oversight

Water Pollution: Serious Problems Confront Emerging Municipal Sludge Management Program

Published by the Government Accountability Office on 1990-03-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

_----     --- .___ --._--.I ---.~..I--   ---- IJnif.c~cl States   Gc~ncral Accounting   Office   ---   ._-.--....
                                            Ikport to the Chairman, Environment,
GAO                                         Energy and Natural Resources
                                            Subcwmmittee, Committee on
                                            Government Operations, House of
                                            Representatives
 _-...---.--__--
            -
Mawh 1!I!)0
                                            WATER POLLUTION
                                            Serious Problems
                                            Confront Emerging
                                            Municipal Sludge
                                            Management Progrm
(&!o    E-!JJ~;~i;gp
               , --
   II   Resources, Community, and
        Economic Development Division

        B-236805

        March 5,199O

        The Honorable Mike Synar
        Chairman, Environment, Energy and Natural
            Resources Subcommittee
        Committee on Government Operations
        I louse of Representatives

        Dear Mr. Chairman:

        In response to your September 14, 1988, request, we have assessed progress by the
        Environmental Protection Agency (EPA) in developing a municipal sludge management
        program, as required by the Clean Water Act. Specifically, the report examines (1) the status
        of existing EPAand state municipal sludge management efforts under EPA'Sinterim sludge
        program, (2) major obstacles EPA and states may face in implementing the permanent
        national sludge management program, and (3) the key issues related to EPA'Sdevelopment of
        technical sludge standards.

        As arranged with your office, unless you publicly announce its contents earlier, we will make
        no further distribution of this report until 30 days after the date of this letter. At that time,
        we will send copies to other appropriate congressional committees; the Administrator, EPA;
        and the Director of the Office of Management and Budget. We will also make copies available
        to other interested parties.

        This work was performed under the direction of Richard L. Hembra, Director, Environmental
        Protection Issues, who may be reached at (202) 275-6 111. Other major contributors to this
        report are listed in appendix I.

        Sincerely yours,




        J. Dexter Peach
        Assistant Comptroller General
Executive Summary


             The generation of sewage sludge by municipal treatment plants has
Purpose      emerged as a major waste management problem in recent years. Nation-
             wide, treatment plants have doubled their annual generation of sludge
             since the early 1970s to the present level of 7.7 million dry metric tons
             and are expected to double sludge generation once again by the year
             2000. Increased awareness of sludge’s potential toxicity has com-
             pounded concern over how to deal with it in an environmentally safe
             manner. Many of the pollutants sometimes found in sludge have been
             linked to serious health problems, including cancer and heart failure.

             As requested by the Chairman, Environment, Energy and Natural
             Resources Subcommittee, House Committee on Government Operations,
             GAOreviewed the Environmental Protection Agency’s (EPA) emerging
             national sludge management program. Specifically, GAOexamined (1) the
             status of existing EPAand state municipal sludge management efforts
             under EPA'Sinterim sludge program, (2) major obstacles EPA and states
             may face in implementing the permanent national sludge program, and
             (3) the key issues relating to EPA'Sdevelopment of technical sludge
             standards.


             Sewage sludge is the solid matter extracted from wastewater during the
Background   treatment process of municipal sewage treatment plants. It can either be
             (1) used as a fertilizer, soil conditioner, or for other beneficial land uses
             or (2) disposed of as a waste in a landfill, through incineration, or by
             other methods. EPApolicy encourages beneficial uses of sludge as a way
             to help deal with the nation’s growing landfill problem.

             To regulate the use and disposal of sewage sludge, the Congress required
             EPAto develop regulations for state sludge management programs by
             December 15, 1986. Among other things, such requirements include pro-
             visions for identifying the treatment plants to be regulated and for mon-
             itoring sludge contaminant levels. The Congress also required EPAto
             issue technical standards by August 31, 1987, to be implemented
             through the management programs. These standards, which specify pol-
             lutant concentration limits for various sludge disposal/use options, are
             particularly important because they will heavily influence the cost and
             feasibility of the disposal/use options used by treatment plants.

             While EPAhas recently issued its sludge management regulations, it does
             not plan to issue its final technical standards until at least 1991. Until
             that time, EPA requires that interim technical sludge standards be
             applied through permits to “priority” treatment facilities (i.e., genera-


             Page 2               GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
                        Executive   Summary




                        tors of toxic and/or high volumes of sludge) in each state. In addition to
                        using the standards to protect human health from contaminated sludge,
                        this interim program (begun in February, 1987) is intended to help
                        states establish the administrative mechanisms that will eventually be
                        needed to implement the permanent national sludge program. Impor-
                        tantly, WA regions must fulfill program responsibilities where states do
                        not participate or do not meet all program requirements.


                        GAO found that fundamental problems have prevented the interim
Resblts in Brief        sludge program from meeting its objectives of protecting human health
                        from ontaminated sludge and helping states to establish administrative
                        mechanisms for sludge management. Among them, (1) state participa-
                        tion in the interim program has been low and (2) EPA regions generally
                        have not fulfilled basic program responsibilities, such as identifying the
                        treatment plants to be permitted, in those states not fully participating
                        in the program. At both the state and EPAlevel, insufficient resources
                        have been a major factor in the inadequate implementation of program
                        requirements.

                        Among the major obstacles that may complicate subsequent implemen-
                        tation of the permanent program are (1) continued questions over the
                        sufficiency of EPA and state resources and (2) the need to develop an
                        enforcement program to deter program violations and to bring about
                        compliance when violations do occur. GAObelieves that to the extent EPA
                        can anticipate and deal with these issues before they become major fac-
                        tors in the permanent program, the agency can go a long way toward
                        averting the type of problems that have affected the interim program.

                        EPA has experienced great difficulty   and years of delays in developing
                        its final technical sludge regulations, Reaction to the Agency’s long-
                        awaited February 1989 technical regulations proposal indicates that
                        these problems have yet to be resolved. State and treatment plant offi-
                        cials and scientists are particularly concerned that the proposal’s pollut-
                        ant limits would discourage beneficial uses of sludge.


Principal Findings

Interim Prograi Goals   While state participation may grow in coming months, few states have
Largely Unfilled        entered into the formal agreements that signal a willingness to partici-


                        Pagr 3                GAO/RCED-90-57   Emerging   Municipal   Sludge Management   Problems
                       Executive   Summary




                       pate fully in the program. Other states entering into less formal
                       agreements have programs that omit key responsibilities, such as
                       identifying priority facilities or setting permit limits.

                       Where states do not implement the interim program (or do not under-
                       take all program responsibilities), EPA regions have generally not done so
                       in their place. Inventories of priority sludge-generating facilities, for
                       example, have yet to be completed in a majority of EPA'S 10 regions. In
                       addition, the results of an EPA-contracted study suggest that regions are
                       not (1) applying interim technical sludge standards to regulated facili-
                       ties when states do not do so nor (2) issuing required approvals for
                       those standards that are being developed by states.

                       Our discussions with state and EPAregional sludge program officials, as
                       well as a 1987 EPA-contracted state survey, suggest that a major reason
                       for low state participation has been limited resources to carry out this
                       program. The regional sludge officials also suggested that if limited
                       resources affect state participation, it will inevitably affect regional per-
                       formance as well. As one noted, the single full-time EPA employee manag-
                       ing a region’s interim program is not enough to issue permits, monitor
                       compliance, and assume other program responsibilities when states are
                       not carrying out the program.

------
Obstacles Facing the   As with the interim program, a major factor affecting the permanent
Permanent Program      program will be the extent to which states participate-and    the suffi-
                       ciency of EPA’Sresources if they do not. While future state participation
                       is uncertain, the prospect that the experience of the interim program
                       may carry over to the permanent program provides cause for concern.
                       An additional concern is whether similar experiences in other water pro-
                       grams, such as EPA'Sindustrial pretreatment program, is indicative of
                       how such problems may affect the sludge program.

                       To some extent, the resource issue reflects a generic and growing prob-
                       lem in many environmental programs where responsibilities have
                       increased while funding has diminished. EPA has initiated efforts to
                       assist states in developing other funding sources, such as fees and dedi-
                       cated revenues from fines and penalties. Given the prospect that these
                       broader agency efforts could help improve state participation in the
                       sludge program, GAObelieves that EPA'Ssludge program staff should
                       supplement them by encouraging treatment plant and state officials to
                       explore alternative methods to finance sludge programs.



                       Page 4                GAO/RCED90-57   Emerging   Municipal   Sludge Management   Problems
                             Executive   Summary




                             In addition to improving prospects for state participation, GAO believes
                             that EPAneeds to anticipate key program gaps where possible and
                             address them before they become major implementation problems
                             Based on its past reviews of other environmental programs, GAO believes
                             that one such gap is the absence of an effective enforcement program.
                             Such a program was not in place during the interim program, and while
                             EPA has taken some initial steps toward developing one for the perma-
                             nent program, much needs to be done to have one in place when that
                             program begins. Among the key elements needed are (1) criteria that
                             allow regulators to set enforcement priorities, (2) criteria that identify
                             what type of enforcement actions are appropriate and when they should
                             be taken, and (3) headquarters’ oversight over EPA regional and state
                             enforcement efforts.


Difficulties in Developing   The main concern of many state sludge program officials, treatment
Technical Standards          plant officials, and scientists about EPA'Sproposed technical standards is
                             that the stringency of the standards would reduce or eliminate benefi-
                             cial uses of sludge (such as land application). This view was substanti-
                             ated by (1) a recent Association of Metropolitan Sewerage Agencies
                             survey that found that of the 25 responding treatment plants with bene-
                             ficial use programs, only 1 could continue the program if the technical
                             regulations were implemented as proposed and (2) a scientific peer
                             review panel report that reached a similar conclusion and questioned
                             the scientific basis for developing the pollutant limits proposed. In addi-
                             tion, GAO found that delays and uncertainties over these regulations are
                             affecting states’ participation in the interim program and their willing-
                             ness to seek approval for the permanent program.


                             Based on experience with other environmental programs and specific
Recommendations              interim sludge program concerns, GAO’s,recommendations generally
                             encourage EPA to anticipate and address gaps in the permanent sludge
                             program before they become major implementation problems. Among
                             them are that the Administrator, EPA, take certain steps to (1) improve
                             headquarters’ oversight of regional and state issuance of sludge permits
                             (chapter 2), (2) establish a strong enforcement component before the
                             permanent program begins (chapter 3), and (3) assist states in seeking
                             alternative ways to fund state sludge programs (chapter 3).


                             GAO discussed its findings with EPA officials and has included their com-
Agency Comments              ments where appropriate. However, as requested, GAO did not obtain
                             official comments on a draft of this report.


                             Page 5                GAO/RCED-W-67   Emerging   Municipal   Sludge Management   Problems
Cjontents


Executive Summary                                                                                                 2

Chapter 1                                                                                                      8
Ir$roduction           Sludge Generation, Use, and Disposal
                       Development of Sludge Management Regulations
                                                                                                               8
                                                                                                              10
                       Ob.jectives, Scope, and Methodology                                                    12

Chapter 2                                                                                                     15
Interim Sludge         State Participation in the Interim Program Has Been Low
                       EPA Regions Have Been Slow to Implement Basic
                                                                                                              15
                                                                                                              19
M’anagement Program         Components of the Interim Strategy
Surfaces Problems      Improvements Needed in Headquarters’ Oversight Over                                   20
Needing Attention           Regions’ and States’ Permitting
                       Conclusions                                                                           22
Before Permanent       Recommendations                                                                       23
Program Begins
Chapter 3                                                                                                    25
Obstacles EPA and      Concerns Over the Sufficiency of EPA and State
                             Resources to Implement the Permanent Sludge
                                                                                                             25
States May Face in           Program
Implementing the       Filling Program Gaps: The Need for an Effective                                       28
Permanent Sludge             Enforcement Program
                       Impacts of the Pretreatment Program on Sludge                                         33
Program                      Management
                       Conclusions                                                                           36
                       Recommendations                                                                       38

Chapter 4                                                                                                    39
EPA’s Continuing       Balancing the Risks of Contaminated Sludge With the
                           Goal of Promoting Beneficial Uses
                                                                                                             39
Difficulties in        Reaction to Proposal Has Been Critical                                                41
Developing Technical   Conclusions                                                                           43
                       Recommendations                                                                       44
Regulations
Appendix               Appendix I: Major Contributors to This Report                                         46

Figure                 Figure I . 1: Alternative Use/Disposal Practices for
                            Municipal Sludge


                       Page 6               GAO/RCEDSO-57   Emerging   Municipal   Sludge Management   Problems
Content6




Abbreviations

AMSA       Association of Metropolitan Sewerage Agencies
CWA        Clean Water Act
EDF        Environmental Defense Fund
EPA        Environmental Protection Agency
GAO        General Accounting Office
ME1        Most Exposed Individual
NPDES      National Pollutant Discharge Elimination System
NRDC       Natural Resources Defense Council
OWAS       Office of Water Accountability System
I’UI’W     publicly-owned treatment works
RCED       Resources, Community, and Economic Development Division
SAIC       Science Applications International Corporation
SI’MS      Strategic Planning and Management System
WDNR       Wisconsin Department of Natural Resources
WQA        Water Quality Act


Page 7              GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
Chapter 1

Iritroduction


                     The generation of municipal sewage sludge has emerged as a major
                     waste management problem in recent years. Sewage sludge is the solid
                     matter extracted from wastewater during the treatment process of
                     municipal sewage treatment plants. Nationwide, these plants (referred
                     to as “publicly-owned treatment works,” or PCKWS)have doubled their
                     annual generation of sludge since the early 1970s to the present level of
                     7.7 million dry metric tons. The volume of sludge is expected to double
                     again by the year 2000.

