Document ID: EPA-HQ-OW-2020-0282-0019
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2021-02-24T05:00Z

Response to Public Comments
          from the EPA Notice: Proposed State Allocation Formula for 
          Sewer Overflow and Stormwater Reuse Municipal Grant Program
                                       
                                       
                        Docket ID#: EPA-HQ-OW-2020-0282
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       

  Response to Public Comments: EPA Proposed State Allocation Formula for the
          Sewer Overflow and Stormwater Reuse Municipal Grant Program
                                       
                                       
 Introduction

On August 4, 2020 the Environmental Protection Agency (EPA) published a Federal Register Notice (FRN) [EPA - HQ - OW - 2020 - 0282] for public comment announcing a proposed allocation formula for the Sewer Overflow and Stormwater Reuse Municipal Grants program. As required by the Clean Water Act (CWA), EPA is to establish a formula to allocate proportional shares of the annual amount appropriated for the program to state entities (for purposes of this notice, the term "state" refers to the 50 states as well as the District of Columbia, Puerto Rico, and the U.S. territories) to fund actions that will help manage combined sewer overflows (CSOs), sanitary sewer overflows (SSOs), and stormwater. EPA was directed to develop a formula based on the relevant infrastructure needs submitted in the most recent Clean Watersheds Needs Survey (CWNS) along with additional information considered appropriate by the EPA Administrator. 

The comment period closed on September 3, 2020 and 16 comments were collected from the following: anonymous; California Association of Sanitation Agencies; California Stormwater Quality Association; Iowa Department of Natural Resources; Rep. Lori Trahan of U.S. House of Representatives; Massachusetts Department of Environmental Protection; Massachusetts Rivers Alliance; Michigan Department of Environment, Great Lakes, and Energy - Water Resources Division; National Association of Clean Water Agencies; National Ground Water Association; National Municipal Stormwater Alliance; National Stormwater Center; New England Interstate Water Pollution Control Commission; Oregon Department of Environmental Quality; Rep. Gwen Moore of U.S. House of Representatives; and Wisconsin Department of Natural Resources.

 Decision on the Proposed Allocation Formula

Section 221 of the CWA gives EPA the responsibility to make grants to states for the purposes of addressing CSO, SSO, and stormwater needs. EPA is also required to develop an allocation formula to provide each state a proportional share of appropriated funds based on: 1) the total needs of the state for municipal CSO controls, SSO controls, and stormwater management identified in the most recent detailed estimate and comprehensive study submitted pursuant to section 221(g)(2) of the CWA (the CWNS); and, 2) other available information the Administrator considers appropriate. The most recent CWNS collected needs information as of January 2012 and given the age of its data, EPA reviewed other data sources potentially relevant for assessing CSO, SSO, and stormwater needs that are consistently available for all 56 state entities and collected by an authoritative entity in the federal government.
In following these statutory requirements, EPA believes that the formula proposed in the August 4, 2020 FRN is the best approach currently available to allocate grants to each state entity. The proposed allocation formula, including its supplemental factors and associated formula weights, will be maintained and applied as the allocation formula to be used for the section 221 program. The formula will include the following factors with corresponding formula weights: CWNS data on CSOs, SSOs, and stormwater needs carrying 50 percent of the formula weight; state precipitation data set at 16.67 percent of the formula weight; total state population data set at 16.67 percent of the formula weight; and urban population data set at 16.67 percent of the formula weight. The comments received in response to this notice were processed and summarized into categories. Each category represents a specific element in the proposed formula and EPA responses are provided for each of these comment categories in part 5 of this notice.

3. Clarification on the Minimum State Allocation Amount
A clarification is added in this document regarding how the minimum state allocation is applied in the allocation formula as the description in the August 4, 2020 FRN did not contain a clear explanation of this process. The allocation formula will function by first reserving the one percent administration expense from the Federal appropriation. The remaining appropriation amount will then be applied to each state using the needs formula described in part 4 of this document. Adjustments will then be applied to ensure that no state entity receives an allocation below 0.5 percent. Any adjustments to raise states to this base allocation amount will be taken at a proportional basis from states that were above this base amount. Once adjustments are made to ensure that each state receives at least 0.5 percent of the remaining amount (federal appropriation minus EPA administrative set-aside), this allocation will be considered the final state allocation for the applicable fiscal year. 

