiting it to types of im­ provements included within I, II, and IVb, might be on the States?

Mr. Train. I believe you would agree t ha t a specific limitation on the allocation of a new authorization to categories I, II and IVb, would substantially main tain the continuity of the present program. It would provide for allocation substantially along the line that the program is presently following. It would have the advantage, there­ fore, of not changing the rules, so to speak, and it would have the advantage of maintaining continuity in the program, both in terms of funding and in terms of eligibility or, priorities. I share with you the concern expressed by the States for the need for continuity in this program. I think we all, no matter what our particular point of view may be, agree th at stability is a very important factor here and rapid changes in either funding or the rules can be very counterproductive in achieving the environmental goals that the 

program is designed to meet. The disadvantage—and I would have to say a strong disadvantage from the administration’s standpoint, is the continued authorization at a very substantial level without in fact facing up to the issue of eligibility; the broader issues submitted by the administration.

Mr. Quarles. Senator Domenici, I wonder if I could clarify at least in my own mind wha t may be an ambiguity here. I think we have to keep clear in our minds the distinction between the categories upon which the allocation is made among the States and the eligibilities
120

for which projects can be approved for grants after allotments have 

been made.

And in the past the Congress has directed the Agency to allot the 

funds among the States based on certain categories. But that has not 

curtailed the eligibilities.

Do I understand tha t you are suggesting that if an additional $5 

billion were to be authorized tha t an additional new type of restriction 

would be imposed upon those funds so tha t they could only be used 

for projects in the categories I, II and IVB?

Senator Domenici. That is what I am suggesting. W hat I am trying 

to find out is what kind of a reaction would we get from the field if 

that occurred based upon what they are planning as their eligible 

projects.

I think tha t would be very relevant to us. Are there out there 

pending for eligibility some projects that are well beyond that?

I think we need that information in any event and if you can supply 

it to us, it would be very relevant because I think it bears heavily not 

only on the practicality of the limitation, but it bears very heavily 

on the relevancy of the administration’s concern because what we are 

setting in motion by the broadened eligibility as compared with the 

allocation that is out there is going to be dictating the future almost 

by pressure.

So if you can get those for us, I think it would be extremely helpful, 

a very practical tool for us in what analysis we can do.

Mr. Train. I think we can take a pretty good cut at that.

Mr. Rhett. There are two items in the administration proposal 

tha t we really have not discussed. Even if you limit funding to I, II 

and IVB, you still have the growth problem, and the reserve capacity 

question. And you still have the problem of some States being able 

to set a higher water quality standard than other States, an being 

able to collect 75 percent for a project.

Senator Domenici. I understand that. But tha t is really a very 

acid issue in terms of w hat the Federal Government’s role is going 

to be.

It seems to me that it is almost inconsistent for us in considering 

just a 1-year extension to try to address that problem.

We might consider, however, as suggested by one of the staff 

people, what the effect would be to use the 1975 population figure 

instead of the 1990 in tha t analysis.

I have no way of knowing whether we can get that information, 

but that would address the issue in another way. I don’t know that 

we can limit it that much in the 1-year, but certainly it would be a 

relevant sort of exercise.

Do you have information on that, Mr. Quarles?

Mr. R hett. We can furnish it.

Senator Domenici. Why don’t you furnish that?

[The information requested follows:]
121

[D o lla r am ounts in thou sa nd s]

M - \ , II, IVB; l- V ; 1, II, IV B ; *4— l- V ;

*4— 1975 popu latio n 1975 po pulatio n

> Percent Am oun t Pe rcent Amou nt

Tota l______________ 1.0 000 $5, 000, 000 Region V— Co ntinued

Minne so ta___________ .0153 76, 500

Region 1: Ohio................ ................. .056 0 280, 000

Con ne cticut__________ .01 24 62, 000 Wisconsin ....................... .020 2 101 ,000

t Ma ine ______ ___ .00 55 27, 500 Region V I:

Ma ssachusetts_______ .02 79 139, 500 Arkan sa s......................... .010 9 54, 500

New Ha mps hire .00 68 34, 000 Lou isia na __ _______ .012 7 63, 500

Rhode Is la n d .. . ___ .0041 20; 500 New Me xico_________ .002 7 13, 500

Ver mon t_____________ .00 24 12, 000 Okla ho ma____ _______ .013 7 68, 500

Region II: Te xas............................. - .043 5 217, 500

New J e rs e y.. _____ .04 80 240, 000 Region V II :

New Yor k...................... . 1062 531, 000 Io w a................................. .011 2 56, 000

Pu erto Rico__________ .00 89 44, 500 Kansa s........................... .012 4 62 ,000

Virg in I s la n d s . . . ___ .00 06 3,000 Misso ur i........................... .020 0 100, 000

Region III: Nebr as ka ...................... .006 4 32 ,000

De lawa re ____________ .0041 20, 500 Region V II I:

M a ry la n d.. _________ .03 83 191,500 Co lorado.......................... .008 2 41,000

Pe nn sy lva nia_________ .04 39 219, 500 Mon tan a........................ .00 21 10, 500

V irgin ia ______________ .02 23 111,500 No rth Da kota________ .001 9 9, 500

West V irgin ia ________ .02 18 109, 000 South Da kota........... . . .001 7 8, 500

District of Colu m bia . . . .00 40 20, 000 Uta h________________ .004 4 22,000

Region IV : W yo ming......................... .001 2 6,00 0

Alaba ma_____ ______ .0111 55 ,500 Region IX :

Flo rid a______________ .03 62 181,000 Ariz ona ________ _____ .006 6 33 ,000

Georgia______ . ._ .0202 101,000 C alif orn ia ........................ .08 32 416,000

K e n tu c k y .. ............. . .01 52 76, 000 H awaii............................. .007 0 35,000

M is siss ip pi___________ .0077 38, 500 Ne vada ...... ..................... .00 31 15, 500

No rth Caro lin a_______ .02 10 105, 000 America n Samo a........... .000 4 2,00 0

South Caro lin a.......... .. .01 34 67, 000 Tru st T e rr ito ry .............. .002 0 10, 000

Tenn ess ee .. . . . . .01 49 74, 500 Gua m................................ .001 0 5,00 0

Region V: Region X:

I llin o is . . . ____ ______ .05 27 263, 500 Ala ska............................. .004 8 24, 000

In dia na............................ .02 19 109, 500 Id aho_______________ .004 2 21, 000

M ichiga n_____ _____ _ .04 75 237, 500 Oregon______________ .008 5 42, 500

W as hing ton__________ .015 7 78, 500

[I n thou sa nd s of dollars]

50 perce nt 50 pe rcent

1975 > $ - l, II , IV B; 1975 M - l , II , IV B;

popu latio n: ^ - l - V ; po pul at io n;

50 percent y - 1975 50 percent 8 - 1 9 7 $

1, II , IVB po pu latio n 1, II, IVB po pu latio n

Tota l______________ 4, 000, 000 4,00 0, 000 Region V— Co ntinue d

Minne so ta____________ 66, 800 61,200

Region 1: Ohio___ ______ _______ 201,6 00 224, 000

Co nn ec tic ut....... ............. 49, 200 49, 600 Wisc onsin ........................ 82, 800 80, 800

Maine _________ ___ 21,600 22, 000 Region V I:

Ma ssachusetts ____ 110, 800 111,600 Arkan sa s____________ 44, 800 43,600

New Ham ps hire ......... 24, 400 27, 200 Lo uisia na........................ 56, 400 50, 800

Rhode Is la nd .................. 16, 400 16 400 New Mexico _______ 14, 800 10, 800

Ver mont______ ___ 10,00 0 9; 600 Oklah om a....................... 53,600 54,800

Region II: Te xa s................ ............... 200, 400 174,000

New Je rsey __________ 180, 000 192, 000 Region V II :

New Yo rk .................. 366, 000 424. 800 Io w a...................... .......... 49, 600 44, 800

Pu erto Rico.................... 44 ,000 35; 600 Ka ns as ............................ 43 ,600 49, 600

Virg in Isla nd s................ 2,4 00 2,40 0 M is sou ri_____________ 80, 400 80, 000

Region H I: Nebra ska.. . _____ 24 ,000 25 ,600

De lawa re____________ 14,000 16, 400 Region V III:

Ma rylan d 138, 000 153, 200 Co lorado __________ 39, 600 32 ,800

Pe nn sy lva nia________ 179; 600 175; 600 Mon tana .......................... 10,800 8, 400

* V irgin ia ______________ 94, 800 89, 200 North Dakota _______ 8, 800 7 ,600

West V irgin ia ______ _ 73, 600 87, 200 So uth D a k o ta _______ 9, 200 6,80 0

Distr ict of C olu m bia .. . 9,6 00 16, 000 U t a h . . . . ........... ............ 20, 400 17,60 0

Region IV: Wyo ming____________ 6,00 0 4,80 0

Alabam a ___ 54, 000 44, 400 Region IX :

Flo rid a.................... . . 158,000 144, 800 Arizo na ___________ 32 ,000 26, 400

Georg ia______________ 89, 200 80 ,800 C alif orn ia ......... .............. 37 2,800 332,800

Ken tu ck y____________ 59, 600 60, 800 H aw aii.............................. 27, 200 28 ,000

Missis sip pi ________ 37, 200 30, 800 Nevada . ............. ...... 13,200 12. 400

No rth Caro lin a............ 95 600 84 ,000 Am erica n Samoa . . . t2 0 0 1,6 00

Sou th Caro lin a............... 57,20 0 53 ,600 Tru st Terr itory ______ 6,800 8,00 0

Te nnessee___________ 67,60 0 59, 600 Guam ______________ 3, 600 4,00 0

Region V: Region X :

Illin ois _____________ 204, 000 210, 800 Ala ska............................. 17, 200 19, 200

Indian a ___________ 85, 200 87, 600 Idah o _______ . 17, 200 16. 800

Michiga n.......................... 156,800 190,’ 000 Oregon____ .. ____ 34 ,400 34,000

Was hing ton__________ 62 ,000 62, 800
122

[D ol lar am ou nt s in tho usands!

50 pe rcent 1975 po pul at io n;

50 pe rcnt 1, II , IVB

50 pe rcen t 1975, po pu latio n; 

50 pe rcen t 1 II , IVB

Percent Amoun t Pe rcent Am ou nt

Tota l______ _____ 1.0000 $5, 000, 000 Region V-C on tin ue d

Ohio_______ . 0.05 04 $252,000 Region 1: W is consin ............... .0207 103, 500 Con ne cticut____ . .01 23 61, 500 Region V I:

Maine . . . . 0054 27, 000 Arkan sa s__________ .011 2 56, 000 Mas sachusetts_____ . 0277 138. 500 Louisia na_________ .01 41 70, 500 New Ha mp shire . 0061 30, 500 New M e xic o .. ........... .003 7 18, 500 Rhode Is la nd___ . .0041 20, 500 Okla ho ma________ .013 4 67, 000 Ver m ont _____ . 0025 12, 500 Te xas....... .................. .05 01 250, 500 Region II: Region V II :

New J e rs e y ,. .......... .04 50 225, 000 Io w a_______ . . .012 4 62, 000 New Y ork _____ . .09 15 457, 500 Kansa s_______ . .010 9 54, 500 Puerto Rico________ .01 10 55, 000 M isso uri___________ .020 1 100, 500 Virg in Is la nds............ .00 06 3,000 N efr aska____ . . .006 0 30,000 Region III: Region V II I:

Delaw are_____ .00 35 17, 500 C o lo ra d o .. ................ .009 9 49, 500 M ary la nd__________ .03 45 172, 500 Mon tana ______ . . . .002 7 13, 500 Pen ns ylv an ia______ .04 49 224, 500 No rth Dak ota______ .002 2 n ; ooo Virg in ia ____ .02 37 118, 500 South D a kota .. ........ .002 3 11,500 West V irg in ia ____ _ .01 84 92, 000 Ut ah . __________ .005 1 25, 500 D is t'ic t of Colum bia. .00 24 12,000 Wyoming ................... .001 5 7’ 500

Region IV: Region IX :

Ala ba m a__________ .01 35 67, 500 Ariz ona . ............... .008 0 40, 000 Flo rid a____________ .03 95 197, 500 C alif orn ia ________ .093 2 466, 000

Ge orgia____________ .02 23 111 ,50 0 Hawaii____________ . 0068 34, 000

Ken tu ck y________ . .01 49 74, 500 Nevada . .003 3 16, 500

M is siss ip pi________ . 0093 46, 500 Am erica n Samo a___ . 0003 1,500

No rth Caro lin a_____ .023 9 119, 500 Truc k T e rr ito ry ____ .001 7 8, 500 South Caro lin a_____ .01 43 71 ,500 G uam ._______ . .000 9 4,5 00 Tennessee_________ .01 69 84, 500 Region X:

Region V: A la ska.___________ .004 3 21, 500

Il li n o is ............... ........ .05 10 255,00 0 Idaho. . . . . . . . . . . .004 3 21, 500

Indian a ............. .02 13 106, 500 Oregon ____________ .008 6 43,00 0

Michigan ................... .03 92 196,0 00 Was hington________ .015 5 77,500

Minne so ta_________ .016 7 83, 500

Senator Domenici. Let me ask a couple of questions on a side 

issue. Tt wouldn’t be relevant to the 1-year extension. But it is applicable to the overall hearings.

We heard some testimony yesterday from the States in response to 

my questions about section 208 planning. There was some serious 

concern on the part of the State s as to whether or no t that planning 

approach could be relevant to our assessment of the needs and priorities 

because i t is not far enough along due to some delays in the funding 

and the like.

Let me ask two questions. Wh at is the possibility from the EPA 

standpoint of expediting the 208 planning approach and what would 

your thoughts be on the relevancy of th at mechanism as part of the 

assessment of priorities and needs in the States?

Mr. Train. Let me ask Mr. Beck to address that, please.

Mr. Beck. We have achieved the approval of most of the work •

plans for the 149 agencies that were designated prior to June 30th,

1975.

Many of those, but n ot all of them, are doing elements of areawide 

sewage trea tme nt plant, facility-type planning. We are now in the 

process of approving the State for 208 nondesignated areas. They 

should all be approved and the funds obligated by June 30th.

The period of time that it is going to take before we get any results 

that would be useful in terms of determining overall national needs 

will probably run up until November 1978.
123

So it is questionable whether section 208 could be a vehicle to be 

used to define national needs at this time. However, we are expecting 

some interim output from these 208 agencies tha t will give us some 

indications of the facility moneys needed in different geographic 

areas before that.

Senator Domenici. You indicated it would not be a significant 

tool. Is that just because of the date?

Mr. Beck. Yes, Senator, it is going to take some time.

The States are saying, t ha t it is going to take some time under 208 

to develop the relevant information for us to make determinations 

with regard to need. I concur with that. But I would like to say tha t 

some of the areas in terms of State areas may be able to fast track th at 

in the course of developing the early outputs from these plans.

It may be possible in certain areas for us to get a fix on the finances 

needed for the facility planning.

Senator Domenici. Would you have sufficient conclusive information from some of these to determine whether that mechanism might 

be an effective approach when we began to look at long-term eligibility 

and perhaps even a formula?

Mr. Beck. Yes.

Senator Domenici. By what time do you think you would begin to 

have some samples?

Mr. Beck. I would suspect that a good time to pass judgment on 

this as a vehicle will be when we finally adopt those States work plans 

which will be in midfall of this year. We will then have a pretty good 

opportunity to determine whether that is a worthwhile vehicle for 

needs service.

Senator Domenici. One last question and before I forget the other 

item, I assume tha t some of the other Senators might w ant to submit questions to Mr. Train. We have a fairly difficult schedule around here. 

The staff will inquire. If they do, they will submit them in writing 

and hopefully you will get them in as soon as possible in this record. On a separate subject, as you know, I have been generally concerned 

about the sta tus of research and development in the area of innovative 

technology for cleaning up waters and cleaning up our sewers.

Do you find any relevancy to perhaps tapping construction grant 

moneys for R. & D. projects and making some percentage of them as available for ongoing R. & D. efforts and demonstration thru sts; or 

do you favor maintaining a separate demonstration R. & D. pot of 

money?

Mr. Train. I am shooting a little bit from the hip on this. I have 

no doubt that we could effectively utilize more resources for research 

and development in this area. I would, I think, have some concern about any kind of an automatic 

allocation of funds for particularly demonstration projects unless 

EPA maintained a tight control over priorities and decisions as to 

what research projects would go forward.

If it became sort of automatic entitlement to research and development funds on the part of individual States, I would have considerable 

concern over a research program that was so designed.

Andv, could you add anything to that?

Dr. Breidenbach. Yes. When you have a multibillion-dollar 

construction program which has as its objective to put into place
124

very complex technology there has to be some consideration given to 

the question of how much research and development should be 

supported so th at the best technology is applied.

I agree with Mr. Train that these would be national research <

programs, and any demonstrations tha t will support a better construction grants program would have to have national overview and 

control to assure that what was done in one place was indeed applicable 

to the other place. «

Senator Domenici. I guess what bothers me is I don’t know whose 

responsibility it is as a ma tter of policy, to assess whether or not there 

is adequate research and development thrust in a national endeavor 

of this size.

As you look at the marketplace, whenever there is an expenditure 

of the type tha t we are contemplating here, private industry spends a 

much larger percent of its funds on research and development.

What we have got here in this big program is we have got principally 

bureaucrats and engineers. We have some companies on the outside 

tha t are exploring here and there. But the extent to which they will 

do this is rather directly related to their expectation of resources to 

do it.

It is no t like a typical marketplace proposition because almost the 

entire multibillion-dollar thru st is governmental and controlled 

basically by engineers. Engineers are busy drawing the plans for the 

very perpetuation of the system tha t they are trying to get funds for.

I am concerned as to who is going to put the thrust for the brainpower and innovation th at is American with sufficient resources in it to 

make sure we aren’t building the same kind of thing 15years from now 

as if there is another way.

I don’t know where we are going to find tha t change in direction.

Maybe it is our job. But I think it ought to concern you, too, in 

evaluating whether there is enough going on at that end.

My thought would be to let 1 or 2 percent of the gran t program 

be used for research and development, subject to approval, tha t it is a 

relevant project by the EPA.

That is the kind of bill I am envisioning. I don’t know whether it 

belongs on this continuation or a separate thrust. That is what I am 

talking about. Mr. Train.

Mr. Train. In response to this may I say that: first, undoubtedly 

we could use and we need more research funds in this area. I have 

always thought given the billions tha t we are putting up of public •

money for this program, the research and development effort is 

really all o ut of proportion. It is so small.

On th at I am in complete accord. Second, I think tha t there is a 

need to have a driving force as you have described it. •

Perhaps from tha t standpoint the best kind of thrust could be 

generated by the sort of program you suggest.

I th ink tha t it w’ould be a mistake to have this allocated on a Stateby-State basis. I think tha t a percentage of the total taken off the 

top and set aside as a research and demonstration program under the 

full control of the Environmental Protection Agency would be 

preferable.

There are some disadvantages in tha t such a procedure utilizes an 

arbitrary percentage basis for determining the amount of research and
125

development funds which may or may not be justified at any particular 

time.

It also has the disadvantage of removing budgetary control, which 

I would normally consider desirable, from the research and development funding.

There are some advantages, but there are also clearly some disadvantages in an approach such as this. I would say tha t the overall 

desirable way to handle this problem would not be by allocation, but 

by increasing the research and development authorizations and appropriations specifically.

Senator Domenici. I don’t agree with the last part of your statement. I do the first. I don’t intend in my approach for it to be a Stateby-State allocation. B ut up to a percent tha t you have the authority 

to approve research and development efforts or demonstration projects 

and we have to figure out what that does to the States’ normal allocation. And it is in that area that we have got to do some thinking 

because to the extent tha t you are too rigid they won’t try.

If you have got some flexibility to n ot necessarily penalize them for 

the excess costs as it goes into a demonstration project, or perhaps 

given credit only if it works or the like. Tha t is generally the thought.

I don’t think we have any other questions. We thank you all very 

much. We await the inserts that you are going to prepare for us. 

Thank you.

We are adjourned.

[Whereupon, at 11:30 a.m., the subcommittee recessed, to reconvene 

subject to the call of the Chair.]

[Response from EPA to additional written questions and statements 

submitted for inclusion in the record follow:]

Question 1. If th e $5 billion were a utho rized, how much of it would go to projects 

from categories other than I, II, and IVb? Answer. Our best estim ate is t hat about 29 percent or abo ut $1.5 billion of an assumed $5 billion auth orization would go to projects other tha n I, II, and IVb. 

An approximate distribution of the 29 percent follows:

(Dollar amounts in billions]

Category

IIIA ..............

IIIB ..............

IVA . . . .

V ..........

VI ..................

Total

Percent Amount

4.0 $0.20

2.6 .13

12.9 .65

9.4 .47

0

28.9 1.45

Fund s would be obligated on projects other tha n categories I, II and IVB in all State s, although the proportion would vary. Available data is not adeq uate to 

project a detailed State-b y-State break down.

Question 2. How much of the presently unobligated funds are scheduled to go 

to projects from categories other than I, II, and IVB? Answer. Of the approximate $8.6 billion remaining to be obligated, about 20 

perc ent or $1.7 billion would go to categories other than I, II, and IVB.