                     Along with the concern over increasing sludge volume has come an
                     increasing awareness of its potential adverse effects on public health
                     and the environment. While sludge contains nutrients (such as nitrogen
                     and phosphorus) that can allow it to be used as a fertilizer and for other
                     beneficial uses, it can also contain heavy metals and organic compounds
                     that can contribute to serious human health problems, including cancer,
                     kidney and liver damage, and heart failure.

                     To protect public health and the environment from the potential adverse
                     effect of pollutants in sludge, the Clean Water Act of 1977, and later the
                     Water Quality Act of 1987, directed the Environmental Protection
                     Agency (EPA) to develop a national sludge management program. Never-
                     theless, EPAwas unable to meet the statutory promulgation schedules.
                     Responding to congressional concerns over these delays and the effec-
                     tiveness of the emerging program, this report evaluates EPA’Scurrent
                     efforts and the future prospects in this area.


                     I’urws may use one or more levels of treatment to clean wastewater.
Sludge Generation,   These processes remove the wastewater solids, which are ultimately
Use, and Disposal    used and/or disposed of as sludge. Primary treatment uses gravity to
                     remove the solids that readily settle out of the wastewater. Secondary
                     treatment uses a biological treatment process, such as the use of bacte-
                     ria, to break down and convert the organic substances in the waste-
                     water, generating sludge as a residue. Finally, advanced wastewater
                     treatment uses chemicals to remove organic materials and nutrients and
                     to separate solids from the wastewater, generating additional sludge as
                     a by-product.

                     If the influent entering the PCXWfrom its sewer system contains highly
                     toxic materials, such materials can find their way into the PWW’S sludge
                     as part of the cleansing process. Therefore, an important part of many
                     IUYWS sludge management efforts is the requirement under the National



                     Page 8              GAO/RCEDBO-67   Emerging   Municipal   Sludge Management   Problems
                    Chapter 1
                    Introduction




                    Pretreatment Program that industrial dischargers “pretreat” their was-
                    tewater before discharging it into the P(JTW’S sewer system.’


Use iand Disposal   While EPA’S policy encourages the beneficial uses of sludge, a POTW’S
                    decision whether sludge can be used beneficially or must be disposed of
                    as a waste depends on a number of factors, such as the cost of each
                    disposal/use option, the contaminant levels in the sludge, the availabil-
                    ity of markets for sludge use, and the availability of sites for disposal. In
                    some cases, local public concern with certain options may also be a fac-
                    tor. Treatment facilities may use one or more use and/or disposal meth-
                    ods due to capacity limitations of any single option.

                    As figure 1.1 indicates, the major beneficial uses of sludge are land
                    application and distribution and marketing. Land application is the
                    spreading of sludge on or just below the soil surface and is usually prac-
                    ticed in four settings; agricultural land, forest land, land dedicated to
                    sludge disposal, or land reclamation. Distribution and marketing, accord-
                    ing to EPA, refers to the free distribution or sale of sludge products (e.g.,
                    fertilizers or soil conditioners) to commercial growers, landscaping
                    firms, parks, highway departments, and the public.

                    A POTWmay also seek to dispose of its sludge, particularly if the sludge’s
                    toxicity prevents its use for beneficial purposes. Among the alternatives
                    are disposal in a solid waste landfill, disposal in a “sludge-only” landfill,
                    incineration, and ocean disposal. Disposal options, however, are becom-
                    ing limited. Ocean disposal of sludge will be banned as of 1991 under
                    recent legislation, and constrained landfill capacity has become common
                    across the United States (eastern states in particular have little or no
                    remaining capacity). In addition, siting new landfills is becoming
                    increasingly difficult due to concerns over groundwater contamination
                    and other environmental considerations and as a result of public
                    opposition.




                    ‘The Congress established the National Pretreatment Program in 1972, although PoTWs were not
                    required to have EPA-approved pretreatment programs until duly 1983. For GAO’s recent evaluation
                    of this program, see Wai& Pollution: Improved Monitoring and Ekforcement Needed for Toxic Pollut-
                    ants Entering Sewers (GAO/RCED -89.- 101 1.



                    Page 9                     GAO/RCED-90-57    Emerging   Municipal   Sludge Management   Problems
                                         Chapter 1
                                         Introduction




Figure 1 .l : Alternative Use/Disposal
Practices for Municipal Sludge




                                                                                               7.4%
                                                                                               OTHER


                                                                                               LAND APPLICATION



                                                                                               9.1%
                                                                                               DISTRIBUTION AND MARKETING




                                                                                               MUNICIPAL LANDFILL




                                         Source: data from 40 CFR 257 and 503, February 1989


                                         While earlier legislation contained certain specific EPA requirements
Development of Sludge                    relating to sludge (such as requiring the Administrator to encourage
Management                               recycling of potential sewage pollutants), it was the 1977 amendments
Regulations                              to the Clean Water Act (CWA) that first required EPAto promulgate
                                         sludge disposal regulations. These regulations, required to be promul-
                                         gated by December 1978, were to identify (1) sludge use and disposal
                                         options, (2) factors to be taken into account in the implementation of
                                         each use or disposal option, and (3) limits on the concentration of pollut-
                                         ants for each use or disposal practice. While EPA studied and provided
                                         guidance on sludge management issues, the agency did not meet the
                                         requirements to issue the regulations called for by this statute.




                                         Page 10                    GAO/RCED-90-5’7   Emerging   Municipal   Sludge Management   Problems
                                  Chapter 1
                                  Introduction




Watkr Quality Act’s              The Water Quality Act of 1987 (WQA) reaffirmed the Congress’s intent
Req irement for a National       for EPAto regulate the use and disposal of sewage sludge and placed new
                                 emphasis on identifying and limiting those toxic pollutants in sludge
Slut rge Management              that may adversely affect health and the environment. It required EPA to
Pro&am                           meet a schedule for developing the key components of a national sludge
                                 management program, including

                             l procedures for the approval of state sludge management programs by
                               December 15, 1986,” and
                             . technical regulations specifying toxic pollutant concentration limits in
                               sludge and acceptable sludge management practices by August 31, 1987.

                                 EPApublished the final program approval regulations on May 2, 1989.
                                 The Agency expects to issue its technical regulations (proposed in Feb-
                                 ruary 1989) in 199 l-4 years after the 1987 deadline set in the WQA and
                                 13 years after the initial deadline for regulations called for in the 1977
                                 act. EPA cites the complexity of the scientific issues in developing techni-
                                 cal regulations as a major contributor to these delays.


-__- ---rement for an            Rather than waiting for the promulgation of the technical sludge regula-
Int&im Sludge Program            tions, the WQA required EPAto immediately begin incorporating sludge
                                 “conditions” as part of the POTW’SNational Pollutant Discharge Elimina-
Until the Permanent              tion System (NPDES)permit.:’ To meet this requirement, EPA formulated
Program Begins                   an “interim implementation strategy,” whereby an EPA region or a par-
                                 ticipating state would manage an interim program for sludge disposal
                                 and use. Among the key tasks to be accomplished under the interim pro-
                                 gram are

                         l       the identification of “priority facilities” to be permitted, including IYXWS
                                 with pretreatment programs, incinerators, and facilities suspected of
                                 posing significant sludge contamination risks, and

                                 ‘The appearance of a 1986 deadline here and elsewhere in the Water Quality Act of 1987 is explained
                                 by the history of the act’s passage. The bill containing the deadlines was passed twice and vetoed
                                 both times. When it was finally enacted in 1987 in an override of the la% veto, the 1986 deadlines had
                                 not been updated.
                                 “The NPDES program, established in 1972, limits the amount and concentration of specific pollutants
                                 a I’OTW may discharge into a 1J.S.body of water. The WQA required PCYl’Ws’permits issued under
                                 the NI’DES program to include these “conditions” or take other appropriate measures to prot,cct the
                                 environment and public health. The conditions set limits on contaminant levels in sludge or impose
                                 other rcquircments intended to control sludge contamination. NI’DES permits remain valid for a max-
                                 imum of 6 years. IIence, as these permits come up for renewal, they must be amended to include EPA-
                                 approved sludge conditions. The conditions would be subject to further revision when the final tcch-
                                 nical regulations (expected in 199 1) are promulgated.



                                 Page 11                     GAO/RCED-90-67     Emerging   Municipal   Sludge Management    Problems
                                 Chapter 1
                                 Introduction




                             l   the establishment of sludge conditions where (1) all porws’ NPDESper-
                                 mits contain some minimum conditions (i.e., compliance with existing
                                 requirements) and (2) priority POTWS'permits contain additional require-
                                 ments concerning appropriate contaminant levels and management prac-
                                 tices for the various sludge use and disposal options. EPA published
                                 “case-by-case” guidance in September 1988 to assist in the development
                                 of these management practices and contaminant levels.

                                 According to EPA'Sinterim strategy, its purpose is not only to impose
                                 conditions into permits, but also to build on states’ sludge management
                                 experience and to expand state programs where necessary in anticipa-
                                 tion of their roles under the permanent program. Nevertheless, there is
                                 no statutory or regulatory requirement that a state must participate in
                                 the interim program; a state could elect not to participate and yet later
                                 assume full responsibility for the permanent sludge management pro-
                                 gram once it is established. If a state does not wish to participate in the
                                 interim program or fulfill certain requirements, EPA regional offices are
                                 required to implement the interim program or fulfill those missing
                                 requirements in its place.


                                 In a letter dated September 14, 1988, the Chairman, Environment,
Objectives, Scope, and           Energy and Natural Resources Subcommittee, House Committee on Gov-
Methodology                      ernment Operations, requested that we examine issues relating to EPA
                                 and state sludge management. Based on subsequent discussions with the
                                 Chairman’s office, we agreed to

                         . determine the status of existing EPA and state municipal sludge manage-
                           ment efforts under EPA'Sinterim program,
                         l identify major obstacles EPA and states may face implementing the per-
                           manent national sludge management program, and
                         . discuss the key issues relating to the development of EPA'Semerging
                           technical regulations,

                                 To address the first objective, we gathered information from a variety
                                 of sources on EPA'Sinterim program and on existing sludge management
                                 efforts by both participating and non-participating states. Two EPA-con-
                                 tracted analyses provided some information on existing state sludge
                                 management efforts, including data on program staffing, budget, and
                                 state legal authorities relied upon to implement a state sludge program.
                                 As agreed with the Chairman’s office, we also performed detailed work




                                 Page 12             GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
 Chapter 1
 Introduction




in EPA’S Region V (Chicago) and the Region V states of Ohio and Wiscon-
sin in order to obtain insights into specific aspects of how existing
sludge management programs operate.4

To supplement these efforts and to understand how states and EPA’S
regions are implementing the interim sludge program, we interviewed
state and EPA officials responsible for sludge management, as well as
officials in the headquarters’ Office of Water Enforcement and Permits.
We also reviewed (1) headquarters’ evaluations of the implementation
of the interim program by EPA’S regions and (2) data from EPA’S Office of
Water Accountability System (OWAS).The OWASis a management control
system used by headquarters to track implementation of water pro-
grams. In the case of the sludge program, OWAStracks the extent to
which permits are being modified to include sludge conditions, one of
the primary objectives of the interim program.

In addressing the second objective (obstacles EPA and states may have
implementing the permanent program), we first reviewed the comments
by states, r~cn‘wofficials, and other commenters on EPA’S sludge manage-
ment program, as summarized in the 65-page preamble to EPA’S May 2,
 1989, final rule.” We also interviewed officials from some of these orga-
nizations, as well as representatives of the Association of Metropolitan
Sewerage Agencies (AMSA) and officials from EPA Headquarters and
Regional Offices.” Additional insights into these issues were obtained
from the EI’A-contracted studies mentioned previously and from our
reviews of the Ohio and Wisconsin programs. We also examined recent
GAO analyses of other water quality programs (particularly    EPA’S pre-
treatment and NPDES programs) to see whether the past experiences of
these programs could provide insights into potential problems facing the
emerging sludge program, as well as possible solutions.




‘Region V was particularly useful for this purpose, given the large number of sludge-generating facili-
ties in the upper Midwest, and Wisconsin and Ohio provided a useful contrast in alternative state
approaches toward sludge management.

