WINCHESTER MUNICIPAL UTILITIES (WMU) IS A KENTUCKY MUNI- CIPAL UTILITY ENGAGED IN THE TREATMENT OF WASTEWATER FROM BOTH DOMESTIC AND INDUSTRIAL CONTRIBUTORS. WMU OPERATES THE STRODES CREEK WASTEWATER TREATMENT PLANT, WHICH DIS- CHARGES INTO STRODES CREEK, THEN TO STONER CREEK, THEN TO THE SOUTH FORK LICKING RIVER, ALL WATERS OF THE U.S. THE STRODES CREEK WWTP WAS CONSTRUCTED WITH PARTIAL FEDERAL PARTICIPATION. CONSTRUCTION OF THE STRODES CREEK WWTP WAS BEGUN IN JULY 1978 AND WAS COMPLETED IN JULY 1980. THE STRODES CREEK FACILITY HAS EXPERIENCED MECHANICAL PROBLEMS SINCE INITIAL{ START-UP. WMU CONTENDS THAT THE MECHANICAL PROBLEMS ARE CAUSED BY: 1) INADEQUATE DESIGN BY THE ENGINEER, 2) IMPROPER CONSTRUCTION BY THE CONTRACTORS, AND 3) INFERIOR EQUIPMENT FURNISHED BY THE MAJOR BIOLOGICAL TREATMENT EQUIPMENT SUP- PLIERS. THE CITY OF WINCHESTER HAS FILED SUITS AGAINST THE DESIGN ENGINEER, CONTRACTOR, AND AN EQUIPMENT SUPPLIER BECAUSE PF ALLEGED DESIGN ANDMECHANICAL DEFICIENCIES.