IN COURT OF APPEALS
Reversed and remanded
Minnesota Pollution Control Agency
File No. 7-2200-14439-2
Janette K. Brimmer, Minnesota Center for Environmental Advocacy, Suite 206, 26 East Exchange Street, St. Paul, MN 55101 (for relator)
Mike Hatch, Attorney General, Paul
Merwin, Stephanie Morgan, Assistant Attorneys General,
The City of
Considered and decided by Willis, Presiding Judge; Stoneburner, Judge; and Crippen, Judge.*
S Y L L A B U S
1. Under Minnesota’s nondegradation policy for protection of specially-designated high quality state waters, the Minnesota Pollution Control Agency (MPCA) may require a city to analyze whether downsizing a proposed new wastewater treatment plant and using decentralized wastewater treatment to meet anticipated additional population growth is a prudent and feasible alternative that would greatly reduce the resulting new discharge of wastewater into a river designated as an Outstanding Resource Value Water –Restricted (ORVW-R). Without that analysis, a decision by the MPCA that there is no prudent and feasible alternative to the proposed discharge of wastewater into an ORVW-R is not supported by substantial evidence in the record.
2. MPCA’s position that it lacks authority to impose more than minimally required water quality standards necessary to protect the scenic and recreational aspects, rather than the high-water quality, of an ORVW-R from a proposed new discharge of wastewater is an error of law, causing MPCA’s issuance of a permit for a proposed discharge without requiring affordable, available technology that would reduce the amount of pollutants from a proposed discharge into an ORVW-R to be affected by an error of law.
3. MPCA’s failure to define and appropriately describe the high quality of the water in an ORVW-R makes the discharge limits set by the MPCA in a permit for a new wastewater treatment plant arbitrary and capricious and unsupported by substantial evidence in the record.
4. “Existing high quality” of water in a river into which no discharge of pollutants has previously been permitted means the quality of the water prior to the issuance of any permit to discharge pollutants into the water.
Relator Minnesota Center for Environmental Advocacy (MCEA) challenges respondent Minnesota Pollution Control Agency’s (MPCA) grant of a permit to the City of Princeton allowing the city to triple the capacity of its current wastewater treatment facility by constructing a wastewater treatment plant (WWTP) that will discharge 1,905,000 gallons of waste per day into an outstanding resource value water, the Rum River. MCEA argues that (1) the finding that there are no prudent and feasible alternatives to the proposed discharge is not supported by substantial evidence in the record because Princeton failed to analyze the alternative of downsizing plus decentralized treatment to reduce the amount of discharge into the Rum River and (2) MPCA’s failure to require available, affordable technology to reduce pollutants in the discharge permitted is contrary to the law requiring protection of the existing high quality of the water in the Rum River, not supported by substantial evidence in the record, and arbitrary and capricious. MCEA argues in the alternative that it raised factual disputes on these issues requiring a contested-case hearing.
Princeton, whose existing wastewater treatment facility is close to capacity and near the end of its useful life span, applied to MPCA for a National Pollutant Discharge Elimination System/State Disposal System permit (NPDES/SDS permit) allowing it to construct a new wastewater treatment plant (WWTP) that will triple the capacity of the current wastewater treatment method and discharge 1,905,000 gallons of wastewater per day directly into the Rum River.
affected portion of the
part of the permit application, the city was required to perform a nondegradation
study that included an analysis of various alternatives to determine whether
any of the alternatives provided a prudent and feasible alternative to the
city’s proposal. One of the alternatives
that the city was required to study was “[d]ownsizing the project and/or
implementing water conservation practices so that a land disposal method might
be used.” The city rejected all of the
alternatives it was required to analyze as not prudent or feasible. Downsizing was rejected as inconsistent with
reviewing Princeton’s application, including its study of alternatives, plus
some additional information requested by MPCA, MPCA staff recommended approval
of a permit for
does not dispute that the use of treatment upgrades such as sand filters and
the addition of alum would reduce phosphorus, CBOD, and total suspended solids
(TSS) in the discharge, but rejected these upgrades based on its determination
that the benefit would be so minimal in comparison to the cost that this
alternative is not necessary to protect the quality of the water. MPCA and the city, without considering
downsizing in conjunction with decentralized treatment to meet some of
that an EIS was not required, MPCA drafted a NPDES/SDS permit for the project
that includes a limit on the discharge of phosphorus and a more-stringent-than-minimal
limit on TSS, but does not require use of sand filters or alum as proposed by
MCEA to further reduce these pollutants as well as CBOD. MPCA circulated the proposed permit for
public comment. MCEA requested a
contested-case hearing, reiterating its concerns that (1)
In a hearing before the MPCA Citizen’s Board, MPCA staff and MCEA representatives presented the proposed permit and MCEA raised its objections to the permit and requested a contested-case hearing. The board denied MCEA’s request for a contested-case hearing and granted the NPDES/SDS permit with the restrictions proposed by MPCA staff. MCEA appeals the grant of the permit by writ of certiorari, arguing that MPCA’s decision to reject downsizing as a feasible and prudent alternative is arbitrary, capricious, and unsupported by substantial evidence, and MPCA’s failure to require the use of sand filters and alum is contrary to law, unsupported by substantial evidence, and arbitrary and capricious. In the alternative, MCEA argues that MPCA erred by denying a contested-case hearing.
