NATURE OF CASE THE DEFENDANTS NAMED IN THIS REFERRAL ARE THE TOWN OF CLARKSVILLE, INDIANA, AND THE STATE OF INDIANA. THE DEFENDANT TOWN OPERATES TWO MUNICIPAL WASTEWATER TREATMENT FACILITIES, EACH OF WHICH IS DESIGNED TO HANDLE 0.9 MILLION GALLONS OF WASTEWATER PER DAY. SINCE 1981, THE TOWN HAS BEEN IN VIOLATION OF THE CLEAN WATER ACT, 33 U.S.C. SECTION 1311 ET SEQ. BOTH THE NORTH AND THE SOUTH CLARKSVILLE WASTEWATER TREATMENT FACILITIES HAVE HAD SERIOUS AND RECURRING VIOLATIONS OF THE EFFLUENT LIMITATIONS CON- TAINED IN THEIR RESPECTIVE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) PERMITS. THE TOWN HAS EXPERI- ENCED SIGNIFICANT AND RECURRING VIOLATIONS OF BIOCHEMICAL OXYGEN DEMAND, SUSPENDED SOLIDS AND FECAL COLIFORM PARA- METERS AT BOTH ITS PLANTS. U.S. EPA ISSUED ADMINISTRATIVE ORDERS TO THE TOWN ON DECEMBER 21, 1982, AND SEPTEMBER 9, 1983. IN RESPONSE TO THE ADMINISTRATIVE ORDER ISSUED DECEMBER 21, 1982, THE TOWN SUBMITTED A FACILITIES PLAN TO THE INDIANA STATE BOARD OF HEALTH AND U.S. EPA, SEEKING A FEDERAL GRANT FOR THE CONSTRUCTION OF A NEW WASTEWATER TREATMENT PLANT THAT WOULD REPLACE THE TWO EXISTING WASTE- WATER TREATMENT PLANTS. THAT PLAN WAS NOT CERTIFIED BY THE STATE OF INDIANA BUT WAS RETURNED TO THE TOWN FOR MODIFICA- TIONS. DURING THIS INTERIM, THE NEW S