City of Fort Worth, Texas

Plain-English summary

The City of Arlington, Texas challenged the renewal of an NPDES permit for the Village Creek Wastewater Treatment Plant, which is owned and operated by the City of Fort Worth. Arlington sought a permit condition requiring Fort Worth to continue serving western Arlington after the cities' contract expired, and it also requested public and evidentiary hearings. The Environmental Appeals Board denied review because the requested condition would not affect the three-year permit period, Arlington had not shown an inconsistency with the applicable areawide wastewater treatment plan or grant requirements, and the hearing requests did not identify a material contested permit condition. The Board also found no clear error or abuse of discretion in the Region's denial of a public hearing.

Decision snapshot

• Cited authorities: Clean Water Act §§ 101, 208, and 301; 40 C.F.R. §§ 30.309, 35.840, 122.44, 122.64, 122.91, 124.12, and 124.74-.75.
• Outcome: Review was denied, and the Region's permit decision remained in place.
• Key point: A permit petitioner must show that a requested condition is legally required or materially related to the permit, and an evidentiary hearing is not warranted for an immaterial dispute.

Full text (EPA EAB public release)

392 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
IN RE CITY OF FORT WORTH
NPDES Appeal No. 95-8
ORDER DENYING REVIEW
Decided April 5, 1996
Syllabus

The City of Arlington, Texas (“Arlington”) has petitioned for review of the denial of its
request for an evidentiary hearing in connection with the renewal of an NPDES permit for the
Village Creek Wastewater Treatment Plant (*Village Creek WTP”), which is owned and operat-
ed by the City of Fort Worth, Texas (“Fort Worth"). This facility was built, in part, with grant
funds under the Clean Water Act (“CWA”) based upon representations that the facility would
serve 22 neighboring municipalities, including Arlington. The facility serves the western portion
of Arlington pursuant to a contract between Arlington and Fort Worth, which by its terms expires
on February 14, 2001. The applicable areawide wastewater treatment management plan pre-
pared pursuant to CWA § 208 indicates that the Village Creek WTP will serve Arlington until
approximately that date; it makes no representations beyond that date. The permit at issue is by
its terms effective from August 1, 1994 until July 31, 1997

Arlington makes five arguments for granting review. Three of Arlington's five arguments
pertain to the Region’s denial of Arlington's request to have the permit include a condition
requiring the Village Creek WTP to serve western Arlington's wastewater treatment needs after
the expiration of the contract between the two cities. First, Arlington contends that the Region
clearly erred because it failed to follow the law by issuing a permit that is not consistent with
an areawide wastewater treatment plan approved under CWA § 208. Second, citing the grant pro-
visions in the CWA and its implementing regulations, Arlington contends that it is entitled as a
matter of law to use the Village Creek WTP for the useful life of the facility, and that the permit
must reflect this. Third, Arlington asserts that it was entitled to an evidentiary hearing on the
facts underlying its legal entitlement to the requested permit condition.

Arlington also contends that the Region erred in denying its public hearing request on the
permit because the permit involves a significant degree of public interest in that it affects the
80,000 residents of western Arlington. Lastly, Arlington contends that the Region erroneously
denied Arlington's request for an evidentiary hearing on Fort Worth’s alleged violations of its
permit.

Held: The petition for review is denied. Including the requested “duty to serve” condition
in the permit would have no practical effect on Fort Worth’s obligation to provide wastewater
service to western Arlington, as Fort Worth is contractually obliged to provide this service dur-
ing the entire period covered by this three-year permit. Accordingly, the petition does not raise
any important policy issues requiring review. In addition, Arlington's legal claims are without
merit. While it is true that CWA § 208(e) and 40 C.F.R. § 122.44(d)(6) require that NPDES permits
be consistent with any applicable areawide wastewater treatment management plan, Arlington
has not demonstrated any inconsistency between the permit and the plan in this case. No incon-
sistency can arise from the permit's silence on the issue of whether Ft. Worth has a duty to serve
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CITY OF FORT WORTH 393
western Arlington beyond the year 2000. Further, contrary to Arlington's assertions, the plan
does not indicate that it is entitled to use the Village Creek WTP for the useful life of that facil-
ity. Moreover, even if Arlington has correctly construed the CWA grant provisions and their
implementing regulations as giving Arlington the right to use the facility for its useful life,
Arlington has failed to show that this right needs to be reflected in this NPDES permit. Under
40 C.F.R. § 122.44(n), an NPDES permit must reflect applicable grant conditions only if the grant
conditions are reasonably necessary for the achievement of effluent limitations. Arlington does
not argue that the effluent limitations in this permit will be affected in any way by the absence
of its requested “duty to serve” condition. Because there is no legal obligation to include a “duty
to serve” condition in this permit, any dispute over the factual basis for such a condition is not
material to the permit, and therefore does not require an evidentiary hearing.

Arlington also failed to show that the Region abused its discretion in deciding not to hold a
public (non-evidentiary) hearing on the permit. Nor has Arlington demonstrated clear error in the
Region's failure to hold an evidentiary hearing on Fort Worth's alleged violations of its permit. An
evidentiary hearing request must refer to contested permit conditions. Arlington's evidentiary hear-
ing request fails to identify any contested permit condition implicated by its allegations.