“Interviews with state officials included sludge program coordinators from 17 states. As explained in
chapter 2, the states were chosen for geographical diversity and to reflect variation in the level of
state participation in the interim program.
“Interviews with regional officials included pretreatment coordinators in all 10 EPA regions, These
officials were asked for their views on potential conflicts and coordination problems between the
sludge and pretreatment programs. As explained in chapter 3, these officials were chosen because in
addition to their familiarity with the operations of pretreatment programs in their respective regions,
they have some responsibility for compliance with certain POTW sludge requirements.



Page 13                     GAO/RCED-90-67      Emerging   Municipal   Sludge Management     Problems
                                                                                   .


Chapter 1
Introduction




To address the third objective, the key issues relating to the proposed
EPA technical sludge regulations, we examined written comments submit-
ted to EPA on the draft regulations and interviewed officials from EPA’S
Office of Water Regulations and Standards, states, and other affected
public and private groups. Among the other information sources used
was EPA’S analysis of the projected impacts of the regulations on indus-
try and the environment, and an analysis of the proposed regulations by
a scientific peer review group (discussed in chapter 4).

Importantly, we did not attempt to assess the technical merits of the
specific pollutant limits in the regulations, which were in the proposal
stage during our review and may change significantly. Rather, we iden-
tified the status of these efforts and the issues likely to arise as the tech-
nical regulations development process moves toward implementation.

Our work was conducted in accordance with generally accepted govern-
ment auditing standards between September 1988 and October 1989.
The views of EPA officials responsible for the sludge management pro-
gram were sought during our review, and their comments have been
incorporated where appropriate. In accordance with the wishes of the
Chairman’s office, however, we did not request formal comments from
the Agency on a draft of this report.




Page 14              GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
Interim SludgeManagementProgram Surfaces
P$blems Needing Attention Before Permanent
program&gins
                             As noted in chapter 1, the primary goals of the interim program are (1)
                             to protect human health through permits regulating sludge pollutants
                             and (2) to help states in establishing or refining the administrative
                             mechanisms that will be needed to implement the permanent national
                             sludge program, due to begin in 1991. We found, however, that neither
                             of these objectives are being fully met. Among the problems affecting
                             the interim program are the following:

                         .   While EPAis counting on broad participation by the states in the interim
                             program, only eight states as of November 1989 have entered into the
                             formal agreements that signal their willingness to participate fully in
                             the program.’ Although other states are implementing certain aspects of
                             the program, many omit basic components, such as the identification of
                             facilities to be given sludge conditions in their permits.
                             EPAregions have generally not undertaken interim program responsibili-
                             ties as required in those states not fully participating in the program.
                             Here, too, these omissions include basic program components such as
                             identifying the facilities to be permitted.
                             WA headquarters’ knowledge of essential information needed to track
                             the progress of regions and states is incomplete. While some improve-
                             ments are being made, additional actions are needed to further improve
                             headquarters’ oversight and to instill in the regions a sense of accounta-
                             bility for meeting program goals.

                             The primary reasons for these problems are (1) insufficient state and
                             EPAresources and (2) delays and other problems related to EPA'Spromul-
                             gation of its technical regulations.


                             EPA had hoped for strong state participation in the interim program,
State Participation in       given (1) the interim program objective of developing the administrative
the Interim Program          tools and skills to implement the permanent program and (2) EPA's
Has Been Low                 strong desire to have states assume responsibility for the permanent
                             program. As of November 1989, however, only eight states have entered
                             into the Memoranda of Agreement that signify a willingness to partici-
                             pate fully in the program. Furthermore, a number of these formal agree-
                             ments -as well as the less formal agreements involving many other




                             ‘According to an official with EPA’s Office of Water Enforcement and Permits, at least eight more
                             states are developing agreements with EPA regions.



                             Page 16                    GAO/RCED-90-67      Emerging   Municipal   Sludge Management    Problems
                            Chapter 2
   ,                        Interim Sludge Management Program
                            Surfaces Problems Needing Attention    Before
                            Permanent Program Begins




                            states-omit key responsibilities. One EPA-contracted study, for exam-
                            ple, cited agreements that did not require identification of priority facili-
                            ties nor the incorporation of sludge conditions into permits.2 Among the
                            other omissions cited were provisions related to monitoring and
                            enforcement.

                            Based on our discussions with state and EPAregional officials, and on
                            the Agency’s own program evaluations, we found a number of reasons
                            that explain the low rate of state participation in the program. Among
                            the key reasons are the following:

                            Many states have indicated that they do not have sufficient staff and
                            other resources necessary to fully implement the program.
                            The delay in EPA’Spromulgation of the technical regulations has resulted
                            in a situation where states would find it difficult to estimate budgetary
                            requirements and perform other tasks in developing their sludge pro-
                            grams. Compounding this concern has been a consensus among state
                            officials we interviewed that if the regulations are issued as they
                            appeared in EPA’SFebruary 1989 proposal, they would reduce or elimi-
                            nate beneficial uses of sludge.


States Cite Inadequate      Among the earlier indications that resource constraints may affect state
Resources as a Barrier to   participation are the results of a 1987 EPA-contracted study, which con-
                            cluded that states would need additional resources to be able to imple-
Program Participation       ment the requirements of the national sludge management program.” In
                            particular, a majority of states responding to the study’s survey specifi-
                            cally cited the need for more staff and computer hardware and
                            software.

                            Half of the EPAregional sludge officials we contacted also cited resource
                            constraints as an important factor explaining low state participation in
                            the interim program, and the problem has been documented in past com-
                            munications between headquarters and the regions. As part of a 1988
                            headquarters evaluation of Region IX’s program, for instance, the region
                            noted that the lack of resources was preventing the states in its region
                            from developing basic program elements required in the interim strat-
                            egy, and cited the lack of inventories of sludge generation facilities as an

                            ‘Science Applications Internationd Corporation, Status of State-EPA Sludge Management Agree-
                            ments: Interim Sludge Permitting and Enforcement (McLean, VA: 1989).

                            %oy F. Weston, Inc., Status of State Sludge Management Programs (Washington, D.C.: January 6,
                            1987).



                            Page 16                   GAO/RCED-90-67        Emerging   Municipal   Sludge Management   Problems
 Chapter 2
 Interim Sludge Management Program
 Surfaces Problems Needing Attention       Before
 Permanent Program Begins




 example. In August 1988 comments on the interim strategy, Region III’s
 Permits Enforcement Branch Chief asserted that “the most significant
 implication of the strategy is the lack of resources devoted to the sludge
 program,” noting that this was both a regional and state concern.

Our discussions with sludge program coordinators from 17 states also
confirm resource constraints as an issue affecting both near-term partic-
ipation in the interim program and the longer-term prospects for seeking
permanent program approval4 While two coordinators indicated that
resource constraints were not a major obstacle for their states, the rest
indicated either that resources were an immediate problem or that the
magnitude of a potential resource need was as yet unclear. Among these,
five indicated that resource problems were inhibiting their current
efforts to implement interim program responsibilities. Problems cited
were consistent with the results of those noted above, including
shortages of staff to develop inventories of priority facilities and review
permits, and a shortage of computer hardware and software.

Our review of the Ohio and Wisconsin programs suggests that the mag-
nitude of additional resources needed by states may depend on the level
of development of their existing sludge management programs. Accord-
ing to an official with the Ohio Environmental Protection Agency’s Pub-
lic Wastewater Section, for example, the agency’s information systems
do not enable it to monitor whether permit limits are being exceeded.
Among the problems cited was the agency’s lack of resources to employ
individuals to analyze the sludge management information. A similar
concern about the lack of personnel was expressed by the supervisor of
the Office of Water Pollution Control of one of the Ohio Environmental
Protection Agency’s district offices. This official said that his office
needed an additional full-time employee for reviewing and monitoring
I’OTWsludge management activities, noting that his staff currently
reviews the sludge management files when they happen to have the time
to do so.

By contrast, Wisconsin’s sludge management program has an informa-
tion management system that allows it to monitor the specific sludge use
and disposal activities of POTWS and uses this information to ensure that
IXXWSdo not exceed the pollutant limits established in the state regula-
tions. The state’s Department of Natural Resources receives soil tests


‘In addition to geogrdphicai diversity, the 17 states were selected to rcflcct variation in the Icwt of
stateparticipation in the intcrim program.



Page 17                      GAO/RCED-90-67      Emerging   Municipal   Sludge Managrvuent     Problems
“--~--._-   _...   --




                                       C h a p te r 2
                                       In te ri m S l u d g eM a n a g e m e nPtr o g ra m
                                       S u rfa c e sP r o b l e m sN e e d i n gA tte n ti o n B e fo re
                                       P e rm a n e n tP r o g ra m B e g i n s




                                      fro m fa rm e rsa n dth e A g ri c u l tu raEl x te n s i oDn e p a rtm e no tf th e U n i v e r-
                                      s i ty o f W i s c o n s Iti nu. s e sth i s i n fo rm a ti o nto, g e th ewr i th d a ta o n p a s t
                                      s l u d g ae p p l i c a ti oa nt th e s es i te sto, c a l c u l a fu
                                                                                                           te tu re s l u d g ae p p l i c a ti o n
                                      ra te re c o m m e n d a ti fo      o nr sc e rta i nc ro p s A. c c o rd i ntog a n o ffi c i a w
                                                                                                                                       l i th
                                      th e s ta te ’sD e p a rtm e no tf N a tu ra lR e s o u rc eths e, s ta te l e g i s l a tu hrea s
                                      p ro v i d e sd tro n gs u p p o rtfo r w a te r q u a l i typ ro g ra m as n do th e re l e m e n ts
                                      o f i ts s l u d g pe ro g ra m .


S t$ e P a rti c i p a ti oA nl s o   S o m es ta te sh a v ea l s oe x p re s s ea dre l u c ta n ctoe a c ti v e l py a rti c i p a te  in
A ffe c te db y P ro b l e mi ns      th e i n te ri mp ro g ra ma n dto s e e ka p p ro v afol r th e i rp e rm a n e np ro       t g ra m ,
                                      d u eto d e l a y as n du n c e rta i n ti ei nsp ro m u l g a ti nthge te c h n i c as l u d g re   e g-
D & e l o p i nTge c h n i c a l      u l a ti o n sE .P A ' Si n te ri ms tra te g ye n c o u ra g setas te sto s e e kp ro g ra m
R e g u l a ti o n s                  a p p ro v abl e fo reth e p ro m u l g a ti o nf th e te c h n i c as lta n d a rd N    s .e v e rth e -
                                      l e s si ,n th e c o m m e n otsn b o th th e 1 9 8 6a n d1 9 8 8v e rs i o nosf E P A ' Sp ro -
                                      p o s e sd l u d g me a n a g e m ep nrot g ra mre g u l a ti o nms a, n ys ta te ss a i dth a t
                                      w i th o u tk n o w i n wg h a tth e te c h n i c arel g u l a ti o na sre i t w o u l db e d i ffi c u l t
                                      to e s ti m a teb u d g e ta ry    re q u i re m e natsn dp e rfo rm o th e rn e c e s s atarys k s
                                      i n d e v e l o p i sn tag te s l u d g me a n a g e m ep nrot g ra m sF . o rth i s re a s o ns ,o m e
                                      e x p re s s ea dn u n w i l l i n g n etos cs o m m itht e m s e l v to e ss e e kp ro g ra m
                                      a p p ro v aul n ti lth e y k n e wm o rea b o u tht e s c o p ae n dc o n te not f th e te c h -
                                      n i c a re
                                               l g u l a ti o n s .

                                      S ta te s re
                                                 ’ s e rv a ti o na sb o u tht e u n k n o w nres l a te dto th e te c h n i c arel g u l a -
                                      ti o n sa l s os u rfa c e idn e v a l u a ti o on fsre g i o n as ll u d g pe ro g ra m cs o n d u c te d
                                      b y E P Ah e a d q u a rtedrsu ri n g1 9 8 8R. e g i o Vn ’s e v a l u a ti o fon ,r e x a m p l e ,
                                      n o te dth a t a l lo f i ts s i x s ta te sw e re re l u c ta ntot d e v e l oi pn te ri mp ro -
                                      g ra m si n a d v a n coef th e te c h n i c arel g u l a ti o nIns ,o n eo f th e s es ta te s ,
                                      W i s c o n s ai nD, e p a rtm e no tf N a tu ra lR e s o u rc e(Ws D N Ro) ffi c i a el x p l a i n e d
                                      to u s th a t m u n i c i p a l i tiweosu l di n c u ur n n e c e s s ac ry   o s tsi f th e s ta te
                                      i m p o s ei dn te ri ms l u d g lei m i tsi n p e rm i tsth a t m a y c h a n gwe h e nth e te c h -
                                      n i c a re
                                              l g u l a ti o na sre p ro m u l g a te S   d i.”m i l a rl yR, e g i o IX
                                                                                                                       n ’s e v a l u a ti o n
                                      c i te da u n a n i m o up sre fe re n caem o n igts s ta te sto w a i t u n ti la t l e a s at
                                      d ra ft o f th e te c h n i c arel g u l a ti o nw sa s a v a i l a b bl ee fo rep u rs u i n thg e
                                      m a tte r.