Question 3. What do you project the savings to be to th e Federal government if 

the Adm inistration’s amendments (S. 3038) were enacted? Answer. The 1974 needs survey produced an estimate of needs tota ling $444 billion ($1975). The savings in Federal share resulting from the Adm inistratio n’s amendmen ts would be as much as $268 billion if the 1974 needs survey results

74 -536 0 - 76 - 9
126

are accepted (see attach ed table for the details of this calculation). However, the 

total needs estim ate, and therefore the redu ction in Federal share due to the 

proposed amendments, are considered to be ove rsta ted. In particular the $305.5 

billion reported for Category VI in the Survey is considered high. The estimates 

in Category VI are based on capital intensive control techniques, whereas noncapital intensive techniques will probably be more cost-effective in most cases.

Question 4. How reliable do you consider the figures th at were transmi tte d to 

Congress in the 1974 Needs Survey.

Answer. The costs reported in the 1974 Needs Survey are of limited value both 

for allocation purposes and for determining the full costs of providing municipal 

facilities to meet the requirements of P.L. 92-500. The assumptions, the levels of 

effort and the quality of data used in preparing these estim ates varied widely 

from State to State.

Question 5. Is there any difference between the reliability of the figures for 

categories 1, 2 and 4B, so-called partial needs, and the reliability of the other 

categories?

Answer. Yes, needs repo rted in categories 1, 2 and 4B are generally considered 

more comparable from Sta te to State. The Agency adju sted the figures in categories 

1, 2 and 4B on the basis of an independent review of estimates submitted by the 

States. These adjustments were necessarily somewhat subjective, bu t resu lted in 

some improvement on comparability of estimates in these categories, as in dicated 

in the report to Congress on th e 1974 survey. No such adjustm ents were possible 

for the other categories because the assumptions and approaches varie d more 

widely from State to Sta te than for categories 1, 2 and 4B.

Question 6. Do you feel th at in responding to the 1974 Needs Survey th e States 

made an effort to sub mit only actual needs which met the full crite ria for costeffectiveness of Section 201 of the Act.

Answer. No, States did not have th e tim e or resources to u ndertak e the detailed 

analysis necessary to determ ine needs which me t the criteria of Section 201. The 

extent to which Sta te estimates approach this standard varied from facility-tofacility, category-to-category and State to State depending on the am ount of 

planning information available at the time of the Survey, and the approac h and 

assum ptions used by the State.

Question 7. Do you feel th at allotment of the funds on the basis of population 

would provide some States with more money than they eithe r need or could use?

Answer. Yes, because current pollution control needs relate to pop ulation 

density, receiving water characteristics, Sta te stan dards, previous level of effort 

and other factors in addition to State-wide population. A formula based strictly on 

popu lation would prov ide some States with m ore money tha n they need or could 

use. assuming a con tinuing program of Federal assistance.

Question 8. Do you feel tha t allotment on t he basis solely of needs as expressed 

in the 1974 Survey would provide some States with more money tha n the y need 

or could use? Partial needs? All needs?

Answer. Yes, we feel that, because of the shortcomings of the 1974 Needs 

Survey, an allo tme nt based solely on needs would provide some States with more 

money than they need or can use. This is for a formula based on all needs bu t less 

so for a formula based on partial needs (Categories 1, 2 and 4B).

Question 9. If, in fact, the Needs Surveys th at have been done app ear to be 

unreliable, how could a formula which uses them even in p art be justified?

Answer. A formula based 50% on Categories 1, 2 and 4B, and 50% on pop ulation has fewer shortcom ings, in our view, than alte rna tive formulae, even th ough 

it may be far from completely satisfactory. Such a formula would minimize the 

shortcomings of both the needs and the population approach.

Question 10. Is the Agency still experiencing a shortage of funds with which to 

liqu idate the con trac ts under the construction gra nts program?

Answer. Yes.

Question 11. What are the reasons for the shortage?

Answer. The fun ding shortage was caused prim arily by an increase in p ayme nt 

frequency rates in recent months to aid communities with cash flow problems. 

This caused a greater “catch up” demand than had been expected. Also, the 

publicity surrounding EPA’s request for add itio nal appropriation s in the March/ 

April period and the stopping of paym ents in some cases pending the enac tment of 

supplemental app ropriations bill c reated a "run on the ban k” atmosphere which 

added to FY 1976 outlay demand.
127

Question 12. Has the Agency co ntac ted individual cities or individual State s to ask them to with hold making paymen ts on con trac ts or to tell them th at the Agency is going to require th at they withhold those paym ents? Answer. EPA has not advised gra nt recipients to withhold making pa ym ent to their contracto rs. EPA has contacted certain cities and States a nd explained th at we will not have sufficient appropriations to cover all paymen t demand through June 30. EPA has asked certain cities if they could wait until J uly 1 for the next paym ent. In those cases where these cities can wait u ntil July 1 Federal paym ents will be held until th at date, and paymen ts made to cities where there is a more 

urgent demand.

Question 13. Now th at the Appropriations Committee has increased the outla y ceiling by $300 million will th at figure be ade quate to liquidate con tracts in the 

months between now and June 30? Answer. No. As noted above, the increased rat e of payments and “ru n on the bank” atmosph ere created in April have led to demands in excess of th at $300 

million.

Question H . Will th at outlay ceiling requ ested for the Transition qu ar ter be 

adequate to liqu idate contracts? Answer. A supplementa l appropriation reques t is currently being pre par ed for the tran sition qu arter which would provide sufficient appropriations to cover all 

outlay demand.

Question 16. Will the outlay ceiling for the nex t fiscal year be adequate to 

liquidate contracts? Answer, Yes, if curre nt projections p rove t o be accurate.

Question 16. How can similar problems be preven ted in the future? Answer. Since projections are made so far in advanc e, a facto r should be includ ed for error or other changes in the situ atio ns between projection and paym ent. Therefore, it would be wise to req uest more liquidation auth ority than a nti cip ate d demand for cash to avoid unforeseen shortages.

Question 17. You have advanced a formula base d 50% on popu lation and 50%

on limited needs. It was originally in tend ed to be app lied to a three year a utho riz a­ tion at $7 billion per year. Concommitantly, you are conducting a new needs survey which we und erstand will be ready in Ja nu ary of 1977. Do you feel th at the allotment form ula settled on by this Com mittee should be tem porary un til the inform ation from th at new needs survey can be evaluated? Answer. No, we do not. The possible adv antage s of later adjusting the allo t­ ment formula are heavily outweighed by the disruptive impact on the program of a temporary form ula. The unc ertainty would make sh ort-run program planning and managem ent very difficult. Obligations would likely be slowed as a result.

Question 18. Is there a way to develop a fo rmu la which can respond to the new 

survey withou t having to drastically change? Answer. Yes, i t is possible, bu t we would recom mend against it for the reasons discussed in the response to the previous question.

Question 19. Under any circumstances, do you favo r limiting allotments und er the construction gran t program to Categories 1, 2 and 4B? Answer. We fav or an allotmen t formula based 50 percent on Categories 1, 2 

and 4B, and 50% on population.

Question 20. Is th at because those categories app ear to be the most relia ble or 

because th at tre atmen t is highest priority? Answer. Both considerations have led us to recommend th at Categories 1, 2 and 4B serve as a par tial basis for the allotment.

Question 21. If the new needs survey were to produce information on the oth er categories which you felt were reliable, would you support including them in an 

allotment formula? Answer. Categories 1, 2 and 4B, in general, provide for more pollu tion reduc­ tion per dollar spent tha n the other categories. Altough we would prefer to await an analysis of the 1976 survey results for a final judgement, righ t now our feeling is th at only Categories 1, 2 and 4B should be used in an allotmen t formula.

Question 22. What is your rationale for including a 50% population factor? Answer. Pop ulation would add an element of predic tability and stability to the allotmen t form ula over time, and serve to tem per the more unreliable aspects of the needs survey results. It is in itself a one indicator of needs, though far from 

ideal.
128

Question 23. If no new authorization for FY 1977 is made available by the 

Congress, how would you propose dealing with the problem th at between 22 and 

28 States will run out of money during FY 1977?

Answer. Although a num ber of States will “run out of money” before the end 

of FY 1977, the absence of new funding authority for most of these States will 

not be for excessive periods. In all cases the States in question will have a significant level of ongoing activ ity on their funded projects until new funds become 

available.

Question 24. What formula would you propose for distribution?

Answer. EPA would not sup port a redistribution of unobligated funds as of the 

end of the FY 1976/transition qua rter period. We believe that this would be 

unfa ir to those States which have planned their programs to existing allo tme nt 

levels.

Question 25. Many Sta tes are rightfully concerned th at they will be out of 

money within the next fiscal year. Do you see the possibility of those Sta tes 

slowing down their program in anticipa tion of running out of money?

Answer. This is possible in some States.
STATEMENT OF ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES 

BEFORE THE SUBCOMMITTEE ON ENVIRONMENTAL POLLUTION 

OF THE PUBLIC WORKS COMMITTEE

UNITED STATES SENATE

May 25, 1976

ON FUNDING OF THE WATER POLLUTION CONSTRUCTION GRANT PROGRAM 

AND ON ALLOCATION OF FUNDS

The Association of Metropolitan Sewerage Agencies (AMSA) is an organization made up of large metropolitan sewerage agencies throughout the United States. Its membership includes over 50 agencies representing over 60 million people and the large bulk of the sewered population of this country. Appen dix A is a list 

of AMSA members.

GRANT PROGRAM FUNDING LEVELS

It is AMSA's understanding that the Subcommittee is considering an interim solution to the funding requirements for Title II of the Water Pollution C ontrol Act (PL 92-500) which wo uld authorize funding for only one year and at a $5 billion level. AMSA strongly urges the 

Subcommittee to enact a three-year program. This organization came into being in 1970 in large part 

Decause of the special needs of large metrop olitan sewerage agencies to have funding on a continuing basis and at appropriate levels. Many smaller communities are able to meet their constru ction needs on a one-year grant; however, this is virtually impossible for projects 

of the magnitude of those undertaken by AMSA members.

There seems to be u niversal agreement that the stop-and-start problems inherent in a one-year program, particularly with the need for review by the Budget Committees and the Appropriations Committees of the Congress, would work to create a climate of uncertainty about funding. This can only lead to increased costs a-nd to further delays in ac­ complishing the objectives of PL 92-500. Even under the existing "contract authority" approach, the failure of the Administration to keep adequate funds in the pipeline has led a number of EPA regions into precarious positions. A recent article in Business Week (copy attached as Appendix B) details some of the communities that have had to suspend construction operations because of EPA "cash flow" problems

AMSA urges the Committee in the strongest terms that every possible action be taken to avoid this unfortunate kind of situation which is 

both wasteful and demoralizing. •

On the question of the level of appropriations, the $5 billion amount included in S. 3037, in our judgment, should be raised to $7 billion for each of the three years. In part, the rationale for a larger appro priation is to ensure that the cash pipeline will be full for, as noted earlier in this statement, failure to have an adequate cash flow can have a devastating impact on operations of major metropolitan agencies. Particularly in light of the Budget and Appropriations process now required, every doub t on the level should
be resolved in favor of a higher figure. The Needs Survey, conducted 

by EPA and by the National Commission on Water Quality, makes it 

abundantly clear that there must be an annual level of financing of 

considerabley higher than $5 billion in order to even be within 

striking distance of the goals and objectives of PL 92-500. Addition 

ally, the switch to an October 1-September 30 fiscal year means that 

there will be five quarters of opera tion in fiscal 1976, and accordingly a level considerable higher than the $5 billion should be authorized and appropriated for fiscal year 1976. The national commitment to achieving the enormous clean-up job of our waters was 

made by overwhelming votes in the Congress during 1972 and reflected 

the willingness of the Congress to make the necessary financial commitments when it overwhelmingly overrode the veto by P resident Nixon 

in October 1972 and just before election time made an $18 billion 

commitment for the first three years of the program. The point is 

that this p rogram will not be effective if it is not adequately funded. We urge, therefore, that the $5 billion figure be reexamined 

and increased.

ALLOCATION FORMULA

Representing, as it does, the major population centers of the nation, 

AMSA has consistently recommended that allocations to the states be 

on the basis of population. It recognizes, however, th political 

realities of a program that must a lso take into account the needs of 

areas more sparsely populated and has understood and accepted the 

usual comp romise of allocation on the basis of 50% for population and 

50% for needs.

There is, however, in the implementation of the allocation formula 

an unfairness in some states that has occurred to the detriment of 

AMSA's me mbers and, of course, to the millions of citizens that are 

served by those member agencies. We refer to the fact that, despite 

the manner in which the allocation of funds is made to the individual 

states, the states are free to distrib ute or reallocate funds to its 

applying municipal systems in any way that the governor or the state 

water control personnel believe is advantageous to the state. In too 

many instances, this has taken the form of freezing out metropolitan 

areas of a particular state because of the greater political benefit, 

as seen by some governors, in distributing the lion's share of a particular state's entitlement to smaller communities. AMSA believes 

this is not what was intended by Congress in the past in accepting 

the compromise formula for allocation to the states and proposes 

that the legislative mechanism exp licitly provide that the states 

are required to distribute funds wit hin the state on a basis that 

reflects the formula upon which those funds were obtained by the 

state. AMSA urges, therefore, that S. 3037 reflect that principle 

and suggests the following language to be added to S. 3037: "In 

reallocating funds received by each state in the manner prescribed 

herein, each such state shall do so in a fashion that reflects the basis upon wh ich those funds were m ade available to such state. The 

governor of every state shall submit to the regional administrator 

by ___________ of each year the proposed distribution of
funds within the state. The Administrator is authorized to withhold 

payments to individual states which do not reallocate funds on a basis approximating that upon w hich the state allocation was based."

To demonstr ate that the problem of inequitable reallocation is not a theoretical or academic concern, attached to this statement for the benefit of the Subcommittee is a petition that was submitted to the Administrator of EPA Region V, seeking an administrative review of the project priority lists made by the State of Illinois in fiscal years 1973/74 and 1975 (Appendix C ) . The Regional Administrator denied the petitions on the ground that there was no authority under PL 92-500 or any other statute that would permit EPA to question the 

priority selections made by the State of Illinois. Should the Cleveland-Wright Bill, which wo uld delegate considerable additional authority to the states, be enacted, the problem of inequitable realloc ation of funds will undoubtedly be more severe. We believe we have properly interpreted the intention of Congress in the past development of allocation formulas and urge that the intention be 

turned into reality by a specific statutory requirement

AMSA takes note of the fact that S. 3037 was reported by the Committee 

to the full Senate on May 12, 1976, and understands that this was done prior to hearings in accordance with requirements of the Budget Act. AMSA hopes that during the hearings scheduled on May 25 and 27 the Committee will obtain enough information and data upon which to urge an amendment on the floor of the Senate to S. 3037 whic h will more realistically take into account the requirements of major sewerage agencies of this country. The people of AMSA memb er cities have made considerable commitments of their own funds and believe that any mora torium or delay in the p rogram can only be a breach of the 

mutual confidence and trust that, in our view, has been inherent in the formulation of PL 92-500 and in joint efforts by all parties 

to meet the goals of the act.

Obviously, there will be mid-course refinements, including many of the proposals made by the National Commission on Wa ter Quality, when and if Congress reexamines the basic structure of the act in 1977. We believe, however, it would be a mistake to stop or retard the program while these possible adjustments are being considered.
APPENDIX A

ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES 

Member Agencies, June, 1975

Greater Anchorage Area Borough, Ak.

City of Tucson, Az

City of Los Angeles, Ca.

County Sanitation Districts of 

Los Angeles County, Ca.

East Bay Municipal Utility District 

Oakland, Ca.

County Sanitation Districts of 

Orange C ounty, Ca.

Sacramento Regional County 

Sanitation District, Ca.

City of San Diego, Ca.

City & County of San Francisco, Ca.

City of San Jose, Ca.

Metropolitan Denver Sewage 

Disposal District No. 1, Co.

The Metropolitan District 

(Hartford County), Ct.

Miami-Dade Water & Sewer Authority, FI.

City of Atlanta, Ga.

City & County of Honolulu, Hi.

Metropolitan Sanitary District of 

Greater Chicago, II.

City of Wichita, Ks.

Louisville & Jefferson County

Metropolitan Sewer District, Ky.

City of Baltimore, Md.

Washington (D.C.) Suburban 

Sanitary Commission, Md.

Metropolitan District Commission 

(Boston), Ma.

County of Wayne, Mi.

Metropolitan Waste Control

Commission (Twin Cities Area) 

Mn.

Western Lake Superior Sanitary

District, Mn.

City of Kansas City, Mo.

Metropolitan St. Louis Sewer

District, Mo.

City of Omaha, Ne.

Bergen County Sewer Authority, NJ

Middlesex County Sewerage

Authority, NJ

Passaic Valley Sewerage

Commissions, NJ

Albany County Sewer District, NY

County of Monroe, NY

City of New York, NY

City of Greensboro, NC

City of Akron, Oh.

Metropolitan Sewer District 

of Greater Cincinnati, Oh.

Cleveland Regional Sewer Di st., Oh 

City of Columbus, Oh.

City of Dayton, Oh.

City of Portland, Or.

Allegheny County Sanitary

Authority, Pa.

City of Philadelphia, Pa.

City of Providence, RI

Metropolitan Government of

Nashville & Davidson Cnty, Tn.

(Continued)
AMSA MEMBER AGENCIES

El Paso Water Utilities 

Public Service Board, Tx.

City of Fort Worth, Tx.

City of Houston, Tx.

Trinity River Authority of Texas, 

Northern Division, Tx.

Hampton Roads Sanitation District, Va.

Municipality of Metropolitan Seattle, Wa

City of Charleston, WV

Metropolitan Sewer District

of the County of Milwaukee, Wi.
134

A cash-flow problem blocks clean waler

A temp orary but painful cash-flow 

crunch has hit the construction gran ts 

program of th e Environmental Protection Agency. Although most projects 

may be able to squeak by until money 

comes into the epa's regional offices 

again in July, the shortfall has claimed 

at least one casualty. On May 10’, all 

work was stopped on a $54.5 million 

sewage treatm ent facility in New Orleans because the city’s sewerage and 

water board could not pay its bills.

Under the program, the EPA provides 

municipalities with funds to build water treatm ent facilities. In its zeal to 

get sta rte d on needed sewage trea tment projects and in its hope to bolster 

a recession-wrack ed economy, th e 

agency underestimate d the amourtt of 

money it would need through July and 

did not ask for enough from Congress.

In the New Orleans situation, the 

epa’s Region 6 office, which includes 

New Mexico, Oklahoma, Arkan sas, 

Texas, and Louisiana, committed itself 

to some $34 million in paym ents until 

July 1. Now the region finds itself with 

only $12.7 million available, and officials there bitterly complain tha t they 

are being penalized for being too successful. "Last yea r we were criticized 

for not g ettin g gr an t applications processed quickly enough, so we accelerated our efforts,’’ says a Region 6 

spokesman. Officials of th e sewerage 

board ar e angry . "The EP A put the gun 

to New Orleans’ head, and now they’re 

not living up to their obligatio ns,’’ says 

Stu art H. Brehm, executive director. 

Ske leto n cre w . The first sig ns of the 

problem surfaced on Apr. 23 when the 

EPA could not give the sewerag e board 

the $817,000 it needed to pay Pittman 

Construction Co., the general contractor on the tre atmen t pla nt. The board 

also told Pit tman that it would miss a 

second paymen t of $1,356,000 due on 

May 21, so the contractor pulled its 

workers off the job. T. A. Pittman, 

president of the company, says he and 

his subcontractors had to lay off 320 

employees.

Most other regions have not fared so 

badly, although all are playing it close 

to t he vest. Congress, in a rid er to the 

swine flu vaccination hill, gave the EPA 

an addition al $300 million to distribute , 

and Louis Jefferson, an official for District 9 in S an Francisco, points.to three 

projects in California that migh t have
135

STATEMENT

► ON

ALLOCATION FORMULA

, S .3 0 3 7

FOR

PU BL IC WORKS COMMITTEE 

UN ITED STA TES SENATE 

MAY 25 a n d 2 7 , 1 9 7 6

BY

COMM ISSION ER PE TER A. A. BERLE 

NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION 

ALBANY, N .Y . 1 2 2 3 3

*
136

As Commissioner of Environmental Conservation for the State of New York, 

designated by Governor Hugh L. Carey as the water pollution control agenc y for i

administration of the Federal Water Pollution Control Act Amendments of 1972,

1 wish to present a statement regarding allocation formulas about to be considered by the Senate Committee on Public Works in connection with Senate bill *

S. 3037 recently reported by the Committee.

It is generally accepted that an allocation formula based on needs • is the 

most sound basis for accomplishment of the goals envisioned by the sponsors of 

the Act, Public Law 92-500. This was clearly indicated in the original reports 

on the bill before enactment, as for example House Report No. 92-911, 92nd 

Congress, 2nd Session, March 11, 1972, which on page 93, states:

"This needs formula (i.e. for allotment under Section 

209) is a sound basis for allotting funds since our 

experience to date clearly demonstrates that there is 

no necessary correlation between the financial assistance needed for waste treatment works in a given State 

and its population."

This concept was accepted by the full Congress and P.L. 92-500 became law.

Again, when the allocation formula for fiscal year 1975 was being considered, 

and ultimate ly was enacted as Public La w 93-243, the Senate Committee on Public 

Works, in Senate Report No. 93-630, December 13, 1973, reiterated, (page 9)

"The Committee remains firmly committed to the concept 

of allocating sewage treatment facility construction

grant funds on the basis of the needs for such facilities.

