_---- --- .___ --._--.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 Page 25 GAO/RCED-90-57 Emerging Municipal Sludge Management Problems Chapter 3 Obstacles EPA and States May Face in Implementing the Permanent Sludge Program 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. Page 26 GAO/RCED-90-67 Emerging Municipal Sludge Management Problems *------- 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). Page 27 GAO/RCED-90-67 Emerging Municipal Sludge Management Problems Chapter 3 Obstacles EPA and States May Face in Implementing the Permanent Sludge Program 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 Page 28 GAO/RCED-90-67 Emerging Municipal Sludge Management Problems 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 Page 29 GAO/RCEDSO-67 Emerging Municipal Sludge Management Problems Chapter 3 Obstacles EPA and States May Face in Implementing the Permanent Sludge Program 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. Page 30 GAO/RCED-SO-67 Emerging Municipal Sludge Management Problems Chapter 3 Obstacles EPA and States May Face in Implementing the Permanent Sludge Program 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 Page 3 1 GAO/RCED-90-57 Emerging Municipal Sludge Management Problems 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 Page 33 GAO/RCED-90-57 Emerging Municipal Sludge Management Problems Chapter 3 Obrtacles EPA and States May Face in Implementing the Permanent Sludge Program 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. Page34 GAO/RCED-90-67 Emerging Municipal Sludge Management Problems Chapter 3 Obstacles EPA and States May Face in Implementing the Permanent Sludge Program 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. Page 35 GAO/RCED-90-67 Emerging Municipal Sludge Management Problems Chapter 3 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. Page 36 GAO/RCED-90-57 Emerging Municipal Sludge Management Problems 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 -.-..- l-.------.- ._._ -______~- ----__.. -._- -.-.- ..-.--........--.-. - I7irritA~tl St.irtt% I(;c~ttf~ritl Awottttt.ittg Offiw Wstshi tlgt.011, I).( :. 205,413 O:l’f’ic*ial Htisirtws Pt~tt;llt,y for Private I_Jse $300
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)