                                      S u c ha d ra ft o f th e re g u l a ti o ns su rfa c e idn th e fo rm o f E P A ' sd ra ft te c h -
                                      n i c a re
                                              l g u l a ti o np sro p o s ei dn F e b ru a ry1 9 8 9In. l i g h ot f th i s d e v e l o p -
                                      m e n t,w e a s k e sd l u d g ceo o rd i n a to fro
                                                                                         rs m th e 1 7 s ta te sc i te da b o v fo  e r

                                      “ A c c o r d i ntog a n o ffi c i a wl i th E P A ’sO ffi c eo f W a te Er n fo rc e m e an nt dP e rm i tsth, i s c o m m e nret fl e c ts
                                      a m i s u n d e rs ta n di ni nth ga t th e p ro g ra md o e ns o tre q u i reth e i n c l u s i o nf n e wn u m e r il ci m i tsi n p e r-
                                      m i ts ,b u t ra th e rth e i n c o rp o ra ti oo fnc u rre n st ta tes l u d gl ei m i ts m, a n a g e m pe ra
                                                                                                                                                   n t c ti c e as n, dm o n i to r-
                                      i n gre q u i re m e n ts .



                                      Page18                                G A O /R C E D - 9 0 - 5 7E m e rg i n gM u n i c i p a Sl l u d g eM a n a g e m e nPt r o b l e m s
                        Chapter 2
                        Interim Sludge Management Program
                        Surfaces Problems Needing Attention        Before
                        Permanent Program Begins




                        an update on their views whether issues and uncertainties of the techni-
                        cal regulations would affect their current participation in the interim
                        program or subsequent participation in the permanent program. Coor-
                        dinators from nine of the states said that based on their reaction to the
                        February 1989 proposal, their states would wait until the final technical
                        regulations are issued (i.e., until at least 1991) before making any deci-
                        sion to seek approval for their sludge programs. Another said that the
                        proposal has already led the state to decide not to seek program
                        approval. Among these 10 states is one that has a Memorandum of
                        Agreement with EPA to implement the interim program. Among the key
                        issues affecting these states’ willingness to participate was what they
                        viewed as the detrimental effect that the proposed regulations would
                        have on beneficial uses of sludge.”


                        Among the regions’ key responsibilities under the interim program is the
EPA Regions Have        issuance of permits with sludge conditions:
I3eenSlow to
Implement Basic     l   In states that implement the NPDESprogram, but which have not decided
                        to participate in the interim sludge program, the interim strategy
Components of the       requires the region to issue a “sludge rider” to the state NPDESpermit
Interim Strategy        that adds interim sludge conditions.
                    l   In states participating in the program, EPAregions are responsible for
                        reviewing and certifying state-issued permits to ensure that the permits
                        include sludge conditions that protect public health and the
                        environment.

                        Hence, some EPA regional action is required whether the state is building
                        shldge conditions into permits or not. Nevertheless, a June 1989 EPA-con-
                        tracted study found that none of the regions had issued any sludge rid-
                        ers, nor did they certify any of the state-issued permits with sludge
                        conditions7




                        “Although 10 of the 17 coordinators indicated that the technical regulations directly affected their
                        desire to participate in EPA’s sludge management efforts, 16 said that the technical regulations, as
                        proposed, would have a detrimental effect on the beneficial uses of sludge in their state. Regarding
                        the seven states that did not cite the proposal as directly affecting their participation, (1) six said
                        that they expect to apply for permanent program approval regardless of the technical regulations
                        proposal and (2) one cited other reasons for deciding not to participate.

                        ‘Science Applications International Corporation, Status of State-EPA Sludge Management Agree-
                        ments: Interim Sludge Permitting and Enforcement (McLean, VA: 1989). In states without NPDES
                        authority, the SAIC study shows that EPA regions are issuing the NPDES permits.



                        Page 19                      GAO/RCED-90-67         Emerging   Municipal   Sludge Management   Problems
,-_.          I........,                        “.“.” .-., --_   -

                                                                     Chapter 2
                                                                     Interim Sludge Management Program
                                                                     Surfaces Problems Needing Attention   Before
              ,
                                                                     Permanent Program Begins




 .     -..   1.            .““..   .   . . -.         .--_


                                                                     Beyond this fundamental problem, EPA regions’ 1988 mid-year evalua-
                                                                     tions disclosed that in most regions other basic components of the
             I                                                       interim program were not being implemented. According to the evalua-
             1                                                       tions, for example, inventories of priority facilities had not been com-
                                                                     pleted in 6 of EPA'S10 regions. The evaluation for one region noted that
                                                                     “there was no evidence the Region (alone or in conjunction with the
                                                                     states) had made any effort to identify P(JTWSwith known or suspected
                                                                     sludge use and disposal problems” (i.e., permitting priorities).

                                                                     Both the mid-year evaluations and our discussions with regional sludge
                                                                     officials suggest reasons why these activities are not being accom-
                                                                     plished. As was the case with a number of states, several regions cited
                                                                     delays in promulgating the technical regulations as a major problem.
                                                                     The most commonly cited reason, however, was a lack of resources to
                                                                     fully implement the program, particularly when a number of states in a
                                                                     region have not opted to implement the program themselves. As noted
                                                                     by the sludge program coordinator of Region IX, for example, the one
                                                                     full-time EPAemployee devoted to managing the interim program in a
                                                                     region is not enough to issue permits, monitor compliance, and assume
                                                                     other program responsibilities when states are not participating in the
                                                                     program. Similarly, Region III’s Permits Enforcement Branch Chief
                                                                     noted in his August 1988 comments on the interim strategy (cited previ-
                                                                     ously) that additional staff was needed to maintain sufficient knowledge
                                                                     on states’ programs, review the adequacy of state permits, write sludge
                                                                     riders when necessary, and for other purposes.


                                                                     While states and EPA regions are responsible for implementing the key
Improvements Needed                                                  components of the interim program, the responsibility for overseeing
in Headquarters’                                                     how well the program works lies with EPA headquarters. To do this,
Oversight Over                                                       headquarters relies on a tracking system called the Office of Water
                                                                     Accountability System (OWAS).OWASsets specific annual program objec-
Regions’and States’                                                  t,ives to be met by regional office commitments for a variety of water-
Permitting                                                           related programs. For the interim sludge program, the system tracks the
                                                                     number of permits that have been modified to include sludge conditions.
                                                                     As discussed in this chapter, however, the system presently does not
                                                                     give headquarters an accurate picture of how well this key activity is
                                                                     being carried out.

                                                                     To adequately track the incorporation of sludge conditions into permits,
                                                                     we believe headquarters needs to know (1) how many of the permits
                                                                     being issued or renewed should and do include these conditions and (2)



                                                                     Page 20                 GAO/RCED-90-57     Emerging   Municipal   Sludge Management   Problems
, -- --..-_;..-.._...
                  --_-.-_____
                                Chapter 2
                                Interim Sludge Management Program
                                Surfaces Problems Needing Attention      Before
                                Permanent Program Begins




                                whether the content of the conditions is sufficient to achieve their objec-
                                tives-to protect human health and the environment. Regarding the
                                first of these elements, OWAS began collecting information on the number
                                of permits containing sludge conditions for priority facilities (by EPA
                                region and by state) in the first quarter of fiscal year 1989. However,
                                the system did not track the total number of priority POTWSthat need to
                                be issued permits with sludge conditions and therefore could not iden-
                                tify how many permits were being issued that did not contain such con-
                                ditions. Without this information, it was difficult to gauge the Agency’s
                                success in performing this key task.

                                According to an official in EPA'SOffice of Water Enforcement and Per-
                                mits, one of the reasons for this omission was that until fiscal year 1990,
                                such information was not required for sludge in EPA'SStrategic Planning
                                and Management System (SPMS).SPMSis EPA'Sagency-wide system for
                                planning and performance monitoring and determines the level of detail
                                with which OWAStracks sludge permits. According to this official, OWAS
                                will expand its coverage in fiscal year 1990 so that EPAwill be able to
                                identify (1) the total number of permits being issued or reissued (each
                                requiring sludge conditions) and (2) the number of these permits that
                                are actually modified to include the required sludge conditions.

                                When implemented, we believe that this improvement will provide the
                                Agency with a better indication of the regions’ and states’ success in
                                revising permits to include sludge conditions. However, to obtain a suffi-
                                ciently accurate picture of program performance in this area, the system
                                also needs to provide information on the content of these sludge condi-
                                tions. Such a system would identify, for example, whether recommended
                                concentration levels for pollutants were being included for different
                                sludge use and disposal practices, and whether the permit identified
                                “best management practices” to be employed in the use and disposal of
                                sludge (e.g., sludge application rate for an agricultural site).

                                To understand more about the content of the sludge conditions being
                                written into NPDESpermits, an EPA-contracted study reviewed the condi-
                                tions developed for a number of priority facilities.H The study concluded
                                that the permits reviewed were not implementing many of the require-
                                ments of the interim strategy, such as the incorporation of sludge condi-
                                tions into permits and clauses allowing for the inclusion of the technical
                                standards once they are promulgated (“reopener clauses”). According to

                                sScicnc:cApplications International Corporation, Kevicw of Sludge Conditions In Municipal NI’IXi
                                I’crmits Issued to Class I Facilitic% (McLean, VA: .July 1989).



                                Page 21                    GAO/RCED-90-57      Emerging   Municipal   Sludge Management    Problems
              Chapter 2
              Interim Sludge Management Program
              Surfaces Problems Needing Attention   Before
              Permanent Program Begins




              the official cited earlier in EPA'SOffice of Water Enforcement and Per-
              mits, the Agency hopes to build on this one-time “snapshot” by tracking
              data on permit content on a quarterly basis. We believe such an
              improvement would give a more accurate picture of the program’s suc-
              cess and therefore serve as a useful tool in setting the Agency’s sludge
              policies. It could also be used to hold regions accountable for both the
              number and content of the sludge conditions in permits they are issuing
              and approving.


              The primary goals of EPA'Sinterim sludge management program are to
Conclusions   protect human health and the environment by limiting the contamina-
              tion of sludge from certain facilities and to help EPA and the states in
              developing the administrative mechanisms that will be needed for the
              upcoming permanent program. Among the key prerequisites needed to
              accomplish these goals are (1) strong participation in this voluntary pro-
              gram by states, (2) oversight by EPA regions of participating states and
              direct involvement where states do not participate, and (3) oversight of
              both regional and state activity by EPA headquarters. We believe, how-
              ever, that fundamental problems at each of these levels has left the
              goals of the interim program largely unfulfilled.

              Although it is possible that state participation may grow in coming
              months, only eight states have thus far entered into agreements to par-
              ticipate fully in the program. Other states entering into less formal
              agreements have programs that omit key responsibilities, such as identi-
              fying priority facilities or setting permit limits. Where states do not
              implement the interim program (or do not undertake all program
              responsibilities), EPA regions are required to do so. However, regions
              have also been slow to implement basic requirements of the program,
              such as identifying the facilities to regulate.

              One key explanation for both limited state participation and poor
              regional performance appears to be limited resources with which to
              carry out the program. Regarding state participation, this concern was
              expressed by many of the state sludge program coordinators we inter-
              viewed, by many of EPA'Sregional sludge program coordinators, and was
              the conclusion of an EPA-contracted study reporting on the status of
              existing state sludge management efforts. Consequently, with few states
              assuming interim program responsibilities, a larger burden has fallen on
              EPA regions. With a small staff available to handle the permitting, moni-
              toring, and enforcement required under the program (typically one full-



              Page 22                 GAO/RCED-90-57     Emerging   Municipal   Sludge Management   Problems
                  Chapter 2
                  Interim Sludge Management Program
                  Surfaces Problems Needing Attention   Before
                  Permanent Program Begins




                  time employee), the typical EPA region has been ill-equipped to fill the
                  gap.

                  EPA has recognized resource shortages as a chronic and generic problem
                  affecting many environmental programs and is attempting to take meas-
                  ures to deal with it. These efforts are discussed in chapter 3, where we
                  suggest how EPA sludge officials might build on them to further improve
                  the prospects that resources among both states and regions will be ade-
                  quate to fulfill their responsibilities under the permanent program.

                  Another factor affecting both state participation and regional perform-
                  ance has been a reluctance to issue interim sludge conditions under the
                  program, since these conditions will likely be revised after EPA'Stechni-
                  cal regulations are issued (currently scheduled for 1991). In addition to
                  being an administrative burden, this was cited as a problem for POTWS
                  because it would require them to revise their processes to meet one set
                  of standards, only to revise them again to meet subsequent standards.
                  Beyond the effect of this uncertainty, the draft technical standards pro-
                  posed by EPA in February 1989 were criticized by the states and cited by
                  some as a factor that may affect their participation in the interim pro-
                  gram and/or willingness to apply for permanent program approval. The
                  importance of timely and credible technical regulations for the entire
                  program, and our views on how to minimize the chance for further
                  delays, are discussed in chapter 4.