1. Should the city have been required to analyze whether the alternative of downsizing its proposed WWTP and using decentralized treatment methods to accommodate additional anticipated population growth is a prudent and feasible alternative to its proposed discharge of 1,905,000 gallons of wastewater per day into a river classified as ORVW-R?
2. Did MPCA misapply the law when it focused on preservation of the scenic and recreational value of the river rather than on the high water quality of the river to determine necessary restrictions on a permitted discharge?
3. Given MPCA’s mandate to restrict any permitted discharge into an ORVW “to the extent necessary to preserve the existing high quality” of the water, were MPCA’s restrictions in Princeton’s permit arbitrary and capricious and unsupported by substantial evidence in the record because MPCA did not identify or define the existing quality of the water prior to setting the restrictions?
I. Standard of review
review of MPCA’s decision to grant a permit for Princeton’s proposed WWTP is
governed by the Administrative Procedure Act, Minn. Stat. §§ 14.63–.69 (2004); In
re Univ. of Minn., 566 N.W.2d 98, 103 (Minn. App. 1997). The statute provides in relevant part that
this court can affirm, or remand for further proceedings, or reverse, or modify
any of the agency’s findings, inferences, conclusions, or decisions if they are
affected by error of law, unsupported by substantial evidence in view of the
entire record as submitted, or are arbitrary and capricious.
Deference is also given to the agency’s interpretation of its own rules
when the language subject to construction is so technical in nature that only a specialized agency has the experience and expertise needed to understand it, when the language is ambiguous or when the agency interpretation is one of long standing.
The parties disagree as to the level of deference to be afforded to the agency in this case. MPCA argues that this is a highly technical matter, with “onerous issues,” resulting in great deference given to the agency. See e.g., Resident, 305 N.W.2d at 312 (explaining the general rule that this court should defer to an agency for interpretation of its rules on matters so technical that only the agency has the experience and expertise to understand it). MCEA argues that deference is unnecessary if the agency’s decision is arbitrary, inconsistent, or unreasonable. See generally St. Otto’s Home, 437 N.W.2d at 40-41 (finding agency’s decision unreasonable); In re City of Owatonna’s NPDES/SDS Proposed Permit Reissuance for the Discharge of Treated Water, 672 N.W.2d 921, 926 (Minn. App. 2004) (noting that “where there is a combination of danger signals which suggest the agency has not taken a hard look at the salient problems and has not genuinely engaged in reasoned decision making,” this court will intervene).
II. Nondegradation law
The federal Environmental Protection Agency, under authority of the Clean Water Act, 33 U.S.C. §§ 1251-1387, requires each state to develop a nondegradation policy that meets minimum standards. 40 C.F.R. § 131.12(a). At a minimum, the state policy must protect the level of water quality necessary to protect existing water uses, and,
[w]here the quality of the waters exceed levels necessary to support propagation of fish, shellfish, and wildlife and recreation in and on the water, that quality shall be maintained and protected unless the State finds . . . that allowing lower water quality is necessary to accommodate important economic or social development in the area in which the waters are located. In allowing such degradation . . . the State shall assure water quality adequate to protect existing uses fully. Further the State shall assure that there shall be achieved the highest statutory and regulatory requirements for all new and existing point sources. . . .
Rules 7001.1000 to 7001.1100 (2003) govern the procedures and conditions for
receiving a NPDES/SDS permit, that is required to discharge pollutants from a
point source into any water in the state of Minnesota. Minimal standards for municipality point
sources are provided in Rule 7050.0211 (2003).
