City of Ames, Iowa

Plain-English summary

The City of Ames appealed the denial of an evidentiary hearing concerning renewal of its NPDES permit for a wastewater treatment plant. It sought a delayed compliance schedule for ammonia nitrogen and carbonaceous biochemical oxygen demand limits, arguing that it could not meet the new limits immediately without reducing the plant's operating capacity. The Region argued that the City was already fundamentally in compliance and that a schedule would conflict with the federal requirement to comply as soon as possible. The Board held that it could not decide as a matter of law that the City was not entitled to a compliance schedule, and remanded the issue to the Regional Administrator to reconsider the City's entitlement to a schedule for either or both limits. The order does not state a civil penalty.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 122.47, 124.74, and 124.75
• Outcome: The compliance-schedule issue was remanded for further proceedings.
• Key point: A factual dispute about whether a wastewater treatment plant can meet new effluent limits immediately may be material to the permit terms and require an evidentiary hearing.

Full text (EPA EAB public release)

498 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

IN RE CITY OF AMES, IOWA

NPDES Appeal No. 94-6
REMAND ORDER

Decided June 4, 1996

Syllabus

On April 4, 1996, the Environmental Appeals Board issued a decision concerning this
appeal by the City of Ames, Iowa (“the City”). The City was appealing the denial by U.S. EPA
Region VII of its evidentiary hearing request made in conjunction with a renewal of the City’s
NPDES permit for its waste water treatment plant. In that decision, the Board granted review of
two issues relating to the City’s request for a delayed compliance date for effluent limitations for
two parameters, ammonia nitrogen and carbonaceous biochemical oxygen demand (5-day). In
particular, the issues concerned Iowa’s so-called “moratorium” provision, which has the effect
of delaying the effective date for effluent limitations more stringent than those in a POTW’s orig-
inal NPDES permit by up to 12 years. The Board sought briefing on whether this provision could
provide a legal basis for the Region to include a compliance schedule in a permit if the pre-
conditions for such a schedule under Federal regulations are met. In its brief in response to the
Board’s April 4, 1996 decision, the Region cites (for the first time) other provisions of Iowa law,
approved by EPA, that specifically authorize compliance schedules. The Region argues, howev-
er, that the City “already is fundamentally in compliance” with the new limits and therefore can-
not be granted a compliance schedule under Federal regulation 40 C.F.R. § 122.47(a)(1), which
requires compliance “as soon as possible.” The City disputes that it can presently maintain com-
pliance with the new, more stringent limits, particularly as the POTW’s operating level increas-
es toward design capacity.

Held: The Board cannot conclude as a matter of law that the City is not entitled to a com-
pliance schedule. The matter is remanded to the Regional Administrator to reconsider, in light
of this decision and the prior April 4, 1996 decision, whether the City is entitled to a compliance
schedule as to either or both effluent limitations. If the City is not satisfied with the results of
the reopened proceedings, it may submit a new evidentiary hearing request raising the issue.

Before Environmental Appeals Judges Ronald L. McCallum
and Edward E. Reich.

Opinion of the Board by Judge Reich:

I. BACKGROUND

On April 4, 1996, the Environmental Appeals Board issued an
Order Granting Review in Part and Remanding in Part in this matter.
As fully described in that decision, this case involves an appeal by the

VOLUME 6

CITY OF AMES, IOWA 499

City of Ames, Iowa (“the City”), of a permit issued to it by U.S. EPA
Region VII under the National Pollutant Discharge Elimination System
(“NPDES”) for the City of Ames waste water treatment plant (a pub-
licly owned treatment works or “POTW”). Among the issues on
appeal was the City’s contention that it was entitled to a compliance
schedule for ammonia nitrogen and carbonaceous biochemical oxy-
gen demand (5-day) (“CBOD5”), allowing it to meet the effluent lim-
itations for those parameters in 1998 rather than immediately upon
permit issuance.