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

Opinion of the Board by Judge McCallum:

Pursuant to 40 C.F.R. § 124.91, the City of Arlington, Texas has
petitioned for review of the denial of its request for an evidentiary
hearing in connection with the renewal of an NPDES permit for the
Village Creek Wastewater Treatment Plant, which is owned and oper-
ated by the City of Fort Worth, ‘Texas. The main issues raised by this
petition involve the petitioner’s legal claims that the permit should
include a condition establishing a duty upon the City of Fort Worth,
as the permittee, to provide wastewater treatment to the petitioner for
the useful life of the permitted facility. Specifically, Arlington claims
that Fort Worth has a duty to serve Arlington’s wastewater treatment
needs because of Fort Worth’s acceptance of federal grants to build
the permitted facility, and because the applicable areawide waste-
water treatment management plan indicates that the permitted facility

serves Arlington. For the reasons set forth below, we conclude that
the Region did not clearly err in denying the petitioner's evidentiary
hearing request, and that review of the petitioner's legal claims is not
warranted. Accordingly, the petition for review is denied.
I. BACKGROUND
A. Statutory Background

The Clean Water Act (‘CWA” or “Act”) embodies a network of
policies and goals that further the national objective of restoring and
maintaining “the chemical, physical, and biological integrity of the
Nation’s waters.” CWA § 101(a), 33 U.S.C. § 1251(a). One goal of the

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394 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

CWA is to eliminate the discharge of pollutants into navigable waters.
CWA § 101(a)(1). To this end, the CWA makes it unlawful to discharge
pollutants into navigable waters except in compliance with the Act.
CWA § 301(a), 33 U.S.C. § 1311(a). The discharge of pollutants is in
compliance with the Act if, among other things, the discharger has
received a National Pollutant Discharge Elimination System (NPDES)
permit under CWA § 402, 33 U.S.C. § 1342. A discharger may receive
an NPDES permit if, inter alia, the discharge meets the requirements
of CWA § 301 setting forth limitations on effluents in discharges. More
specifically, a discharge from a publicly owned treatment works
(*POTW"), such as the facility involved here, must meet the technol-
ogy-based effluent limitations prescribed in CWA § 301(b)(1)(B).! If
compliance with the technology-based effluent limitations is insuffi-
cient to achieve or maintain the desired water quality, a discharge
from a POTW must also meet additional, more stringent, water quali-
ty-based effluent limitations under CWA § 301(b)(1)(C). The CWA con-
tains specific deadlines for achieving compliance with these effluent
limitations. The purpose of an NPDES permit is to apply these statu-
tory standards; each permit establishes specific and enforceable limi-
tations on the amount of pollutants that can be contained in each dis-
charge within its scope. NPDES permits may be issued for terms not
to exceed five years, CWA § 402(b)(1)(B), and may be renewed.

To achieve its water quality goals, the CWA incorporates two poli-
cies relevant here. First is the policy “that areawide waste treatment
management planning processes be developed and implemented to
assure adequate control of sources of pollutants in each State.” CWA
§ 101(a(5). Consequently, CWA § 208, 33 U.S.C. § 1288, requires State
and local officials “to develop plans for areawide waste treatment man-
agement in areas with critical water pollution control problems.” S.
Rep. No. 2770, 92d Cong., Ist Sess. at 9 (1971). These plans are sub-
ject to approval by the EPA. CWA § 208(b)(3). To be approved, a plan
must identify “treatment works necessary to meet the anticipated
municipal and industrial waste treatment needs of an area over a twen-
ty-year period.” CWA § 208(b)(2)(A). Pursuant to CWA § 208(e), “[nlo

' The technology-based effluent limitations for POTWs are known as “secondary treatment”
or “equivalent to secondary treatment” and are prescribed by 40 C.F.R. Part 133, In general, sec-
ondary treatment refers to the introduction of microorganisms to the wastewater in order to oxi-
dize the organic matter present in the wastewater. See Office of Water Enforcement and Permits,
Training Manual for NPDES Permit Writers at 49 (May 1987) (“Training Manual").

? Another goal of the CWA is to achieve and maintain “water quality which provides for
the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and
on the water.” CWA § 101(a)(5), 33 U.S.C. § 12510aX5).

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CITY OF FORT WORTH 395
permit under section 1342 of this title [NPDES permit] shall be issued
*** which is in conflict with a plan approved pursuant to * * * this sec-
tion.” Likewise, the regulations implementing the NPDES permit pro-
gram provide that each NPDES permit shall “[e]nsure consistency with
the requirements of a Water Quality Management plan approved by
EPA under section 208(b) of CWA.” 40 C.F.R. § 122.44(d)(6).

The second policy relevant here is “that Federal financial assis-
tance be provided to construct publicly owned waste treatment
works.” CWA § 101(a)(4). The purpose of this grant program is “to
assist the development and implementation of waste treatment man-
agement plans and practices which will achieve the goals of this chap-
ter.” CWA § 201(a), 33 U.S.C. § 1281. In particular, the grant program
is intended to help POTWs meet the CWA’s deadlines for achieving
applicable effluent limitations. Training Manual at 54. CWA § 204
details the determinations that the Agency must make before award-
ing a grant. For example, in order to approve a grant for a POTW in
an area covered by the areawide waste treatment management plan-
ning requirement, the Agency must determine that the proposed treat-
ment works is included in that plan. CWA § 204(a)(D, 33 U.S.C.
§ 1284(a)(1). Moreover, any grant under CWA § 201 may not conflict
with any applicable plan approved under CWA § 208. CWA § 208(d).
Conditions in a grant made under CWA § 201 shall be reflected in the
recipient's NPDES permit only if the condition is “reasonably neces-
sary for the achievement of effluent limitations under section 301 of
CWA.” 40 C.F.R. § 122.44(n). Regulations in 40 C.F.R. Part 35, Subpart
EF, govern the administration of the grant program.