                  Finally, problems with EPA headquarters’ oversight of the regions and
                  states have complicated headquarters’ efforts to (1) understand how
                  well the program is being implemented and (2) hold the regions account-
                  able for meeting key program goals, particularly the incorporation of
                  sludge conditions into permits. While some improvements have been
                  made to track regional performance in this area, we believe that further
                  improvements are needed.


                  To improve regions’ and states’ performance in the interim program and
Recommendations   to lay the foundation for their implementation of the permanent pro-
                  gram, EPA headquarters needs to build on its ongoing efforts to improve
                  the way it tracks their performance. Specifically, we recommend that
                  the Administrator direct that modifications be made so that the Agency
                  can track both (1) the number of permits that are required to include
                  sludge conditions as well as the number that actually do include the con-
                  ditions and (2) the content of the conditions, such as whether pollutant



                  Page 23                 GAO/RCED-90-67     Emerging   Municipal   Sludge Management   Problems
    Chapter 2
    Interim Sludge Management Program
    Surfaces Problems Needing Attention   Before
    Permanent Program Begins




    concentration levels were being included for different sludge use and
    disposal practices.




w




    Page 24                  GAO/RCED-90-57        Emerging   Municipal   Sludge Management   Problems
‘i’
          I
      Chapter 3

      ‘Obstacles EPA and StatesMay Facein
      @plementing the PemnaylentSludgeProgram

                                   Beyond the problems that surfaced in the interim program, we identified
                                   a number of other potential problems that may complicate implementa-
                                   tion of the permanent program. For some, the need for prompt EPA atten-
                                   tion is apparent; for others, simple solutions may not exist,
                                   Nevertheless, we believe that to the extent that EPA can anticipate and
                                   deal with these types of problems before they become major issues, it
                                   can go a long way toward averting the type of delays and inefficiencies
                                   that have affected the interim program. Among the potential obstacles
                                   discussed in this chapter are (1) continued questions over the suffi-
                                   ciency of resources to fully implement the program, (2) the need to
                                   develop an effective enforcement program to deter program violations
                                   and to bring about compliance when violations do occur, and (3) compli-
                                   cations arising from the impacts of other pollution programs on sludge
                                   management, particularly the pretreatment program.


                                   In chapter 2, we observed that insufficient resources were a contribut-
      Concerns Over the            ing factor toward low state participation in the interim sludge program
      Sufficiency of EPA           and toward incomplete implementation of program requirements by EPA
      and State Resourcesto        regions Likewise, a major factor affecting the success of the permanent
                                   sludge program will be the extent to which states participate-and      the
      Implement the                sufficiency of EPA'S resources if they do not, According to an official in
      Permanent Sludge             EPA'S Office of Water Enforcement and Permits, the Agency has not yet
                                   evaluated its resource needs for the permanent program. However,
      Program                      based on past experiences of other environmental programs, as well as
                                   the types of problems affecting the interim sludge program that were
                                   discussed in chapter 2, there is cause for concern as to whether EPA will
                                   have sufficient resources to fully implement a national sludge program.


      Extent of State              As in other state-implemented environmental programs, EPA'S resource
      Participation W ill Affect   needs will depend largely on the level of state participation in the pro-
                                   gram and the quality of participation as those programs are carried out.
      EPA Resource Needs           In cases where states assume full program responsibility and effectively
                                   carry out the program’s objectives, EPA'S role can be expected to be one
                                   of oversight with little direct implementation. Where states elect not to
                                   participate in the program or experience difficulty in implementing
                                   some of its key elements, EPA will need to play a more direct role in basic
                                   program responsibilities such as writing sludge conditions into permits,
                                   monitoring compliance, and taking enforcement action when necessary.

                                   EPA'S experience with the pretreatment program provides some indica-
                                   tion of the problems it may face if such a direct implementation role is


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Obstacles EPA and States May Face in
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required in the sludge program in many states. Among the problems we
identified in that program was a lack of effective EPA and state oversight
of POTW pretreatment programs, particularly in taking enforcement
actions against noncomplying POTWS.~In acknowledging these problems
to us, EPA headquarters and regional officials explained that a major
contributing factor to the problem was that only half the states assumed
primacy for that program, leaving EPA regions to manage the program in
the other states. As a result, according to these officials, EPA regional
resources for compliance and enforcement efforts had been stretched
thin, affecting program performance.

 While it is still unclear how many states will choose to implement the
 permanent sludge program, chapter 2’s discussion of the interim pro-
 gram provides cause for concern. It notes, for example, that as of
 November 1989, only eight states had entered into the Memorandum of
Agreement that signifies a willingness to participate fully in the interim
 program. Should a significant number of states choose not to fully
 implement the permanent program-or          choose not to participate at
 &-EPA     will be hard-pressed to fulfill the demands on its own staff and
resources. As one indication, EPA'S Region V (as other regional offices)
 was assigned an equivalent of one full-time employee during fiscal year
 1989 to oversee the interim sludge program for the six states within its
jurisdiction. In Wisconsin, a Region V state, 4 staff years were expended
on the state’s sludge program, and a state official indicated that an addi-
tional 2-l/2 staff years will be needed once the technical regulations are
promulgated. Based on the projected staffing needs for this single state
program, the need for additional EPA staff would appear inevitable if
several states within a region elected not to participate.

The extent of the impact on EPA staff and resource needs will also
depend heavily on whether the 39 states currently operating the NPDES
program choose to participate in the permanent sludge program.
According to an official with EPA'S Office of Water Enforcement and Per-
mits, for NPDES states that elect not to participate, EPA staff would have
to gain familiarity with the NPDES permits and other aspects of these
facilities before assuming many essential regulatory functions.




‘Water Pollution: Improved Monitoring and Enforcement Needed for Toxic Pollutants Entering Sew-
ers
- (GAO/RCXb89-101, Apr. 25, 1989), pp. 32-33.



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                               Chapter 3
                               Obstacles EPA and States May Face in
                               Implementing the Permanent Sludge Program




Res/ourceLimitations Have      During the present climate of fiscal constraint, the resource problems
Bedomea Generic Problem        facing the sludge program (and, for that matter, the pretreatment pro-
                               gram) are common to many water quality programs and indeed to other
Affktcting Environmental       environmental programs as well. The problem stems from an increase in
Probrams
    /                          regulatory responsibilities arising from new legislative requirements,
                               often to be carried out without increased federal funding. The problem
                               is particularly acute in the water quality area because at the same time
                               program costs are rapidly increasing, federal support is decreasing. The
                               reasons, according to EPA, are essentially twofold. First, half of the fed-
                               eral funds the states use to administer their surface water programs
                               under the Clean Water Act come from “set-asides” under the Construc-
                               tion Grants and State Revolving Fund programs. Most of these set-asides
                               terminate in fiscal year 1990 and the remainder by the end of fiscal year
                               1994. Second, the remaining sources of federal funds for state water
                               program funds have remained essentially flat since 1981, resulting in a
                               30 to 40 percent cut in state purchasing power.2

EPA Encourages States to Use   As program responsibilities increase and federal support decreases, it
Alternative Financing          has become more difficult for states to assume primacy in programs
Mechanisms for Environmental   such as sludge. Yet it would be impossible for EPA to manage a signifi-
Programs                       cant number of these programs for the states, given the limitations of its
                               own resources. Given this dilemma, EPA has been examining alternative
                               ways that states can supplement existing funds for environmental pro-
                               grams in general, and water quality programs such as sludge in particu-
                               lar. One 1988 study conducted by the Agency’s Office of Policy,
                               Planning and Evaluation found, for example, that nearly one-third of
                               the states make widespread use of alternative financing mechanisms
                               and that such mechanisms have been used to fund all or part of their
                               environmental program operating costs.”

                               In addition to this EPA-wide effort, the Office of Water recently com-
                               pleted an analysis of alternative financing mechanisms to be used in
                               paying for state water quality programs, Citing a number of successes
                               among the states in this area, the analysis recommends a number of
                               mechanisms for states to consider, such as increased or new fees for
                               state services and dedicated revenues from fines and penalties. The
                               analysis also recommends an active role for the Office of Water in
                               encouraging use of such mechanisms through a variety of activities,

                               ‘Environmental Protection Agency, Transition ‘89: Major National Issues (Washington, DC.: 1989),
                               pp. 6-18.

                               “Environmental Protection Agency, State Use of Alternative Financing Mechanisms in Environmental
                               Programs (Washington, D.C.: *June 1988).



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                        such as acting as a clearinghouse on state supplemental financing mech-
                        anisms, providing technical expertise, and providing seed money for
                        specific financing projects.

                        Our review of the sludge program points to at least one instance where
                        the use of such a mechanism may well make the difference whether the
                        state assumes primacy for the sludge program or leaves it to EPA to man-
                        age. California was reluctant to assume responsibility for the sludge pro-
                        gram due to a lack of funding support from the state legislature.
                        Reflecting its preference for a state- rather than an EPA-administered
                        program, however, a technical advisory committee representing Califor-
                        nia municipalities and treatment plants proposed in a June 7, 1989, let-
                        ter that the state charge treatment plants a fee to cover the program’s
                        costs. As of December 1989, it was unclear whether the state will
                        assume responsibility for the program.

                        While we have not evaluated the effectiveness of either the EPA-wide
                        effort nor those of the Office of Water to encourage use of these types of
                        alternative financing mechanisms, such assistance appears particularly
                        appropriate, given the severity of the states’ funding shortfall-and    the
                        poor prospects of dealing with it through additional federal grants to
                        the states. Such efforts seem all the more appropriate regarding the
                        sludge program in light of the findings above concerning the threat
                        resource shortages pose to the development of the permanent sludge
                        program. Accordingly, we believe that supplemental efforts along these
                        lines by the EPA officials specifically responsible for sludge management
                        (i.e., the cognizant officials in the Agency’s Office of Water Enforcement
                        and Permits and the regional offices’ sludge coordinators) could help to
                        increase the number of states willing to implement the program-and
                        help to ensure that they have the resources to manage the program more
                        effectively.


Filling Program Gaps:   complex elements in the national sludge program. In some cases, EPA will
The Need for an         need experience with the program to identify key program gaps and
Effective Enforcement   how best to fill them. In cases where major program gaps can be antici-
                        pated, however, we believe the Agency can improve the prospects for its
Program                 emerging sludge program by effectively addressing the gaps before they
                        become major implementation problems.
           Y
                        Our own experience in evaluating EPA'S NPDES permit, pretreatment, and
                        other environmental programs suggests that a fundamental element of


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                            Chapter 3
                            Obstacles EPA and States May Face ln
                            Implementln~  the Permanent Sludge Program




- ..-__^.__
        -.__-_l_--~
                            the sludge program will be strong enforcement by EPA regions and dele-
                            gated states. Effective enforcement serves as a deterrent to violations
                            and, when violations do occur, helps to ensure that appropriate correc-
                            tive action is taken in a timely manner. Without effective enforcement,
                            the consequences of violating permit limits and other program require-
                            ments are greatly diminished-making      it much less likely that these
                            requirements will be observed.

                            As explained in this chapter, EPA has taken some initial steps toward
                            developing an enforcement component in its sludge program, but has a
                            long way to go if such a component is to be in place when the permanent
                            program begins. Among the essential elements of an enforcement pro-
                            gram are (1) criteria that allow regulators to set enforcement priorities,
                            (2) criteria that identify what type of enforcement actions are appropri-
                            ate and when they should be taken, and (3) effective oversight over EPA
                            regional and state enforcement efforts by headquarters.


Setting Enforcement         In an era of limited resources among environmental regulators, a generic
Priorities by Identifying   problem has been their inability to take enforcement action against all
                            violators. Many environmental programs therefore devise a system for
“Significant”               setting enforcement priorities to target the most egregious violators for
Noncompliance               enforcement action. In the NPDES program, for example, EPA regions and
                            delegated states prepare quarterly reports on the compliance status of
                            mqjor permittees. The most severe violations in these reports are desig-
                            nated as being in significant noncompliance, which may include viola-
                            t,ions of either pollutant limits or reporting requirements. The key part
                            of the system is the identification of criteria for determining when non-
                            compliance is “significant,” so that it is clear whether an enforcement
                            action is necessary. In the NPDES program, for example, a violation of an
                            effluent limit can be either “severe” (exceeding average monthly permit
                            limits by a minimum amount) or “chronic” (exceeding average monthly
                            permit limits by any amount). Two severe or four chronic violations of
                            the same pollutant limit over a B-month period constitutes significant
                            noncompliance.

                            The history of the pretreatment program illustrates the problems of con-
                            ducting enforcement without such criteria. As noted in our evaluation of
                            that program, the lack of significant noncompliance criteria fostered
                            inconsistencies among Nrrws enforcement actions against noncomplying




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                          industrial dischargers.4 These inconsistencies affected which industrial
                          users were subject to an enforcement action, because what one POTW
                          considers a major violation, others may not. After dischargers com-
                          plained to EPA and the states about such inconsistencies, the Agency
                          developed a definition of significant noncompliance to be used in enforc-
                          ing pretreatment program requirements.

