Cole County Regional Sewer District v. United States

22 Cl. Ct. 551, 21 Envtl. L. Rep. (Envtl. Law Inst.) 20921, 1991 U.S. Claims LEXIS 38, 1991 WL 15036
CourtUnited States Court of Claims
DecidedFebruary 7, 1991
DocketNo. 249-88L
StatusPublished
Cited by5 cases

This text of 22 Cl. Ct. 551 (Cole County Regional Sewer District v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Cole County Regional Sewer District v. United States, 22 Cl. Ct. 551, 21 Envtl. L. Rep. (Envtl. Law Inst.) 20921, 1991 U.S. Claims LEXIS 38, 1991 WL 15036 (cc 1991).

Opinion

OPINION

FUTEY, Judge.

This case is before the court for review of an administrative agency decision. Plaintiff, Cole County Regional Sewer District (RSD), contends that the United States Environmental Protection Agency (EPA) committed an abuse of discretion in refusing to award plaintiff additional grant funding under the Clean Water Act, 33 U.S.C. § 1251 et seq. (CWA). Defendant maintains that the EPA decision to withhold this funding was entirely consistent with applicable regulations and longstanding EPA policy, and should, therefore, not be disturbed by the court. For the reasons stated below, the court grants summary judgment in favor of defendant and denies plaintiff’s motion for summary judgment.1

Factual Background

This case involves a series of grants authorized by the EPA to finance an area-wide wastewater treatment system located in Missouri. Under Title II of the CWA, the EPA Administrator may award federal grants to a municipality for the construction of publicly-owned wastewater treatment works. 33 U.S.C. § 1281 et seq. These grant funds are appropriated by Congress on an annual basis and allotted to the states in accordance with section 205 of the CWA. 33 U.S.C. § 1285(c). The funds [553]*553are, thereafter, obligated to individual projects within the state. In order to receive funding for a proposed project, the costs of that project must be allowable under Appendix A of Subpart I, 40 C.F.R. Part 35. In addition, a municipality must submit a detailed application to the state. The state must certify that the project is entitled to intrastate priority. The state may not certify a project for grant assistance unless the application meets various requirements set forth in the regulations. 40 C.F.R. § 35.2100 et seq. The EPA is ultimately responsible for determining whether the project meets the requisite criteria for grant award as established by statute and regulation. 33 U.S.C. §§ 1281(a), 1283, and 1284. The Administrator’s approval of a municipal application is “deemed a contractual obligation of the United States for the payment of its proportional contribution to such project.” 33 U.S.C. § 1283(a)(1).

Plaintiff submitted an application for a construction works grant to the Missouri Department of Natural Resources (MoDNR). Plaintiff sought funding for a project known as the Gray’s Creek Waste-water Collection Facilities Project, which involved the construction of a series of wastewater treatment works in the Gray's Creek area. The project was designed to eliminate wastewater discharges in the Binder Basin watershed by rerouting them to a Jefferson City treatment facility for eventual discharge in the Missouri River. In April of 1983, Doug Garrett, a MoDNR representative, wrote to RSD concerning the project and related the following:

It is the state’s opinion that the most critical problem facing the RSD will be acquiring the flow of the Binder Basin Sewer Company service area. We have been informed in the past that the RSD would obtain acquisition; if the RSD fails to do this future grant funding will be jeopardized. Also, failure to acquire the flow of the Sewer Company service area could result in the recovery of the previous Step 3 grant by the EPA.

Administrative Record (A.R.) No. 28c.

Mr. Garrett further advised RSD by letter of May 10, 1983:

To clarify our position, we expect the District to assume the flow of the Binder Basin Sewer Company Area, not the entire company. It is our understanding that you will pursue this matter by initiating negotiations with the Company. [Emphasis added.]

A.R. No. 28d.

In an effort to develop a regional wastewater treatment program, the MoDNR and the Missouri Clean Water Commission (Commission) issued a priority certification to the EPA on behalf of plaintiff on September 20, 1983.2

Plaintiff received several construction grants under Title II of the CWA for an interceptor and force main system. This system was developed to intercept the Binder Basin sewer flow and direct the flow to the Jefferson City secondary treatment facility.3 The Binder Basin Sewer Company (Binder Basin) was a privately-owned company located within the Cole County regional sewer district. The Binder Basin facility consisted of a three cell lagoon, a mechanical plant, and sewer connection lines. The facility discharged into streams flowing into Binder Lake. Two of these grants, issued to RSD on October 12, 1983 and September 14,1984, contained the following condition: “[t]he flow from Bind[554]*554er Basin Sewer Company will be eliminated.”4

Following EPA approval, RSD initiated negotiations with Binder Basin in an effort to meet the conditions imposed by the two grants. Binder Basin rejected all proposals for a leasing or “joint control” arrangement between the two concerns, and insisted that RSD purchase the entire facility from the company. RSD’s negotiation efforts eventually resulted in the acquisition of the Binder Basin plant in 1986 for $205,-700.00.5

On February 7,1984, RSD filed a request with MoDNR for an increase in grant funds under grant number C290932-04 in order to cover the cost of acquiring the Binder Basin facility. MoDNR denied the request on March 26, 1984, concluding that RSD was not eligible for such funding under the regulations then in effect. Under those regulations, the purchase of an existing wastewater works was a compensable cost only if “[t]he acquisition, in and of itself, considered apart from any upgrade, expansion or rehabilitation, provide[d] new pollution control benefits.” 40 C.F.R. § 35.2350, App. A (1984).6 Following discussions between MoDNR and RSD representatives, MoDNR agreed to reconsider the March 26, 1984, decision. On August 1, 1984, MoDNR upheld its previous determination that the costs associated with the purchase of Binder Basin were ineligible for grant participation. In the decision, MoDNR concluded that RSD’s acquisition of Binder Basin would not, in and of itself, provide new pollution control benefits and, therefore, was not an “allowable cost” under 40 C.F.R. Part 35, Subpart I, App. A (1984).

RSD appealed the MoDNR decision to the EPA pursuant to 40 C.F.R. Part 30, Subpart L.

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22 Cl. Ct. 551, 21 Envtl. L. Rep. (Envtl. Law Inst.) 20921, 1991 U.S. Claims LEXIS 38, 1991 WL 15036, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cole-county-regional-sewer-district-v-united-states-cc-1991.