B. Factual Background

The Village Creek Wastewater Treatment Plant (‘Village Creek
WTP”), which discharges into the Trinity River, is located in and
owned and operated by the City of Fort Worth, Texas (“Fort Worth”).
It serves 22 other municipalities, including the City of Arlington, Texas
(“Arlington”), pursuant to service contracts between Fort Worth and
those municipalities. Fort Worth has received large amounts of feder-
al grant funds to expand and improve the Village Creek WTP based
upon the fact that the facility serves these other municipalities in its
region in accordance with a regional wastewater management plan
approved under CWA § 208. The contract between Fort Worth and
Arlington was executed in 1966, and by its own terms will expire on
February 14, 2001. Under this contract Fort Worth agrees to provide,
for a fee, wastewater treatment services for the western portion of
Arlington. (The remaining portions of the City of Arlington receive
wastewater treatment services from the Trinity River Authority of

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396 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Texas.) The 1995 regional wastewater management plan for the Upper
Trinity River Basin prepared by the North Texas Council of
Governments pursuant to CWA § 208 reflects Fort Worth’s contractual
relationships with Arlington and the other municipalities served by the
Village Creek WTP} This plan indicates that through the year 2000,
Arlington’s wastewater treatment needs will be met by the Village
Creek WTP, 1995 Annual Water Quality Management Plan for North
Central Texas (“1995 Plan”) at 1-35 to 1-40.

In the mid-1980s, Fort Worth began negotiating renewed con-
tracts with the 22 municipalities. Before long, contract renewal nego-
tiations between Fort Worth and Arlington broke down, primarily over
disputes as to the rates for continued service. On December 12, 1988,
Fort Worth informed Arlington that the Village Creek WTP would no
longer serve western Arlington after the expiration of the contract in
2001.

Instead of pursuing further contract negotiations with Fort Worth
for wastewater treatment service after 2001, Arlington filed suit in a
State court seeking a declaration that as long as the Village Creek WTP
is operating, Fort Worth has a duty under the CWA to provide waste-
water treatment services to Arlington. According to the trial court,
Arlington's claim “hinged on [these] operative facts: that Fort Worth is
a regional management agency and that it got that designation and
federal money by representing to the federal and state authorities that
it served a portion of Arlington.” Response to Petition for Review, Ex.
17D at 4-5. The court, however, rejected Arlington’s claim that Fort
Worth is required to provide wastewater treatment services to western
Arlington after the expiration of the contract in 2001. This decision
was upheld on appeal, where the appellate court stated:

Under Texas case law, a ruling, premised upon any the-

ory, that Fort Worth has a duty to provide wastewater

treatment service to Arlington indefinitely after February

14, 2001, would violate the police powers doctrine. This

being the case, any decision other than the one made

by the trial court would have been erroneous.
City of Arlington v. City of Fort Worth, 844 $.W.2d 875, 877 (Tex. App.
— Fort Worth 1992) (emphasis added). The appellate court held that

• This plan was the only one provided to this Board in connection with this appeal. It was

submitted by the City of Fort Worth with its response to the petition for review. See n. 8 infra.
It is not clear from the plan itself whether the Agency has approved it. Nevertheless, as we have
received no objections to our consideration of this document, we will rely upon it here.
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CITY OF FORT WORTH 397
because the police powers doctrine prohibits Fort Worth from making
an agreement to provide wastewater treatment to western Arlington
for the useful life of the Village Creek WTP," Arlington cannot rely on
any other theory, even one based upon the CWA, “to establish a duty
for Fort Worth that Fort Worth is powerless to undertake on its own.”
844 S.W.2d at 878-79.

The State courts have not been the only forum through which
Arlington has sought to obtain a legal decision that Fort Worth must
provide wastewater treatment services to western Arlington after the
expiration of the contract. In 1986, in connection with Fort Worth’s
application for a renewal of its State wastewater discharge permit,
Arlington requested a public hearing on the issue of whether Fort
Worth had an obligation to provide service to Arlington based upon
Fort Worth’s receipt of federal grant money and the status of the
Village Creek WTP as a regional facility described in the applicable
CWA § 208 regional wastewater management plan. The Texas Water
Commission rejected Arlington’s request for a public hearing on the
ground that the issue was not germane to the permit proceeding.
Later, in 1993, when Fort Worth was seeking another renewal of its
State discharge permit, Arlington again requested a public hearing to
show that the State “should order the City of Fort Worth to continue
to provide waste water treatment service to Arlington beyond the year
2001 as part of the [State’s] renewal of the permit.” Response to
Petition for Review, Ex. 17] at 2. To support its request, Arlington
again argued that both the applicable CWA § 208 regional wastewater
management plan and the federal grant money given to Fort Worth for

‘ The Texas appellate court explained the police powers doctrine as follows:

A municipality’s operation of a sewer system in Texas is the
exercise of a governmental function. * * * When discharging
a governmental function, a municipality, as an agent of the
state, is exercising the state’s police power, which is a grant
of authority from the people to the government for the pro-
tection of the public health, safety, and welfare. * * * As such,
the police power cannot be abdicated, or bargained away.
An agreement to provide sewer service for an indefinite peri-
od of time bargains away a city’s governmental responsibili-
ties and abdicates its police power. Such an agreement strips
the city of its power to determine whether, on a particular
date, it is in the best interests of all its customers and the pub-
lic in general to extend water and sewer service to a particu-
lar person or entity.
844 S.W.2d at 878.
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398 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

the Village Creek WTP require Fort Worth to treat Arlington’s waste-
water after the contract expires in 2001. Again, the Texas Natural
Resource Conservation Commission (the successor to the Texas Water
Commission) rejected this request on the same basis.

