For several years, EPA has been working with states and cities to develop and implement new approaches that will achieve water quality goals cost-effectively and in a manner that "addresses the most pressing public health and environmental protection issues first." The first two sections of this report examine two recent initiatives by EPA: (1) an integrated planning policy and (2) a framework policy for assessing a community's financial capability to meet objectives and requirements of CWA. For some time, municipalities have pressed EPA for greater flexibility to meet the financial and compliance challenges that they face for wastewater, stormwater, and other CWA infrastructure improvements. It allows communities to prioritize water management goals—such as water conservation or lower wastewater treatment costs—so that limited public dollars can be invested in ways that each city finds most valuable. A major point of contention between EPA and local government stakeholders has been the agency's reliance on administrative orders or judicially approved consent decrees to codify pollution reduction plans, including plans approved under the integrated planning policy, rather than through modification of CWA permits. Mayors, represented by the U.S. Conference of Mayors, have stated that they would prefer that EPA authorize compliance flexibility through permits, rather than subjecting cities and towns to legally binding consent decrees with penalties and fines for noncompliance. EPA typically uses a consent decree after periods of permit noncompliance. The agency takes the position that both enforcement and permits are necessary, depending on individual circumstances. Utilities and municipalities have welcomed the opportunity for flexibility under the integrated planning policy. But nearly five years after the framework policy was announced, one concern is that, so far, integrated plans have been incorporated only into new or amended consent decrees, not in CWA permits. Determining Community Affordability

A long-standing concern for local governments is EPA's process for evaluating how much communities can afford for CWA-mandated and other water infrastructure improvements. Affordability considerations can influence schedules established by EPA and states for communities to meet CWA requirements. The document identifies additional information that may help some communities provide a more complete picture of their financial capability than under the 1997 guidance alone. Congressional Interest

EPA's integrated planning process and community affordability are issues of interest to legislators, because they relate to policymakers' overall concern with funding needs for water infrastructure projects and the federal role in assisting communities. In recent years, Members have offered bills that would address these issues in different ways. Some bills sought to codify EPA's integrated planning approach—as written in the 2012 framework—into the CWA. Other proposals would go beyond codifying the integrated planning approach by including other provisions that alter the CWA's existing framework to varying degrees. In general, some environmental groups have opposed such changes proposed in bills from prior Congresses. Conclusion

Local government stakeholders generally support EPA's efforts to encourage ways for communities to prioritize their investments in CWA infrastructure and to consider a wide range of factors that affect affordability of such investments. As described in this report, cities and states have some continuing concerns with aspects of both the integrated planning policy and the financial capability assessment framework.
For several years, the U.S. Environmental Protection Agency (EPA) has been working with states and cities to develop and implement new approaches that will achieve water quality goals cost-effectively and in a manner that "addresses the most pressing public health and environmental protection issues first." Two recent EPA initiatives are an integrated planning policy and a framework policy for assessing a community's financial capability to meet objectives and requirements of the Clean Water Act (CWA).
Pressed by municipalities about the financial challenges that they face in addressing needs for wastewater and stormwater control projects, in 2012 EPA issued an integrated permitting and planning policy. The intention of the policy is to provide communities with flexibility to prioritize and sequence needed water infrastructure investments so that limited public dollars can be invested in ways that each municipality finds most valuable.
Water utilities and municipalities have welcomed the opportunity for flexibility under the integrated planning policy. But they have sought clarification of a number of issues, including EPA and state roles in developing integrated plans. A major point of contention between EPA and local government stakeholders has been the agency's reliance on administrative orders or judicially approved consent decrees to codify integrated pollution reduction plans, rather than through modification of CWA permits. City and town officials say that they would prefer that EPA allow compliance flexibility through permits, rather than subjecting cities and towns to legally binding consent decrees with penalties and fines for noncompliance. The agency takes the position that both enforcement and permits are necessary, depending on individual circumstances. EPA typically uses a consent decree after periods of permit noncompliance.
While integrated planning may be helpful in identifying communities' relative priorities, a long-standing concern for local governments is EPA's process for evaluating how much communities can afford for CWA-mandated and other water infrastructure improvements. EPA has worked with communities to refine how the agency determines when a project is affordable for individual communities, because affordability considerations can influence schedules established for a community to meet CWA requirements. In 2014, EPA released a Financial Capability Assessment Framework that identifies a range of information related to a community's financial strength that may help provide a complete picture of cities' financial capabilities in relation to water infrastructure investments.
State and local governments generally support EPA's efforts to encourage ways for communities to prioritize their CWA infrastructure investments and to consider a wide range of factors that affect affordability. Nevertheless, cities and states have continuing concerns with aspects of both policies. For example, some criticize EPA for relying in part on Median Household Income (MHI) as a measure of community affordability. Further, cities are critical that integrated plans that have been approved so far have been incorporated only into new or amended consent decrees, not CWA permits.
EPA's integrated planning process and water infrastructure affordability are issues of interest to legislators. In recent years, Members have offered bills that would address these issues in different ways. Some bills have sought to codify EPA's integrated planning approach—as written in the 2012 framework—into the CWA. Other proposals would go beyond codifying the integrated planning approach by including other provisions that alter the CWA's existing framework to varying degrees (e.g., H.R. 465 in the 115th Congress). In general, some environmental groups have opposed such changes proposed in bills from prior Congresses, but municipalities have generally supported the additional flexibility.