It is the intention of the Committee to use an estimate o f

t
137

need for such fa c il it ie s as the sale ba sis for

a 1 loc ation as soon as a comprehensive re liab le 

needs survey is av ail ab le (underlining supplied 

fo r emphasis).

Thus, in pr in ci pl e, the alloca tio n formula of P.L. 92-500, i. e . "the 

ra ti o th at the estimated cost of constru cti ng a ll needed publi cly owned 

treatme nt works in each Sta te bears to the estimated co st of const ruc tion 

of a ll needed pu blicl y owned trea tment works in a ll of the St ates ;" was 

sus tain ed. The compromise in P.L. 93-243, i.e . the basing of the allo ca tio n 

formula on one hal f the to ta l needs of a ll the Sta tes (except re hab ilitat io n 

of co lle ction systems, and treatment and co ntro l of stormwater); and on e-h alf 

of the needs fo r Categ ories I, improvement of treatment pl an ts for more string en t 

than secondary treatme nt where require d by water qu ali ty stan dards requirement; 

and IVa, new in te rc ep to rs, force mains and pumping st at io ns ; was believed necessary to acooiimodate alleged shortcomings in the 1973 needs survey.

To r ecti fy th is shortcoming, P.L. 93-243 provided expli cit instru ct io ns 

for the conduct of the reassessment of needs on an accelerate d ba sis to be used 

for allo ca tin g the fi sc al year 1976 gra nt funds . The P.L. 93-243-mandated 1974 

Needs Survey was submitted to Congress by EPA on February 10, 1975 and was subsequently rev ise d on May 6, 1975. Release of the impounded FY 1973, 1974 and 

1975 T it le II co ntract autho rit y by the Supreme Court in February 1975 made i t 

unnecessary to use th is survey for al lo ca tion as the origi na l formulae in 

P.L. 92-500 and P.L. 93-243 were ap plicab le. However the 1974 survey may be 

su ita bl e for allo ca tio n of the fiv e b il li o n do lla rs auth orized for fi sc al year 

1977 in S.3037.
138

There is considerable confusion relative to the respective needs survey s’ 

caused in principal part by the disparagement of State's estimates of needs by

the Administrator, U.S. Environmental Protection Agency with each successive «

report.

The 1971 Study used as the basis for the FY 1973 and 1974 authorizations 

in accordance with P.L. 92-500 was an EPA estimate of needs to clean up the *

backlog requirements of P.L. 84-660, expressed in 1971 dollars, amounting to

eighteen billion dollars. According to testimony presented by the General 

Accounting Office at the House oversight hearings February 24-25, 1976, on ly 

$8.2 billion of the $18 billion authorized had been obligated as of December 31,

1975. Therefore of needs existing prior to P.L. 92-500, less than half the needs 

for a lesser requirement had been satisfied as of that date.

The 1973 Needs Survey was based on attainment of 1977 goals of P.L. 92-500, 

a substantial increase in treatment requirements over P.L. 84-660, and estimates 

were expressed in 1973 dollars. This estimate was used for the allocation of 

fiscal 1975 contract authority under the formula of P.L. 93-243.

The 1974 Needs Survey prepared in accordance with P.L. 93-243, includes all 

categories of sewage treatment works eligible under P.L. 92-500 as required to 

meet 1983 goals for best practicable wastewater technology. Estimates are also 

in 1973 dollars.

Because of the vast difference between the basic requirements of each study, 

none are comparable with each other.

Currently EPA is proceeding with a 1976 needs study under ground rules of 

their own devising pointed to reduction of needs by lessened federal participation.

This study, as yet unsanctioned by the Congress, will be based on 1976 dollars.

a

t
139

Sumiiing up, th e posi tion of th e S ta te of New York on Allo ca tio n Formulae 

is as follo ws:

» 1. Tine allocat io n formula in P.L . 92-500 ar rive d a t a fte r two ye ar s of

he arings and delibera tions p ri or to th e eff ecti v e da te of October 18, 1972 is 

th e optimum form ula fo r attainment of th e go als of th e Act.

* 2. The compromise formula of P.L . 93-243 is ac ceptab le as an in te rim

basi s fo r all o cati o n of F.Y. 1977 au th ori za tions in view of pr os pe ctiv e oth er 

chan ges in th e Fe de ral Water Pollution Co ntrol Act through H.R. 9560, and such 

ac tion s as may be tak en pursu ant to th e Rep ort of th e Na tio na l Comnission on 

Water CMa lity.

3. The Sen ate Publi c Works Committee should determine th e basi s fo r 

all o cati o n , i . e . , e it h e r the 1973 needs stu dy estim ate d to a tt a in 1977 go al s; 

or th e 1974 nee ds stu dy es tim ate fo r at ta inm en t of 1983 go als.

4. Po pu lat ion shou ld no t be an ele me nt of th e all ocat io n form ula as th is 

was co nc lu sive ly re je ct ed in th e Committee re ports of 1972 and the deta il ed 

an al ysi s co ntaine d in Senate Report No. 93-630 of December 13, 1973. I t has 

been tho rou ylily demonstrated th at po pu latio n is no t a measure of needs due to 

va ria nce between Sta te s in deg ree of in d u str ia li zati o n , ur ba ni za tio n and geograp hic in fluen ce s.

Su rely nee ds re su lt in g from co nc en trat io ns of po pu latio n is im po rta nt, 

where th re e m illion people in the D is tr ic t of Columbia or 10 m illion people in 

th e New York City Me tro politan Area, each encompassed with in a ra di us of 20 mil es 

have needs g re atl y in excess of those eq ui va le nt po pu latio ns spr ead ou t ov er th ree 

to fi ve S ta te s.
140

5. Any formula should give major weight to total needs for all categories 

of eligibility guaranteed by P.L. 92-500, vzith the exception of storm water control and to. lb ent. Currently, there is an Administration bill before the 

Senate, S.3038, which seeks to reduce the percentage of federal grants for some 

categories of sewage treatment works and complete elimination of grants for other

«

categories. The transparent reason behind this bill is to lessen federal participation in water pollution abatement thus by hypothesis reducing needs. The 

effect of such a bill would relegate the goals of P.L. 92-500 beyond all hope 

of achievement. Any allocation formula based on loss than total need- would ba 

sanctioning the downfall of the federal Water Pollution Control Act eligibilities.

6. Needs are identifiable. After four years of planning required by the 

Act, few if any States should not be able to pinpoint their needs with reasonable 

precisian. Thus, use of the "crutch" of population to compensate for lack of 

identifiable needs can only divert funding away from those State's whose planning 

has progressed to the point of assembling viable projects.

In conclusion, the complaint nost heard as regarding full aoccnplish rat of 

the intent of Congress in implementing the Amendments of 1972 is the instability 

of the fiscal aspects. This comes about from a variety of reasons beginning with 

the original impound rents of fund authority; the short period of the original 

bill covering only three fiscal years, whereas most projects require a gestation 

period of three to five or more years; the lack of authorizations beyond ry 1975 

(except for the single stop-gap authorization of S.3037) which inhibits forward 

pieinning; and the fiasco within recent days where ewed federal grant payments 

went unsatisfied due to mal-administration of cashflow by EPA and O?53, leaving 

contractors unpaid in several areas of the country.

M

r
141

Added to t h i s i s th e th re a t o f ch an ge s in a ll o c a ti o n fo rm ulas which ha s 

hung over th e pro gram fo r th e p a st year o r more.

I ca nn ot urg e more st ro n g ly th a t th e Sen at e C ai m itte e on Publi c Works 

i ddre ss th is m att er o f f is c a l s ta b ility fo r e ffe c tiv e long ra ng e pl an nin g.

In th is re gard i t may b? no te d th a t w h il e th e U.S. Supreme Cou rt fou nd 

th a t th e vz ith ho lding o f a ll o c a ti o n s to th e S ta te s by th e Exe cu tive Bra nch was 

.i ll e g a l, th e d ecis io n did not ab ro gat e th e Exec utive r ig h t to c o n tr o l ex pe nd itu re s tlt roug h re g u la ti o n of o b li g a ti o n s.

The Gen er al Ac coun tin g o ffic e te st im ony a t th e House overs ig h t heari ngs 

Feb ru ar y 24 -2 5, 1976, re vea le d th a t o f $8 .2 b illio n o b li g ate d up to Efecerrbei:

31, 197 5, h a lf was o b li g ate d in on ly fo ur mon ths, i . e . March 197 3, June 1973, 

Ju ne 1974 arid Ju ne 1975 . Tl: ne fo re th e re m ai ni ng fo ur b illio n d o lla rs re q u ir e d 

a to te d o f 35 months fo r o b li g ati o n . T his vza.s aco om plislie d by EPA-0M3 p o li c y 

o f ri g o ro u s a p p li c a ti o n of str in g e n t re g u la ti o n s and imposin g o f r e s tr ic tiv e 

quota s to c o n tr o l ca sh flow . Thi s may not lxs th e forum to p re sen t th is prob lem, 

b u t I feed i t .is po rt in ■••nt, as a ll o c a ti o n frnm ulae sh ou ld not ly* co nsi der ed in 

is o la tio n wi tho u t sone re a liz a tio n th a t a ll o c a ti o n i s on ly th e f i r s t te n ta tiv e 

ste p in the; wh ole p o ll u ti o n ab ab m vn t p ro cess .

74 -53 6 0 - 76 - 10

APPENDIX

U S. E N V IR O N M E N T A L PROTE CTI ON AGENCY

W ASH IN G TO N . D C. 20 46 0

S2Z

(145)
REPORT OF

THE DECENTRALIZATION

TASK FORCE

DECEMBER 1975

DA NI EL L . PE TK E. Chairman

( Mfice of Water Planning and Standard*

WILLIAM AD AM S. JR.

Maine Department of Environmental Protection

BILL DEND Y

Cahforrha Water Reso urce* Control Hoard

TH OM AS FR ANCO S

U iRconam Dep artm ent of Natural Resou rce *

PATR ICK (X )D SI L

Water Division. Ration VIII

RICH AR D HA GE R

Office of Regiona l

and Intergovernm ental Operation*

PATRICK HA RV EY

Reftion II

PATRICIA O 'C O N N E L L

Office of Water Enfo rcem ent

TRI MAN PRICE

Office of Planning and Evaluation

ED WAR D RICH AR DS

Office of Water Plannimt and Standard*

RA LPH SI LL IV AN

Office of Water Program Operation*
Preface

During the past several years , sig n ific a n t progress has been made 

toward achievement of the goals and ob jectives of the Federal Water Pollu tion Control Act (Public Law 92-500) as a re sult of the co lle ctive e ff o rt s of the States and EPA. Not on ly have many specific water q uality problems been solved, but much has been accomplished toward build ing an e ff ective jo in t Fe de ral/S tate program to deal with the 

d iffic u lt and complex challenges which lie ahead.

In est ablis hi ng the Dec en tra liz at ion Task Force, the Ass ista nt Adm inistra tor fo r Water and Hazardous Materials emphasized the increa s­ in gly cr uci al ro le which States w il l play in fu tu re years and recognized the pote ntial need fo r changes in the basic EPA/State re la tionship as the States inc remen tally assume the major opera tional ro le in ca rrying out the prov isions of P.L. 92-500. To promote the continuin g ev olution toward increased State part ic ip ation in the jo in t EPA/State program, the Task Force was charged with the re sp o n sib ility fo r conducting an in-depth ev alua tio n of EPA/State re la tions and fo r developing specific 

recommendations.

Because our mandate was lim ited, the Task Force delib era te ly re str ic te d it s e ff o rt s to evaluatio n of the EPA/State re la tionship s in the water pollution contr ol program. Much of what we learned and have to recommend, however, may well apply to oth er environmental programs 

and to re la tionsh ip s between oth er le vels of government.

More than 130 interview sessions were conducted with o ffic ia ls in 

20 States, 7 EPA Regional Office s and EPA Headquarters as the Task Force gathered the information and in sig ht which provide the basis fo r the fin ding s and recommendations contained in th is re port. We were encouraged by the en thus iastic rece ption of those we interv iew ed and wish to express our sincere ap prec iatio n fo r the many comments and 

co ns truc tiv e suggestions which we rec eiv ed.

While the Task Force found evidence of sig n ific a n t progress toward increased Sta te part ic ip ation in the jo in t EPA/State water program, we also detected some loss of momentum and re la tive lack of commitment to fu rt her progress on the pa rt of both EPA and the State s. C le arly, the fu ll po te ntia l of program dece ntraliz atio n has not ye t been achieved.

And because many ad ditio na l opportunities exis t to build upon past accomplishments, EPA and the States must not allow themselves to become complacent and be satisfied with what has been accomplished thus fa r.
148

As might be expected, given the rapid s h ifts in re sponsib ility 

which have occurred during the past several years and the dynamic 

nature of the program which P.L. 92-500 outli nes fo r fu tu re years, 

a need was found fo r several changes in the ways in which EPA and 

the States re la te to each other . Effec tin g these necessary changes 

w il l continue as a major challe nge fo r each of the partic ip ants in 

the water program. Failu re to meet th is challenge w il l re su lt in an 

unfor tun ate in s ti tu ti o n a liz a ti o n of the remaining in e ff ic ie ncie s in 

the EPA/State re la tionship .

Implementation of the Task Force's recommendations w il l not 

re su lt in immediate re solu tion of the problems which impede a more 

eff e ctive Federal/State program. But our proposals, i f implemented, 

w il l giv e new impetus to the continuin g e ff o rt to build more producti v e re la tio nsh ips which, in tu rn , w il l lead to grea ter re sults in 

our combined e ff o rt s to pro te ct and enhance our Nation's waters.

L.

Daniel L. Petke 

Chairman

Dec en tra lization Task Force
149

Contents

Se ction Pa^e.

Ex ecutive Summary ........................................................................................... * 1 I.V

I . In tr oduction ........................................................................................... ®

I I . The Concept o f D ecen tr alizati o n ................................................. 11

I I I . Policy Ev olu tion and Progress Toward D e c e n tr a li za ti o n .. 17

IV . A ttitudes Toward D ecentr alizatio n ............................................. 23

V. Con st ra ints and Opp or tu niti es ...................................................... 30

V I. The Need fo r Organiz ed Follow-up ............................................... 42

V II. Recommendations .................................................................................... 43

Appendices ...........................................................................................................

A - Recommended A dm in is tr ato r's Stateme nt and Ac tio n Plan

on D ecen tr alizati o n ......................................................................... 49

B - (Memorandum o f August 4, 1975, Esta blishin g the D ecentr alizatio n Task Force ........................................................ 53
150

Executive Summary

Last August, the Ass istant Adm inistrator fo r Water and Hazardous 

Materials estab lished the Dec en tra liz at ion Task Force, composed of 

several senio r State environmental pr ot ec tio n agency o ffic ia ls and 

representatives of the EPA Regional Office s and Headquarters. In 

doing so, he stressed the continuing need fo r increased Sta te p a rtic ipation in the jo in t EPA/State water pollu tion control program and 

recognized the necessity fo r findin g ad ditio na l means to build State 

capacity to increm entally assume the major opera tional ro le in 

ca rrying out the provisions of Pu blic Law 92-500. He s p e c if ic a lly 

charged the Task Force to "conduct an in-depth evalu ation of existin g 

EPA/State re la tions in the water program11 and to "develop specific 

recommendations."

In ca rrying out these re sp o n sib ilitie s, the Task Force vis ited 

20 States , 7 Regional Offic es, and most Headquarters Office s and 

conducted more than 130 interview sessions. Based on the information 

obtained during these interviews, the Task Force has form ulated the 

findin gs, conclusion s and recommendations which are summarized below.

Major Findings

Progress Toward D ecentraliz atio n.

1. A gre at m ajor ity of the States have accepted the basic 

program framework outli ned in P.L. 92-500 and are 

working coop erative ly with EPA to achieve the goals of 

the Act.

2. The ad ministra tiv e st ru ctu re and management process 

linkin g the Sta tes, the Regional Office s and EPA 

Headquarters -- although in need of some improvement — 

is in place and is fu nct ionin g we ll in most instances.

3. Delegations of-program func tio ns have been made to a 

large number of State s, and these are working e ff e c ti v e ly 

in a m ajor ity of cases.

-1 -
Obstacles to Further D ece ntraliz ation.

4. Given the sig n ific a n t v a ria b il it y among State water 

programs, there is no general agreement regarding specific fu tu re dece ntraliz ation goals, and the re is grea t 

d is parity in opinion concerning the ultim ate d iv is io n of 

re sp o n sib ility and labo r between EPA and the States.

5. Progress toward decentraliz ation in the form o f formal 

program delegations (e .g ., NPDES) has reached a poin t 

of diminishing re tu rn s, as there are few addition al 

States which have the s ta ff capacity to assume th is 

type of large scale de lega tio n.

6. State and Federal ap prop ria tio ns fo r support of Sta te 

water pollu tion co ntro l programs have lev ele d o ff and 

the prospect fo r s ig n if ic a n t funding increases from 

these sources through FY77 is minimal. Indeed, many 

States are facing the prospe ct of funding cutbacks and 

some States sta ted th at any additio na l Federal funds 

would be used to supplant State funds i f not expressly 

for bid den.

7. The lack of s u ff ic ie n t funds to increase Sta te s ta ff is 

viewed by many States as the sing le most important 

obstacle to a more e ff e ctive div is io n of re sp o n sib ility 

and lab or between EPA and the Sta tes.

8. Some Regional O ffic e s ta ff have serious doubts regarding the capacity of many State agencies to operate an eff ective program, and EPA Headquarters managers, while advocating the need fo r fu rt her decentraliz ation, have 

not provided re a li s tic , specific polic y guidance to 

achieve th at end.

9. Many States view the "p ar tner sh ip" curr ently offerred to 

them by EPA as an unequal one in which "th e States do a ll 

of the work and EPA re ta in s a ll of the auth ority and 

takes the c re d it ."

10. EPA and the States, c o lle c ti v e ly , have fa ile d to est ablis h 

the necessary program management systems to implement the water program in a de ce ntralized fas hion . This fa il u re is the source of many of the a tt it u d in a l problems which exis t 

between EPA and the States .
152

Op po rtu nitie s fo r Further Progress.

11. Most Sta te and EPA program managers support an incremental 

s h if t of program auth ority and re sp o n sib ility to State 

agencies.

12. The Sta te agencies are prepared, with some rese rvations , 

to use addition al funds, such as may become av ailable

from congressional approval of the Cleveland-Wright concept, 

to expand th e ir sta ffs and to build capacity fo r fu rt her 

dece ntraliz atio n.

13. There is considerable duplic atio n of e ff o rt between the 

Regions and States (e .g ., State and EPA review of plans

and specific ations, EPA review of d ra ft State pe rm its, e tc .) 

which could be gre atly reduced, thereby fre eing up scarce 

resources fo r oth er tasks.

14. Many States have overlooked opportunities fo r supplementing 

th e ir scarce resources by in vo lvin g oth er Federal, State 

and loca l agencies more d ir e c tl y in th e ir water quality 

management programs and thus benefit in g from the sig n ific a n t 

tech nica l ex pe rtise and forms of tech nica l assistance 

ava ila ble to them.

15. With regard to supplementing scarce State resources, EPA 

its e lf - - p a rt ic u la rl y the Regions — could do much more

in terms of making av ailable to the States it s considerable 

tech nica l ex pe rtise through vario us tec hnica l assistance 

mechanisms.

16. Most Sta te o ff ic ia ls — and many EPA s ta ff — be lieve th at 

EPA could take better advantage o f in dividua l State capab ilitie s , auth orities and procedures by modifying it s 

re gula tio ns, polic ie s and gu idelines to inc orp ora te more 

f le x ib ilit y fo r the Sta tes.

Conclusions

1. Despite sig n ific a n t past progress and a general re ceptivity 

to dece ntraliz atio n among Sta te and EPA s ta ff , some loss of 

momentum and a re la tive lack of commitment to fu rt her 

progress appears to be developing.

2. The States' view of lack of s u ff ic ie n t funds to increase 

State capa city as being the major obstacle to fu rt her 

progress toward de ce ntraliz atio n is only p a rti a ll y va lid .

-3 -
153

Many op po rtun ities (see findin gs above) fo r build in g addition al State ca pa city to assume a more s ig n if ic a n t ro le in the jo in t EPA/State program exis t -- even in the absence of s ig n if ic a n t increases in fun din g.

3. The advantages associate d with fu rt her dece ntraliz ation of the water program fa r outweigh the disadvantages, and the pote ntial be ne fits to both EPA and the States fa r outweigh the costs associated with fu rt her e ff o rt s to re alize the 

fu ll pot en tia l of program dece ntraliz atio n.

4. Given the developing loss of momentum toward fu rt her dece ntraliz ation, the sig n if ic a n t op po rtun ities fo r fu rt h e r progress and the favorable benefit/cost re la tionship , what is needed now is "a shot in the arm." New impetus could be given to the continuing e ff o rt to build more pro ductive re la tionship s by takin g several specific actions designed to overcome many of the problems which impede a more effective Ee deral/State program (see Task Force recommendations below.)

5. The problems which impede fu rt her progress toward dece ntraliz atio n w il l not be resolved with ou t the cooperatio n of each of the partic ip ants in the water program, nor w il l they be resolved ov ernigh t. I t is importa nt, however, th at a process be establish ed to deal with these problems and th at specific mechanisms fo r 

follo w-up be b u il t in to the process.