4. Final Allocation Formula 
The factors that determine CSO, SSO, and stormwater needs used in the final allocation formula will be those proposed in the August 4, 2020 FRN. In addition to the most recent CWNS, EPA chose further objective factors to help establish the infrastructure needs of each state, as permitted by CWA section 221(g)(2) and assigned weights to each of the factors in the allocation formula. The CWNS needs are weighted at 50 percent and the additional factors were weighted evenly to collectively account for the remaining 50 percent. The combination of the following factors forms the need allocation for each state:

 Clean Watersheds Needs Survey: This factor is included as the statute directs EPA to use the needs submitted pursuant to CWA section 516. Each allocation year, EPA will use the latest available CWNS data that provide a comprehensive assessment of CSOs, SSOs, and stormwater infrastructure needs. This factor represents 50 percent of the need allocation as these needs are directly identified in the survey.

 Annual Average Precipitation: This factor is included to account for the volume of annual precipitation a state receives which suggests the amount of stormwater runoff that needs to be managed. This factor represents 16.67 percent of the need allocation.

 Total Population: This factor is included to represent the proportional need of each state's population size acknowledging that higher populations generally have greater infrastructure needs. This factor represents 16.67 percent of the need allocation.

 Urban Population: This factor is included to represent the needs that urban centers have for CSOs, SSOs, and stormwater management due to high concentrations of impervious surfaces. This factor represents 16.67 percent of the need allocation.

The steps below outline the procedure to be used for allocating appropriated funds under section 221. 

 Reserve one percent of the federal appropriation for EPA's administrative expenses per CWA section 221(h).
 Allocate the remaining amount (federal appropriation minus EPA administrative set-aside) based on a formula established to characterize the relevant funding needs of each state.
 Adjust the allocation proportions to ensure that no state entity receives an allocation below 0.5 percent. Any adjustments to raise states to this minimum allocation amount will be taken at a proportional basis from states that were above this floor amount. Once adjustments are made to ensure that each state receives at least 0.5 percent of the remaining amount (federal appropriation minus EPA administrative set-aside), this allocation will be considered the final state allocation for the applicable fiscal year.

In following this methodology, the results for each state's allocation proportion are shown in Table 1.

Table 1: State Allocation Table____________________________________________________________ -  -  -  -  - 
                                 State Entity
                             Allocation Percentage
                                    Alabama
                                     1.0%
                                    Alaska
                                     0.5%
                                American Samoa
                                     0.5%
                                    Arizona
                                     0.8%
                                   Arkansas
                                     0.7%
                                  California
                                     10.6%
                                   Colorado
                                     1.0%
                                  Connecticut
                                     2.2%
                                   Delaware
                                     0.5%
                             District of Columbia
                                     1.3%
                                    Florida
                                     2.7%
                                    Georgia
                                     1.5%
                                     Guam
                                     0.9%
                                    Hawaii
                                     0.5%
                                     Idaho
                                     0.5%
                                   Illinois
                                     2.7%
                                    Indiana
                                     3.1%
                                     Iowa
                                     0.8%
                                    Kansas
                                     1.2%
                                   Kentucky
                                     2.1%
                                   Louisiana
                                     1.4%
                                     Maine
                                     0.6%
                                   Maryland
                                     2.7%
                                 Massachusetts
                                     2.6%
                                   Michigan
                                     1.5%
                                   Minnesota
                                     0.7%
                                  Mississippi
                                     0.8%
                                   Missouri
                                     3.9%
                                    Montana
                                     0.5%
                                   Nebraska
                                     1.3%
                                    Nevada
                                     0.7%
                                 New Hampshire
                                     1.0%
                                  New Jersey
                                     5.7%
                                  New Mexico
                                     0.5%
                                   New York
                                     6.4%
                                North Carolina
                                     1.3%
                                 North Dakota
                                     0.5%
                               Northern Marianas
                                     0.8%
                                     Ohio
                                     7.0%
                                   Oklahoma
                                     0.8%
                                    Oregon
                                     1.5%
                                 Pennsylvania
                                     3.5%
                                  Puerto Rico
                                     0.9%
                                 Rhode Island
                                     0.9%
                                South Carolina
                                     0.8%
                                 South Dakota
                                     0.5%
                                   Tennessee
                                     1.5%
                                     Texas
                                     5.5%
                                     Utah
                                     0.5%
                                    Vermont
                                     0.5%
                                Virgin Islands
                                     0.5%
                                   Virginia
                                     2.1%
                                  Washington
                                     1.8%
                                 West Virginia
                                     1.3%
                                   Wisconsin
                                     1.8%
                                    Wyoming
                                     0.5%