In support of its appeal, the City cited a provision of the Iowa
Code, the so-called “moratorium” provision, which states:

A publicly owned treatment works whose discharge
meets the final effluent limitations which were con-
tained in its discharge permit on the date that con-
struction of the publicly owned treatment works was
approved by the department shall not be required to
meet more stringent effluent limitations for a period of
ten years from the date the construction was complet-
ed and accepted but not longer than twelve years
from the date that construction was approved by the
department.

Iowa Code § 455B.173(2). Since the effluent limitations for ammonia
nitrogen and CBOD5 in the permit at issue are more stringent than the
effluent limitations for those two pollutant parameters contained in the
City’s original NPDES permit issued in 1986, the City argued that under
Iowa Code § 455B.173(2), the State is precluded, until 1998, from requir-
ing the City to comply with those more stringent effluent limitations.
The City further contended that the Region would be similarly preclud-
ed, citing the decision of the EPA Administrator in In re Star-Kist Caribe,
Inc., 3 E.A.D. 172 (Adm’r 1990), modification denied, 4 E.A.D. 33 (EAB
1992), and the Tenth Amendment to the U.S. Constitution. See In re City
of Ames, Iowa, 6 E.A.D. 374, 379-385 (EAB 1996).

In its April 4, 1996 decision, the Board discussed the legal frame-
work under the Clean Water Act governing the establishment of com-
pliance schedules. The Board made clear that the Region can include
a schedule of compliance in the City’s permit only if the State’s water
quality program authorized the inclusion of such a provision. As the
Administrator stated in Star-Kist:

[T]he only instance in which the permit may lawfully
authorize a permittee to delay compliance after July 1,

VOLUME 6

500 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

1977, pursuant to a schedule of compliance, is when
the water quality standard itself (or the State’s imple-
menting regulations) can be fairly construed as autho-
rizing a schedule of compliance.

Star-Kist, 3 E.A.D. at 175.

The Board in its April 4, 1996 decision then went on to state that
“[a]ny schedule of compliance included in the permit must comply
with the requirements in the Clean Water Act or its implementing reg-
ulations defining and governing such provisions. To the extent Iowa’s
moratorium statute mandates a schedule of compliance that conflicts
with these requirements, the Region would not be required to give
effect to the moratorium statute.” City of Ames at 382 n.11. The Board
rejected the City’s argument that the Tenth Amendment compelled a
different result. Id.

Because the compliance schedule issue had been framed in terms
of the applicability and effect of the moratorium statute, the Board
then examined that statute within the framework articulated in Star-
Kist. The Board noted that:

The moratorium statute appears to contemplate more
relief than would be authorized under Federal law,
and thus may not be given full effect by EPA to the
extent that the relief it provides goes beyond that per-
missible under Federal law. However, it may nonethe-
less be a sufficient expression of State intent to autho-
rize whatever relief is permissible under Federal law.

City of Ames at 382. (footnote omitted). Therefore, the Board grant-
ed review of this issue and required the parties to brief it. In addi-
tion, since it appeared that the Region had never approved the mora-
torium statute, the parties were also required to brief the issue of
whether the Region is precluded from giving effect to the moratori-
um statute because the statute was apparently never approved by
EPA. Id. at 384.

On May 20, 1996, the Region submitted its brief on these two
issues. The essence of the Region’s brief was succinctly stated as
follows:

[T]he Board need not decide either issue. The Board
need not reach the first issue because Iowa law and
implementing regulations — wholly independent of

VOLUME 6

CITY OF AMES, IOWA 501

the ten-year moratorium statute — explicitly authorize
schedules of compliance to meet water quality stan-
dards. The Board need not reach the second issue
because the provisions of State law authorizing sched-
ules of compliance were approved by EPA.

