User Charge Revenues for Wastewater Treatment Plants--Insufficient To Cover Operation and Maintenance
CED-82-1
Published: Dec 02, 1981. Publicly Released: Dec 02, 1981.
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Highlights
Billions of dollars in federal grants have been made to municipalities throughout the nation to construct publicly owned wastewater treatment plants. Once the plants are constructed, municipalities are responsible for raising sufficient monies from system users to properly operate and maintain these plants. GAO made a review to determine whether user charge revenues collected by municipalities are sufficient to properly operate and maintain the treatment plants; whether such costs are fairly and equitably distributed among system users; and whether sufficient revenues are being generated to pay for replacing major capital items in the plants.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider whether there will be further federal participation in treatment plant replacement or whether plant replacement will become the responsibility of state and/or local governments. If Congress should decide that state and/or local governments are to be held responsible, these governments must be made aware of this requirement so that they can begin planning for such future expenditures. | Proposed legislation before Congress would phase out the Construction Grants Program. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Environmental Protection Agency | The Administrator of the Environmental Protection Agency should incorporate, as part of the financial management guidance package, instructions to the municipalities that clearly state: (1) the purpose of the user charge program; (2) that, except for ad valorem taxes, direct user charges are the only source of funding authorized for financing treatment plant operation and maintenance expenses; (3) the need to review and revise the user charge system in accordance with federal regulations and the grant agreement; and (4) the need to maintain the treatment plants' financial integrity and self-sufficiency as envisioned by Congress. |
Action has been completed and an accomplishment report has been prepared.
|
| Environmental Protection Agency | The Administrator of the Environmental Protection Agency should incorporate, as part of existing operation and maintenance inspections and closeout financial audits of construction grants, a review of user charge system adequacy, including a review of the adequacy of reserve accounts for replacing major pieces of equipment considered essential for continued plant operations. |
EPA told GAO that it will review user charge adequacy as part of its routine operation and maintenance inspections rather than as part of its grant closeout audits as recommended by GAO. GAO does not feel this action will be effective due to large amounts of work during such inspections.
|
| Environmental Protection Agency | The Administrator of the Environmental Protection Agency should incorporate the user charge system requirements under the National Pollutant Discharge Elimination System permit program. |
EPA action did not conform precisely to the recommendation, however, the implementation of the compliance improvement program will result in some corrective action.
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Topics
Construction costsDebt collectionEconomic analysisEnvironmental monitoringFinancial managementGrants to local governmentsLaw enforcementTaxesWastewater managementWastewater treatmentWastewater treatment plants