5. EPA Response to the Comments Received 

Comment Category 1: Clean Watersheds Needs Survey

The use of the CWNS data in the proposed allocation formula received the highest number of comments. Several of the comments expressed support for assigning the greatest weighting factor of the formula to the CWNS dataset on CSO, SSO, and stormwater needs. These comments stated that the CWNS is the most comprehensive dataset for identifying wastewater infrastructure needs across the nation. One comment suggested that the CWNS weighting factor be raised from 50 to 75 percent. In addition to supporting the significant weighting factor for the CWNS in the formula, nearly half of the comments submitted stated that the latest CWNS data published in 2012 does not accurately represent current water infrastructure needs and should be updated. Many comments urged EPA to prioritize conducting a new CWNS that will collect the most accurate and timely data for use in the allocation formula. Some comments expressed concern that recently identified CSO, SSO, and stormwater infrastructure needs would not be taken into consideration and that the 2012 CWNS survey is not reflective of the current need. Another comment requested clarification on whether the CWNS factor is comprised of just the CSO, SSO, and stormwater portions from the survey or the survey's results in its entirety.

      EPA Response 1: Clean Watersheds Needs Survey
      
      Determining infrastructure needs for CSOs, SSO, and stormwater management for all communities across all 50 states, the District of Columbia, Puerto Rico, and the U.S. territories requires an in depth review of the water infrastructure already in place as well as the volume of wet weather events each community needs to manage. In searching for such information, the CWNS is the most comprehensive collection of data that was designed to specifically review capital investment needs as determined by the states. Following the documented needs in the latest CWNS is also a requirement described in the statutory language authorizing this program. The robustness of the CWNS and the requirement to use this dataset are reasons why this information is used in the formula with a significant weight. Only CSO, SSO, and stormwater identified needs from the survey are proposed to be used in this formula.
      
      While EPA recognizes the utility of the CWNS in developing this allocation formula, the amount of time that has elapsed since the last survey was considered as well as the completeness of the available data. The most recent survey collected needs information in 2012 and data was not complete for every state, in part because the CWNS had not been previously used for allocating grant funds. Therefore, EPA elected to include other factors that could serve as a substitute for infrastructure needs. Even so, the CWNS data is the primary data source for this allocation formula and as future Needs Surveys are completed, EPA may revisit the structure of this allocation formula. EPA is currently developing the next CWNS to ensure that current needs are identified, collected, and used for making decisions on how to best manage water quality infrastructure.
      

Comment Category 2: Annual Average Precipitation

Several of the submitted comments presented different opinions on the annual average precipitation factor. Some suggested that this factor be increased in weight in the formula, while others suggested it be removed. Alternative weather metrics were suggested, including metrics to assess drought, municipal separate storm sewer system components, precipitation in urban settings, or storm event intensity. Another comment requested that snowfall be used in the formula. 

      
      EPA Response 2: Annual Average Precipitation
      
      The primary purpose of this grant program is to address infrastructure needs related to CSO and SSO events, in addition to stormwater management needs across 56 state entities. One factor that has a direct influence on CSOs, SSOs, and stormwater management is the volume of precipitation an area receives in a given time interval. Because overflow events are largely correlated with precipitation and this data is readily available for all state entities, EPA included annual average precipitation in the allocation formula as it provides available data on the average volume of precipitation each state experiences. The precipitation data used in this allocation formula is from the National Oceanographic and Atmospheric Administration and does incorporate snowfall in addition to rainfall. If other relevant datasets were to be made available across all 56 state entities, such as precipitation impacting urban populations, EPA may revisit the allocation formula in the future.

Comment Category 3: Total Population and Urban Population

EPA received several comments regarding both population factors in the proposed formula. Some commenters suggested that the total population factor be eliminated and replaced with either of the following: an estimate of the cost of CSO, SSO, and stormwater infrastructure needs on a per capita basis; urban population alone; or on the number of CSO events in a state. Several other comments stated that lower population communities often lack the necessary funds for their stormwater needs and that the formula should take these communities into consideration. Another comment requested lowering both the total population and urban population weights. Comments also recommended using recent estimates on population rather than decennial data collected every ten years, as proposed.