Recommendations

1. The Ad ministrator should issue a statement on de ce ntraliz atio n to the d irecto r of each State water pollu tion co ntrol agency and to a ll EPA managers and s ta ff associated with the na tio na l water pollution co ntro l program. The Adm in is trato r's statement (see recommended statement in Appendix A) should enunciate cle a rly the Agency's polic y with rega rd to dece ntraliz atio n of the water program and should include an Agency ac tio n program, based on the recommendations of the Task Force which are designed to res olv e the problems which impede progress toward fu rt her decentraliz ation. The ac tio n program should id e n tify specific tasks to be accomplished and should assign specific re sp o n sib ilitie s fo r accomplishing 

those tasks.

-4 -
154

2. A process, which includes Sta te p a rt ic ip a tio n , should be 

estab lished to determine the Agency's polic y regarding 

the cu rren t and fu tu re EPA overview ro le . The process 

should re sult in Agency policy (and procedures i f appropriate ) on matters such as:

* State part ic ip ation in the development of proposed 

regu latio ns and gu id elin es.

* State auth ority to make decis ion s and take actions 

commensurate with th e ir program re sp o n sib ilitie s.

* Regional Office and State part ic ip ation in the 

d e fin itio n of minim al, es se ntial re po rting 

requirements.

* Mutual EPA/State accounta bili ty in program 

ev alua tio n.

* Reprogramming of EPA s ta ff as States assume the major 

major opera tional ro le .

The process should also re su lt in pe rio dic updating of the 

Agency's action program fo r dece ntraliz atio n in order to 

re fl e c t new polic ie s on dece ntraliz atio n and EPA/State 

experience in dealing with the problems impeding 

dece ntraliz atio n.

3. EPA should continue, on a high p rio rit y basis , to seek 

additi on al funding fo r support of State programs. In doing 

so, the Agency should emphasize in it s re la tions with the 

O ffic e of Management and Budget and the Congress the 

be nefits which would accrue w ith fu rt her program de ce ntra li 

za tio n. Primary attention should be focused on measures 

such as passage of le g is la tio n which incorp ora tes the 

Cleveland-W right concept, increased Section 106 State 

program gra nt fun din g, and re a li s tic funding under Section 

20 8(f) to support State (and areawide) water quality 

planning and management programs. In additio n, serious 

co ns ider ation should be given to proposing le g is la tive 

amendments which would in h ib it or preclude decreases in 

Sta te fund ing as Federal fun din g is increased.

-5-
155

4. Cu rrent EPA polic y and program guidance (and po ss ibly some re gula tio ns) should be reviewed and mo dified as necessary 

to accommodate and promote fu rt her incremental de lega tio n 

of program re sp o n sib ilitie s to the State s. In doing so, program managers in each water program area should conside r 

ma tters such as:

* Ways to take better advantage of in divid ual 

State ca p a b ilitie s, auth orities and procedures 

by providing additio nal fle x ib ilit y to the 

States fo r conduct of th e ir programs.

* D efinitio n of ap prop ria te State and EPA roles 

and re sp o n sib ilitie s which can be ta ilore d to 

in dividua l Sta te ca p a b ilitie s (rath er than 

na tional program models).

* Increased use of program evalu ation and spot 

checking (i n place of redundant EPA review of 

State work) to reduce duplic ation of e ff o rt.

* Id e n tifica tio n of improved output measures, 

a c ti v it y in dicato rs and standards of performance 

(f o r use in the Agency's MBO-FPRS system) to 

better re fl e c t the v a ria b il it y among States of 

water qualit y problems and approaches fo r 

so lutio n of these problems.

5. Each Regional O ffic e and Sta te should be requested to 

prepare annually a jo in t EPA/State ac tio n plan fo r 

decentraliz atio n as part of the Regional workplans and 

Section 106 State program submissions. These ac tio n plans should id e n tify jo in t dece ntraliz atio n ob jectives 

and should include items such as:

* A de sc rip tio n of how the Region inte nds to build 

ad ditio na l Sta te ca pa city to take on ad dition al 

program re sp o n sib ilitie s over time. Fin ancia l 

assis tan ce, improved tr ain in g programs, EPA 

technic al as sis tance, and assignment of EPA s ta ff 

to State agencies through short-term d e ta ils , IPA 

assig nm en ts,-c oloc ation, etc. should be considered.

* A de sc rip tio n of how the Region and States intend 

to fu rt her minimize duplic ation of e ff o rt and 

determine the proper u ti li z a tio n of jo in t EPA/State 

resources. The Regions and States should seek to

-6 -
156

es tablish a clea r d e fi n it io n of th e ir res pective 

roles and re sp o n sib ilitie s in the conduct of the

FY77 water program and should Include a li s tin g of «

the w ritten agreements or memoranda of understanding 

to be negotiated in each func tio na l area.

* A de sc rip tio n of what the Region and States plan to

accomplish in the way o f improving th e ir jo in t program 4

management and repo rting systems in order to assure

th at the water program is implemented e ff e c ti v e ly and 

e ff ic ie n tl y in fu tu re years. Development of performance standards fo r each fu nct ional area of the water 

program, improved mechanisms fo r pe rio dic program 

ev alua tio n, and development of repo rting mechanisms 

which are ta ilore d to the in divid ual procedures and 

needs should be considered.

6. The Regional Ad ministrators should re po rt semi-annually to 

the Deputy Ad ministrator on progress achieved in implementing the EPA Reglon/State dece ntraliz atio n ac tio n plans. The 

Deputy Adm inistra tor, in tu rn , should present a summary of 

these progress reports to the State/Federal Water Programs 

Advisory Committee (conmonly known as the "Committee of Ten") 

fo r th e ir conside ration and recommendations.

-7 -
157

I. INTRODUCTION

The Dec en tra lization Task Force was estab lished by the Ass istan t Ad ministrator fo r Water and Hazardous Materials in August of th is year. The Task Force was asked to provide EPA with an assess­ ment of the cu rren t state of EPA/State re la tions in the water pollu tion co ntrol program and to recommend to the managers of the Agency ways to promote a fu rt her incremental s h if t of program auth ority and re sp o n sib ility from EPA to the Sta te agencies (see Appendix B fo r the memorandum estab lis hing the Task Force).

In au thor izing the Task Force, the As sis tant Adm inistra tor stressed the increa sing ly ess en tia l ro le which the States w il l play in the co ntro l and abatement of water pollu tion under P. L. 92-500 and recognized the pote ntia l need fo r changes in the basic EPA/State re la tionship as the States develop the capacity to assume the major operation al ro le in the program. He foresaw the need fo r EPA to devolve its e lf of many of these operationa l re sp o n sib ilitie s and to ad just its polic ie s to pla y an, as ye t undefined, overview ro le .

The s h if t in re sp o n sib ilitie s between EPA and the States has been evolv ing over the past several years and has now reached a poin t where basic decis ion s regarding the fu tu re development of the re la tionship are requ ire d. I t is imp ortant and appropriate th at EPA and the States now conside r changes in the ways in which they re la te to each othe r.

In ord er to bring tog ether a group with a wide range of perspectives and experience in management of the water pollu tion co ntro l program, the directo rs of thre e State aqencies and EPA s ta ff from the Regional Of fices and Headquarters were asked to partic ip ate as members of the Task Force. The in divid uals who made up the group were:

Daniel L. Petke, Chairman 

Ch ief, State Management Branch

Office of Water Planning and Standards

William Adams, Jr .

Commissioner

Maine Department of

Environmental Prote ction

Patric k Harvey 

Water Coordinator 

Region II

B il l Dendy 

Executive O ffic er 

C alif orn ia Water

P atr ic ia D'Connell 

Special As sis tant to the

Resources Control Board

Deputy As sis tant Adm inistra tor 

O ffic e of Water Enforcement

-8 -

74 -536 0 - 76 - 11
158

Thomas Frangos

Ass istant Secretary 

Wisconsin Department of 

Natural Resources

Truman Price

Senior Program Analyst

Offic e of Planning and Management

Patric k Godsil

Chief, Planning Branch 

Water Division

Region V II I

Edward Richards

Chief, State Programs Section 

O ffic e of Water Planning and 

Standards

Richard Hager

O ffice of Regional and 

Intergovernmental 

Operations

Ralph Sullivan

Program Counselor

O ffice of Water Program Operations

In ad dition to the e ff o rt s of the Task Force members, several other 

people played important roles in developing the Task Force re port.

Two State o ffic ia ls , Robert Krim from the Wisconsin Department of 

Natural Resources and Edward Anton from the C aliforn ia Water Resources 

Control Board, pa rticipated in the interview sessions and made valuable 

co ntrib utio ns to the dra ftin g of the re port. Margaret Davis and 

Bruce Ro sin off of the State Management Branch did much of the s ta ff 

work and research fo r the re port. Towana H il l, also of the State 

Management Branch, typed and proofre ad the manuscript.

To gathe r the inform ation and in sig ht required as the basis fo r 

it s assessment and recommendations, the Task Force was divid ed in to 

three teams which vis ited a to ta l o f 20 State s, 7 of EPA's Regional 

Offices and EPA Headquarters. More than 130 interview sessions 

were conducted with State agency o ffic ia ls , State le gis la to rs and 

budget o ff ic e s ta ff and with EPA o ffic ia ls at a ll le ve ls.

In se lecting the States to be vis it e d , care was taken to 

include agencies of d iffe re n t siz e and varying degrees of program 

re sp o n sib ility and so phis tica tion. Partic ula r atte ntio n was given 

to in clus ion of States which have harmonious re la tions with the 

EPA Regional Office and those where sig n ific a n t d if fic u lt ie s 

have been experienced. C alif orn ia was studied ca re fu lly, because 

it s rec ent assumption of re sp o n sib ility fo r v ir tu a ll y a ll municipal 

fa c il it ie s func tio ns qualifies i t as a possible prototype fo r fu tu re 

EPA/State re la tions, with important im plications fo r other State s.

-9-
159

The States and EPA Regions visited by the Task Force were:

r Massachusetts Wyoming

Vermont Utah

Connecticut Texas

Tennessee Louisiana

Georgia New Mexico

Mississippi Alaska

Illinois Idaho

Michigan Washington

Minnesota Oregon

Montana California

Region I - Boston Region VI - Dallas

Region IV - Atlanta Region VIII - Denver

Region V - Chicago Region IX - San Francisco

Region X - Seattle

The Task Force concentrated its assessment on those aspects

EPA/State relations which seemed most pertinent to a determination of the most effective division of responsibility and labor between EPA and the State agencies. Because of time limitations, Task Force 

attention was directed primarily toward the NPDES and municipal facilities functions and less toward functions such as water qu ality management planninq and ambient monitoring, which are already hiqhly 

decentralized.

The extensive discussions of Task Force members with a wide selection of State and EPA officials revealed a general concensus that decentralization 1s essential to the success of the water pollution control program under present conditions of severely limited resources. 

There was agreement that changes are necessary in the way EPA and the States do business with each other, if the decentralization effort is to move into the additional functional areas and if the shift of 

major program responsibility and auth ority is to continue.

The major portion of the report discusses the need for changes 

in the EPA/State relationship and suggests possible avenues for innovation and modification. The recommendations are a statement of the Task Force's best judgement as to how to set in motion a process which can in the next several months and years result in major improvements in EPA/State relations, which in turn will facilitate the transition to a more effective division of responsibilities between 

EPA and the State agencies.

-10-
160

I I . THE CONCEPT OF DECENTRALIZATION

E a rl y in th e co ur se o f in te rv ie w in g S ta te and EPA o f f ic ia ls , i t 

became ap par ent to th e Task Fo rce th a t th e te rm , " d e c e n tra li z a tio n ," 

had many d iffe r e n t meanings to d iffe r e n t in d iv id u a ls . S p e c if ic a ll y , 

th ere was u n c e rta in ty and confu sio n re g a rd in g th e o b je c ti v e s o f and 

methods to ach ie ve d e c e n tr a li z a ti o n . Conse quently, th e Task Fo rce 

f e l t co mpe lle d to de ve lop and pre sent i t s view as to wh at th e te rm , 

"d e c e n tra li z a ti o n ," means and im p lie s .

This s e c ti o n o f th e re p o rt sta te s th e Task F orc e's view o f th e 

d e c e n tr a li z a ti o n co nc ep t and it s a p p lic a b ilit y to th e n a ti o n a l wate r 

p o ll u tio n c o n tr o l program. The ad va ntag es and disa dva nt ages o f th is 

appro ach to managing th e n a tio na l pro gram are then explo re d.

Background

One o f th e m ajo r ch alle nges o f P .L . 92 -500 is th e management ta-sk 

o f a d m in is te ri n g a S ta te and Fe de ra l pro gram to p ro te c t and enhance 

w ate r q u a li ty in a manner wh ich is s u f f ic ie n tly c o n s is te n t n a tio n a ll y 

to s a tis fy th e p ro v is io n s o f th e Fed er al A c t, and y e t is f le x ib le 

enough to ada pt to th e c o n d it io n s and programs in 56 d iffe r e n t S ta te s 

and t e r r it o r ie s . Im plem enta tio n o f th e A c t th us fa r has de mon strated 

the d if f i c u l t y o f th is ta sk.

Perhaps one way o f under st andin g some o f thes e problem s is to 

re cogniz e th a t EPA is compe lled by th e A c t to ta ke c e rta in a c ti o n s - - 

th e issu an ce o f perm its and th e pro cessin g o f Fed er al gra nts fo r th e 

c o n s tr u c ti o n o f m unic ip al waste tr eatm ent f a c i l i t i e s , fo r example — in 

ac cordan ce w it h s p e c if ie d deadlines and pro cedure s. Furtherm ore , EPA 

is co mpe lled by P .L . 92-50 0 and by re sourc e c o n s tr a in ts to c a rry o u t 

many o f th e s p e c if ic p ro vis io n s o f th e A ct by in ducin g S ta te ag en cies 

to assume a m ajo r o p e ra tio n a l ro le in th e jo i n t EP A/State program.

The S ta te s , on th e oth er hand, have pro gram s wh ich pre date 

P.L . 92 -5 00 , which are governe d by S ta te la w , and wh ich are a ff e c te d by 

th e p h y s ic a l, p o lit ic a l and in s titu tio n a l circ um st ances o f each S ta te . 

In th is c o n te x t, and in the eyes o f in d iv id u a l S ta te s , EPA's p r io r it ie s 

may som etim es ap pe ar to be in c o rre c t and i t s pr oc ed ur es may o ft e n seem 

to be in a p p ro p ria te .

-1 1-
161

These two perspectives — the Sta te and the na tio na l -- in evitably cre ate tensions and disagreements between EPA and the States. However, through the process of program dece ntraliz ation, opera tionally effective program polic ie s can be determined and ca rried out by both EPA and the States. As a re su lt, fric tio n can be minimized and the improved cooperation can lead to a s ig n if ic a n t increase in p ro ductivity.

The Task Force View of Dec en tra liz ation

To re aliz e the be ne fits of program dece ntraliz atio n w il l requ ire the eff e ctive u ti li z a tio n of the s ta ff resources of both EPA and the States through ad ditio na l disp ersion of program func tio ns and auth ority to the State s. Such an approach -- de ce ntraliz atio n — can be employed e ff e c ti v e ly only in those situations where each unit of government:

* understands it s re sp o n sib ilitie s and its re la tionship 

with other units;

* understands and accepts the goals or ob je ctives of 

P.L. 92-500;

* has the op po rtun ity to determine the methods by which cornnon goals w il l be reached ( i.e . , pa rt ic ip a tio n 1n the deter mination of needed le g is la tio n and dra ft in g of 

regu latio ns and guid elin es) ;

* is w illin g and able to transfe r and /or accept respons ib ilit y and auth ority ;

* has adequate resources to ca rry out it s re sp o n sib ilitie s;

* is mutually accountable to other inv olved governmental 

units; and

* maintains a basic leve l of tr u s t.

-12-
162

In an attempt to apply these princip le s to the cu rrent water 

po llu tio n co ntrol program, the Task Force devised the fo llo w in g 

statement of the dece ntraliz atio n concept fo r the purpose of establish in g a framework fo r the remaining po rtion of the Task Force repo rt

"D ec en tra lization of ad ministrat ion of the na tio na l 

water pollu tion co ntrol program to the States consis ts of assigning re sp o n sib ility and auth ority fo r 

decision-making and circum stan tia l in te rp re ta tion 

of P.L. 92-500 and associated re gu latio ns to in d ividual States as ra pid ly as possible and to the 

exten t that each is reading , w illin g and able to 

assume such re sp o n sib ilit ie s. The purpose of th is 

s h if t in auth ority and re sponsib ility is to achieve 

the most effective div is io n of program func tio ns 

between EPA and the States. To accomplish th is d iv ision of fu nc tio ns , EPA recognizes the need to giv e 

the States a grea ter ro le in dete rmining polic y, so 

as to achieve grea ter equalit y and mutual accounta b il it y 1n the Fe de ral/S tate pa rtn ersh ip. Fur ther ,

EPA recognizes th at various elements of the na tio na l 

program can be administered in a non-uniform manner 

and s t i l l accomplish the specific and general 

ob jectives of P.L. 92-500. Achieving dec en tralization w il l requ ire a su bs tant ial reevaluation of 

re gu latio ns , d e fi n it io n s , guidance, e tc ., which have 

previously been Issued by the Adm in istrato r."

This statement 1s designed to address State concerns th at they 

are doing more and more of the work, wh ile EPA re ta ins most of the 

auth ority to make polic y de cisio ns . These State concerns, in general, 

center on the State view th at the cu rren t "p artner sh ip" is unequal, 

p a rt ic u la rl y 1n the area of polic y deter mination.

The statement also calls fo r dece ntraliz atio n which is as rapid 

and exten siv e as State w illin gness and capacity pe rm it. This in te rpre ta tio n of dece nt ra liz at ion im plies an EPA commitment to fu ll -s c a le 

implementation and gives the States assurance th at EPA w il l not change 

polic y direction at some fu tu re date.

-13-
The refe rence to the "most eff e ctive div is io n of program func tio ns " 

implies th at there w il l not be a jo in t e ff o rt to elim inate unnecessary duplic ation of e ff o rt. The poin t regarding non-uniform ad m in istratio n alludes to the gre at variety of pollution problems, the varying p o li ti c a l and socia l co nd ition s among the States, and the need to administer pollu tion co ntro l programs in a fl e x ib le manner which takes 

these va riations into co ns ideration.

The State ro le implied in th is statement is e n ti re ly co ns istent with Section 101(b) of the Act which says, " I t is the polic y of the Congress to recognize, preserve , and protec t the prim ary re sp o n sib ili­ tie s and rights of States to prev en t, reduce, and elim inate p o llu tio n , to plan the development and use includ ing re sto ra tion, pres er va tio n, and the enhancement of land and water resources, and to co ns ult with the Adm inistra tor in the ex ercis e of his auth ority under th is A ct." 

Advantages and Disadvantages

Because the purpose of the suggested polic y toward dece ntraliz atio n is to improve the effectiven es s o f the water pollution co ntrol program, i t is important to appre ciate the advantages to be derived. Some of the 

more important advantages are discussed below.

Improved, less a rb itra ry decisions. State personnel are in a better positio n to take in to co ns ideration the economic, socia l, environmental and in s ti tu ti o n a l situations w ithin th e ir Sta tes when 

developing so lutio ns to water q u a lity problems.

Increased State conmitment. When State o ffic ia ls have more auth ority and re sponsib ility fo r the pollu tion co ntro l e ffo rt, they w il l be more accountable to th e ir citiz ens fo r the re sults of th e ir program. This should lead to gre at er pu blic involvement and support fo r 

the p ollution control e ff o rt in each Sta te.

Gre ater e ff ic ie n cy. Given the severe resource const ra in ts in the na tio na l program and the dim pro spect fo r increased EPA s ta ff in g , i t is es se ntial th at in effic ie ncie s be reduced to the maximum po ssible ex tent. By elim in ating unnecessary duplic ation of e ff o rt (e .g ., Regional Office review of Sta te permits and -State-approved plans and specific ations), dece ntraliz atio n can re su lt in gre atly increased co st -e ffect iv eness .
164

Increased State coopera tion. The tr a n sitio n to a more equal 

partn ership w il l increase State willin gness to assume the respons ib ility fo r ad ditio na l program func tio ns and w il l re su lt in a

more effective div is io n of re sp o n sib ility and lab or between EPA •

and the Sta tes.

Increased ou tput. Expanded State auth ority , more ac tiv e 

involvement of State personnel in the "f ro n t lin e " decisions of

water q uality management and minimal "second-guessing" by EPA w il l 4

re sult in improved morale of State s ta ff which, in tu rn , w il l lead 

to increased outpu t.

These advantages, wh ile not su bjec t to quantita tive measurement, 

could make a major co ntrib utio n to the ove ra ll success of the na tional 

water p ollution co ntrol program. However, a decentralized program 

w il l requ ire new ad ministra tiv e mechanisms fo r policy -making , more 

effective lin es of communication between the State s, EPA's Regional 

Of fices and EPA Headquarters, and changed attitudes on the part of 

EPA and Sta te s ta ff . I f the polic y suggested by the Task Force is 

adopted and these necessary changes are not accomplished, serious 

problems could arise . These are discussed below.