Brief of Environmental Protection Agency in Response to Order of
April 4, 1996, at 2. In explaining why these regulations had not been
previously discussed in submissions to the Board, the Region stated
that it “did not address these other provisions of state law in its earli-
er brief because the City relied on the ten-year moratorium statute —
both in the State administrative proceedings and the proceedings
before Region VII — to completely excuse compliance with the water
quality standards in issue.” Id. at 2 n.3.

The existence of the provisions explicitly authorizing compli-
ance schedules under Iowa law,¹ which the Board had no reason to
suppose existed based on the parties’ earlier briefs, effectively moots
the issues as to which the Board granted review, i.e., whether the
moratorium statute is of a character that could lay the necessary
groundwork for authorizing a schedule of compliance and whether the
Region is precluded from giving effect to the moratorium statute
because it was apparently never approved by EPA. City of Ames at

382. However, this does not totally moot the appeal. The Board
     expressly reserved judgment on other issues in the City’s petition
     pending resolution of the outcome of the moratorium issue. See City
     of Ames at 391 n.26. One issue for which the denial of an eviden-
     tiary hearing is being appealed is whether the immediate imposition
     of the daily maximum limits creates a risk of fines and penalties.
     Petition at 5. In a similar vein, the City also raises in its appeal the
     issue of whether the immediate imposition of the daily maximum
     limits would force the City to operate at a level below design capac-
     ity, thus depriving it of the full benefit of its economic investment.

¹ Iowa Code § 455B.174(4)(a), which provides authority to the director of the Iowa
Department of Natural Resources to issue permits to POTWs, states that “[t]he permits shall con-
tain conditions and schedules of compliance as necessary to meet the requirements of this part
of this division, the federal Water Pollution Control Act and the federal Safe Drinking Water Act.”
More detailed provisions relating to schedules of compliance in NPDES permits are set forth at
Iowa Administrative Code § 567-64.7(4). These include a requirement that with respect to any
discharge not in compliance with an applicable effluent limitation, the permittee be required to
take “specific steps to achieve compliance,” such steps to be achieved in “the shortest, reason-
able period of time.” IAC § 567-64.7(4)(a). The predecessors of these provisions, with language
authorizing schedules of compliance identical to the current provisions, were part of the Iowa
NPDES program as approved by EPA on August 10, 1978. See Brief of Environmental Protection
Agency in Response to Order of April 4, 1996, at 4-5.

VOLUME 6

502 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Petition at 4.² These issues are not framed in terms of the moratorium
statute. However, because these issues related to the City’s request for
a compliance schedule, and the Board believed that the compliance
schedule issue was dependent upon the issues relating to the mora-
torium statute for which it had granted review, the Board reserved
decision on these issues. See City of Ames at 382, 391 n.26. While the
moratorium-related issues may now be moot, the issues relating to the
alleged need for a compliance schedule are not. Thus, the Board will
now address the issues relating to the City’s alleged entitlement to a
compliance schedule in light of the Iowa statute specifically relating
to compliance schedules and applicable Federal regulations.

II. DISCUSSION

The precise issue before the Board is not whether the City is enti-
tled to a compliance schedule but rather whether the Regional
Administrator properly denied the City’s request for an evidentiary
hearing on this issue. City of Ames at 375.³ More particularly, as pre-
viously discussed, the City requested an evidentiary hearing on the
factual issue of the City’s ability to comply with the newly imposed
effluent limits without a substantial reduction of the facility’s operat-
ing capacity. The Regional Administrator denied the request for an
evidentiary hearing as being immaterial. Under 40 C.F.R. § 124.75(a),
an evidentiary hearing request must set forth “material issues of fact
relevant to the issuance of the permit.” As the Board stated in In re
Mayaguez Regional Sewage Treatment Plant, 4 E.A.D. 772, 781 (EAB
1993) “[a] factual dispute is material where, under the governing law,
it might affect the outcome of the proceeding.”

² The factual issue of the City’s ability to comply immediately was raised in the City’s evi-
dentiary hearing request, in which the City stated:

Petitioner’s Publicly Owned treatment works is able to meet
the newly imposed effluent limits only by operating at a vol-
ume that is significantly less than the intended capacity for
which the EPA approved construction permit was issued.