Phosphorus effluent discharge is limited to 1 mg/L under this rule when
the effluent is discharged to or directly affects a lake or reservoir, but
there are no stated phosphorus-effluent limits for rivers and streams. Minn. R. 7050.0211, subp. 1a. The rule provides, however, that removal of
nutrients, such as phosphorus from wastes “shall be provided to the fullest
practicable extent wherever sources of nutrients are considered to be actually or
potentially detrimental to preservation or enhancement of the designated water
Plans for a WWTP are governed by Minnesota Rules 7077.0272 and 7077.0274 (2003). Rule 7077.0272, subp. 1, requires that plans for a wastewater treatment system must be prepared and signed by a registered engineer, and subp. 2 requires the plans to include a description of the current WWTP and its problems, a discussion of all treatment alternatives that were considered during the facility selection process, a cost-effective comparison of the alternatives, a comparison of the potential environmental impact of the alternatives, and a description of the selected treatment alternative.
Guidance Manual for Applying
Nondegradation Requirements on Outstanding Resource Value Waters in Minnesota
(hereinafter Guidance Manual)
describes the procedures, criteria, and time frames associated with meeting the
prudent-and-feasible standard. The Guidance Manual notes that although the
phrase “prudent and feasible” is “not familiar or highly descriptive to
laypersons, it is a well-known and reasonably well-defined term of art in
environmental statutes and case law” as requiring an “examination of whether
there are unusual or extraordinary reasons why an alternative to a proposed
discharge should not be required.” Minn.
Pollution Control Agency, Guidance Manual
for Applying Nondegradation Requirements on Outstanding Resource Value Waters
in Minnesota, (1988), at 4 (citations omitted). By statute, “[e]conomic considerations alone shall
not justify pollution, impairment or destruction of the [s]tate’s natural
III. Downsizing alternative
MCEA concedes that, given Princeton’s anticipated growth and the inadequacy of its current wastewater treatment process, development of a WWTP that discharges into the Rum River is somewhat inevitable, but contends that Princeton should have been required to analyze the prudence and feasibility of downsizing the proposed WWTP to double the current treatment capacity and handling the treatment needs of additional growth though decentralized treatment processes. MCEA asserts that the city did not really analyze this downsizing alternative. MPCA does not argue that because some discharge may be permitted the city is not required to look for prudent and feasible alternatives that would minimize the amount of the discharge.
asserted that a WWTP with double the city’s current capacity to treat
wastewater, in conjunction with decentralized treatment of wastewater to
accommodate additional growth, would significantly reduce discharge to the Rum
River without limiting the city’s growth and supported this assertion with the
affidavit of its expert, Curtis Sparks, P.E., former MPCA consultant and
program manager of the permit program (responsible for all NPDES/SDS permits in
its nondegradation analysis,
argues that MCEA has not shown how much treatment decentralized systems would
provide and has not explained how it determined that decentralizing some
treatment would only require doubling--rather than tripling--current treatment
capacity. MPCA asserts that nonetheless
it “examined” the downsizing alternative to determine if it was prudent and
feasible. But the purported examination
consisted of asserting narrative reasons why the alternative need not be
analyzed. There was no attempt at a
cost/benefit analysis or specific information about the environmental impacts
of decentralized treatment coupled with a reduced discharge as compared to the
proposed discharge. MPCA continues to
argue that it has no control over the size of the city’s WWTP
and asserts that centralized treatment is favored over other treatment systems
under the Clean Water Act, citing
EPA concluded in its report, “adequately managed decentralized wastewater systems are a cost effective and long-term option for meeting public health and water quality goals.” Reasons cited for installing decentralized systems included:
· Properly managed decentralized systems can provide the treatment necessary to protect public health and the environment. They can be sited, sized, designed, installed and operated to meet all federal, state, and local water-quality requirements.
· Are appropriate for low-density communities.
· Decentralized systems are usually the most appropriate technology and most cost-effective options for rural areas and many urban outskirts.
· Are appropriate for varying site conditions.
Decentralized systems can be designed for a variety of site and soil conditions including shallow water tables, bedrock and small lot sizes.
Report at 13. The
MPCA Report concludes that: “[c]ommunities upgrading failing systems should
consider both centralized and decentralized systems.”
this case, the mayor of
Princeton’s city administrator simply dismissed the idea of decentralized systems, stating: “[o]ur experience is that on-site systems, as good as they are, are only as good as the people who maintain them,” therefore if “expansion of a [WWTP] is curtailed, I believe that the impact on the Princeton area is going to be negative.” But MCEA responded that “decentralized” does not necessarily mean individual mound septic systems, noting that cluster treatment facilities are permitted by MPCA and are highly regulated.