      EPA Response 3: Total Population and Urban Population
      
      Using total state population as a factor in the OSG allocation mirrors the method the Clean Water State Revolving Fund (CWSRF) allocation was formulated. According to the Report to Congress on the Review of the Allotment of the Clean Water State Revolving Fund from 2016, "EPA considered the allotment adequate if it distributed the appropriated funds to most States proportional to their needs or population." This states that there are two measures to validate the accuracy of the CWSRF formula: 1) needs as determined in the CWNS; or 2) population determined by the Census. With precedent set by the CWSRF, if CWNS data is incomplete for assessing needs, then the next factor to consider would be total population. In assessing overflow and stormwater needs for the OSG formula, the most recent CWNS in 2012 had incomplete data for several states and therefore warrants the use of total population as a determining factor to supplement the needs identified in the 2012 CWNS. Since total population is positively correlated with infrastructure needs, this factor provides another way to assess relative needs by state and is considered valuable to incorporate into the formula. 
      Decennial census data is the most accurate data available as it is based on a conducted survey. Population reports created in between decennial intervals are based on estimates which would not be appropriate to use for determining allocations of funds. In addition, consistent data is needed for all 56 state entities, which the use of the decennial data provides. The proposed allocation will be updated accordingly with each new decennial census.
      

Comment Category 4: Prioritization for Distressed Communities

Some of the comments received urged EPA to prioritize these funds for financially distressed communities as stated in the authorizing statutory language. 

      EPA Response 4: Prioritization for Distressed Communities
      
      EPA is directed in CWA section 221(g) to develop the allocation formula based on CSO, SSO, and stormwater capital infrastructure needs by state. CWA section 221(b) provides direction regarding the priorities each state shall use for selecting project applicants. Section 221(b) is separate from the allocation criteria and instead instructs states how to select project applicants for these funds. One of the project selection priorities stated in section 221(b) is that a state shall give priority to applicants that are considered a financially distressed community which is determined by affordability criteria established by the state after considering factors outlined in section 221(c)(2). EPA developed the allocation formula solely based on infrastructure needs, leaving project selection to be determined by the state as the prioritization section directs. EPA will provide documentation to states to explain this process, however the final determination on which applicants and projects receive grant funding is left to the states. 

Comment Category 5: Statutory Modifications

Several comments requested modification of authorizing statutory language. One comment requested that the statute be modified to make the affordability criteria specific for stormwater needs. Another comment suggested that prioritization language be changed to have two separate funding formulas, one for CSO and SSO needs and another for stormwater needs. One request was to change the statutory language from "grant" to "additional subsidization". Another comment requested that the CWSRF allotment formula be used in to determine this allocation. 

      EPA Response 5: Statutory Modifications
      
      Modifications to statutory language in the CWA is beyond the scope of EPA. However, while the prioritization criteria are listed in the statute, states are given latitude on how to weight these criteria based on a particular state's needs. Additional Subsidization is a funding mechanism authorized to be used with loans made in the CWSRF program. The Sewer Overflow and Stormwater Reuse Municipal Grant program authorized under section 221 of the CWA is a distinct funding program from the CWSRF. The section 221 program will not be administering funds using a grant and loan vehicle, as the CWSRF operates, but instead will be awarding funds using a grant and subaward method. This grant and subaward vehicle operates in the traditional grant method where a state receives a grant after providing a cost share component. The state then uses this grant to provide subawards to applicants with eligible projects. Since this program is already being distributed as a grant, "additional subsidization" is not relevant.  

Comment Category 6: Other Inquires

The remaining comments received do not fall under the above categories and are summarized in this section. A comment was submitted asking if adequate guidance for the states and municipalities will be provided on designing stormwater control measures. Another comment asked if maintenance would be an eligible use of program funds. One comment requested information whether impaired waters was a factor taken into consideration. A few comments made requests to post the complete data sources to be used to develop this allocation formula on the EPA website. Another comment requested that priority be given to projects that plan to integrate their NPDES permits for the purpose of efficient pollutant removal of CSO, SSO and Stormwater runoff for both point and non-point sources.

      EPA Response 6: Other Inquires
      
      EPA is required to follow the statutory authority when developing this allocation formula, which directs that the CWNS must be used along with other information deemed relevant by the Administrator to determine needs for CSOs, SSOs, and stormwater management. EPA cannot develop a formula to specifically favor one region or type of need over another. Implementation documentation will be provided for how the program will follow the statutory guidelines and EPA grant policies. Specific design of project types and measures is not a requirement for EPA in this program and grantees will have discretion to use their preferred project designs to match their needs consistent with the eligible list of activities for this program. In terms of operations and maintenance, this is not an eligible use for funds under this program as this activity does not fall under the program's authoritative intended uses of "planning, design, and construction" as stated in section 221 (a)(1). Once final, EPA will post on its website the sources of data used in the allocation formula.