This issue of fact is relevant to the pertinent decision as a
determinant of the practicability of meeting the more stringent
standards without a reasonable compliance schedule over
which to amortize the public investment in treatment capacity.

Request for Evidentiary Hearing at 2.

³ Under 40 C.F.R. § 124.74, any interested person may submit a request to the Regional
Administrator for an evidentiary hearing within 30 days following the service of notice of the
Regional Administrator’s final permit decision.

VOLUME 6

CITY OF AMES, IOWA 503

The Region argues on appeal that the City is not entitled to a
compliance schedule because any compliance schedule would con-
travene Federal regulations, specifically 40 C.F.R. § 122.47(a)(1), which
provides as follows:

Time for compliance. Any schedules of compliance
under this section shall require compliance as soon as
possible, but not later than the applicable statutory
deadline under the CWA.

The Region argues that “the City already is fundamentally in compli-
ance with the new and more stringent limits * * *.” Region’s Response
to Petition at 18. This demonstrates, in the Region’s view, that com-
pliance is already “possible” within the meaning of section
122.47(a)(1). The Region argues further that any compliance schedule
allowing additional time would not “require compliance as soon as
possible,” within the meaning of that section. Thus the Region would
have us conclude that as a matter of law the City is not entitled to a
compliance schedule and no hearing is required.

The City, disputing the Region’s assertion respecting the compli-
ance status of the facility, argues that there is “an immediate risk of
non-compliance” with the permit’s “one-day maximum” limits for
ammonia nitrogen and CBOD5, a risk that increases as the POTW’s
operating level increases towards design capacity. Even at reduced
capacity, the City “did experience two days of violation with the [pro-
posed] ‘maximum day’ ammonia limitation.” Petition at 5.⁴

In addressing these contentions in our previous decision, we stat-
ed as follows:

Based on the arguments presented on appeal, we
cannot conclude as a matter of law that the City is now
“fundamentally in compliance” with the permit’s efflu-
ent limitations for ammonia nitrogen and CBOD5 and
that no compliance schedule can be included in the
permit for one or both of those limitations. Rather,

⁴ In its previous decision, the Board remanded to the Region the issue of whether it would
be practicable to state the effluent limitations for ammonia nitrogen and CBOD5 as weekly and
monthly averages. If it would be practicable, then the Region would have to remove the daily
maximum limits from the permit. City of Ames at 19. Since the City’s arguments as to its inabil-
ity to comply immediately seem focused on its alleged inability to meet the daily maximum lim-
its, it may well be that the compliance schedule issue would become moot if on remand the
daily maximum limits were deleted from the permit.

VOLUME 6

504 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

whether the City is able to comply with those limita-
tions at this time is an issue of fact that should be
decided in the first instance at the Regional level.

City of Ames at 385.

Nothing the Region has said in response to our previous decision
changes our view of this matter. Under 40 C.F.R. §§ 124.74 and 124.75,
the City is entitled to an evidentiary hearing on any material factual
dispute. Since the issue of whether the City is entitled to a compli-
ance schedule directly affects the permit’s terms, factual issues hav-
ing to do with the City’s ability to comply immediately are clearly
material (i.e., could affect the outcome of the proceeding). Thus, we
are remanding this issue to the Regional Administrator. On remand,
the Regional Administrator is directed to reconsider the issue of
whether the City is entitled to a compliance schedule as to either or
both effluent limitations. If the City is not satisfied with the results of
the reopened proceedings, it may submit a new evidentiary hearing
request raising the issue.⁵

III. CONCLUSION

This matter is remanded to the Regional Administrator for further
proceedings consistent with this decision.

So ordered.

⁵ As previously noted, resolution of this issue may depend on how the Region addresses
the issue of the daily maximum limits, remanded in our April 4 decision. See supra n.4.

VOLUME 6