Reduction of management co n tr o l. I f a State receives re sp o n sib ility 

fo r program /unc tio ns and does not have the ri g h t combination of s u fficie nt res ources, a cooperative a tt itu d e and clea r lin es of auth ority to 

EPA, the re su lt could be an in e ffe ctive program which would be d iffic u lt 

fo r EPA to improve or contr ol.

In s u ff ic ie n t program info rm atio n. A decentralized program, i f not 

care fu lly coord ina ted , could re sult in a variety of d iffe re n t management 

information systems and in a b il it y on the pa rt of EPA to obtain consiste nt program s ta ti s ti c s and inform ation needed fo r repo rts to Congress 

and the Executive Branch and fo r program planning .

Ad ditio na l program co or dina tio n. Measures to increase the Sta te 

ro le in polic y determination -- fo r example, State part ic ip ation in the 

development of proposed regu latio ns and guidelines -- w il l requ ire 

ad ditio na l program coordin ation and an increased time period fo r polic y 

determ ination . The offsettin g benefits , however, w il l be re alized 

through more re a li s ti c polic ie s which are more acceptable to the State 

agencies.

-15-
165

In sunmary, the Task Force concluded th at program dec entral izat io n

— as defined in th is section of the re po rt — has much to o ff er as the

management approach fo r eff ective implementation of P.L. 92-500. The

basis fo r our conclusion is provided in subsequent sections of the re po rt.

-1 6-
166

I I I . POLICY EVOLUTION AND PROGRESS 

TOWARD DECENTRALIZATION

1

For several years EPA has been pursuing a polic y which calls fo r 

the transfe r of fun ctions of the water pollu tion co ntro l program from 

EPA to State agencies. However, th is polic y, which in th is repo rt is 

termed "d ece ntraliz ation," has never been defined well by EPA nor has 4

progress toward implementing the polic y been evaluated in an organized 

manner. In th is section the ac tio ns which, taken toge ther, co nst itu te 

dece ntraliz atio n are discussed, and progress toward the goals of 

dece ntraliz atio n is assessed.

The Current Po licy

Progress toward dece ntraliz atio n of the water p ollution contr ol 

program, as pursued by EPA sin ce the passage of P.L. 92-500, has been 

made because of many in div id ual decisions and actions which have 

re su lte d in the s h if t of program re sponsib ilitie s from EPA to the States.

This progress was achieved in the absence of any comprehensive po lic y 

statement which cle arly establish ed ob jectives and miles ton es. Rather, 

i t occurre d as a pragmatic response to the requirements o f the pollu tion 

co ntro l e ff o rt ou tline d in P.L. 92-500 and was achieved under demanding 

tim ing pressures caused by the deadlines contained in the Act.

Reponsi bilitie s fo r some specific program func tio ns (e .g ., issuance 

of NPDES permits, review of plans and sp eci fic atio ns of municipal waste 

treatm ent fa c ilit ie s , e tc .), which were in it ia lly ca rried out by EPA, 

have been tra ns ferred to Sta te agencies. These re sp onsib ilitie s 

(mostly in the municipal fa c ilit ie s and NPDES programs) are now dis ­

trib ute d unevenly between the States and EPA. Some State agencies are 

ca rrying out a large m ajo rity o f these opera tional fu nct ions, wh ile EPA 

continues to have the major re sp o n sib ility fo r program a c ti v it ie s in 

other Sta tes.

Determinations rega rding which program re sp o n sib ilitie s to s h if t 

to which State agencies have been determined, la rg ely in an ad hoc 

fash ion, depending on such fa cto rs as State willingn es s and capa city.

S im ilarly, auth ority to decide which func tio ns to de ce ntra liz e and when 

and how to transfer specific func tio ns has been div ide d between several 

program offic es in Washington and EPA's ten Regional O ffic es. Consequ en tly , there is no central o ff ic e in EPA Headquarters which determines 

de ce ntraliz atio n polic ie s and oversees th e ir exe cution. Coordination and

-17-
167

general policy directives are provided in part by EPA's rnnual Operating 

Guidance, and evaluation is ma de possible by information obtained periodically through EPA's Formal Program Reporting System (FPRS).

Even though the Agency has not specifically defined the goals 

and methods of decentralization, it has made a firm — although 

general — commitment to such a policy. For example, the memorandum 

transmitting the FY 76 Operating Gu idance said, under the heading 

"Partnership with State and Local Governments" :

"We at EPA are committed to ensuring that the 

State and local governments are able and willing to accept a larger responsibility for 

publication control problems, especially those 

best handled by the governments closest to the 

problems.

We are conmitted to providing financial and 

technical asssistance to help in achieving this 

objective. Our goal in FY 76 is to significantly 

increase the role of the States in our regulatory 

and construction gran t programs. The Agency's 

environmental objectives are not secondary to 

this goal -- they are the results we seek from 

the partnership."

Left unanswered as yet, however, are important questions concerning 

the future extent of decentralization, EPA's willingness to transfer 

authority along with responsibility, and the nature of EPA's overview 

role in future years.

Progress to Date

Program decentralization to the States has occurred in a variety of 

areas. And it is important to recogniz e that significant progress has 

been made toward building the institutional foundations necessary for 

program decentralization as well as to recognize the magnitud e of 

functions which have been transferred.

Institutional progre ss.. Since passage of P.L. 92-500, EPA has 

expanded its water pollution control staff in its ten Regional Offices. 

State agencies have also greatly increased their staffing. Policy is 

determined primarily in EPA Headquarters and is transmitted in the form 

of regulations and guidance to the Regional Offices and, through them, 

to the States. Linkage between the States and the Regional Offices is

-18-
establish ed by the annual process of jo in t EPA/State program planning 

and funding Section 106 gra nts to Sta te agencies. In the course of 

th is process, funding is provided to the State agencies in re tu rn fo r 

State commitments to ca rry out specific func tio ns and to produce 

sp ec ified outputs which are es se ntial to the nationa l water pollu tion 

co ntrol program.

This ad m inistrat ive str uctu re and the auth orities and procedures 

by which i t operates are now fu nct io nin g e ff e c ti v e ly . The combined 

e ff o rt s of EPA and the States have accomplished the tasks require d in 

the implementation of PL 92-500. But new and heavier requirements are 

now ca lle d fo r, p a rt ic u la rl y in the areas of permit compliance and 

enforcement, constru ction and maintenance of municipal fa c ilit ie s and 

co ntro l of nonpoint source p o llu tio n .

To meet these requirements, a ll remaining In effic ie ncie s 

(e .g ., duplic atio n of e ff o rt) 1n the EPA/State system must be e lim inated or d ra stica lly reduced, thereby making s ta ff ava ila ble to work 

on othe r tas ks. At the tim e, mod ifica tio ns must be made in EPA adminis tr a tiv e auth orities and procedures to provide the States auth ority 

commensurate with th e ir assumed op eration al re sp o n sib ilitie s w ithin the 

lim it s o f the Act. I f these m od ifica tio ns are responsive to the State 

concerns, then the continuing transfe r of program func tio ns to the 

States w il l be gre atly fa c il it a te d .

Tran sfer of fu nct ions. Since the passage of P.L. 92-500, EPA has 

sought to s h if t re sponsib ility fo r di sc re te func tio ns (e .g ., opera tion 

and maintenance manual review) or sets of func tio ns (e .g ., NPDES) to 

State agencies through formal de lega tio n agreements. This was an 

e ff e ctive way of matching exis ting Sta te s ta ff capa city to program 

func tio ns in the municipal fa c ilit ie s and NPDES areas. In othe r areas, 

such as planning and ambient mon ito rin g, where States were given primary 

re sp o n sib ility in the Act and had re la ti v e ly effective exis ting programs 

EPA delib era te ly re fra ined from developing a separate ca pa city and 

concentrated instead on improving Sta te e ff o rt s through use of Informal 

agreements and coordina tin g act io ns.

The to ta l number of formal deleg ations to date are li s te d in the 

fo llo win g table. These fig ure s rep res ent su bs tantial progress toward 

decentraliz ation, p a rt ic u la rl y when the scope of the NPDES delegations 

are considered.
169

Total Number of Programs Delegated

Function

SBA Loan Program 

Change Order Review 

Bid Tabulation Review

NPDES

Review of Operation 

and Maintenance Manuals

Review of Plans 

and Spe cific at ions

Number of Delegations

2

29

5

27

35

29

The Task Force found in the 20 States vis ite d th at v ir tu a ll y a ll 

of the States with s u ff ic ie n t s ta ff to assume the major fu nctions, 

id e n tifie d by EPA as delegable, have already accepted most of these re sp o n sib ilitie s. The accompanying charts show the ra te of deleg ation 

from FY 74 to the present of the f i r s t three func tio ns which EPA 

sought to delega te. Although the planned targets fo r FY76 do not 

in dica te a dram atic slowdown in the rate of de lega tio n, actual 

accomplishments do appear to have slowed. Although i t may be too ea rly 

to state co nc lusive ly th at FY 76 w il l be the la st year of rapid formal 

deleg ation to the State s, given the cu rren t resource s it u a tio n , th is appears to be the case, I f so, EPA can no longer contin ue to re ly he av ily 

on th is ad m inistrat ive mechanism fo r decentraliz atio n, u n ti l State capacity expands s ig n if ic a n tl y - - perhaps, as a re su lt of new le g is la tio n 

inco rporating the Cle veland-W right approach.

-20 -
170

Fitcal Year

’ A* of S«pi«<nltar 30. 1975

Pl*».*»l FY 7b

ri.nnml FY 76

NPOiS PROGRAM O H (CAT IONS

F.»c*» Yew

•At of Octobw 78 1975

Pt.»»nwf F Y 76

<

S ta te ^ h a J p ^ n rP A ? / 0 ^

1 d e !

e 9

a t i o n s ’ m a "V Regional O ffic es and 

sta te s have agreed to inform al or p a rti a l dele gation. For examole 

a number of agreements" have been reached whereby a State may d ra ft 

and c e r tif y penults, while EPA fo rm ally issu es them Or a State 

FPA A<!d lJ C t JhC t e c h n ic a 1 rev iew o f plan s and s p e c if ic a ti o n s , w hile 

re quirem ents ^ 6 r e s p o n s i b 1 l 1 t* f o r so-c a lle d "F ed eral" revie w

-2 1-
171

These inform al or p a rt ia l deleg ation s constitu te an important 

aspect of the div is io n of re sp o n sib ility and lab or between EPA and the State s. I f they were extended to a ll func tio na l areas and were 

► forma lized in w ri ti n g , they would serve as a basis fo r cle a rly de fin ing the respective EPA and State roles and re sp o n sib ilit ie s. Increased emphasis on clea r delin eation of re sp o n sib ilitie s, id e n tificatio n of redundant func tio ns between the States and the Regional O ffic es, and elim in atio n or redu ction of such redundancy through spotk checking and more effective program evaluatio n could lead to s ig n if icant reductions in s ta ff which are performing redundant fu nct io ns. These s ta ff could be redirected to othe r p rio rit y tas ks. At the same tim e, re la tions with the States would improve, as a re sult of re so lu­ tion of exis ting areas of c o n fl ic t and red uction of the "b ig brothe r" 

review ro le of EPA.

A new dimension to the cu rren t program of formal and informal delegations is represented by the current e ff o rt to transf er respons ib ilit y fo r v ir tu a ll y a ll municipal fa c il it ie s func tio ns to C alif orn ia . This e ff o rt, i f i t succeeds, would place v ir tu a ll y a ll 

operation al program re sponsib ility in the hands of a State .

P a rt ic u la rly i f the Clevelan d-W right approach is enacted by the 

Congress, the C alif orn ia experience should be extremely valua ble 

as a te st case which il lu s tr a te s the problems and opp or tu nitie s inh ere nt in " fu ll scale" decentraliz ation. The ca reful development of a new overview ro le fo r EPA, which recognizes the increased Sta te ro le and which develops new forms o f program repo rting and ev alua tio n 

w il l be an important aspect of th is e ffo rt.

As the for egoing discussion in dic ate s, EPA curr ently has the op po rtu nity to s h if t the emphasis of it s dece nt ra liz at ion e ff o rt from formal deleg ations of entire func tio ns to the development of a se rie s of w ritten agreements which are ta ilo re d to the in divid ual ca p a b ilitie s 

of each State. At the same tim e, i f additio na l funding becomes availa ble , " fu ll scale" deleg ations can again become an important ad ditio na l avenue toward decentraliz ation. On the other hand, i f these 

opp or tu nitie s are not acted upon, the re sult w il l probably be an in s ti tu ti o n a liz a ti o n of the cu rren t in effic ie ncie s in the EPA/State 

re la tionship .

-22-
172

IV . ATTITUDES TOWARD DECENTRALIZATION

The a b ilit y o f EPA and th e S ta te ag en cies to c a rry out 

e ffe c tiv e ly a jo in t program is s tro n g ly in fl u e n c e d --b o th p o s it iv e ly 

and n e g a ti v e ly --b y th e a ttit u d e s o f p a rtic ip a n ts in th e S ta te 

agencie s, in EPA's Re gio nal O ff ic e s and in EPA Headqua rters . These 

a ttit u d e s are p a r tic u la r ly c ru c ia l to th e success o f d e c e n tra li z a tio n , 

and th ey must be re co gn ized and app re cia te d in o rd e r to unde rs ta nd 

many o f th e prog rammatic issu es associa te d w it h d e c e n tra li z a tio n .

For th is re ason, the Task F orc e's p e rc e p tio n o f th e a ttit u d e s en counte re d in our in te rv ie w s is described in th is s e c ti o n .

The S ta te Ag en cie s

S ta te o f f ic ia ls alm os t in v a ria b ly re fe rre d to th e 1972-73 p e rio d 

as th e so ur ce o f many negative a ttit u d e s toward EPA wh ich are s t i l l 

held to day. The passage o f P. L. 92 -500 seemed to many to im p ly a 

la ck o f re c o g n it io n o f and confidence in S ta te e ffo r ts to c o n tr o l 

wate r p o ll u tio n . Many Sta te o f f ic ia ls who had worked most o f th e ir 

ca re ers in th is f ie ld and who had de ve lope d programs wh ich th ey f e l t 

were ta il o re d to th e p a rtic u la r c o n d it io n s o f t h e ir S ta te s, foun d th e 

sta n da rd iz e d , n a ti o n a l program and th e str ong Fe de ral ro le im p lie d 

by P. L. 92 -500 to be o ff e n s iv e .

This im pre ssi on o f th e Act was s tro n g ly re in fo rc e d by EPA's 

i n i t i a l method o f im ple m enta tion. In th e words o f one pe rson in t e r ­

view ed , EPA proceeded "as i f th e S ta te s d id n 't e x is t." Pre vious 

e ffo rts and acco mplish men ts o f th e S ta te s tended to be ig nore d, 

w h ile newcomers--many w ith o u t pre vio u s exp erience in th e f i e l d — 

de sign ed and imposed fro m Washin gton a n a ti o n a l b lu e p rin t based on 

th e new A ct.

This S ta te p e rs pective o f th e 1972-73 period s t i l l c o lo rs th e 

a ttit u d e o f many o f th e S ta te o f f ic ia ls who were in te rv ie w e d . Howe ve r, th e re is gene ra l agree me nt th a t ev ents o f th e past ye ar o r so 

have re s u lt e d in a consid era ble change in a ttit u d e s . V ir tu a lly a ll 

(18 o f 20 ) o f th e S ta te ag en cies v is ite d appeared to have made th e 

d e cis io n to accept th e p ro v is io n s o f P. L. 92-50 0 and to co opera te 

(w it h va ry in g de gree s o f.enth usia sm ) w it h EPA in it s im ple m enta tion 

Two S ta te s ex pr es se d ve ry li m it e d w il li n g n e s s to opera te a jo in t 

pro gram , e x h ib it e d consid era ble re se ntm ent o r h o s t ilit y toward EPA, 

and appeare d to wa nt to rem ain as autonomous as p o s s ib le .

-2 3 -
173

Spe cific programmatic issu es have also influenced Sta te 

att itudes. V ir tu a lly a ll persons interview ed complained about the 

excessive leng th, complexity and in fle x ib ili ty of EPA regu latio ns 

and guidance. Concern was also expressed regarding the lac k of 

program s ta b il it y , re flect ed by the constan t issuance o f new guidance 

which often co ntradic ted or mo dified previous guidance and req uired 

new procedures and program directions. Remarks on th is issue were 

us ua lly lin ke d to a discussion o f excessive requirements fo r paper 

work and re portin g, although there was general agreement th at changes 

in re portin g requirements over the la st year have made them more 

pa latable.

Of even more concern to Sta te o ff ic ia ls is the deeply fe lt 

b e lie f th at the "jo in t State/EPA pa rtne rs hip, " which is ofte n ci te d 

in EPA program documents, is l i t t l e more than a sloqan. The use of 

the term , "p artne rs hip," by EPA is seen by many States to be somewhat 

se lf-s erv in g since EPA defines the terms of the pa rtn ersh ip and 

appears to reserve to its e lf the ro le of "sen ior partner." Several 

State o ffic ia ls referre d to program delegation as a system in which, 

"the States do a ll the work and EPA re tains the auth ority and takes 

the c re d it ." The im plicat ions o f th is att itude fo r fu tu re de ce ntra liz ation e ff o rt s are obvious.

The Task Force encountered in several Regions a specific program 

issue which illu s tr a te s the differ en ce s in att itude between EPA and 

State o ffic ia ls and which, i f not res olv ed, may exacerbate these 

diffe re nce s. The EPA enforcement philosophy as expressed by some 

Regional Office s ta ff is th at an unknown, but s ig n if ic a n t, percentage 

of in dustr ia l discha rgers are not convinced th at th e ir permit 

co nd ition s w il l be enforced and must therefore be shown th at EPA 

"means business" i f the program is to have c re d ib il it y . The number 

of formal enforcement ac tio ns , p a rt ic u la rl y co urt s u its , were pointed 

to with pr ide. State o ffic ia ls , on the oth er hand, had much more 

confidence th at in dustria l discharg ers in th e ir States intended to 

comply with permit co nd ition s. They advocated a coopera tive approach, 

which takes in to consideration the part ic ula r d if fic u lt ie s which a 

dis charg er might be having with equipment deliv eries or othe r problems 

These State o ff ic ia ls stated th a t the doctr in aire, " s tr ic t" EPA 

approach, i f continued, would be co un ter-prod uc tiv e, because i t would 

convince indu stry th at EPA was beinq unreasonable and had no real 

desire to seek sensible solu tions. In th e ir view, the re su lt would 

be a concerted attempt by in dust ry to modify and weaken environmental 

le g is la tio n .

The foregoing desc rip tio n o f the enforcement philosophy issue is 

ove rs im plif ie d fo r the sake of b re vity; actu ally, the situation varies 

conside rably from Region to Region and State to State . The ill u s tr a ­

tion is impo rta nt, however, and leaving aside any judgement as to

-24-

74 -536 0 - 76 - 12
174

which of these two approaches is the most r e a li s tic , i t is apparent

th at the State's perception of EPA's enforcement polic y could hinder

EPA cooperation with NPDES States and may tend to discourage NPDES

assumption by other States. 1

Several other programmatic co nflic ts were frequently cite d as 

adversely affecting State attitudes regarding cooperation with EPA.

For example, the management by ob jective (MBO) approach was ge ne rally

viewed as being p o te n tia lly us efu l, i f administered in a more 4

reasonable manner. However, State o ff ic ia ls ge ne ra lly believe th at

Headquarters pressure on the Regional Of fices to produce numbers,

with l i t t l e or no co ns ideration of the meaning or e ff ect of these

numbers, causes more problems than i t solves. Of p a rt ic u la r concern

is the inapprop riateness of some output measures and how they are

used. Tracking the number of permits issued, enforcement actions

taken, or plans and sp ecific ations reviewed with ou t regard to siz e

of the pro je ct or it s environmental importance seems nonsensical to

many States. In e ff e c t, these o ff ic ia ls are saying th at 1f they take

considerable time and e ff o rt to issue a high q u a lity permit or to

in fo rm ally persuade a discharg er to come in to compliance or i f they

review ten major pro je ct s rather than twenty small ones, they are

penalized or viewed unfavora bly under the cu rren t MBO approach to

program ev alua tio n. The net re sult is an unintended re flection on

the pro fes sio nal judgement and effectiven es s o f State program managers

Another area of Sta te concern 1s the perce ption of EPA Headquarters. In general, the State s ta ff inter vie we d tended to view 

Headquarters' o ffic ia ls with a ce rtain amount o f d is tr u st and suspicion.

These o ff ic ia ls are viewed as having l i t t l e or no experience at the 

opera ting program le ve l and appear aloof and out of touch with the 

"re al w orld ." This concern regarding Headquarters o ff ic ia ls 1s 

compounded by the rapid turnover rate 1n many o f the senio r leve l 

po sitio ns in Washington. Because of these pe rcep tio ns , EPA's 

capacity to e ff e c ti v e ly manage and ad minis ter the na tional water 

program is ca lle d in to question.

In co ntrast to th is perception of Headquarters, attitudes toward 

the Regional Office s were generally favo rable. Although there are 

frequent disagreements over specific program issues, these disputes 

ge ne rally occur in the conte xt of a genuine, jo in t e ff o rt to move 

the program forward. On the whole, personal re la tions between State 

and Regional O ffic e s ta ff appear good, and there was l i t t l e State 

c ri ticis m of counterparts in the Regional O ffic es.