Having failed in these fora, Arlington is now attempting to use
these NPDES permit proceedings to secure an obligation on the part
of Fort Worth to provide wastewater treatment to western Arlington
after the expiration of the current contract between the two parties.
These permit proceedings began in May 1993 when Fort Worth
applied for renewal of the NPDES permit for the Village Creek WTP.
Even before a draft permit was made publicly available for comment,
Arlington filed its comments on the proposed permit action. The
thrust of Arlington's comments was that any permit issued for the
Village Creek WTP should contain a condition requiring continuing
service to western Arlington for the useful life of the Village Creek
WTP. According to Arlington, the failure to include such a “duty to
serve” condition in the permit would violate the law in two respects.
First, it would violate CWA § 208(e), which provides that no NPDES
permit “shall be issued for any point source which is in conflict with
a plan approved” pursuant to that section. Secondly, Arlington com-
mented that the failure to include such a condition in the permit
would violate provisions of the CWA and its implementing regulations
pertaining to grants for wastewater treatment plants. According to
Arlington, these statutory and regulatory provisions provide that
Arlington is entitled “by law to use the [Village Creek WTP] for its
entire useful life.” Response to Petition for Review, Ex. 8 at 8.

In February 1994, a draft permit for the Village Creek WTP was
made available for public comment. Arlington requested a public
hearing on the draft permit, repeating (almost verbatim) its prior com-
ments and asserting that there is a significant public interest justifying
a public hearing on the permit under 40 C.F.R. § 124.12(a)(1) because
the permit action affects the “approximately eighty thousand citizens
of western Arlington who depend upon the Village Creek facility for
their wastewater treatment services.” Response to Petition for Review,
Ex. 13 at 11,

The Region issued the final permit decision on June 25, 1994. At
that same time, the Region responded to Arlington's comments and
denied Arlington’s public hearing request. The Region rejected
Arlington’s legal claims that the CWA requires a “duty to serve” con-
dition in this permit. The Region stated that “Arlington would use the
permit condition it now seeks to obtain favorable terms in a renego-
tiated agreement or to force Fort Worth to treat its wastewater with-
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CITY OF FORT WORTH 399
out any service agreement whatsoever. These NPDES permit pro-
ceedings * * * provide no forum for resolution of the dispute between
Arlington and Fort Worth.” Response to Petition for Review, Ex. 14B
at 3. Consequently, the Region concluded that a public hearing on the
permit was not necessary “[blecause the dispute between Arlington
and Fort Worth is irrelevant to any condition EPA might impose in Fort
Worth’s NPDES permit.” Id. By its own terms, the permit is effective
from August 1, 1994 until July 31, 1997. In addition, the permit makes
no mention of any of the municipal users of the Village Creek WTP,
including Arlington.

On July 25, 1994, Arlington filed a request for an evidentiary hear-
ing. This request again repeated Arlington’s arguments that as a mat-
ter of law the permit must contain a condition requiring Fort Worth to
provide wastewater treatment to Arlington after the expiration of the
contract. Arlington also asserted that an evidentiary hearing is
required because there is a significant degree of public interest in the
.permit. Before the Region responded to Arlington’s request, Arlington
filed a “Supplement to Request for Evidentiary Hearing” on April 12,
1995. This supplemental filing requested an evidentiary hearing on
“Fort Worth’s continuing use of the old sludge drying beds” allegedly
in violation of Fort Worth’s current NPDES permit. According to
Arlington, this practice by Fort Worth has resulted in contamination of
Arlington’s groundwater.*

On June 30, 1995, the Region denied Arlington’s request, as sup-
plemented, for an evidentiary hearing. The Region first pointed out
that the standard for granting an evidentiary hearing request is not
whether there is significant public interest in the permit, but whether
the request sets forth a material issue of fact relevant to the permit
decision under 40 C.F.R. §§ 124.74 and 124.75. Under this standard, the
Region denied the request on the ground that Arlington did not
demonstrate that there were any disputed factual issues material to a
determination of any permit term or condition. Instead, the contention
that the permit should contain a condition imposing upon Fort Worth
a duty to serve Arlington’s wastewater treatment needs for the useful
life of the facility raised only legal issues that the Region concluded
lacked merit. Further, the Region concluded that the issues raised by
Arlington concerning Fort Worth’s alleged violations of its current per-

5 Arlington also requested an evidentiary hearing on whether the method used by Fort
Worth to charge users of the Village Creek WTP complies with 40 C.F.R. § 35.929, which estab-
lishes requirements for a grant recipient's system of calculating fees. This issue, however, has
not been pursued in Arlington's petition for review.

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400 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

mit were not raised during the public comment period and thus were
not preserved for review under 40 C.F.R. § 124.76.°

C. Petition for Review

On August 7, 1995, Arlington petitioned the Environmental
Appeals Board for review of the Region’s denial of its evidentiary
hearing request under 40 C.F.R. § 124.91, which provides that a peti-
tion for review must demonstrate that the denial of an evidentiary
hearing request was clearly erroneous, or involves an exercise of dis-
cretion or policy that is important and deserves review. Arlington
makes five arguments for granting review.