MPCA Issue Statement submitted to the board most directly responds to the
decentralized alternative by explaining that the city developed a plan to meet
its population requirements, and that MCEA did not lay out specific enough
treatment amounts for the decentralized alternative. But the burden of showing that downsizing was
not feasible and prudent is on the city, not MCEA. MCEA has raised the issue that the
alternative was never actually analyzed and it cited the
court can reverse or remand an agency’s decision if it is unsupported by
substantial evidence in the record.
1. Such relevant evidence as a reasonable mind might accept as adequate to support a conclusion;
2. More than a scintilla of evidence;
3. More than some evidence;
4. More than any evidence; and
5. Evidence considered in its entirety.
White v. Minn. Dept. of Natural Res., 567 N.W.2d 724, 730 (Minn.
App. 1997), review denied (Minn. Oct. 31, 1997). And “[t]he court will intervene . . . where
there is a ‘combination of danger signals which suggest the agency has not
taken a ‘hard look’ at the salient problems’ and the decision lacks ‘articulated
standards and reflective findings.’”
In this case, we conclude that there is not substantial evidence in the record to support rejection of the alternative of downsizing the WWTP and using decentralized treatment as not feasible or prudent, and we remand this issue to the MPCA with instructions to require the city to actually analyze the prudence and feasibility of this alternative.
IV. Restrictions on discharge
a. MPCA’s restrictions were not imposed to preserve existing water quality as required by law
Schumann erroneously asserted that
this reach of the Rum River was not designated an outstanding resource value water because of high water quality, but rather its designation by the DNR is a state scenic and recreational river. So those are the characteristics that we have to protect, that’s what we have the authority to do. To set stringent standards to protect the receiving stream’s scenic and recreational value.
Schumann also told the board that MPCA’s authority to impose restrictions on wastewater discharges into the ORVW-R river is limited, stating: “[T]he extent of what [MPCA] can do” with regard to restrictions is impose the technology-based controls already established by the CWA for publicly owned treatment works. Schumann told the board that the only reason MPCA was able to include some restrictions that exceed established standards was by negotiation with the city. Despite the comments of MCEA’s representative that MPCA’s responsibility is to restrict the discharge to the extent necessary to preserve the existing high water quality of the Rum River, and at least one board member’s comment indicating that understanding, the board voted five to two to deny a contested hearing and to approve the permit as drafted by MPCA staff.
MPCA’s findings of fact include the following:
The MPCA finds
that the effluent limits in the proposed permit meet the minimum secondary
treatment standards, will ensure protection of the receiving water for its
designated uses, will not cause or contribute to an exceedance of water
quality standards, and will not impair those special characteristics that
limits reflect more stringent effluent limitations for TSS, DO, and P in order to
protect the high recreational and fishery value of the
(Emphasis added.) MPCA’s conclusions of law include:
The proposed permit contains effluent limitations and special conditions which are the most stringent allowed by current rule and policy. These limits and conditions will meet or exceed the minimum secondary treatment standards, will ensure protection of the receiving water for its designated uses, will not cause or contribute to an exceedance of water quality standards, and will not decrease the river’s existing special scenic or recreational value.
The record, findings, and conclusions demonstrate that, despite sporadic
references to water quality, MPCA’s focus in granting the permit was on the
scenic and recreational qualities of the
b. MPCA’s failure to define the existing high quality of the
water in the
MCEA argues that MPCA’s restrictions on pollutants in the permitted discharge do not satisfy MPCA’s obligation under EPA rules to “assure that there shall be achieved the highest statutory and regulatory requirements for all new and existing point sources. . . .” 40 C.F.R. § 131.12. MCEA asserts that MPCA rejected requiring effective, available, affordable technology such as sand filters and the use of alum based only on cost and an erroneous application of only minimal water quality standards plus “negotiated” higher limits for some pollutants.
7050.0211 sets out the “minimum secondary treatment for municipal point source
and other point source dischargers of sewage.”