One c ri ti c is m was made on several occasions: Nowhere in the 

Regional O ffic e, sh or t o f the Regional Adm in istrato r, can the State 

find an in divid ual with auth ority who can address an issue which cuts 6

across func tio na l program lines. For example, during the program

<

-25 -
175

planning period in February and March, issues such as division 

of incentive grant funds, additional staffing needs and reporting 

requirements cannot be resolved by the functional program managers 

in the Regional Office. And the EPA State Programs staff, while 

having the necessary information and perspective, usually do not 

have the authority to do so. However, despite this and other 

programmatic problems, State staff generally viewed the Regional 

Offices as doing as effective job under difficult circumstances.

Balanced against the somewhat negative State attitudes described 

above, the Task Force found several strong, positive attitudes which 

tend to promote the viability of efforts to decentralize. There is 

a strong sense of professional pride which, combined wi th a general 

desire to "run the show" in e ach State, leads to a desire in almost 

every State for minimal Federal presence and strong State management 

of the abatement program. Where this tendency is combined with 

State acceptance of P. L. 92-500 as the basic program framework, it 

provides a powerful motivating force toward decentralization.

About half of the States interviewed said that they wanted to 

assume full responsibility for the water program and cited lack of 

resources as the only major bar rier to such assumption. These States 

also expressed optimisim regarding the future and said they believed 

that the pollution control effort and relations with EPA had improved 

significantly in the last eighteen months.

There was also a general desire to reduce or eliminate much of 

the duplication of effort now present in such functions as the review 

of plans and specifications and the processing of permits. This 

attitude toward duplication of effort was indicative of a strong 

desire on the part of the States to make the program work and to be 

a part of a successful and cost-effective national water pollution 

control program.

Thus, residual resentments and doubts regarding the EPA "partner" 

are mingled with a growing State sense of accomplishment and professionalism. The Task Force found that on balance a large majority 

of the State agencies have accepted the provisions of P. L. 92-500 

and are prepared to work toward full program delegation.

The Regional Offices

Sentiment in the Regional Offices regarding decentralization was 

mixed, both within a given Region and between Regions. However, there 

was general agreement that some decentralization was necessary, given 

that EPA does not have sufficient resources to manaae the entire 

program. Discussion of the feasibilit y and desirability of dece ntralization centered around the question of State will and management

-26-
176

capacity. Although i t is d iffic u lt to ge neralize regarding remarks 

concerning 20 State agencies, some general observations are possible 

in those cases where lack of confidence in the States was expressed.

The vu ln e ra b ility of State pollu tion co ntro l programs to 

p o liti c a l pressure was advanced as an argument again st relia nc e 

on State agencies. State agencies are viewed as sometimes being 

influenced either by the Governor or the State le gis la tu re regarding 

it s budget or reg ard ing individ ual program ac tio ns such as issuance 

of perm its or the funding of trea tment pla nts . Thus, the Federal 

auth ority is viewed as necessary to back up the State agency. One 

Water Divisio n Dire ct or sta ted th is vie wpoin t b lu n tly when he sa id,

"No State (in his Region) could produce an honest pro je ct p rio rit y 

lis t without ERA pressure."

An Enforcement Division Dire ctor sounded the same theme when 

he said th at he would be unwilling to re lin quis h enforcement auth ority 

to the States in his Region u n ti l perhaps 1977, by which time EPA 

would have made be lie ve rs out of the Region's discharg ers and the 

States could then take over. Regional O ffice d is tr u s t of State 

capacity was p a rt ic u la rl y strong with regard to those States which 

give economic development a high p rio rit y and which, fo r th at reason, 

might be more suscep tib le to pressure from in dust ry .

Regarding the issue of program gualit y in cases where fun ctions 

have been turned over to the Sta tes, a m ajo rity of Pegional Office 

s ta ff said th at State work was ge ne rally as good as that of EPA and 

pointed out th at Sta te s ta ff were us ua lly as we ll qualif ie d from a 

technic al sta ndpoint as were those of EPA. In co ntrast to th is 

judgement was the statement of one Enforcement Division Dire ct or to 

the eff ect th at the States in his Region were performing inad equately 

in the NPDES program and could not be en tru ste d with fu ll program 

re sponsib ilitie s during the next several years--and only then when 

they had acquired considerable ad ditio na l s ta ff.

Also related to the question of State program quality is the 

issue of EPA sanctions. One Regional O ffic e o ffic ia l pointed out 

th at in his Region the Reqional Adm inistra tor would not invoke 

sanctions in instances where States did not liv e up to the commitments 

made by them in the annual program pla n. He fe lt th at such inac tio n 

made a mockery of dece nt ra liz at ion and would have a negative eff ect 

on the quality of performance of oth er States in the Region, because 

they too would feel th at they could "get by" with ignoring commitments 

In e ff e c t, he believed th at some States were accepting "paper" de lega tio ns , but were not producing the volume and q u ality of product 

which would be expected i f EPA retained the re sp o n sib ility fo r the 

delegated fu nc tio ns .

-27 -
This concern regarding the EPA overview ro le was shared by 

several of the Regional O ffic e s ta ff . The div is io n of re sp o n sib ility 

and labo r between EPA and the States ranges from the "C alif orn ia type 

de lega tio n, through deleg ation of NPDES and the lesser municipal 

fa c ilit ie s func tio ns , to informal agreements. The Regional Office 

concern is focused prim arily on those situ ations where States have 

form al, w ritten delegations but fa il by a su bs tantial measure to 

f u l f i l l the commitments in the delegation agreements and/o r in the 

annual State program plan. The issue is a complex and d iffic u lt one 

and involve s the manner in which deleg ation agreements are w ritt e n , 

the mo nitoring of State performance and EPA use of san ctions in the 

case o f su bs tantial nonperformance.

Some Regional Office s ta ff fe lt th at EPA must be prepared to 

exerc ise the ultim ate sanction and withdraw delegated auth ority from 

States which fa il to produce, i f the circumstances wa rrant such 

actio n. Others fe lt th at i t was u nre alistic to expect EPA to w ithdraw delegated auth ority and pointed out th at in such a case there 

would be a residue of resentment which would pers is t fo r years. 

Without attempting to res olv e these diffe re nc es in th is re port , the 

Task Force believes th at th is issue is a major one which should be 

addressed in the near fu tu re , before the delegation process proceeds 

much fu rt h e r.

EPA Headquarters

The most str ik in g feature o f the Headquarters interviews was 

the enthusiasm expressed over the notion of decentraliz ation. However, eq ua lly str ik in g was the general lack of a specific conceptual 

approach to achieving decentraliz ation. I t was als o apparent th at 

few of the the program managers giv e program decentraliz ation a high 

p rio rit y among th e ir a c tiv it ie s , nor have they in s til le d in th e ir 

sta ff s any real sense of urgency in th is regard.

Headquarters program managers appear to have fu ll y recognized 

th at success in the water program requires grea ter re lia nce on the Sta tes. But they have not thought through in deta il how to s h if t 

grea ter auth ority and re sp o n sib ility to the State s. For example, the 

Task Force was to ld of no s ta ff e ff o rt s to eva luate State performance 

where deleg ation has occurred, as compared to States where EPA s t i l l 

performs the major ro le . One Headquarters s ta ff e r brought up the 

example of the d ra ft FY76 Operating Guidance, in which the Regional 

Office s were instructed in ge ne ralte rm s to achieve more delega tio ns . 

The Regional Office re plie s stressed the lack of realism in the 

guidance and pointed out th at with ou t a large increase 1n res ources, 

sig n ific a n t ad ditio na l deleg ation s could not be achieved. This
178

example was pointed out as an il lu s tr a tio n th at Headquarters program 

managers have not ye t devised a re a li s ti c dece ntraliz atio n strate gy 

which addresses the key management issues which face EPA and the 

States.

One such issue which arose was the question of consistency 

versus fle x ib ility in program op eration s. EPA has ge ne rally approached 

th is Issue by devis ing a na tio na l model fo r program deleg ation 

(e .g ., the NPDES deleg ation agreement), which mandates consistency, ye t gives the Regional Offices auth ority to administe r the delegations 

with some fle x ib ility . However, the Task Force found th at Regional 

Offic e s ta ff , because they fe ar a loss of con sistency from State 

to State , have tended not to take advantage of the f le x ib ilit y in 

the dece nt ra liz at ion process. The State agencies, of course, then 

complain of a lack of fle x ib ilit y in EPA's management.

C ertain ly, th is is an issue which requires guidance from the 

na tio na l le vel. However, with regard to th is and othe r major issu es, 

the Task Force found a general lack of appreciation of the need fo r 

guidance and direction on the pa rt of the responsible program 

managers.

Any successful e ff o rt to promote dece ntraliz atio n must address 

the a tt itu d in a l issues describ ed in th is se ction. The actions which 

are taken as pa rt of th is e ff o rt must attempt to address a tt itu d in a l 

problems and to build on the posi tiv e attitudes which e xis t. The 

reconinendations of the Task Force are designed to accomplish these 

ends.

-29-
179

V. CONSTRAINTS AND OPPORTUNITIES

The Task Force rec om mendations to improve and expand de ce ntr a ­

liz a tio n re la te d ir e c tly to e it h e r problem s to be re solv ed o r 

o p p o rtu n it ie s to 'b e re a li z e d . This se ctio n co nta in s a d is cu ssio n 

o f th e pro blem s, o r c o n s tra in ts , and o p p o rtu n it ie s wh ich th e ta sk 

Force he ard in it s in te rv ie w s w it h th e S ta te and EPA O ffic ia ls 

who de al d a il y w it h th e issu es o f d e c e n tra li z a tio n .

C o n str a in ts

C o n str a in ts have been grou pe d fo r pu rposes o f d is cu ssio n in to 

th re e c a te g o rie s : re sourc es, a ttit u d e s , and a u th o rit y and pro ce dure s. 

Alth ough thes e gro upin gs o ve rl a p - - fo r exam ple, EPA a c ti o n s re gard in g 

re so u rc e s, a u th o rit y and pro ce dure s in v a ria b ly a ffe c t S ta te a t t i ­

tude s - - th ey pro vid e a convenie nt d iv is io n fo r pu rposes o f dis cu ssio n

Res ou rces . The Task Fo rce foun d th a t in s u ffic ie n t fu n din g fo r 

S ta te agenc ies is the s in g le mo st im port ant ob sta cle to a more 

e ffe c tiv e d iv is io n o f r e s p o n s ib il it y and la b o r between EPA and the 

S ta te s. In s p it e o f th e un pr ec ed en ted in cre ases in fu n din g wh ich 

have occurr ed over th e la s t severa l years , th e c u rr e n t and p ro je cte d 

le v e ls o f fu ndin g are in s u f f ic ie n t to p erm it la rg e a d d it io n a l 

tr a n s fe rs o f fu n c ti o n s to o c c u r, even i f a ll a ttitu d in a l and p ro ­

ce dura l c o n s tr a in ts were e li m in a te d . For ex am ple, in th e case o f the 

re cent d e le g a ti o n o f v ir t u a lly a ll m unic ip al f a c i l i t i e s fu n c ti o n s in 

C a li fo r n ia , a 92% (76 to 146) in cre ase in th e m unic ip al f a c i l i t i e s 

s t a f f was re q u ir e d . No c u rre n t so urce o f fu ndin g (fe e s , S ta te 

a p p ro p ria ti o n s o r S ection 106 fu nds) can be ex pe cted to pro vid e fo r 

s t a f f in cre ases o f th is m agnitu de.

A b r ie f exa m in atio n o f th ese fu ndin g so urce s in d ic a te s th a t 

re cent in cre ases have, a t le a s t te m p o ra ril y , le ve le d o f f and th a t 

l i t t l e o r no grow th can be a n tic ip a te d fo r the next year o r two 

(se e c h a rt belo w ). Lo ok ing f i r s t a t Sta te a p p ro p ria ti o n s , th ese 

rose from a FY72 le v e l o f $4 2.3 m il li o n to a FY75 to ta l o f $7 6.6 

m illio n . How ever, o f th e 20 S ta te s v is it e d , 15 ex pe cted FY76 

a p p ro p ria ti o n s to d e c lin e o r remain s ta tic and 5 ex pe cted in cre ases. 

This a n tic ip a tio n o f a g e n e ra ll y f l a t le v e l o f S ta te a p p ro p ria ti o n s 

is su ppor te d by an exam in ation o f th e FY76 S ta te pro gra m pla ns wh ich 

have been re ceiv ed in Headquarters .

-3 0-
180

The to ta l expected State ap prop ria tio ns in the f ir s t 34 program 

plans received was one percent below the State ap prop ria tio ns expected 

in the same States in FY75. Thus, based on information gathered on 

the 20 States vis ite d , as well as on data from 34 State program plans, 

i t is re a lis ti c e to expect approximately the same level of State 

ap prop ria tio ns in FY76 as in FY75. Looking beyond FY76, several States 

expressed the concern th at th e ir ap prop ria tio ns may be reduced more 

than 10% from the FY75 le vel.

A dditio nally, the continuing effects of in fl a ti o n in FY76 and 

beyond w il l reduce the leve l of real resources, as measured in constant 

d o lla rs , which w il l be av ailable in the next year or two (See ch art 

fo r impact of in fl a ti o n ).

The reasons fo r the le ve lin g o ff of State ap prop ria tio ns , given 

by the States during the Task Force in te rv iews, were in fl a ti o n and 

rec ession. In fl a ti o n has caused an increase in the d o lla r cost of

-31-
State goods and services, and recession has reduced revenues. State 

agency o ffic ia ls , le gis la to rs and budget o ff ic e s ta ff who were in te rviewed ge ne rally agreed th at the fi s c a l crunch caused by in fl a ti o n 

and recession has led to freezes or red uctions in State budget 

expenditures in order to mainta in balanced budgets. I t can be expected th at these measures w il l be continued u n ti l su bs tantial growth 

in the economy, and consequently in Sta te revenues, occurs. Such 

growth is not an tic ipated in the near fu tu re .

One positiv e conclusion emerged from the interviews, however.

The unanimous judgment of the State o ffic ia ls was th at spending 

ceili ngs and cutbacks fo r State water pollu tion co ntrol agencies are 

not the re sult of backlash against environmental programs. Rather, 

they are the re sult of fiscal belt-t ig hte nin g.

With regard to Section 106 funds, the Pres iden t's budgets fo r 

fisca l years 1974-1976 have con tain ed an id entic al $40 m illio n leve l 

each year. The Congress has ap propriated the fo llo win g amounts:

FY74 - $50 m illio n , FY75 - $45.6 m illio n and FY76 - $50 m illio n . 

Discussions with the senior EPA Headquarters o ffic ia ls who are in ­

volved in preparing budget requests in dica te th at the prospects fo r 

increases in Section 106 funding fo r State programs remain dim — 

unless the Congress acts to re ta in the FY76 $50 m illio n level by 

ov er rid ing the President.

Tnus, the trend of both budget requests and ap prop ria tio ns fo r 

Section 106 funds is re ala tively f la t , and there is l i t t l e reason 

at present to antic ip at e future rises.

The fu tu re prospects fo r generating ad ditio na l State revenues 

through the use of State fees (exclud ing the so -called "C alif orn ia 

fee" ) is als odim . EPA conducted a study of th is question in 1974 

and ar riv ed at the conclusion th at Sta te agencies did not favo r th is 

approach. The States fe lt th at such an approach would be ge ne rally 

unproductive and concluded th at fees were an inap prop ria te revenue 

device fo r a governmental fu nc tio n which be ne fits such a broad segment 

of the po pu latio n.

Given the bleak prospects fo r increases in cu rren t means of 

fun din g, the Task Force explored two oth er promising revenue sources: 

the "C alif orn ia fee" system and the Cleveland-Wright approach. The 

"C alif orn ia fee " system, by which the State charges m unic ip alit ie s 

a percentage of each gra nt fo r co ns truc tio n of waste treatm ent 

fa c ilit ie s , has gre at pot en tia l as a revenue source in an unknown 

number of States. C alif orn ia , which is the only State thus fa r to 

use th is mechanism, provides a good example of th is pote ntial. However, le g is la ti v e changes to est ablis h the fee mechanism are required 

in each State, and in the States v is it e d by the Task Force, the re was 

a general reluctan ce to take th is step u n ti l the Congress acts on the 

Cleveland - Wright approach which is contained in Section 8 of H.R. 9560
182

This Amendment, which would allow EPA to gra nt up to two percent 

of the to ta l State co ns tru ction gra nt allo cation to State agencies 

fo r ad ministra tiv e co sts, has the pote nt ial to fund v ir tu a ll y a ll 

foreseeable dece ntraliz atio n costs ($100 m illio n out o f the FY76 (

allo cation of $5 b il li o n ). The b ill is now in the House, where 

hearings were completed in October. The outlook fo r passage is uncl ear at th is time. However, i t is apparent th at the approach ' *»»>

in H.R. 9560 has gre at pote ntial fo r dece ntraliz ation.

<

The reaction of the States vis ite d to the Cleveland-Wright 

approach was ge nerally quite favorable (9 were enth usia stic, 1 was 

opposed and 10 were ge ne rally in fa vo r, but with some reserva ions ).

However, many State o ffic ia ls expressed the concern th at i f the 

Amendment passes, th e ir le gis la tu re s may subsequently reduce State 

ap prop ria tio ns , thereby at le ast p a rti a ll y negating the be ne fits of 

the Amendment. Most of these States advocate the ad dition of a 

clause in H.R. 9560 and in othe r section s of P.L. 92-500 (such as 

Section 106) which penalize States fo r reducing State funding and 

thereby in h ib it States from making such red uctions.

Another aspect of the resource pictu re is the State sta ff in g 

situ a tio n . Low State sala ries, among othe r fa cto rs , have resulted 

in vacancy rates of 10% to 30% in perhaps h a lf of a ll State programs.

Although the exten t o f the problem varies from State to State, i t 

was apparent to the Task Force th at in the State agencies vis ite d , 

sta ff in g d if fic u lt ie s represented a sig n ific a n t obstacle to bu ild ing 

more effective programs. Vacant po sitio ns are on ly one manifestation 

of th is problem. High turn ov er , p a rt ic u la rl y in key positio ns, also 

can severely reduce effectiveness .

In summary, resource co nstra ints are the sing le grea test barr ie r 

to dece ntraliz atio n. Funding is the major co ns tra ining fa cto r, but 

sta ff in g problems are also an imp ortant ba rr ie r.

A ttitudes. The thr ee sets of attitudes described in Section IV 

have both posi tiv e and negative effects on the dece ntraliz atio n process.

In th is se ction, the negative attitudes are summarized in an attempt 

to show how they adversely a ff e ct the e ff o rt to s h if t more program 

re sponsib ility and auth ority to the State agencies.

The resource situation discussed e a rl ie r in th is section and 

the State perception of th is situation has a powerful e ff e ct on State 

willin gness to accept more re sp o n sib ility. The cu rrent fis c a l c ir s is 

in the vast m ajo rit y of States, and the accompanying hirin g freezes 

and budget reductions in some State agencies, have created an 

atmosphere in which the Sta te agencies are re lu cta nt to assume

re sponsib ility fo r major program fu nc tio ns . *

-33- f
183

And the memory of the Malek-Train correspondence concerning Sec tion 106 

funds and cu rren t e ff o rt s by the Ad ministra tio n to hold down Federal 

expenditures , when combined with the s ta ti c leve l of Section 106 

budget requests, are enough to convince the States th at th is source 

of funds w il l not increase.

As stated e a rli e r, v ir tu a ll y a ll Sta tes are re lu ct ant to move 

, to obtain le g is la ti v e auth ority fo r implementing the "C alif orn ia fee"

concept u n ti l they see what happens to the Cle veland-W 'ight approach. 

Several States pointe d out th at there are no fu tu re year au thor izatio ns fo r co ns truc tio n gra nt funds and th at pro spective adm in istrative 

funds fo r State agencies under H.R. 9560 depend on co ntinuing const ru ction grant fun din g. However, i f the au thor izations are voted , 

i t is probable th at State reservations about Cleveland-Wright funding 

w ill, in most cases, disappear.

The net e ff e c t of the fu tu re fun din g prospects on State attitudes 

is to cause the State agencies, in v ir tu a ll y a ll cases, to be extrem ely 

cautiou s with regard to assumption of new re sp o n sib ilitie s, p a rt ic u la rl y 

those which requ ire ad ditio na l s ta ff. Eith er the passage of H.R. 9560, 

a rev ers al of Sta te fiscal pro spects, or both w il l be necessary before 

State attitudes change s u ff ic ie n tl y to permit a sig n ific a n t number of 

ad ditio na l large-sc ale delega tio ns . Add ition al p a rt ia l deleg ation s 

or inform al de lega tio ns , however, w il l be possible at the presen t leve l 

of fund ing by elim in atio n of duplic ation of e ff o rt between EPA and 

the Sta tes .

Turning to the State attitudes described in Section IV, a fa ir ly 

stro ng residue of resentment of EPA continue s. But in almost a ll of 

the States vis ite d by the Task Force, the re was a counterbalancing viewpoin t. Most States fe lt th at previous problems were water over the 

dam, th at EPA was making a reasonable e ffo rt to change onerous procedures and th at re la tions have been imp roving . Thus, State attitudes 

can be a major const ra in t to new EPA in ia tive s (e .g ., 208 water q u a lity 

management and nonpoint source programs) i f EPA proceeds u n il a te ra lly 

or -- in the Sta te view -- unreasonably, and the States are not fu lly 

consulted or involve d in the program pla nning phase. On the othe r hand, 

State attitudes can be turned to an a tt ri b u te in most cases where such 

co ns ultatio n and involvement does occur.

