U.S. ENVIRONMENTAL PROTECTION AGENCY 

OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Site Inspection Report 

American Recovery and 

Reinvestment Act Site Inspection of 

the Ultraviolet Treatment and 

Chlorine Disinfection Facility Project, 

City of Bremerton, Washington 

Report No. 10-R-0132 

 May 26, 2010 
 

Report Contributors: Eileen Collins 

 Michael Owen 

Abbreviations 

A/E Architectural and engineering services 

ARRA American Recovery and Reinvestment Act of 2009 

DWSRF Drinking Water State Revolving Fund 

EPA U.S. Environmental Protection Agency 

OIG Office of Inspector General 

Cover Illustration: The logo for the American Recovery and Reinvestment Act of 2009 
 

 

 

U.S. Environmental Protection Agency 10-R-0132 

May 26, 2010 Office of Inspector General 

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review 

The U.S. Environmental 

Protection Agency (EPA) 

Office of Inspector General 

(OIG) conducts site visits of 

American Recovery and 

Reinvestment Act of 2009 

clean water and drinking water 

projects. We selected a City 

of Bremerton, Washington, 

project for review. 

Background 

The City received a 

$6.06 million loan from the 

State of Washington under the 

Drinking Water State 

Revolving Fund program. 

The loan terms include a 

$60,000 loan fee and 

100 percent forgiveness on the 

$6 million principal funded 

by the Recovery Act. The 

purpose of the project is to 

design and construct an 

Ultraviolet Treatment and 

Chlorine Disinfection Facility. 

For further information, 

contact our Office of 

Congressional, Public Affairs 

and Management at 

(202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2010/ 

20100526-10-R-0132.pdf 

American Recovery and Reinvestment Act 

Site Inspection of the Ultraviolet Treatment 

and Chlorine Disinfection Facility Project, 

City of Bremerton, Washington 

What We Found 

We conducted a site inspection at the City of Bremerton, Washington, in June 

2009. As part of our inspection, we toured the future site of the Ultraviolet 

Treatment and Chlorine Disinfection Facility, conducted interviews of City 

representatives, and reviewed documentation related to Recovery Act 

requirements. 

Based upon our site inspection, nothing came to our attention that would require 

action from the City. 
 

 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

City of Bremerton, Washington 

Report No. 10-R-0132 

For Melissa M. Heist 

Assistant Inspector General for Audit 

OFFICE OF 

INSPECTOR GENERAL 

May 26, 2010 

MEMORANDUM 

SUBJECT:	 American Recovery and Reinvestment Act Site Inspection of the 

Ultraviolet Treatment and Chlorine Disinfection Facility Project, 

FROM: 

TO:	 Dennis McLerran 

Regional Administrator, EPA Region 10 

This is our report on the subject site visit conducted by the Office of Inspector General of the 

U.S. Environmental Protection Agency. We performed this site inspection as part of our 

responsibility under the American Recovery and Reinvestment Act of 2009. The purpose of our 

site inspection was to determine the City’s compliance with selected requirements of the 

Recovery Act pertaining to the Drinking Water State Revolving Fund program. The City 

received a $6.06 million Drinking Water State Revolving Fund loan. The loan terms include a 

$60,000 loan fee and 100 percent forgiveness on the $6 million principal funded by the Recovery 

Act. 

The estimated cost of this report – calculated by multiplying the project’s staff days by the 

applicable daily full cost billing rate in effect at the time – is $51,176. 

Action Required 

Because this report contains no recommendations, you are not required to respond to this report. 

We have no objection to the further release of this report to the public. This report will be made 

available at http://epa.gov/oig. If you or your staff have any questions regarding this report, 

please contact Robert Adachi at (415) 947-4537 or adachi.robert@epa.gov, or Michael Owen at 

(206) 553-2542 or owen.michael@epa.gov. 
 

 

10-R-0132 

Purpose 

The purpose of our review was to determine the compliance of the City of Bremerton, 

Washington, with requirements for subrecipients of American Recovery and Reinvestment Act 

of 2009 (ARRA) funds under the Drinking Water State Revolving Fund (DWSRF) program. 

Background 

The City entered into a loan agreement with the Washington State Department of Community, 

Trade and Economic Development to design and construct an Ultraviolet Treatment and 

Chlorine Disinfection Facility. The City received a DWSRF loan for $6.06 million. The loan 

terms include a $60,000 loan fee and 100 percent forgiveness on the $6 million principal funded 

by the Recovery Act. The loan fee has a 5-year repayment period at 0 percent interest. 

Scope and Methodology 

Due to the time-critical nature of ARRA requirements, we did not perform this assignment in 

accordance with generally accepted government auditing standards. We did not perform certain 

steps that would allow us to obtain information to assess the City’s internal controls and any 

previously reported audit concerns. As a result, we do not express an opinion on the adequacy of 

the City’s internal controls or compliance with all federal, State of Washington (State), or local 

requirements. 

We conducted an onsite inspection at the City of Bremerton on June 1 and 8, 2009. During our 

inspection we: 

•	 Conducted interviews of the subrecipient’s project and financial managers; 

•	 Reviewed the subrecipient’s procurement policies and procedures; 

•	 Reviewed records maintained by the subrecipient, including procurement documentation; 

and 

•	 Toured the project site. 

At the time of the onsite inspection, the City’s ARRA-funded DWSRF loan with the State of 

Washington had not been executed. However, the State had informed the City that it would 

receive the loan and that the funding would cover allowable project costs incurred after March 1, 

2009. The loan contract was executed on August 10, 2009. 

Subsequent to the onsite inspection, we reviewed the loan agreement to determine the specific 

loan terms and applicable procurement standards. We interviewed State managers and staff to 

clarify the loan terms and applicable procurement requirements. We also reviewed State 

procurement regulations and related manuals. 

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10-R-0132 

Results of Site Inspection 

Based upon our site inspection, nothing came to our attention that would require action from the 

City. We reviewed the City’s procurement of architectural and engineering services (A/E). The 

City awarded a contract to an A/E firm to provide engineering design and bid support services 

for the Ultraviolet Treatment Facility and Chlorine Disinfection Facility project. This contract 

commenced on May 8, 2009. The A/E firm was selected based on qualifications and price 

negotiation. The City's award of the A/E services contract complied with the applicable State 

regulation, Revised Code of Washington 39.80. 

Recommendations 

We have no recommendations. 

Subrecipient’s Response and Office of Inspector General Comment 

On May 6, 2010, we held a meeting with the City of Bremerton and EPA Region 10 to obtain 

their response to the discussion draft report. Neither party had any concerns with the report. 

Although invited, the State did not attend the meeting. The State informed us on May 14, 2010, 

that it did not have any comments on the discussion draft. We have no further comments. 

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10-R-0132 

Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Planned 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Completion 

Date 

Claimed 

Amount 

Agreed To 

Amount 

No recommendations 

O = recommendation is open with agreed-to corrective actions pending 

C = recommendation is closed with all agreed-to actions completed 

U = recommendation is undecided with resolution efforts in progress 

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10-R-0132 

Appendix A 

Distribution 

Office of the Administrator 

Regional Administrator, Region 10 (Action Official) 

Director, Grants and Interagency Agreements Management Division, Office of Administration 

and Resources Management 

Agency Follow-up Official (the CFO) 

Agency Follow-up Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Audit Follow-up Coordinator, Region 10 

Public Affairs Officer, Region 10 

Mayor, City of Bremerton, Washington 

Director, Office of Drinking Water, Department of Health, State of Washington 

Acting Inspector General 

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