                          Acknowledging the possible need for criteria on significant noncompli-
                          ance, EPA has asked a contractor to include this issue as part of a
                          broader examination of existing state sludge programs. We believe that
                          this represents a logical start in the process, and urge EPA to follow
                          through with the promulgation of significant noncompliance criteria
                          before the permanent program begins.


Identifying When          The experience of other programs also illustrates the importance of
Enforcement Is Needed     identifying specific criteria for when enforcement action is required and
                          identifying what action is appropriate for a given violation. These crite-
and What Type of Action   ria for “timely and appropriate” enforcement are essential for (1) the
Is Appropriate            regulatory entity, so that it understands when and how to take action
                          and to ensure that its enforcement policies are consistently implemented
                          and (2) the regulated entity, so that it understands the consequences of
                          noncompliance. Under the NPDES program, actions are classified as either
                          informal or formal, depending on the severity of the violation, the com-
                          pliance history of the permittee, and other factors. While the Agency
                          has some discretion in taking informal actions, formal action is required
                          before a permittee has been in significant noncompliance for two consec-
                          utive quarters and may include administrative orders to cease viola-
                          tions, administrative penalties, and other actions that reflect the more
                          serious nature of this type of violation.

                          Without a requirement for timely and appropriate criteria to guide
                          enforcement, regulators in other programs have been reluctant to “force
                          the issue” with persistent violators. Our review of the pretreatment pro-
                          gram, for example, cited this as a problem that explained POTW reluc-
                          tance to enforce against noncomplying industrial dischargers.


                          4GAO/HCED-89-101,p. 31. For instance, headquarters considered a discharger in significant non-
                          compliance with discharge limits if, for example, 66 percent or more of the measurements (analyses
                          of its wastcwatcr) exceed the same daily maximum limit or the same average limit in a B-month
                          period. EPA’s Region IV, on the other hand, considered a discharger in significant noncompliance if 20
                          percent or more of the wastewater samples collected during the past 12 months contain one or more
                          violations, as long as more than four samples were taken.



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                          Regarding state sludge management, Ohio and Wisconsin illustrate the
                          variation in approaches toward enforcement. According to the head of
                          the Public Wastewater Section of Ohio’s Environmental Protection
                          Agency, the state does not have formal criteria for timely and appropri-
                          ate enforcement and relies heavily on informal actions, such as sending
                          notices and letters to violators. A maximum fine of $100 is presently
                          permitted for a sludge management violation, although Ohio’s Environ-
                          mental Protection Agency is currently seeking legislative approval to
                          raise the limit to $1,000.

                          By contrast, Wisconsin uses specific criteria for timely and appropriate
                          enforcement. These criteria define a sequence of escalating steps that
                          strengthen the actions taken until compliance is achieved. The process
                          begins with informal actions, such as visits, letters, and phone calls to
                          violators. If informal means are unsuccessful, a formal notice of viola-
                          tion is sent, and the violator is given an opportunity to reach an agree-
                          ment with state officials on a compliance schedule to correct the
                          violation(s). If compliance is still not obtained, the case can be referred
                          to the Wisconsin Department of Justice. At this point, failure to comply
                          can result in fines up to $10,000 per day. An important feature of Wis-
                          consin’s enforcement program is the use of a data management system
                          for identifying and tracking enforcement cases. The system provides the
                          oversight mechanism to ensure that formal enforcement actions are
                          taken and that progress in achieving compliance is monitored.

                          As is the case with criteria for significant noncompliance, EPA acknowl-
                          edged the possible need for timely and appropriate enforcement criteria
                          in the preamble to its May 2, 1989, sludge regulations, noting that such
                          guidance was a “likely candidate” as the sludge program moves for-
                          ward. According to an official with EPA'S Office of Water Enforcement
                          and Permits (Enforcement Division), EPA plans to have the same contrac-
                          tor, cited previously, assist in developing criteria. Here again, we urge
                          EPA to follow through on these initial steps with the promulgation of
                          timely and appropriate enforcement criteria before the permanent pro-
                          gram begins.


Headquarters’ Oversight   Other environmental programs typically provide for systematic head-
                          quarters’ oversight over regional and state enforcement so that policy-
of Regional and State     level officials know whether timely and appropriate enforcement is
Enforcement *             being taken and can hold program officials accountable if it is not. In the
                          NPDE:Sprogram, for example, headquarters oversees the timeliness of
                          enforcement actions by regional offices and delegated states through a


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                                                                                                                                    I




Chapter 3
Obstacles E P A a n d S tates M a y F a c e in
Im p l e m e n t i n g the P e r m a n e n t S l u d g e P r o g r a m




q u a r terly report called th e e x c e p tio n s list. This list includes all m a j o r
permittees th a t w e r e in significant n o n c o m p l i a n c efor two or m o r e con-
secutive q u a r ters for th e s a m e violation, b u t w h o h a d b e e n issued n o
fo r m a l e n fo r c e m e n t action. It c o n tains th e n a m e s o f violating facilities,
th e l e n g th o f tim e th e y h a v e b e e n in significant n o n c o m p l i a n c e ,a n d a n
e x p l a n a tio n o f w h y fo r m a l e n fo r c e m e n t actions w e r e n o t ta k e n . In s o m e
cases,this fo l l o w - u p m a y require only a te l e p h o n e call from lower level
h e a d q u a r ters o fficials to th e cognizant r e g i o n a l o fficials to discuss w h y
tim e l y e n fo r c e m e n t w a s n o t ta k e n a n d h o w th e p r o b l e m will b e cor-
rected; in o thers, it m a y involve discussiond u r i n g visits to th e r e g i o n b y
th e D e p u ty Assistant A d m inistrator for th e O ffice o f W a ter or a t a n
a n n u a l m a n a g e m e n tm e e tin g .

A similar oversight system w a s recently established in th e pretreatment
p r o g r a m , w h e r e b y r e g i o n s a n d d e l e g a te dstates report P(JI’W S failing to
m e e t key p r o g r a m r e q u i r e m e n ts o n a “q u a r terly n o n c o m p l i a n c ereport.”
E P A h a s since issued g u i d a n c e to r e g i o n s a n d d e l e g a te dstates o n th e type
o f e n fo r c e m e n t actions to b e ta k e n against P O T W S i d e n tifie d o n th e
report.

A n o fficial with E P A ’S O ffice o f W a ter E n fo r c e m e n t a n d P e r m i ts
( E n fo r c e m e n t Division) to l d u s th a t in th e interim s l u d g e p r o g r a m , h e a d -
q u a r ters is n o t tracking e n fo r c e m e n t b e c a u s eit is p r e s e n tly e m p h a s i z i n g
incorporation o f s l u d g e conditions into permits, G iven th e p r o b l e m s with
permitting discussedin c h a p ter 2 , this e m p h a s i s m a y b e u n d e r s ta n d a -
ble-for th e interim p r o g r a m . H o w e v e r , w e believe th a t for th e p e r m a -
n e n t p r o g r a m , a strong e n fo r c e m e n t capability will b e e s s e n tial to
p r o g r a m success,G iven th e r e g i o n s ’p e r f o r m a n c e in th e interim pro-
g r a m , s u c h a n oversight m e c h a n i s m c o u l d i m p r o v e their p e r f o r m a n c e b y
m a k i n g it clearer th a t th e y will b e h e l d a c c o u n ta b l efor e ffective
e n fo r c e m e n t. A c c o r d i n g to this o fficial, h e a d q u a r ters p l a n s to d e v e l o p
th e capability d u r i n g 1 9 9 0 to track e n fo r c e m e n t actions ta k e n b y
r e g i o n s a n d states. S till, it will b e s o m e tim e b e fo r e h e a d q u a r ters’over-
sight capability in s l u d g e e n fo r c e m e n t m a tches its capability with th e
N P D EpSr o g r a m -allowing it to systematically m o n i tor th e tim e l i n e s s a n d
a p p r o p r i a t e n e s s o f s u c h actions.




Page 32                                G A O / R C E D - 9 0 - 6 7 E m e r g i n g Municipal S l u d g e M a n a g e m e n t P r o b l e m s
                            Chapter 3
                            Obstacles EPA and States May Face in
                            Xmplementing the Permanent Sludge Program




                           To some extent, the multimedia nature of sludge generation, use, and
Imdacts of the             disposal makes it particularly difficult to regulate. Its generation from
Prebreatment Program       wastewater leads to regulation under surface water programs, but its
on sludge Management       use and disposal affects other media including air, soil, and ground-
                           water. As such, regulating sludge in a state can involve a myriad of pro-
                           grams and agencies dealing with solid waste disposal, hazardous waste
                           management, air regulation, and health-related issues. It is this aspect of
                           sludge regulation that led the Weston study (discussed in chapter 2) to
                           conclude from its review of existing state sludge programs that its “fore-
                           most conclusion” was that sludge programs are complex.

                           Of all these programs, however, the one that most affects sludge man-
                           agement is the pretreatment program:

                         . In many cases, POTWS’ ability to avoid sludge contamination depends
                           heavily on the effectiveness of industries’ efforts to pretreat toxic dis-
                           charges before they enter the waste stream leading to the treatment
                           plant. EPA’S pretreatment program, however, has not been fully effective
                           in reducing such toxic discharges to permitted levels.
                         . From an administrative standpoint, effective coordination between the
                           pretreatment and sludge programs will be essential, but may be difficult
                           in states where EPA oversees one program and the state oversees the
                           other. In such situations, particular difficulties can arise in resolving
                           compliance problems.


Pretreatment Program       The pretreatment program, authorized by the Federal Water Pollution
May Not Be Effectively     Control Act Amendments of 1972, is intended to remove toxic pollutants
                           from the effluent of industrial dischargers before they reach the POW.
Reducing Sludge            One of the program’s major objectives is to prevent contamination of
Contamination              sewage sludge; and as a practical matter, the extent to which sludge con-
                           tamination can be controlled in many cases will depend on the effective-
                           ness of pretreatment. As discussed in this chapter, however, our recent
                           analysis of that program suggests that its objectives are not being satis-
                           factorily met, including the objective to prevent sludge contamination.

                           EPA has underscored the importance of the pretreatment program to
                           achieve success in sludge management, For example, in its Regulatory
                           Impact Analysis accompanying the proposed technical sludge regula-
                           tions issued in February 1989, EPA warns of the problems contaminated
                           sludge can cause POTWS and notes that pretreatment can play an impor-
                           tant role in reducing the concentrations of metals, inorganic chemicals,
                           and organic chemicals in wastewater sludges. The analysis cites earlier


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                         Obrtacles EPA and States May Face in
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                         EPAestimates, based on 8 PCTWcase studies, that “full implementation”
                         of the National Pretreatment Program can reduce contamination levels
                         for total metals in POTWS’sludge by more than 40 percent.

                         Our recent report on EPA’Spretreatment program, however, indicates
                         that EPA has a long way to go before the pretreatment program is fully
                         implemented and is effectively reducing toxic contaminants from reach-
                         ing ~01'~s.~ In that report, we estimated that of the 1,500 POTWS partici-
                         pating in the program, about 41 percent of their industrial users
                         exceeded one or more applicable discharge limits during the 12-month
                         period examined. Among the problems resulting from such violations
                         has been toxic contamination of POTW sludge. The report noted, for
                         example, that at one city’s POTW, high levels of copper discharged by an
                         industrial user reduced the life expectancy of the POTW’Ssludge disposal
                         site by 66 percent, forcing the city to find a new disposal site. At
                         another, high cadmium content in sewage sludge resulted in the sludge
                         being designated a hazardous waste for disposal purposes. This designa-
                         tion limits disposal options and increases disposal costs. The report cites
                         the absence of aggressive enforcement by PCFWSagainst violators as an
                         important underlying cause for discharge limit violations and also cites
                         weaknesses in enforcement against noncomplying POTWSby states and
                         1~33regional offices.

                         Given the technical and regulatory challenges facing the pretreatment
                         program, it may be difficult to fully achieve the program’s objectives in
                         the immediate future. However, until the program is more effective, its
                         goal of preventing sludge contamination will not be realized,


Coordination With        In addition to concerns about the effectiveness of the pretreatment pro-
Pretreatment Program     gram in reducing sludge contamination, the close ties between the two
                         programs also raise administrative issues: decisions in one program
May Be More Difficult    about permit limits, enforcement actions, and other matters can strongly
When Different           affect the other program. Because of the close coordination this mutual
Regulatory Authorities   dependency requires, one environmental group commenting on EPA’S
Are Involved             proposed regulations said that the same regulatory authority-be       it a
                         state or EVA region-should implement both the pretreatment and sludge
                         programs. However, noting that the Clean Water Act intentionally
                         authorized flexibility on this issue, EPA'S final regulation made state par-
                         ticipation optional; a state could accept one program and defer to EPA on
                         the other.