A judgment regarding the e ff e ct of Regional Office attitudes is 

much more d if fic u lt to make. Regional O ffice s ta ff have played a major 

ro le in the progress toward dece ntraliz atio n which has occurred during 

the past several years. It is the fa ce -to-face conta ct between Regional 

Office s ta ff and State o ff ic ia ls which has done much to dis sip ate 111- 

>* fe elin g over past months. I t was als o in the Regional Office s th at the

Task Force found much of the genuine enthusiasm fo r dece ntraliz ation 

in EPA.

-34-
184

However, the Task Force was also to ld by Regional Office s ta ff 

th at some div is io n directo rs and branch ch iefs did not favo r fu rt her 

dece ntraliz atio n — part ly because they did not wish to lose program 

co ntro l and auth ority and p a rt ly because of a genuine b e lie f th at 

the States could not do as good a job as the Regional s ta ff. This 

was a very d iffic u lt area fo r the Task Force to explore, because an 

accurate assessment requires in sig ht in to the su bjec tiv e views of 

the principal ac tors. However, the Task Force concluded th at re lu c- ,

tance on the pa rt of program directo rs in the Regional Office s to 

re lin quis h auth ority is at le ast a po tent ial problem, but one which 

is manageable i f Regional Adm inistrators are a le rt to the problem.

Another set of attitudes expressed by some Regional O ffic e s ta ff 

is d is tr u s t of State capability and/or genuine in te ntion to implement 

the co ntro l program ou tlined in P.L. 92-500 and EPA re gula tio ns.

Although the Task Force found the re was ample ju s ti fi c a ti o n fo r these 

attitudes in several cases, the Task Force concluded th at State capa b il it y and willing ne ss were grea ter than some Regional O ffic e s ta ff 

believed in oth er cases. The danger in th is type of situation is 

th at Regional Office attitudes w il l become s e lf- f u lf illin g , as State 

s ta ff recognize the lack of tr u s t and react by lim it in g th e ir cooperativen es s.

I t is d iffic u lt to explo re these si tu ations in any depth in the 

course o f one-day v is it s . But the co ntrast between State-Regional 

O ffic e re la tions which were close and based on tr u s t, and othe r StateRegional Office re la tions where these qualities were weak, enabled 

the Task Force to make the judgment th at some of these situ ations 

where d is tr u st ex ists could be attribute d in large pa rt to Regional 

O ffic e s ta ff . Obviously, where these cond ition s e x is t, i t is d if f ­

ic u lt to negotiate the tr ansfe r of func tio ns to the States involv ed.

Several Regional O ffice s ta ff stated th at where formal delegatio ns 

had occ urred, Headquarters preferred to deal d ir e c tly with the States 

and bypass the Regional O ffic e. These situ ations cle a rly act as a 

dis in ce ntiv e fo r Regional O ffic e s ta ff to promote decentraliz ation.

Since th is type of problem is d ir e c tl y related to the issue of a 

well-conceive d EPA overview policy, i t w il l be discussed as pa rt of 

the procedures topic below.

The Headquarters' a tt itu d e s, discussed in Section IV, also 

constitu te an impediment to fu rt h e r de ce ntraliz atio n as defined in 

th is re port. Although the to p-level program managers in Headquarters 

expressed a clea r commitment to the general concept of dece ntraliz atio n, 

they -- perhaps unconsciou sly -- give l i t t l e p rio rit y to th is commitment 

in th e ir day-to-day a c ti v it ie s and have not tra ns mitted to th e ir sta ffs •

a sense of p rio rit y regard ing dece ntraliz atio n.

Some sig n ific a n t progress has been made under Headquarters directi o n , however, through the establishment of the "Committee of Ten,"

-35-
and through development of mechanisms to obtain State comment on 

the Operating Guidance and State part ic ip ation in the dra ft in g of 

re gu latio ns . Strong pressure has been brought to bear on the 

Regional Office s to make formal de lega tio ns . However, as w il l be 

discussed la te r 1n the Task Force recommendations, str onger Headquarters lea dership w il l be require d i f there is to be sig n if ic a n t 

ad ditio na l progress in the decentraliz ation process.

Auth ority and Procedures. This po rtion of the re po rt discusses 

the co ns training influe nces on the dece ntraliz atio n process re sultin g 

from re gula tio ns, guidance, op erating procedures and the div is io n of 

auth ority between Headquarters, the Regional Office s and the State s. 

This is a d iffic u lt area to analyze because of it s complexity and 

because the judgments rega rding question s -- fo r example, on the 

appropriate degree of auth ority given to the Regional Office s on a 

specific program issue or the number of outputs or a c ti v it y In dic ato rs 

to be rep orted by a State -- are ne ce ss arily su bjec tive ones which 

vary from In dividu al to in div id ual.

However, the net re sult of the decis ions made on auth orities 

‘and procedures, as well as the process by which the decis ion s are 

made, are extremely important. For example, i f acceptance of very 

detailed and cumbersome procedural requirements is made a pre re quis ite 

to State assumption of a pa rt ic u la r program fu nct io n, States may find 

reasons to le t EPA continue to bear th at re sponsib ility. S im ila rly, 

i f a State believes that polic y decis ion s regarding major program 

areas (e .g ., municipal fa c il it ie s ) w il l continue to be made 

u n ila te ra lly by EPA, even a ft e r the State has assumed the operation al 

re sp o n sib ility, then i t may be unw ill in g to give up it s re la tive 

antonomy to become emeshed in an adm in istrativ e system which require s 

the State to do the work, but gives i t l i t t l e or no voice in the 

decisions governing how the work is to be performed.

Thus, EPA actions with regard bo procedures and auth ority have 

a d ir e ct and major impact on State attitudes regarding assumption 

of additio na l program re sp o n sib ilitie s. They also a ff ect the 

effectiven es s of coordination and cooperation of the cu rren t div is io n 

of func tio ns in each program area.

One of the criticis m s of EPA voiced most freq ue nt ly by State 

agency s ta ff was th at regu latio ns and guidance were too le ngth ly , 

too complex and too deta ile d. The chara cte ristics c rit ic iz e d appear 

to be due in large measure' to Headquarters concern th at P.L. 92-500 

be implemented ra pid ly and consis te ntly and th at re gu latio ns be 

s u ff ic ie n tl y de taile d so th at the Regional Of fices would have l i t t l e 

doubt reg ard ing what was to be done and how i t was to be done.

The era in which th at degree of deta il may have been necessary 

is past. The Task Force found, with few execeptions, th at both the
186

Regional Office s and the States are w illin g and capable of operating 

in a manner which req uires re s p o n s ib ilit y , in it ia tiv e and imagination on th e ir part. Consequently, the Task Force concluded th at 

Headquarters guidance which is concise , is fl e x ib le and emphasizes 

ob jectives ra ther than procedures is more appropriate to current and 

futu re opera tions of the water p o llu tio n co ntrol program. Although 

exceptions to th is general ru le may be necessary in the case of 

high ly tec hn ical guidance, i t is ge ne ra lly preferab le to ri s k err or 

on the side of fle x ib il it y than on the side of r ig id it y and d e ta il . 

The basis fo r th is conclusion lie s in the Task Force's b e lie f th at 

the States and Regional Office s are ge ne rally staffed with capable, 

high ly motivated professio nals who can be re lie d upon to manage more 

e ff e ctive ly with ou t de taile d guidance. Any discrepancies in performance re sultin g from th is mode of operation can be revealed and 

subsequently correc ted by ap prop ria te program mo nitoring and eva luation .

Co nsistent with these findin gs regarding regu latio ns and guidance 

is the Task Force's judgment reg ard ing use of the na tional program 

model concept in delega tio n. The term nationa l program model re fe rs 

to a dis cr ete set of program func tio ns (e .g ., NPDES, plan and specif ic a ti o n review , etc .) which EPA defines , along with accompanying 

w ritten agreements and/or checklis ts , and offers to a State as a 

delegation package. Such de lega tio n models are very useful in 

achieving program consistency in cases where States have the exis tin g s ta ff capacity to assume the re sponsib ility fo r an e n tire set 

of program fu nc tio ns . However, at present and in the foreseeable 

fu tu re (unless a b ill such as H.R. 9560 passes or a sim ila r source 

of funding is fou nd), there are few remaining States with such 

ca pa city.

In the many cases where States have lim ited ca pa city, the national 

program model approach may actu ally discourage a more ra tional div is io n 

of re sp o n sib ility and lab or because th is approach implies th at a 

State must assume an entire set of fu nct ions. Lacking th is ca pa city, 

a State may feel com fortable in having EPA perform a ll or v ir tu a ll y 

a ll func tio ns in a given program area.

The Task Force concluded th at a change of emphasis by EPA in 

these circumstances may be prod uc tive in encouraging States to assume 

ad ditio na l re sp o n sib ilitie s. By deemphasizing delegation of an entir e set o f func tio ns ( i.e . , a program model or package) and instead 

stress ing a div is io n cf func tio ns ta ilo re d to each State 's w il li n g ­

ness and c a p a b ilitie s, EPA may help to create a clim ate which is 

more conductive to cooperative sharing of program re sp o n sib ility.

-37 -
In adopting th is approach, both EPA and the States would 

jo in tly determine how a set of program func tio ns would be divid ed 

between them. For example, a State could choose to perform the 

technic al review o f plans and specific ations, wh ile EPA would continue to ca rry out the so ca lle d "Federal requirements" such as the 

EEO and Davis-Bacon re sp o n sib ilitie s. Regional Of fices and States 

would be encouraged to take the in it ia tiv e in div id in g re sp o n sib ility 

fo r as ye t undelegated (except in the case of C alif orn ia ) func tio ns 

such as Step I municipal fa c il it ie s pla nning .

I t would be ap propria te fo r Headquarters to create a segmented 

deleg ation package conta ining a ll p o te n ti a lly delegable func tio ns 

fo r those States having s u ff ic ie n t s ta ff capa city to perform the 

entire set of fu nct ions. Then, where Sta te capacity is in s u ff ic ie n t 

to assume a ll o f these fu nc tio ns , the States and Regional Office s 

could ne gotiate a variety of d iffe re n t agreements which match each 

State 's c a p a b ilitie s .

I t 1s Important to po int out th at these kinds of arrangements 

have already been negotiated 1n many cases in the form of "p a rti a l" 

or Informal de lega tio ns . A lar ge number of these agreements are 

w ritten. However, the Task Force be lieves th at the approach 

represented by these agreements deserves much greater emphasis, and 

th at a ll such arrangements should be described 1n b ri e f w ritten 

agreements which res olv e a ll ambiguity concerning mutual oblig ations 

and auth orities.

One pote ntial way to in s ti tu ti o n a liz e th is approach would be to 

Incorp ora te In to the Agency's MBO-FPRS system a means of rec ogniz ing 

agreements, sh ort of "dele gations" as curr ently defined. This would 

be more d if fic u lt than the present re portin g of formal de lega tio ns , 

since a ll w ritt en agreements would be reco gnized. One possible 

method of dealing with th is d iffic u lty would be to cla ssify agreements as cla ss one, two and thre e; with cla ss one representing " fu ll" 

deleg ation of set of fu nct ions, cla ss three rep res enting State 

assumption of something less than 50% o f fu ll re sp o n sib ility and 

cla ss two In dic ating an interm ediate assumption of re sp o n sib ility. 

Irreg ardles s of the method employed, however, the concept of a 

div is io n of re sp o n sib ility and la bor, based on the cu rren t ca pability 

of each State, should be recognized and stressed.

Another set of criticis m s which were freq ue nt ly expressed 

by State o ffic ia ls re la te ’ to program re portin g and ev alua tio n. These 

procedural concerns, 1n tu rn , are ass ociated with concerns expressed 

by Regional O ffic e s ta ff th at EPA has no coh ere nt, eff e ctive overview polic y with regard to issues presented by the increasin g State 

assumption of re sponsib ility.
188

The term, "overview p o licy," is used here to includ e procedures 

fo r re po rting and evalu ating State performance, as well as policie s 

fo r taking remedial actions where State performance fa ll s substantia lly sh ort of mutua lly agreed go als. To take an extreme example, 

what sanctions or leverage can and should EPA use i f a new admin istr a tio n comes in to o ff ic e in a State with formal riPDES and municipal 

fa c il it ie s delegations and delib era te ly discourages additio na l permit 

issuance, or uses blatant p o li ti c a l c rit e ria fo r rankings in a State's 

pr ojec t p rio rit y lis t , or simply slows program a c ti v it y to a v ir tu a l 

sta ndsti11?

The concerns on the State side are with unnecessary and 

ov erly fre quent re po rting and with ev alua tio n which seems to imply 

a su pe rio r/s ub ordina te re la tionship and which seems more concerned 

with numbers than with an accurate apprais al of the quality and 

effectiven es s of program performance. The Regional Office concerns 

are re la te d to the insu rin g of e ff e ctive State performance, both now 

and in the fu tu re when most of the op eration al re sp o n sib ility passes 

to the State agencies.

There is also considerable unce rtainty in the Regional Office s 

regarding the pra ct ical and leg al li m it s of dece ntraliz ation. At what 

po int in the s h if t of the div is io n of func tio ns with the States might 

EPA lose management control of programs and find its e lf unable to 

insure th at national polic ie s are ca rried out by State agencies?

And, as the recent experience with the delegation of municipal fa c ilit ie s func tio ns to C alif orn ia il lu s tr a te s , can " fu ll de lega tio n" take 

place under cu rren t provisions o f P. L. 92-500 or are le g is la ti v e 

changes required?

Both sets of concerns are deeply fe lt and d ir e c tl y a ff e ct 

State and Regional Office willin gness to proceed fu rt her with decentr a li z a ti o n . Fa ilure to address these concerns w il l severely impede 

any fu tu re e ff o rt to extend decentraliz ation.

Op po rtu nitie s

Program co ns tra ints have been discussed in gre at d e ta il because 

of the b e lie f th at a thorough understanding of a problem can lead 

to a more effective solu tion. The op po rtun ities discussed in th is 

se ction, in most cases, re la te to the id e n tifie d co ns traint s and 

o ff e r a way to overcome cu rren t d iffic u lt ie s . Because of th is 

re la tionship , op po rtun ities are grouped in the same three categ ories 

as are co ns traint s.

-39-
189

Resources

The f ir s t po int to be made with regard to additi onal funding 

is th at there are opportunitie s to ob tain new revenue sources. Both 

the Cleveland-Wright approach and the so ca lle d "C alifo rn ia fee " 

approach have gre at pote ntial.

These op po rtun ities re la te d ir e c tl y to the findin g th at State 

agencies are gene rally w il li n g to use additio na l funds to expand 

th e ir capacity to assume more program re sp o n sib ility. This w il li n g ­

ness can be enhanced, i f EPA w il l adopt the measures discussed under 

procedures and auth ority and giv e the States a more equal partn ership 

ro le . The willingn es s discussed here is cr uci al to a fu rt h e r s h if t 

of re sp o n sib ility and auth ority to the States, because with ou t i t 

ad dition al funding may not re su lt in much ad dition al dece ntraliz ation.

However, even with ou t any ad ditio na l resources, there are sig ­

n if ic a n t op po rtun ities to elim in ate duplic atio n of e ff o rt between 

State and Regional O ffice s ta ff. For example, in cases where the 

plans and sp eci fic atio ns review func tio n has been delegated to State s, 

the Task Force found th at some Regional Office s ta ff were s t i l l 

"double-checking" every set o f plans and speci fica tions reviewed by 

the States. I f an agreement could be reached whereby the Regional 

Office reviewed perhaps 10% of the plans and specific ations, or conducted post au dit review s, s ig n if ic a n t s ta ff could be made av ailable 

fo r othe r tasks.

As States assume more of the opera tional tasks, Regional Offices 

have increasin g opp or tu nitie s to s h if t th e ir s ta ff from those tasks 

(e .g ., issuing permits) and to use them in a technical assistance 

role to support and build the ca pa city fo r States to pla y a more 

sig n if ic a n t opera tional ro le . One Region has su cc es sfully employed 

the approach of re ly in g p ri m a ri ly on the State agencies fo r the 

op eration al ro le , but of supplementing the State s ta ff with EPA 

personnel located in the State agency. This approach has worked 

well and is cle arly more cost- eff ective than the altern ative approach 

of div id in g fun ctions between two units of government.

A dditio nally, many States have overlooked opportunities to 

supplement th e ir scarce resources by invo lving other Federal, State 

and lo ca l agencies more d ir e c tl y in th e ir water quality management 

programs. For example, areawide planning agencies have the pote ntia l 

to do much of the planning reg ardin g complex water q u a lity problems, 

i f the Sta te and areawide agencies e ff e c ti v e ly coord ina te th e ir 

a c ti v it ie s . Furthermore, as lo ca l and areawide water q u a lity management agencies are designated to implement the areawide "208 plan s,"

-40-

74 -536 0 - 76 - 13
190

add ition al resources can be brought to bear on many of the problems 

which the States have tr a d it io n a ll y attempted to handle themselves. 

Indeed, these forms of S ta te /lcca l de ce ntraliz atio n of the water 

program may well be the so lu tio n to overcoming many of the State 

resource problems in the fu tu re .

Attitude s

The overwhelming m ajo rity of State and EPA program managers 

support an incremental s h if t of program autho rl ;y and re sponsib ility 

to State agencies. I f EPA makes the changes 1n polic y and procedures 

which are recommended in th is re port, i t w il l be possible to build 

on the exi st in g posi tive attitudes toward dece ntraliz atio n and to 

fu rt h e r s h if t auth ority and re sp o n sib ility to the State s.

Aut horit y and Procedures

Most State o ff ic ia ls and many EPA s ta ff believe th at EPA could 

take better advantage of in div id ual State ca p a b ilitie s, circumstances 

and procedures. I f EPA were to modify it s polic ie s and procedures 

in order to be tter take advantage of each State's unique ca p a b ilitie s, 

a more effective div is io n of func tio ns could be achieved and States 

would be more w illin g to assume re sponsib ility fo r th at po rtion of 

func tio ns co nsistent with th e ir s ta ff capabilitie s.

S im ilarly, i f EPA re gu latio ns and guidance were w ritten 1n a 

manner which places decision-making and auth ority in the hands of 

State o ff ic ia ls where they have the opera tional re sp o n sib ility, 

better decisions would be made. A sig n ific a n t ad dition al benefit of 

these actions would be to convince other States th at the "partnersh ip" 

with EPA is a reasonable one and th at de ce ntraliz atio n has real 

ben efits fo r them.

-41-
VI. THE NEED FOR ORGANIZED FOLLOW-UP

Because the responsibility in EPA Headquarters for water program 

decentralization is divided between three Assista nt Administrators 

and because there is no single staff office to develjp policy for and 

monitor progress toward decentralization, there is need to sy stematically follow up those T ask Force recommendations which are 

accepted. One means of periodically monitoring decentralization 

actions is proposed as the last recommmendation of the Task Force.

If this reconrnertdation is accepted, the Regional Administra tors will 

report annually to the Deputy Administrator on the progress which has 

been achieved toward implementation of Regional/State decentralization 

action plans. The Deputy Administrator would then submit a summary 

of these reports to the State/Federal Water Programs Advisor y Committee (commonly known as the Committee of Ten). Such a procedure would 

encourage top management discussion and evaluation of the decentralization efforts of the States and Regional Offices at least twice 

a year.

However, other actions proposed by the Task Force 1n Its 

recommendations, such as issuance of policy guidance and defining the 

overview role of EPA, are primarily the responsibility of EPA Headquarters. After much discussion, the Task Force refrained from 

identifying precisely who should be assigned responslbllty for 

implementing and following up its recommendations on the grounds that 

only top management of EPA could effectively address this issue.

Given the diffusion of responsibility for decentralization within 

EPA and the competing program priorities which face Agency managers, 

the Task Force is convinced, that there must be continuing or 

periodic follow-up on the actions required by those recommendations 

which are accepted. After all, one of the primary m essages throughout 

this report is that EPA has set the decentralization process in motion, 

but has generally failed to follow up in an organized way. The time 

to do so is now.

Finally, it is important to recognize that the States must be 

involved in the process of follow-up. Through this mechanism, EPA will 

receive the feedback it needs as the Agency proceeds to take additional 

actions to promote and accommodate program decentralization.
192

V II . RECOMMENDATIONS

Based on the fin din gs and conclusion s contained in the previous 

sections of the re port, the Task Force offers the fo llo win g recommendations which, i f accepted and implemented, w il l in it ia te a 

process of change and improvement in the EPA/Statc re la tionship :

1. The Ad ministrator should issue a statement on de ce ntra liz ation to the dir e cto r of each State water p ollution 

control agency and to a ll EPA managers and s ta ff as so ciated with the na tio na l water pollu tion co ntrol program.

The Adm inistrator 's statement (see reconmended statement 

in Appendix A) should enuncia te cle arly the Agency's 

polic y with regard to decentraliz atio n of the water 

program and should inc lude an Agency ac tio n program, 

based on the recommendations of the Task Force which are 

designed to resolve the problems which impede progress 

toward fu rt her dece ntraliz ation. The ac tio n program 

should id e n tify specific tasks to be accomplished and 

should assign specific re sp o n sib ilitie s fo r accomplishing 

those tasks.