Three of the arguments specifically concern the requested “duty
to serve” permit condition. First, Arlington claims that the Region
clearly erred because it failed to follow the law by issuing a permit
that is not consistent with an approved CWA § 208 plan. According to
Arlington, the requirement that a permit must be consistent with an
approved plan cannot be met in this case without “an explicit condi-
tion in the permit that the plant will continue to provide service to
western Arlington as required by the approved section 208 Plan.”
Petition for Review at 9. Second, citing CWA §§ 201 and 204, and reg-
ulations implementing the construction grant program for POTWs,
Arlington contends that it is entitled as a matter of law to use the
Village Creek WTP for the useful life of that plant. In Arlington's view,
the permit’s failure to include a “duty to serve” condition contradicts
Arlington’s rights as a “beneficiary” of the grants to Fort Worth.’ Third,
Arlington asserts that the Region clearly erred in denying its eviden-
tiary hearing request which set forth material issues of fact.
Specifically, Arlington states that “an evidentiary hearing was required
for the Regional Administrator to determine the facts necessary to take
the ‘appropriate action’ to implement the Section 208 Plan and to sat-
isfy the duty to require Fort Worth to meet the obligations it under-
took in seeking and obtaining federal construction grants.” Petition for
Review at 22. In other words, Arlington asserts that an evidentiary
hearing was required to determine the facts justifying a “duty to serve”

• This regulation provides in pertinent part that “[nlo issues shall be raised by any party that
  were not submitted to the administrative record required by § 124.18 as part of the preparation
  of and comment on a draft permit unless good cause is shown for the failure to submit them.”

“In connection with this argument, Arlington asserts that the Region has never responded
to Arlington's Freedom of Information Act (5 U.S.C. § 552) request for documents pertaining to
the award of grants to Fort Worth for the Village Creek WTP. This request was renewed in
Arlington's evidentiary hearing request. The authority for resolving this dispute, however, rests
with the Agency's General Counsel, see 40 C.F.R. § 2.115, and not with this Board.

VOLUME 6
CITY OF FORT WORTH 401
condition in the permit. Arlington contends that the Region interpret-
ed too narrowly the standard for granting an evidentiary hearing
request, and suggests that evidentiary hearings are appropriate to air
concerns that were not adequately addressed during the public com-
ment period on the draft permit.

Arlington’s fourth and fifth arguments concern its public hearing
and supplemental evidentiary hearing requests, respectively. Arlington
argues that the Region clearly erred by denying each such request. In
the case of the public hearing request, Arlington argues that the per-
mit involves a significant degree of public interest because it involves
wastewater treatment for 80,000 residents of western Arlington, and
therefore it was error for the Region to deny the request. In the case
of the supplemental evidentiary hearing request, which seeks to
address Arlington’s contention that Fort Worth’s use of sludge drying
beds resulted in contamination of Arlington’s groundwater in violation
of its NPDES permit, Arlington states that it did not have evidence of
any groundwater contamination until after it filed its evidentiary hear-
ing request, and therefore it had good cause for failing to raise the
issue during the comment period. Arlington argues that under 40 C.F.R.
§ 122.64, the regulation specifying the grounds for terminating an
effective permit for cause, the Region had an absolute duty to pursue
Arlington’s allegations of violations through an evidentiary hearing in
this case, and that the Region’s failure to do so was clearly erroneous.

The Region responded to the petition, supporting its denial of the
evidentiary hearing request on the ground that the none of the issues
raised by Arlington involve disputes of fact that are material to the
permit. Fort Worth, the permittee, also filed a response to the petition
supporting the denial of the evidentiary hearing request.*

For the reasons set forth below, the petition for review is denied.

II. ANALYSIS

Under the rules governing NPDES permit proceedings, there is no
review as a matter of right from the denial of an evidentiary hearing
request. In re Liquid Air Puerto Rico Corp., 5 E.A.D. 247, 252 (EAB
1994). Ordinarily, a petition for review of a denial of an evidentiary
hearing request is not granted unless the denial of the request is clear-

® The Region's response to the petition for review was filed pursuant to a request from the
Board, which customarily solicits such responses. See EAB, The Environmental Appeals Board
Practice Manual at 6 (Nov. 1994). Fort Worth’s response to the petition was unsolicited, but we
nonetheless have considered it in the interest of having all views on the record before us.

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402 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

ly erroneous or involves an exercise of discretion or policy that is
important and therefore should be reviewed. Id. The Agency’s long-
standing policy is that NPDES permits should be finally adjudicated at
the Regional level, and that the power to review NPDES permit deci-
sions should be exercised only “sparingly.” Id. The petitioner has the
burden of demonstrating that review should be granted. Id.

The City of Arlington does not challenge any term or condition
presently contained in the permit at issue; instead, Arlington’s princi-
pal objective is to have a condition added to the permit that will
require the Village Creek WTP, owned and operated by Fort Worth, to
serve the wastewater treatment needs of western Arlington after the
current contract between Arlington and Fort Worth expires on
February 14, 2001, and until the useful life of the facility ends.° For
the reasons stated below, we conclude that the Region’s decision to
issue this permit without a “duty to serve” condition was neither clear-
ly erroneous nor an exercise of discretion or policy that warrants
review.

A. Duty to Serve Arguments

The principal factor influencing our decision is the proposed con-
dition’s lack of relevance and materiality to the Village Creek WTP’s
discharges and operations during the course of the permit’s three year
term. Until February 14, 2001, Fort Worth is obligated, by virtue of its
contract, to provide wastewater treatment service to western Arlington
at the Village Creek WTP; whereas the permit, by its own terms, is
effective from August 1, 1994, until July 31, 1997.'° Thus, for the
scheduled entire life of this permit, Fort Worth is under a contractual
obligation to provide wastewater treatment to western Arlington even
absent a “duty to serve” condition. Accordingly, the presence or
absence of a “duty to serve” condition in the permit would not seem

” See 40 C.F.R. § 124.74(c)(5) (evidentiary hearing requests shall contain “[slpecific refer-
ences to the contested permit conditions, as well as suggested revised or alternative permit con-
ditions (including permit denials) which, in the judgment of the requester, would be required
to implement the purposes and policies of the [Clean Water Act"); In re Town of Seabrook, N.H.,
4 E.A.D. 806, 809 (EAB 1993) (‘We read [the applicable regulations} as requiring a requester to
set forth each specific permit condition alleged to be inadequate and why, or to set forth why
the permit should contain a condition that it does not, and, in as much detail as possible, what
that condition should be.") (emphasis added).