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                                       Obstacles EPA and States May Face in
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                                      Such a situation could arise frequently because about half the states
                                      have opted not to implement the pretreatment program. EPA regional
                                      offices therefore act as “approval authorities” in overseeing these pro-
                                      grams. If any of these states assume responsibility for sludge manage-
     ,                                ment (which is allowed by the sludge management regulations), then an
                                      EPA regional office will be in charge of the pretreatment program and a
                                      state authority will be in charge of the sludge program. Conversely,
                                      under the sludge management regulations, a state that operates its pre-
                                      treatment program can defer authority to EPA to operate its sludge
                                      program.

                                      As discussed in this chapter, our review suggests that (1) coordination
                                      with the pretreatment program may be difficult in states where differ-
                                      ent regulatory authorities are running each program and (2) such a
                                      problem could become particularly important in resolving compliance
                                      and enforcement problems involving sludge contamination.

Potential Effects of Coordination     To better understand the practical effect of having divided regulatory
Problems on Compliance and            responsibility for the programs and the extent to which such close coor-
Enforcement                           dination can alleviate any problems, we asked the pretreatment coordi-
                                      nator in each EPA region to comment on (1) the overall effect of divided
                                      responsibility on communication and coordination among affected regu-
                                      latory agencies and (2) any particular problems divided responsibility
                                      could pose for program implementation.” We also interviewed officials
                                      with the Association of Metropolitan Sewerage Agencies (AMSA), an asso-
                                      ciation representing POI’WS,to obtain the PWW perspective on this issue.

                                      All coordinators agreed that dividing responsibility for the two pro-
                                      grams among federal and state regulators would make communication
                                      more difficult, although half the coordinators said that strong efforts to
                                      coordinate activities can compensate for this disadvantage. A majority
                                      of the coordinators, however, did agree that divided responsibility could
                                      pose a problem in resolving compliance issues involving sludge contami-
                                      nation. Among the points made were the following:

                                    9 If the sludge regulator takes action against a PCWWfor violating sludge
                                      standards, it should have control over the method available to return
                                      the r’crrw to compliance. This method will often have the POTW strengthen
                                      its pretreatment requirements. If the sludge regulator also manages the

                                      “Pretreatment coordinators were interviewed because, in addition to being familiar with the opcra-
                                      tions of prctrcatmcnt programs in their respective regions, they have some responsibility for compli-
                                      ancc with certain I’U~W sludge requirements.



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                Obstacles EPA and States May Face ln
                Implementing the Permanent Sludge Program




                pretreatment program, it would have such control. It would not, how-
                ever, have control in a situation in which the state managed one pro-
                gram and a region managed the other.
              . Compliance issues dealing with sludge contamination could arise where
                both the pretreatment authority and the sludge authority are authorized
                under their respective programs to take some kind of enforcement
                action.7 If the same authority manages both programs, consistency of
                enforcement would likely not be a problem. However, if responsibility
                were divided, disagreement over appropriateness of alternative enforce-
                ment actions could occur-with     the POTWcaught in the middle of the
                dispute.

                Several coordinators added that state and federal regulators often bring
                different perspectives to compliance and enforcement issues, and
                obtaining agreement on the proper course in a given compliance/
                enforcement issue may be difficult. As noted by one of these officials,
                the magnitude of this kind of problem could grow significantly if, as
                expected, the technical sludge standards are more stringent than
                existing sludge standards. In such a case, one can expect more compli-
                ance problems and, hence, more enforcement cases.

                A representative of the Association of Metropolitan Sewerage Agencies
                (AM%!) agreed that divided responsibility for the two programs would
                cause problems in resolving compliance issues, as did the chairman of
                AMSA’SSludge Management Committee. Citing the results of a recent sur-
                vey of AMSAmembers, the AMSArepresentative said that state and EPA
                regulators often have different perspectives in regulating POI’WS.POTWS
                generally think that states are more flexible and willing to work with
                them to resolve compliance problems. On the other hand, EPAregions are
                viewed as more prescriptive about how to address problems, and as
                threatening enforcement more frequently. The chairman of AMSA’S
                Sludge Management Committee added that with the probability of such
                divergent views, written procedures on what constitutes appropriate
                enforcement could be useful in promoting consistent behavior among
                regulators.


                Unlike the case of the interim program, which is scheduled to end in 2
Conclusions     years, we believe that at least some of the issues that may complicate
          Y


                7Sludge regulators could take action if the PoTW’s sludge violates the technical standards. The pre-
                treatment regulator can take action if industrial wastewater causes “interference” with the PoTW’s
                treatment process and results in contaminated sludge.



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l .-.._   -   ..-_   __“_.__.__   .._..-._   -.__-..--..


                                                           Chapter 3
                                                           Obstacles E P A a n d S tates M a y F a c e in
                                                           Im p l e m e n t i n g the P e r m a n e n t S l u d g e P r o g r a m




                                                           th e p e r m a n e n t p r o g r a m c a n b e a n ticipated b y E P A a n d b e alleviated-at
                                                           least to s o m e extent-before th e y b e c o m em a j o r i m p l e m e n ta tio n p r o b -
                                                           lems. In a d d i tio n to th e issues raised in this c h a p ter, E P A m a y b e c o m e
                                                           a w a r e o f o th e r p r o b l e m s a s it c o n tin u e s to g a i n e x p e r i e n c ewith th e
                                                           interim p r o g r a m .

                                                           W e believe th a t e n fo r c e m e n t provides a p r i m e e x a m p l e w h e r e a m o r e
                                                           a n ticipatory a p p r o a c h c o u l d p a y o ff for E P A .A credible e n fo r c e m e n t
                                                           p r o g r a m h a s b e e n d e m o n s trated to b e a n e s s e n tial c o m p o n e n tn e e d e dto
                                                           e n c o u r a g ec o m p l i a n c e a n d to bring a b o u t c o m p l i a n c ew h e n violations
                                                           occur. W a ter quality p r o g r a m s s u c h a s N P D E Sa n d pretreatment, a s well
                                                           a s o th e r e n v i r o n m e n tal p r o g r a m s , h a v e d e m o n s trated th a t key e n force-
                                                           m e n t p r o g r a m e l e m e n tsinclude (1) a system for setting e n fo r c e m e n t pri-
                                                           orities b y i d e n tifying significant n o n c o m p l i e r s a n d (2) criteria th a t
                                                           i d e n tifie s w h e n e n fo r c e m e n t is n e e d e da n d th e type o f action th a t is
                                                           appropriate. E P A h a s ta k e n s o m e initial steps in d e v e l o p i n g th e s e ele-
                                                           m e n ts; steps th a t w e believe th e A g e n c y n e e d s to p u r s u e s o th a t th e s e
                                                           e l e m e n ts a r e in p l a c e w h e n th e p e r m a n e n t p r o g r a m begins.

                                                           R e g a r d i n g th e latter o f th e s e two issues,th e u n i q u e complexities o f th e
                                                           s l u d g e p r o g r a m , arising from its relationship to th e pretreatment pro-
                                                           g r a m , p r o v i d e a n a d d e d incentive for criteria o n tim e l y a n d appropriate
                                                           e n fo r c e m e n t. A s discussedin this c h a p ter, o n e specific a r e a o f c o n c e r n
                                                           to regulators a s well a s to P C T Wo fficials involves th e p o te n tial for c o m -
                                                           pliance p r o b l e m s in w h i c h s e p a r a te regulatory e n titie s u n d e r th e two
                                                           p r o g r a m s , o n e a state a g e n c y a n d o n e a n E P A region, c o u l d ta k e action
                                                           against a P O T W        for th e s a m e s l u d g e c o n ta m i n a tio n p r o b l e m . In s u c h a
                                                           situation, criteria indicating w h a t represents tim e l y a n d appropriate
                                                           e n fo r c e m e n t action c a n h e l p to a v o i d inconsistent e n fo r c e m e n t actions
                                                           b y th e two regulators.

                                                           In a d d i tio n , w e believe E P A s h o u l d b e g i n n o w to d e v e l o p th e type o f over-
                                                           sight m e c h a n i s m s ,e m p l o y e d b y h e a d q u a r ters in o th e r p r o g r a m s , th a t
                                                           e n a b l e policy-level o fficials to k n o w w h e th e r tim e l y a n d appropriate
                                                           e n fo r c e m e n t is b e i n g ta k e n - a n d th a t c a n b e u s e d to h o l d p r o g r a m o ffi-
                                                           cials a c c o u n ta b l eif it is n o t.

                                                           A m o r e a n ticipatory a p p r o a c h c a n also h e l p E P A d e a l with th e likelihood
                                                           o f resource shortages in i m p l e m e n tin g th e p r o g r a m . T h e likelihood o f
                                                           E P Aresource p r o b l e m s will d e p e n d heavily o n h o w m a n y states partici-
                                                           p a te a n d h o w well th e y i m p l e m e n t th e p r o g r a m . H o w e v e r , th e r e is s o m e




                                                           Page 37                                G A O / R C E D - 9 0 - 5 7 E m e r g i n g Municipal S l u d g e M a n a g e m e n t P r o b l e m s
                              Chapter 3
                              Obstacles EPA and States May Face in
                              Implementing  the Permanent Sludge Program




.-- ____.._._.....__
                --_--..-._-
                              cause for concern, given the experience of other environmental pro-
                              grams and the low rate of state participation in the interim sludge
                              program.

                              To some extent, the potential resource shortage reflects a generic and
                              growing problem in environmental programs; particularly water pro-
                              grams, where responsibilities are increasing at the same time that fed-
                              eral funding sources are diminishing. Accordingly, EPA is presently
                              encouraging states to develop other funding sources for environmental
                              programs, such as fees and dedicated revenues from fines and penalties.
                              Given the seriousness of the funding issue and the potential for alterna-
                              tive financing to improve state participation in the sludge program, we
                              believe that EPA'S sludge program staff should supplement the Agency’s
                              broader efforts in this area by encouraging POTW and state officials to
                              explore alternative methods to finance sludge programs.


                              To improve the prospects for an effective permanent sludge program,
Recommendations               WC recommend that the Administrator, EPA, take measures to ensure
                              that a strong enforcement component is in place when the permanent
                              sludge program begins. Among the key elements that should be included
                              are (1) criteria for significant noncompliance so that enforcement priori-
                              ties can be determined, (2) criteria for timely and appropriate enforce-
                              ment so that the type and timing of enforcement is known to both
                              regulators and IWWS, and (3) effective oversight of EPA regional and
                              state enforcement efforts by headquarters.

                              Given the problems posed by funding constraints for the sludge program
                              and the prospect that EPA'S alternative financing efforts could help alle-
                              viate these types of problems, we recommend that the Administrator,
                              EPA, direct the Agency’s sludge program officials to supplement these
                              broader agency efforts by assisting POTWS and state sludge officials in
                              seeking alternative ways to fund state sludge programs.




                              Page 38                 GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
Chapter 4

EPA’s Continuing Difficulties in Developing
T@mical Regulations

                         The technical regulations, which contain the actual pollutant limits with
                         which municipal sludge generators must comply, are a central element
                         of the national sludge program. As noted in earlier chapters, EPA has
                         experienced long delays in coming up with these regulations. This chap-
                         ter discusses EPA’S efforts to develop the technical regulations, including
                         (1) the Agency’s use of a “risk-based” approach in developing proposed
                         pollutant limits for alternative use and disposal options and (2) the
                         strong reaction the proposal has encountered from PEWS and scientists
                         over the stringency of these limits and the methodology used to derive
                         them.

                         It is important to point out that, as emphasized by EPA, its February
                         1989 proposal is subject to change. However, as discussed in this chap-
                         ter, the significant problems confronting the proposal indicate that as
                         the 1991 deadline for final technical regulations approaches, EPA contin-
                         ues to have difficulties in arriving at limits that balance the goal of pro-
                         tecting health and the environment with its policy of promoting
                         beneficial uses of sludge.


                         As noted in chapter 1, the Water Quality Act of 1987 required EPA to
Balancing the Risks of   develop numerical limits for sludge pollutants to protect health and the
Contaminated Sludge      environment. The act did not explicitly require that these limits be set in
With the Goal of         such a way as to encourage beneficial uses of sludge. However, reflect-
                         ing congressional awareness of the potential benefits of reusing sewage
Promoting Beneficial     sludge, it also authorized the Agency to conduct and initiate scientific
Uses                     studies, demonstrations and public information projects aimed at pro-
                         moting beneficial uses of sewage sludge.

                         The difficulty in balancing these two objectives arises from concerns
                         that under the tightened standards that could be required to implement
                         the statutory requirement to “protect health and the environment,” pol-
                         lutant limits for beneficial use options could be particularly stringent. At
                         some point, however, the stringency of the limits could preclude benefi-
                         cial uses-even though promoting such uses is also an important envi-
                         ronmental goal

                         Along with congressional expressions of support for beneficial uses, EPA
                         has long supported beneficial uses as a matter of agency policy. In the
                         preamble to the February 1989 proposal, it cited its “policy of strongly
                         supporting the beneficial reuse of sewage sludge” and identified a




                         Page 39              GAO/RCED-90-67   Emerging   Municipal   Sludge Management   Problems
                                                                                                                    I
   I




                    Chapter 4
                    E P A ’s Continuing DIfflculties   in Developing
                    Technical Regulations




                    number of benefits from beneficial uses such as improved soil produc-
                    tivity, reduced health effects and other problems caused by incineration,
                    and decreased dependence on chemical fertilizers.