Rationa le. As is pointed out in the preceding sections of the 

re port, opinio ns d if fe r w ithin EPA and among the States as to the 

ob jectives and methods of decentraliz ation. The purpose of the 

recommended Adm inistrat or 's statement is to de fine the goals of decen 

tr a li z a ti o n and to emphasize the importance of th is process to the 

success of the water pollu tion co ntrol program. A statement, such as 

the one recommended, should resolve many of the am big uities and 

unce rtain tie s in the minds of Sta te and EPA o ffic ia ls . The statement 

should re su lt in a clea r sense of direction fo r a ll concerned.

2. A process, which inc ludes State p a rt ic ip ation, should be 

establish ed to determine the Agency's polic y regarding 

the cu rren t and fu tu re EPA overview ro le . The process 

should re sult in Agency polic y (and procedures i f 

ap prop ria te) on matters such as:

* State part ic ip ation in the development of proposed 

regu latio ns and guide lin es .

* State auth ority to make decisions and take actions 

commensurate with th e ir program re sp o n sib ilitie s.

-.43-
193

* Regional Office and State pa rticipation 1n the 

definitio n of minimal, essential reporting 

requirements.

♦ Mutual EPA/State ac co un tability 1n program 

evaluation.

* Reprogramming of EPA s ta ff as States assume 

the major operational ro le.

The process should also re sult 1n period ic updating of the 

Agency's action program fo r decentralization 1n order to 

re fle ct new po licies on decentralization and EPA/State 

experience 1n dealing with the problems Impeding 

decentr alization.

Rationale. As was pointed ou t, partic ula rly 1n the section on 

constraints and opportunities , the Increasing State assumption of 

re sp onsibilitie s has not been matched by Increased delegation of 

decision-making au thority to the States, add itiona lly , States resent 

aspects of the current relatio ns hip which Imply a superlor/subordlnate 

re latio ns hip. This recommendation 1s designed to 1nt1tate a process 

which w ill re su lt 1n a rethin kin g and modification of the procedures 

and au thor ities which constitute the EPA/State relatio ns hip. The 

Cal1forn1a/Reg1on IX re latio ns hip, which 1s cu rre ntly being mod ified, 

may provide a new basis from which EPA can ta ilo r It s re latio ns with 

a ll States.

3. EPA should continue, on a high p ri o ri ty bas is, to seek

addition al funding fo r support of State programs. In doing 

so, the Agency should emphasize 1n Its relatio ns with the 

Office of Management and Budget and the Congress the 

benefits which would accure with furth er program de ce ntra lization. Primary attention should be focused on measures 

such as passage of le gis la tion which Incorporates the 

Cleveland-Wright concept, Increased Section 106 State 

proqram grant funding, and re a lis ti c funding under Section 

208 (f) to support State (and areawide) water qua lity 

planning and management programs. In ad ditio n, serious 

consideration should be given to proposing le gis la tive 

amendments which would In h ib it or preclude decreases 1n 

State funding as Federal funding 1s Increased.

Rationale. The discussion 1n the section on constraints and 

opportunities pointed out the lim its of decentralization Imposed by 

4 funding constraints and the re su lting lim ita tio ns on State sta ffin g.

T

-44-
194

Much can be done with in those li m it s to reduce duplic atio n of 

e ff o rt and to develop more prod uc tive EPA/State re la tions.

However, a large scale transfe r o f additi onal func tio ns to the 

States depends on increased resources.

To meet the problems discussed in Section V concerning the 

prospect th at a sig nific ant number o f States may decrease th e ir 

ap prop ria tio ns fo r water pollution co ntrol i f given the opportunity, 

i t is important that EPA give serio us consideration to le g is la ti v e 

amendments which would prevent Sta tes from using increases in 

Federal funds to supplant State fun ds. Fa ilu re to do so, could 

re sult in a net decrease -- ra th er than an increase — in to ta l 

program reso urces.

4. Current EPA polic y and program guidance (and po ss ibly some 

re gu latio ns ) should be reviewed and modified as necessary 

to accomodate and promote fu rt h e r incremental delega tio n of 

program re sponsib ilitie s to the Sta tes . In doing so, 

program managers in each water program area should conside r 

ma tters such as:

* Ways to take better advantage of in dividu al 

State ca p a b ilitie s, auth orities and procedures 

by providing additio nal fle x ib ilit y to the 

States fo r conduct of th e ir programs.

* D efinitio n of ap prop ria te State and EPA roles 

and re sp onsib ilitie s which can be ta ilore d to 

individu al State ca p a b ilitie s (rath er than 

national program models).

* Increased use of program evalu ation and spot 

checking (in place of redundant EPA review

of State work) to reduce duplicat ion of e ffo rt.

* Id e n tifica tio n of improved outpu t measures, 

a c ti v it y in dicato rs and standards of performance (f o r use in the Agency's MBO-FPRS system) 

to be tter re fl e c t the v a ria b il it y among States 

of water quality problems and approaches fo r 

so lutio n of these problems.

Rationa le. The th ru st of th is recommendation is to ta il o r 

the div is io n of program func tio ns between EPA and each State in a 

manner which recognizes and takes advantage of each State's unique 

capabilitie s and weaknesses. EPA's management procedures, such as

-45 -
repo rting systems and program eva lu at ion, should be modified to 

recognize and promote th is alte re d way of conducting business 

with the States.

5. Each Regional Office and State should be requested to 

prepare ann ually a jo in t EPA/State ac tio n plan fo r 

dece ntraliz atio n as pa rt of the Regional workplans and 

Section 106 State program submissions. These ac tio n 

plans should id e n tify jo in t dece nt ra liz at ion ob jectives 

and should include items such as:

* A de sc rip tio n of how the Region intends to build 

ad ditio na l State ca pa city to take on ad dition al 

program re sp o n sib ilitie s over time. Financial 

assistan ce, improved tr a in in g programs, EPA 

technical assis tan ce, and assignment of EPA s ta ff 

to State agencies through short-term d e ta ils, IPA 

assignments, co lo ca tio n, et c. should be considered.

* A de sc rip tio n of how Region and States intend to 

fu rt her minimize duplic ation of e ff o rt and 

determine the proper u tl iz a ti o n of jo in t EPA/State 

resources. The Regions and States should seek to 

es tablish a clea r d e fi n it io n of th e ir respective 

roles and re sp o n sib ilitie s in the conduct of the

FY 77 water program and should include a li s tin g of 

the w ritten agreements o f memoranda of understanding 

to be negotiated in each func tio na l area.

* A de sc rip tio n of what the Region and States plan to 

accomplish in the way of improving th e ir jo in t 

program management and repo rting systems in ord er 

to assure th at the water program is implemented 

e ff e ctive ly and e ffic ie n tly in fu tu re years. Development of performance standards fo r each fu nc tio na l area 

of the water program, improved mechanisms fo r perio dic 

program ev alua tio n, and development of repo rting 

mechanisms which are ta ilo re d to the in divid ual procedures and needs should be considered.

Rationa le. This recommendation is close ly related to 

recommendations #2 and #4. I t pro vides fo r a process by which EPA 

and the States annually determine to what extent and how de ce ntra liz ation can take place in each Sta te durin g that fisca l year. In
196

the op inion of the Task Force, th is recommendation may well be 

the one which re su lts in the most speci fic accomplishment 

because i t is the one recommendation which impacts the States 

d ir e c tl y .

The development of Re gio nal/State dece ntraliz atio n action 

plans is envisioned to take place during the annual Section 106 

program planning cyc le and, as such, should be accomplished without 

undue e ff o rt or new procedures on the pa rt of either the States or 

Regional Office s. The Task Force (w ith the unanimous sup port of 

it s Sta te and Regional O ffic e repres en tatives ) is convinced th at the 

pote ntial be ne fits to be re aliz ed more than ju s tif y the e ff o rt 

inv olv ed and th at the concept be b u il t in to the program planning 

process now -- even in the absence of s ig n if ic a n tl y increased funding 

fo r the Sta tes. Furthermore, the Task Force believes th at the process 

must be estab lished before new funds become ava ila ble (e .g ., as a 

re su lt of congressional ac tio n on the Cleveland-Wright concept or 

on increased Section 106 or 20 8(f) ap prop ria tio ns ) so th at EPA 

and the States w il l be in a posi tio n to act qu ickly and e ff e c tiv e ly 

toward fu rt her dece ntraliz atio n in the event new funds are provided.

6. The Regional Adm inistrators should re port sem i-annually 

to the Deputy Adm inistrator on progress achieved in 

implementing the EPA/State dece nt ra liz at ion action plans.

The Deputy Adm in istrato r, in tu rn , should present a 

summary of these progress reports to the State/Federal 

Water Programs Ad vis ory Committee (commonly known as the 

"Committee of Ten") fo r th e ir conside ration and 

recommendations.

Ra tio na le. The need to evaluate progress toward dece ntraliz atio n 

and to take fo llo w up ac tio ns as req uired was discussed in Section 

VI. This recommendation would es tablish one of the primary 

mechanisms fo r fo llo w up and would provide a key ro le fo r the States in 

th at process.

-47-
APPENDIX A

The recommended statement which follo ws was designed to be 

Included 1n a le tt e r from the Adm inistra tor to the directo rs of 

State water pollu tion co ntrol agencies and to a ll EPA managers and 

s ta ff concerned with the na tio na l water pollu tion co ntrol program.

The specific language of the statement should be mo dified before It s 

Issuance to re fl e c t the personal views of the Adm inistra tor and 

comments received from the States , the Regional Ad ministrators and 

the Ass istant Ad minis tra tor s o f EPA. In additio n, the ac tio n program 

po rtion of the statement should Incorp ora te those po rtion s o f the 

Task Force recommendations (Numbers 2 through 6) which are accepted 

by the Agency and should be made more sp eci fic to Incorpora te the 

Adm in istrato r's assignment o f specific Implementing re sp o n sib ilitie s.
198

Recommended Adm in istrato r's Statement

and Action Program Regarding

Dec en tra liz ation of.th e Mater P ollu tion

Control Program

Passage of the Federal Water Pollu tio n Control Act Amendments 

of 1972 signaled a sharp re direction in the Nation's e ff o rt s to clean 

up it s waters and to re st or e and preserve th e ir usefulness fo r a ll 

it s citiz ens. The Environmental Protection Agercy was given a 

mandate to lead and coordin ate exis ting State programs 1n implementing 

the Act, while the Sta tes retaine d th e ir primary re sponsib ility fo r 

sp ecific pollu tion co ntro l programs. The Act introduce d a comprehensive, nationally -c onsis te nt permit system fo r in dustr ia l and 

municipal waste disc ha rgers, authorize d su bs tantial sums fo r the 

constru ction of municipal waste water trea tment fa c ilit ie s , and 

estab lished other aspects of a balanced program, includ ing water 

qualit y management pla nn ing, ambient and pollu ta nt source mo nitoring , 

and tr ain in g. An ambitious tim etable fo r implementation was sp ec ified .

All of us who have particip ate d in the execution of these fa rreaching re sp onsib ilitie s should be proud of the accomplishments thus 

fa r. During the past several years , the combined e ff o rt s of EPA and 

the States have la id the fou ndatio n fo r a successful long-term program. 

Over 97% of a ll waste discharg ers are either now in compliance with 

pollu tion contr ol standards or on d e fin ite water clean-up schedules. 

More than 4,000 in div id ual co ns tru ction projec ts which were funded 

under P. L. 92-500 are now underway. The adm in istrativ e framework 

fo r a comprehensive Fe deral/S tate e ff o rt has been put in place.

However, these very real gains were accomplished at a breakneck 

pace, as we sought to in it ia te new and gre atly expanded programs in 

time to meet the deadlines set in the Ac t. ‘In the process, regu latio ns 

grants and permits were issued ra pid ly under pressing time co ns traint s. 

There was too l i t t l e time and op po rtu nity to consider care fu lly the 

in s ti tu ti o n a l im plic atio ns of our programs and crash e ff o rt. Unfortu nate ly , in sp ite of sin cere attempts to develop a well-coordinated 

Federal/State pa rtn ersh ip, strain s did occur 1n th at re la tionship .

Our successful e ff o rt s to lay the foundatio ns of a comprehensive, 

enduring water pollu tion co ntro l program provide us now with time to 

re fl e c t and to re th ink our essential re la tionship with the States. 

Recognizing th is , the Agency in vited the direct ors of three State 

agencies to jo in with EPA Regional and Headquarters s ta ff in an attempt 

to id e n tify problems in EPA/State re la tions, to review ob jectives and

-49-
199

to develop recommendations leading to a more fr u it fu l pa rtn ersh ip.

The EPA/State group, which was designated the Dec en tra lization Task 

Force, vis ite d 20 State s, 7 EPA Regional Of fices and EPA Headquarters 

to gather information and suggestions from State and EPA s ta ff at 

a ll le ve ls .

The Task Force found many positiv e aspects in EPA/State re la tions. 

There is general reco gn ition of the mutual dependence between EPA 

and the States, and Regional O ffic e/S ta te tie s are in most cases 

strong. Experience of the past several years has resu lte d in many 

close personal working re la tionship s, and there is a firm , mutual sense of professio nalism and common purpose shared by State and EPA 

s ta ff .

On the othe r hand, there are many addition al opp or tu nitie s fo r 

build ing upon these past accomplishments in order to achieve a more 

effective div is io n of re sponsib ility and labo r between EPA and the 

State s, which is essential to the achievement of the goals of 

P. L. 92-500 at a time when resources are p a rt ic u la rl y scarce.

There exi st s a need to c la rif y the nature of EPA's overview ro le to be assumed in those si tu ations where States have assumed v ir tu a ll y 

a ll major func tio ns in the NPDES and municipal fa c il it ie s programs. 

Second, new sources of funds must be developed to augment tr a d itio n a l 

funding of State programs, so th at necessary ad ditio na l State s ta ff may be hired to permit expansion of the Sta te ro le . Third , duplic ation 

of e ff o rt must be gre atly reduced or elim inat ed , and mutual accounta b il it y in program evalu ation must be expanded. Fourth, changes in 

program guidance, repo rting and management procedures must be made 

which w il l fo ste r an attitude of genuine equality between EPA and the 

State agencies.

In ord er to bring about these and othe r improvements toward a 

more de ce ntralized mode of management, the Task Force has provided me 

with specific recommendations. I have reviewed these suggestions, along with the comments provided by the ap propria te Ass istant Administr a to rs , Regional Ad minis tra tor s and Sta te o ffic ia ls , and have 

incorporated them in to an "Ac tion Program fo r Dece ntraliz atio n."

I am assigning to the Deputy Adm inistra tor the ov erall management re sponsib ility fo r implementing the ac tio n program and have requested him to periodic ally repo rt progress to me as we move forward in ca rrying 

out the program.

The background and ra tio nale fo r the in divid ual items in the 

action program are contained in the "Report of the Dec en tra lization 

Task Force," which has been dis trib ute d to a ll States and Regional 

Office s. I urge a ll EPA s ta ff concerned with the water pollu tion 

co ntrol program to read and discuss with your colleagues the fin din gs 

and recommendations of the re port. Many of the issues raise d cannot be resolved by new program guidance or additio nal reso urces, but can be 

de alt with only by day-to-day actio ns which we a ll take in our jo in t

-50-
200

e ff o rt s with the States. These act io ns, and the s p ir it and attitudes 

with which they are ca rried ou t, can take us a lonq way down the 

road toward sig n ific a n t improvement in our re la tio ns with the State s.

I th in k i t is p a rt ic u la rl y important to emphasize the general qoal 

of dece ntraliz atio n: to s h if t the op eration al programs and the co rres ­

ponding auth ority and re sp o n sib ility to the States as ra pid ly as 

State ca pa city and willingn es s pe rm it. At pre sent, th is goal is f

defined in ra ther vague terms. But the purpose of the specific items 

in the ac tio n program is to in it ia te a process which w il l lead to 

decisions and polic y determinations necessary to c la rif y and give 

concrete substance to the general go al. Thus, I expect th at in the 

next three to si x months the action re sp onsib ilitie s w il l be assigned 

and implementation w il l be underway.

The "Action Program fo r Dec en tra liz at ion" of the Environmental 

Protec tio n Agency is as fo llo ws:

Those portio ns of the Task Force recommendations 

(Numbers 2 through 6) which are accepted by the 

Agency, in ad ditio n to othe r items which might 

be added to re fl e c t the personal views of the 

Ad ministrator and the comments received from 

othe rs, are to be inc orp ora ted here alonq with 

the Adm inistrator 's assignment of implementing 

re sponsib ilitie s.

-51 - f
APPENDIX B

Memorandum o f Aug us t 4, 1975 

E s ta b lis h in g th e D e c e n tr a li z a ti o n Task Force
202

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

SUBJECT:

FROM.

TO:

Establishment of a Task Force on De ce ntralization date: AUG 4 J

of Water Program Finyfc*gn< to .t h e jita te s

f nr Assistan t AdmirrtSTrator fo r Water and Hazardous Ma terials (WH-556)

Assistan t Ad ministrator fo r Planning and Management (PM-208)

Acting As sis tant Administrator fo r Enforcement (EG-329)

Dire ctor , O ffice of Regional and Intergovernmental Operations (A -101) 

Deputy As sis tant Ad ministrator fo r Water Program Operations (WH-446) 

Deputy As sis tant Administrator fo r Water Planning and Standards (Wil-451) 

A ll Regional Administrators

Since the passage of PL92-500, we have in te nsifie d our effort s 

to create a genuine Fed eral/State partnership in the water program. 

U ti liz in g the Section 106 State program grants mechanism and 

freq uent d ir e ct con tact with State counterparts, the Regional offic es 

have b u il t effective working relatio ns hips with the State agencies. 

Although the re remains considerable room fo r improvement, much has 

been accomplished--including a functioning annual program cy cle, 

establishment of MBO, and inc en tive funding of p rio rit y program 

areas. The States have gra dually accepted increased re sponsib ili ty 

fo r NPDES permits and fo r delegated functions in the municipal 

fa c il it ie s program, although u n til now EPA has ca rried the primary 

burden in these two major programs.

However, as we look ahead over the next two to five years, i t 

is apparent th at our success or fa ilu re depends in large measure on 

the performance of the States. In program areas such as compliance 

assurance, enforcement, processing of co ns tru ction gra nts , and 

management of nonpoint source programs, the States w il l have to 

assume the major ro le , i f the goals of the Act are to be achieved.

To enable the States to play th is ro le , at least two changes 

w il l have to occur. F ir s t, substan tial ad ditio na l State resources 

w il l be requ ire d. We w il l continue to seek ad ditio na l State fin ancia l support and to advocate new State program revenue sources as 

may be ap prop ria te. In additio n, we have re ce ntly in itia te d 

e ff ort s to assi st the States in assessing th e ir manpower needs and 

in upgrading th e ir salary structures to at least p a rt ia lly alle via te 

the serious sta ffin g problem which now exist s in many States. The 

second change must occur in the basic EPA/State re la tio nsh ip , as 

the States inc rem entally take on most of the ope rational and 

ad ministra tiv e tasks while EPA concentrates on an overview ro le of 

es tablish ing polic y and ensuring that the State programs are carried 

out e ff e c ti v e ly .

..
203

In order to accelerate the evolution toward th is altered 

EPA/State re la tio nsh ip , I am es tablishing a task force to 

conduct an in-depth evalu ation of existing EPA/State re la tions 

I in the water program and to develop sp ecific recommendations

• to be incorporated in the FY77 Operating Guidance. A general 

tim etab le fo r the group's a c tiv it ie s and a lis t of '■ome of the

' basic questions to be answered are attached to th is memorandum.

I am appointing Dan Petke of the Water Planning Division

* as chairman of the De ce ntralization Task Force and request that 

you make av ailable the fo llo wing individu als to serve as members 

of the task force: Patricia O'Connell (OE), Dick Hager (ORIO),

Bruce Engelbert (PM), Ralph Sulliva n (Municipal Co nstru ction),

Ed Richards (State Programs), Pat Godsil (Region V III),

Tom Frangos, (Wisconsin), and B il l Adams (Maine). The appointment of an ad ditio na l Regional task force member is planned.

An in itia l meeting in Washington, D.C. has been scheduled fo r 

August 13. The primary purpose of th is meeting w il l be to 

decide on a work plan which includes a de tailed tim eta ble and 

a systematic methodology to obtain the inform ation required 

to answer the attached questions.

I t is essential that the general focus of the task fo rc e's 

a c ti v it ie s be on the EPA/State re la tionship in the broadest 

sense, and that examination of in divid ual program areas be 

conducted in th is conte xt. I expect the task force to include in 

th e ir fin a l rep ort a summary of the State perspective on the issues 

which are raised in the course o f the task fo rce's a c ti v it ie s .

In order to achieve it s obje ct ives, I expect the task force 

to v is it repre senta tive Regions and State agencies. Regional Office 

cooperation in making appro priate s ta ff av ailable fo r interv iew s 

with members of the task force and Regional Office assistance with 

arranging interviews with appro priate State agency s ta ff w il l be 

necessary and appreciated.

I have asked Mr. Petke to re po rt to me periodic ally on the 

progress of the group, and I look forward to the group's fi n a l 

repo rt which I expect wil.l provide us with po lic y recommendations 

which w il l lead to substantial improvements in EPA/State re la tions 

in the water program.

Attachments

-54-

O