• Because Arlington has not challenged any condition contained in the permit, there is no
  reason to believe that any portion of the permit has been stayed pending resolution of this peti-
  tion for review. See 40 C.F.R. § 124.60(c)(1) CUIIf a petition for review of the denial of [an evi-
  dentiary hearing request] * * * is timely filed * * * the force and effect of the contested conditions
  of the final permit shall be stayed.”) (emphasis added).

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CITY OF FORT WORTH 403
to have any practical effect on Fort Worth’s obligation to provide
wastewater treatment service to Arlington during the term of this per-
mit. Under these circumstances, Arlington has not demonstrated any
“compelling policy consideration that suggests the Region should
include in the permit [a condition addressing a problem] that does not
presently exist.” In re Envotech, L.P., 6 E.A.D. 260, 297 (EAB 1996).

Nor do we find any compelling legal considerations for review-
ing the Region’s refusal to include a “duty to serve” condition in the
permit. Arlington’s legal arguments supporting its requested condition
are without merit." In the evidentiary hearing request, and through-
out these proceedings, Arlington has argued that there are two legal
bases under the CWA for including its requested condition in the per-
mit. According to Arlington, these can be found in the applicable
regional wastewater treatment plan approved under CWA § 208, and
from the award of grant money to Fort Worth for the Village Creek
WTP based upon representations that the facility will serve numerous
municipalities, including Arlington.’

As for the first legal basis, Arlington contends that the permit is
not consistent with the applicable regional wastewater management
plan approved under § 208, contrary to CWA § 208(e) and 40 C.F.R.
§ 122.44(d)(6)."3 According to Arlington, the permit and plan are
inconsistent because the plan recognizes Arlington’s entitlement to
use the Village Creek WTP for its useful life and the permit does not.
This inconsistency, says Arlington, can be remedied only by including
a “duty to serve” condition in the permit. We reject this argument for
the obvious reason that no inconsistency arises from the permit’s
silence on this issue. If there is a “duty to serve” as alleged by
Arlington the omission of any reference to that duty in this permit in
no way suggests that the “duty to serve” does not exist. The permit
simply does not address the question. To be inconsistent with the

“ We note that an argument could be made that the “duty to serve” condition would expire
in 1997 along with the permit, and thus the legal issues raised by Arlington are moot. We are
not denying review on this ground, however, as the issues are “capable of repetition.” See In re
539 Alaska Placer Miners, More or Less, 3 E.A.D. 748, 753 (CJO, 1991) (citing Montgomery
Environmental Coalition v. Costle, 646 F.2d 568, 579 (D.C. Cir. 1981)).

2 Because these two issues are purely legal in nature, the Region did not clearly err in
denying Arlington's request for an evidentiary hearing on these issues. Town of Seabrook, 4
E.A.D. at 817 (legal issues “cannot themselves provide a basis for an evidentiary hearing, a pro-
cedure reserved for factual issues.”) Nevertheless, in this appeal, we are authorized to review
such legal issues, provided the petitioner demonstrates that review is warranted under 40 CFR.
§ 124.91(ay(1). Id.

3 See Background section, supra.

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404 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

plan, there would have to be specific language in the permit affirma-
tively contravening the plan. There is none, and for that reason there
is no inconsistency between the plan and the permit.

We also reject Arlington’s argument because it is based upon a
misreading of the applicable plan. The plan does not decree that
Arlington is entitled to use the Village Creek WTP for its useful life.
Indeed, the plan does not indicate that Arlington can expect to use
the Village Creek WTP beyond the end of the year 2000, even though
the useful life of the facility presumably extends beyond that date.
The plan indicates only that Arlington is expected to utilize the Village
Creek WTP until the end of the year 2000, which the plan does by
explicitly recognizing Arlington's utilization of the Village Creek WTP
until that date. 1995 Plan at 1-40."' The permit is obviously not incon-
sistent with this reading of the plan, since it makes no mention of
Arlington’s use of the facility in any respect whatsoever. (Nor does it
mention use of the facility by any of the other municipalities with con-
tractual relationships to Fort Worth.) Because the permit and the plan
are not inconsistent, there is no merit to Arlington’s argument that the
permit must contain a “duty to serve” condition in the permit to be in
compliance with CWA § 208.

Turning to Arlington’s second legal basis for including a “duty to
serve” condition in the permit, the gravamen of Arlington’s contention
is that CWA §§ 204(a)(1) and 208(d), and the regulations implement-
ing the CWA’s construction grant program," create an obligation on
the part of Fort Worth, as a recipient of grant funds, to meet
Arlington’s wastewater treatment needs for the useful life of the
Village Creek WTP. Even if Arlington has correctly construed the CWA
grant provisions and their implementing regulations as creating a duty
upon Fort Worth to serve western Arlington’s wastewater treatment

© The plan does not make any representations with respect to the years 2001 and beyond.

% Arlington relies upon 40 C.F.R. § 30.309, which provides in pertinent part that “the award
of an assistance agreement constitutes a public trust.” Arlington also relies upon 40 CFR.
§ 35.840¢h), which provides in pertinent part that “[Jhe [grant] applicant will demonstrate to the
satisfaction of the Regional Administrator * * * in the case of projects serving more than one
municipality, that the participating communities have such interests or rights as the Regional
Administrator finds sufficient to assure their undisturbed utilization of the project for the esti-
mated life of the project.” We note that this regulation is not contained in the current 1995 vol-
ume of the C.F.R. See 60 Fed. Reg 33,926 June 29, 1995) (40 C.F.R. Part 35, Subpart C “was made
obsolete by passage of the CWA and its implementing regulations at 40 C.F.R. Part 35, Subparts
E, T and J, as well as completion of most of the projects funded by Subpart C grants, which date
to the period prior to the passage of the CWA in 3972.”).