El$‘s Risk -Based   EPA'S regulatory  approach in developing the sludge regulations was
Approach            based on the act’s requirement to “protect public health and the envi-
                    ronment from any reasonably anticipated adverse effects” of pollutants
                    in sludge. EPA reasoned that this requirement called for a different regu-
                    latory approach from the ones used in other environmental programs. In
                    other Clean Water Act programs, for example, the Agency uses technol-
                    ogy-based pollutant standards that reflect the capabilities of pollutant
                    reduction equipment. In the case of the sludge program , EPA determ ined
                    that the use of a risk assessment model for developing pollutant lim its
                    and management practices for each sludge use and disposal option
                    would (1) protect individuals from events that are likely to occur and
                    (2) meet the statutory requirement to protect health and the environ-
                    ment from reasonably anticipated adverse effects of a pollutant.

                    EPA'S proposed sludge regulations were based on two risk assessment
                    approaches. One approach evaluated the effect of pollutants on the
                    “Most Exposed Individual” (MEI), plant, or animal. The second approach
                    evaluated the effect of pollutants in sludge on the population as a
                    whole. The Agency relied upon a 1982 survey of 48 POTWSfor data on
                    sludge contam inants. It then examined conditions that could (1) increase
                    the toxicity and potency of a pollutant in the environment, (2) speed the
                    movement of pollutants through the environment, and (3) intensify the
                    adverse effect that the pollutant may have on human health and the
                    environment. This was accomplished by a computer simulation of the
                    movement of pollutants into and through the environment to determ ine
                    the level of pollutants reaching an MEL Based on its understanding of
                    both (1) the effects of the pollutants on an MEI and (2) the level of pol-
                    lutants reaching an MEI for each sludge use and disposal practice, the
                    Agency then derived pollutant lim its for a variety of sludge use and dis-
                    posal options including land application, distribution and marketing,
                    incineration, and disposal in landfills.

                    In commenting on this process, the Director of EPA'S Office of Water Reg-
                    ulations and Standards emphasized in a September 1988 court brief that




                    Page 40                       GAO/RCED-90-57       Emerging   Municipal   Sludge Management   Problems
                            Chapter 4
                            EPA% Continuing Dtfflcultiee    in Developing
                            Technical Regulations




                            the development of regulations in this area has been difficult for EPA.'
                            She noted, for example, that the issues to be dealt with “require an
                            assessment of environmental effects and interactions across a number of
                            different media including air, soil, groundwater, surface water, and veg-
                            etation , . .” The brief also noted that “EPA fully expects that numerous
                            questions will be raised regarding the scientific information and mathe-
                            matical models relied on by EPA to develop the proposed numerical limi-
                            tations, as well as EPA'S assumptions about the behavior of pollutants
                            and their movement through the environment. . . .” As discussed in the
                            remainder of this chapter, this expectation has proven to be correct.


                            Reaction to EPA'S methodology and the standards they produced has gen-
Re&ction to Proposal        erally been critical, with most commenters indicating that reliance on
H& Been Critical            the MEI concept, combined with consistently conservative assumptions,
                            led to overly stringent pollutant limits. An exception to this reaction was
                            the joint comments submitted by the Natural Resources Defense Council
                            and the Environmental Defense Fund, which maintained that in many
                            cases, the ME1 should be afforded more protection and that more strin-
                            gent pollutant levels may be appropriate to achieve that protection.
                            NHDC and EDF also maintain that additional pollutants and disposal/use
                            options need to be regulated.

                            As discussed in the following section, however, the majority of com-
                            menters, including treatment plant officials, state officials, and scien-
                            tists of a peer review group created at EPA'S request, have consistently
                            questioned the scientific basis for the pollutant limits proposed, and
                            asserted that the limits are overly stringent and that they will discour-
                            age beneficial uses of sludge.


PoTWs Expressed Concern     POI’WS have generally maintained that the proposed technical standards

Over Proposal’s Effect on   would discourage the development of beneficial uses of sludge and
                            would do so on the basis of insufficient data on the effect of its
Beneficial Uses of Sludge   pollutants.

                            Officials from the Association of Metropolitan Sewerage Agencies (AMSA)
                            told us that a basic problem with the 1989 proposal was the quality of


                            ‘The brief was part of EPA’s response to a lawsuit by the Natural Resources Defense Council, which
                            asked the IJS. District Court for the Eastern District of Pennsylvania to direct EPA to propose and
                            promulgate technical regulations according to a specified schedule.



                            Page 41                    GAO/RCED90-57        Emerging   Municipal   Sludge Management   Problems
                          Chapter 4
                          EPA’s Continuing Difficulties   in Developing
                          Technical Regulations




                          key assumptions, such as (1) the consistent reliance on worst-case scena-
                          rios and (2) various assumptions concerning the environmental and
                          health effects of sludge use and disposal. In addition, they contended
                          that a number of studies show that beneficial uses have minimal effect
                          on health and the environment, but that such findings were not suffi-
                          ciently reflected in EPA'S proposed standards.

                          In addition to questioning the basis for the limits in the proposed regula-
                          tions, AMSA has also maintained that the limits would significantly dis-
                          courage the beneficial uses of sludge. AMSA first commented on this issue
                          in a 1987 draft regulatory package developed by EPA. At that time, the
                          association stated that it believed the pollutant limits in the draft would,
                          if implemented, virtually ehminate the land application option for many
                          POTWS.

                          During our subsequent interviews with AMSA officials, they indicated
                          that their opinion had not changed after reviewing the 1989 proposal,
                          and pointed to the results of a recent survey of AMSA members con-
                          ducted on behalf of the association as further evidence supporting this
                          view. The survey found that of the 25 responding P(JTWS that currently
                          use some form of beneficial reuse, only one could continue to utilize its
                          beneficial use program if the technical regulations were implemented as
                          proposed.2 Citing the effects o? the pollutant limits on beneficial uses,
                          and the data problems encountered in deriving them, AMSA concludes
                          that EI'A should not restrict the recycling of sludge on the basis of insuf-
                          ficient information on the effect of the pollutants in sludge.


Scientific Review Group   Some of the sharpest criticisms of the EPA proposal came from a scien-
                          tific peer review group, which arrived at similar conclusions as those
Also Concerned About      discussed previously regarding the methodology used to derive the pol-
Proposal’
-    ^. . s_--Impact on   lutant limits and the effect of those limits on beneficial uses. The peer
Beneficial Uses           review group was created at the request of the Director of EPA’S Criteria
                          and Standards Division, and included EPA experts, environmental
                          groups, members of academia, and local government.

                          The group’s July 24, 1989, report said that while it commends EPA’S
                          efforts to evaluate pollutants’ effects through a multi-media risk assess-
                          ment approach, the proposed rule and the methodology behind it are

                          “These results are consistent with the views expressed to us by state sludge coordinators. As noted in
                          chapter 2, 16 of 17 coordinators interviewed said that the technical regulations, as proposed, would
                          have a detrimental effect on the beneficial uses of sludge in their state.



                          Page 42                     GAO/RCED-90-57      Emerging   Municipal   Sludge Management    Problems
L


              Chapter 4
              E P A ’s Continuing Difficulties   in Developing
              Technical Regulations




              deficient in num erous waysS3Among its major criticisms, it cited the
              combined use of “worst case scenarios” and consistently conservative
              assumptions that result in a series of unduly stringent pollutant lim its.
              Specifically, in commenting on the approach behind these scenarios, the
              group said,

              “It is certainly easier to develop a scenario so bizarre that no person will ever have
              that much exposure and then to protect that nonexistent person and thereby all
              existing persons. But . , , that approach leads to results that can not only be unreal-
              istic, but where the degree of unreality cannot even be estimated. The regulation of
              sludge disposal options based on multi-media risk assessments should not be driven
              by these bizarre scenarios,”

              The peer review group took particular exception to how EPA used the
              concept of a Most Exposed Individual, which it cited as the “driving
              force of criteria setting.” In defining the MEI as an extreme event, it said
              that the exposures to pollutants implied by the MEIS are “grossly exag-
              gerated.” It argued that reliance on this type of analysis is not consis-
              tent with the Agency’s intent-or      the act’s requirement-to  protect the
              public health and the environment from reasonably anticipated adverse
              effects associated with potential sewage sludge exposure.

              In addition to its numerous other findings and recommendations, the
              report stated that EPA should revise the proposed rule to conform to its
              stated policy to encourage the beneficial use of municipal sewage sludge.
              W ith the public comment period having closed in August 1989, EPA has
              indicated that it plans to review these and other comments before revis-
              ing its proposal, and that it will place particular emphasis on those com-
              ments relating to the beneficial uses of sludge.


              The promulgation of technical sludge regulations has been a longstand-
Conclusions   ing problem for EPA, with serious implications for the development of a
              national sludge management program . While the Agency’s February
              1989 proposal attempts to balance the goal of protecting health and the
              environment with that of promoting beneficial uses, most commenters
              have agreed that (1) it would discourage beneficial uses with little evi-
              dence of additional protection to health and the environment and (2) its
              pollutant lim its are based on an unsound methodology.



              ‘$1J.S.Dopartmmt, of Agriculture, Cooperative State Research Service, PEER REVIEW:Standards for
              the Disposal of Scwsgr Sludge (Riverside, California: *July 1989).



              Page 43                       GAO/RCED-90-57       Emerging   Municipal   Sludge Management   Problems


                                                                                                                ,..
                  Chapter 4
  ,               EPA’s Continuing Dif’ficnltfes   in Developing
                  Technical Regulations




                  EPA indicated that the basis for its approach was the Water Quality Act’s
                  requirement to “protect health and the environment from reasonably
                  anticipated adverse effects” of pollutants in sludge. To implement this
                  requirement, the Agency chose to rely heavily on the concept of a Most
                  Exposed Individual. With the notable exception of NRDC and EDF, com-
                  menters have generally stated that reliance on the MEI concept, com-
                  bined with consistently conservative assumptions, ultimately led to
                  overly stringent pollutant limits. The scientific peer review group
                  charged with reviewing the proposal has also questioned whether the
                  uniform reliance by EPA on conservative assumptions and worst-case
                  scenarios has gone beyond the “reasonably anticipated adverse effects”
                  referred to by the statute.

                  While EPA said that it will (1) thoroughly evaluate the comments on its
                  regulations by the scientific peer review group and other commenters
                  before publishing final regulations and (2) place particular emphasis on
                  those comments relating to the beneficial uses of sludge, the task will
                  likely be difficult. As noted previously, these regulations have expe-
                  rienced years of delay, and the EPA has acknowledged that the complex-
                  ity of the technical issues involved has made regulations development in
                  this area very difficult, Moreover, given the importance of EPA'S reliance
                  on key provisions of the Water Quality Act as a basis for the proposal’s
                  methodology and its resulting pollutant limits, its reevaluation can be
                  expected to involve sensitive legal issues as well as technical judge-
                  ments. Consequently, we believe the attention of upper-level EPA man-
                  agement could be useful in resolving these issues. Such upper-level
                  management attention may be particularly warranted in light of (1) the
                  Agency’s long history of problems in deriving technical limitations, (2)
                  the possibility for further delay in the future, and (3) the fact that con-
                  tinued problems with the technical regulations, as noted in chapter 2,
                  appear to be having detrimental effects on state participation in EPA
                  national sludge management efforts.


                  In light of the long history of delays in issuing technical sludge regula-
Recommendations   tions, the prospect of continuing difficulties, and the significance of
                  timely development of these regulations to the emerging national sludge
                  management program, we recommend that the Administrator, EPA,
                  closely track the Agency’s progress in its efforts to promulgate them.
                  Specifically, the Administrator should ensure that further delays are
                  minimized as EPA incorporates the views of interested parties on the
                  draft technical regulations the Agency proposed in February 1989.



                  Page 44                     GAO/RCED-90-57       Emerging   Municipal   Sludge Management   Problems
Y




    Page 46   G A O / R C E D - 9 0 - 6 7 E m e r g i n g Municipal S l u d g e M a n a g e m e n t P r o b l e m s
 Apdendix I

 wajor Contributors to This Report


                        Peter F. Guerrero, Associate Director, (202) 262-0600
Rekources,              Robert S. Procaccini, Assistant Director
Cdmmunity , and         Steven L. Elstein, Assignment Manager
E&nomic
Dqvelopment Division,
W$shington, DC.

                        James B. Musial, Regional Management Representative
Chicago Regional        David C. Hoffman, Evaluator-in-Charge
Office                  Melvin Rodriguez, Evaluator




(089442)                Page 46            GAO/RCED-90-57   Emerging   Municipal   Sludge Management   Problems
-I   ____-- 11”11
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