Minnesota Rule 7050.0220 (2003) lists “specific standards of quality and
purity by associated use classes.” But
MCEA argues that these minimums are not sufficient to maintain the existing
high quality of the water in this case as is required under the
25 mg/L (Minn. R. 7050.0211, subp. 1)
Fecal Coliform Organisms
200 organisms per 100 milliliters (Minn. R. 7050.0211, subp. 1)
200 organisms per 100 milliliters
Total Suspended Solids
30 mg/L (Minn. R. 7050.0211, subp. 1)
No requirement for rivers; 1.0 mg/L for lake or reservoir (Minn. R. 7050.0211, subp. 1), suggested limit in Phosphorus Strategy
6.9 ng/L (R. 7050.0220, subp. 3a, B(16)-numeric quality standard)
17 ng/L (daily maximum)
Dissolved Oxygen (non-pollutant)
5.0 mg/L (minimum) (Minn. R. 7050.0222, subp. 4)
6.0 mg/L (minimum)
argues that it correctly evaluated the costs and benefits of requiring sand
filters and alum and concluded that the de minimus reduction in pollution that
would result from their use made them unnecessary to preserve existing high
water quality. But there is no evidence
in the record defining or describing the quality of the water that is to be
protected. Without defining what the
existing quality of the water is, it is not possible to evaluate whether
argues that the term “existing high water quality,” which is not defined or
quantified in statute or rule, is ambiguous, requiring MPCA to “apply its
expertise in determining exactly what is meant by ‘existing high water quality’”
and that the court must defer to this exercise of expertise. Nowhere in the record, however, does MPCA
define the existing high quality of the
is the first application for a permit to discharge pollutants into the
V. Contested-case hearing
Because we have granted the relief sought by MCEA, we do not reach the alternative request for a contested-case hearing on the issues raised in this appeal. But we caution that if disputed issues remain following remand, MPCA should conduct a contested-case hearing to provide a fully developed record on which the board can make informed decisions.
Minnesota’s nondegradation rules, the City of Princeton must analyze the
prudence and feasibility of a downsized WWTP used in conjunction with
acceptable decentralized treatment to meet additional anticipated population
growth before such an alternative can be rejected by the city and MPCA as not
prudent or feasible. The MPCA must
establish the existing water quality of the
Reversed and remanded.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 CBOD refers to the oxygen demand made by certain pollutants in the water body over a five-day period. If the oxygen demand is too high, dissolved oxygen (DO) in the water may become too low to support certain aquatic life. CBOD is regulated as a pollutant under portions of Minnesota Rule 7050.
 A “point source” is “any
discernible, confined and discrete conveyance, including, but not limited to,
any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container,
rolling stock, concentrated animal feeding operation, or vessel or other
floating craft, from which pollutants are or may be discharged.” Minn. Stat. § 115.01, subd. 11 (2004). A “nonpoint source” is “a land management or
land use activity that contributes or may contribute to ground and surface water
pollution as a result of runoff, seepage, or percolation and that is not defined
as a point source.
 MPCA set the phosphorus
limit in this case at 1 mg/L, and the internal MPCA office memorandum regarding
 The parties agree that downsizing to reduce the amount of a proposed discharge could be analyzed under the part of the rule that requires restrictions on a proposed discharge necessary to preserve water quality rather than under the prudent and feasible alternatives requirement of the rule, but that the prudence and feasibility of this alternative would have to be considered in either analysis.
 MPCA acknowledged at oral argument that it has authority in other areas to make decisions that will impact community growth but asserts without explanation that control of community growth cannot be achieved through the NDPES permitting process.
 See 1999
 On January, 12, 2005, the EPA published a press release, regarding its continued vision for decentralized wastewater treatment systems. See Environmental Protection Agency, Decentralized Wastewater Treatment Systems: A Program Strategy, (Jan. 12, 2005) available at http://www.epa.gov/owm/septic/pubs/septic_program_strategy.pdf (Last visited May 11, 2005). The EPA notes that decentralized systems are a “key component” of the nation’s water treatment infrastructure, and citing the 1997 report, it showed concern for areas that still needed improvement for these systems to be better recognized as the “key component” of the system. See id. at 1, 4. See also,Environmental Protection Agency, Response to Congress on Use of Decentralized Wastewater Treatment Systems, (1997), mircoformed on EPA/832/R-97/001B (U.S. Dep’t of Commerce, Nat. Technical Info. Serv.), available at http://cfpub.epa.gov/owm/septic/publications.cfm?sort=date_published&view=all (Last visited May 11, 2005).
 An assistant attorney general who was present during the staff’s presentation to the board stated that he thought Schumann meant to say that water quality standards also mattered.