VOLUME 6
CITY OF FORT WORTH 405
needs for the useful life of the Village Creek WTP,!° such a duty need
not be reflected in this NPDES permit. Under 40 C.F.R. § 122.44(n), an
NPDES permit shall include:

Any conditions imposed in grants made by the

Administrator to POTWs under sections 201 and 204 of

CWA which are reasonably necessary for the achieve-

ment of effluent limitations under section 301 of CWA.
Id. (emphasis added). Thus, in order to show that the Region clearly
erred in omitting a “duty to serve” condition from this permit based
upon Fort Worth’s receipt of CWA grant funds, Arlington must show
that the “duty to serve” condition is “reasonably necessary for the
achievement of effluent limitations.” Arlington, however, does not
argue, and therefore has made no showing, that achievement of any
effluent limitation will be remotely affected, much less undermined, if
a “duty to serve” condition is not included in this permit. Indeed, as
stated previously, at no time in these permit proceedings has Arlington
made any argument whatsoever with respect to the permit’s effluent
limitations. Accordingly, Arlington has not demonstrated a requirement
that this NPDES permit contain a “duty to serve” condition.

We turn now to Arlington’s contention that an evidentiary hear-
ing was required in this case to determine the facts supporting
Arlington’s legal claims that a “duty to serve” condition must be
included in this permit. Arlington maintains that “an evidentiary hear-
ing was required for the Regional Administrator to determine the facts
necessary to take the ‘appropriate action’ to implement the Section
208 Plan and to satisfy the duty to require Fort Worth to meet the
obligations it undertook in seeking and obtaining federal grants.”
Petition for Review at 22. We reject this contention. As just explained,
Arlington has not demonstrated that a “duty to serve” condition is
required in this permit under 40 C.F.R. § 122.44(d)(6) (requiring con-

16 The Region asserts that Arlington has not correctly construed these regulations, explaining:

40 C.F.R. §30.309 creates no fiduciary obligation between an
EPA grantee and a third party like Arlington. The “public
trust” to which the regulation refers runs from grantees to the
United States and its citizens, obliging grantees to spend fed-
eral funds wisely. The version of 40 C.F.R. §35.840 on which
Arlington relies creates no rights whatsoever. It simply
requires a demonstration that rights already exist, presumably
by submission of the legal rights creating them, e.g., inter-
municipal service agreements.
Response to Petition for Review at 6 n.2.
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406 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
sistency between permits and § 208 plans) or 40 C.F.R. § 122.44(n)
(requiring permits to reflect those grant obligations reasonably neces-
sary to achieve effluent limitations). Having failed to establish any
legal basis for including a “duty to serve” condition in the permit, it
logically follows that holding an evidentiary hearing to establish a fac-
tual basis for implementing the CWA § 208 plan and to satisfy Fort
Worth’s construction grant responsibilities would be unproductive, for
regardless of the facts established at the hearing there would be no
legal duty to include the condition in the permit. Thus, any dispute
over the factual basis for Arlington’s requested “duty to serve” condi-
tion would not affect this particular permit, and therefore is not mate-
rial to the permit.'”
B. Other Arguments

Apart from its arguments pertaining to the “duty to serve” condi-
tion, Arlington's petition for review asserts two other bases for grant-
ing review. One such basis is the Region’s failure to grant Arlington's
request for a public hearing on the permit.'"* Under 40 C.F.R.
§ 124.12(a), the Region “shall hold a public hearing whenever [it]
finds, on the basis of requests, a significant degree of public interest
in a draft permit.” Arlington argues that “there can be no real ques-
tion that there was (and is) a ‘significant degree of public interest’” in

Under 40 C.F.R. §§ 124.74(>)(1) and 124.75(a)(1), an evidentiary hearing is appropriate
only to resolve genuine disputes over facts that are material to the permit, that is, that may affect
the outcome of the proceeding. In re Mayaguez Regional Sewage Treatment Plant, 4 E.A.D. 772,
780-781 (EAB 1993), affd sub nom. Puerto Rico Aqueduct Sewer Authority v. EPA, 35 F.3d 600
(1st Cir, 1994),

Further, Arlington's evidentiary hearing request fails to set forth any genuine dispute as to
the facts underlying its claim for a “duty to serve” condition. Although the request claims to raise
factual issues, it does not specify any particular facts that are in dispute. Instead, the request
asserts that an evidentiary hearing is required because there is a significant public interest in the
permit. Response to Petition for Review, Ex. 15 at 15. The degree of public interest in the per-
mit, however, is the standard for granting public hearings under 40 C.F.R. § 124.12, not for grant-
ing evidentiary hearing requests under 40 C.F.R. § 124.75(a)(1). Obviously, Arlington was con-
fused as to the applicable standard, and thus failed to meet the pertinent one.

Lastly, we note that Arlington has misunderstood the circumstances in which an eviden-
tiary hearing is appropriate. The purpose of an evidentiary hearing is not, as Arlington suggests.
“to air significant concerns that were not adequately addressed in the draft permit comment peri-
od.” Petition for Review at 22-23. As we have explained, the “{tlime and resources needed to
conduct evidentiary hearings are not unlimited, and therefore such hearings should not be held
absent a demonstration that there is a genuine issue of fact to be resolved.” Town of Seabrook,
4 E.A.D. at 815.

\“ A public hearing is distinct from an evidentiary hearing, and, if held, takes place during
an earlier phase of the permit proceedings. Arlington does not contend that the Region should
have conducted an evidentiary hearing on this issue.

VOLUME 6
CITY OF FORT WORTH 407
a permit necessary for the wastewater treatment for the 80,000 resi-
dents of western Arlington. Petition for Review at 21.

The decision to hold a public hearing under 40 C.F.R. § 124.12(a)
is “largely discretionary.” In re Avery Lake Property Owners
Association, 4 E.A.D, 251, 252 (EAB 1992). The Region explained its
exercise of that discretion in this case as follows:

“On the basis of requests” EPA Region 6 received in

response to its proposal to renew Fort Worth’s permit,

there does not even appear to be “a significant amount

of public interest” in the dispute between Fort Worth

and Arlington. The only request for hearing Region 6

received was submitted by Arlington’s attorney; not

one of the “eighty thousand citizens of Arlington” even

submitted a comment. There was no reason for a pub-

lic hearing.
Response to Petition for Review at 7. Although Arlington plainly dis-
agrees with the Region’s conclusion with respect to the degree of
public interest in this permit, it has not met its burden of showing that
the Region clearly erred or abused its discretion in deciding not to
hold a public hearing “on the basis of [the] requests” it received.’”
Review of this issue is therefore denied.

The fifth and final alleged error raised in Arlington's petition for
review concerns the Region’s denial of Arlington's request for an evi-
dentiary hearing on Fort Worth’s alleged violation of its current
NPDES permit with respect to the use of the sludge drying beds.
According to the petition, Arlington had good cause for its failure to
raise this issue during the public comment period.”” Without explana-
tion, Arlington contends that its allegations concerning the sludge dry-
ing beds raise “factual questionls] directly related to the issuance of
this permit.” Petition for Review at 28. Citing 40 C.F.R. § 122.64,
Arlington claims that the Region had an “absolute duty” to pursue the
alleged violations, presumably by granting an evidentiary hearing on
the matter.

We acknowledge that a municipality may be viewed in some respects as a representa-
tive of many of its citizens. Nevertheless, the absence of individual citizens coming forward in
these proceedings is a legitimate consideration in our analysis.

» As noted in the Background section of this opinion, Arlington claims that it did not have
evidence of Fort Worth’s alleged violations until after it filed its evidentiary hearing request,
when it discovered that its groundwater was contaminated.

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408 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
We conclude that this portion of Arlington’s petition also lacks
merit. Even if Arlington had good cause for its failure to raise this
issue during the public comment period, it still has not demonstrated
any link between the violations alleged and the conditions of the per-
mit at issue. Under 40 CFR. § 124.74(c)(5), an evidentiary hearing
request must contain “{slpecific references to the contested permit
conditions, as well as suggested revised or alternative permit condi-
tions (including permit denials) which, in the judgment of the
requester, would be required to implement the purposes and policies
of the [CWA].” Without knowing exactly what permit conditions are
contested (or suggested), the Board cannot reasonably conclude
whether an alleged factual or other issue is material and relevant.
Town of Seabrook, 4 E.A.D. at 809. Consequently, the failure to meet
this requirement justifies denial of the petition for review. Id. Upon
examination, Arlington's evidentiary hearing request fails to identify
any contested permit condition implicated by its allegations.”" It fol-
lows, then, that Arlington’s petition does not “present a link to a con-
dition of the * * * permit at issue here sufficient to invoke the Board’s
authority to review the permit decision.” Envotech, 6 E.A.D. at 274.
Further, Arlington’s reliance upon 40 C.F.R. § 122.64 is misplaced.
That regulation governs the termination of a currently effective
NPDES permit. It provides that termination may be warranted based
upon noncompliance with a permit.” The initiation of termination
proceedings by the Region under that regulation is discretionary. In
re Marine Shale Processors, Inc., 5 E.A.D. 461, 470-71 (EAB 1994). We
are aware of no authority, and Arlington cites none, to support
Arlington's claim that the Region has an “absolute duty” under this
regulation to investigate allegations of permit violations through a
NPDES evidentiary hearing or otherwise. In any event, any pursuit of
Arlington’s allegations in this case would have to be linked to a con-

*' If current permit conditions are being violated, such an issue is appropriately addressed
through the Agency’s enforcement process, and not through these permit issuance proceedings.
See In re City of Haverbill, 5 E.A.D. 211, 217 n.9 (EAB 1994) (compliance with a permit is an
enforcement matter dealt with through enforcement process); see also In re Beckman Production
Services, 5 E.A.D. 10, 22 (EAB 1994) (“should [permittee] fail to comply with the terms of its per-
mit it may be subject to an enforcement action or permit revocation proceeding”); In re Brine
Disposal Well, Montmorency County, 4 E.A.D. 736, 746 (EAB 1993) (Board's authority to assess
permit’s validity under governing statutes and regulations does not include oversight of permit
implementation and enforcement),

• We do not interpret Arlington's argument as calling for the denial of the permit at issue
  based upon the alleged violations. Such an argument could not be reconciled with Arlington's
  request for a “duty to serve” condition in the permit, which, in our opinion, is Arlington's pri-
  mary objective in these proceedings.

VOLUME 6
CITY OF FORT WORTH 409
dition of the permit at issue, as discussed above, and Arlington has
failed to satisfy that requirement.

III. CONCLUSION
Arlington has failed to show that the Region clearly erred in deny-
ing its request for an evidentiary hearing, or that review of its legal
claims is warranted under 40 C.F.R. § 124.91. Therefore, the petition
for review is denied.
So ordered.
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