United States
Environmental Protection
Agency
Office of Water
EPA/812-K-92-001
September 1992
5-EPA
Helping Small Systems Comply
With the Safe Drinking Water Act
The Role of Restructuring
Providing Safe, Affordable Drinking
Water...
If you are reading this, chances are you
know of small drinking water systems that
are between a rock and a hard place. They
are trying to figure out how to stay in com-
pliance with increasingly complex Safe
Drinking Water Act (SDWA) requirements
without charging more than their customers
can afford.
Requires Doing Business Differently...
Many small systems are able to provide ex-
cellent service at a reasonable cost. How-
ever, small systems facing compliance and
financial difficulties over the long term may
want to restructure their ownership or op-
erations. Restructuring solutions can be as
simple as several systems sharing a certified
operator or as ambitious as the creation of a
regional water authority.
And Making a Team Effort.
Successful restructuring takes team work.
Careful planning is required to bring water
systems, technical assistance providers, regu-
lators, and consumers together in a coalition
that can address everyone's needs,
This brochure answers some of the most
commonly asked questions about restruc-
turing and provides sources of additional
information.
Printed on Recycled Paper
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Q: WHAT is RESTRUCTURING?
A: Restructuring is the adoption of management and/or ownership
changes that help a drinking water system address new responsibili-
ties and increased costs.
Systems can restructure in a variety of ways. For example:
Groups of small systems can buy and share services together.
Systems can contract with a private company or larger water system to
receive services such as operation and maintenance, meter reading and
billing, and sample collection and analysis.
A small system can merge with or be bought out by a larger one.
Systems may be physically connected following this kind of restructur-
ing, but they don't have to be.
Small privately owned systems can restructure into a non-profit coop-
erative or public service district and become eligible for federal and
state grants and loans.
Q: WHAT ARE THE BENEFITS OF RESTRUCTURING?
A: The primary benefit is economic. Restructuring: can give small
system operators access to technical, managerial and financial re-
sources they could not afford on their own.
Systems who make management changes through restructuring may
also benefit from:
ability to make necessary investments in facilities and personnel
more reliable and better quality service
larger rate base
access to grant and loan programs
improved ability to stay in compliance
long-term savings on increasing monitoring, treatment and operation |
costs
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Q: WON'T WATER RATES INCREASE DUE TO RESTRUCTURING?
A: Water rates are increasing for everyonesmall systems may be able
to minimize big increases by restructuring.
Changes made to the Safe Drinking Water Act in 1986 are improving health
protection. In 1986, EPA required water systems to meet standards for only
22 contaminants. Today, systems must comply with standards for more
than 80 different substances including micro-organisms and chemical by-
products of various industrial and agricultural practices.
These new requirements mean new testing and analysis expenses for all
systems and increased water treatment costs for many. Small systems will
be hardest hit because they have fewer customers to share the costs. For
example, additional water testing costs of $5,000 per year would mean $200
per family served by a system with only 25 connections. However, for a
larger system of 2,000 connections the same $5,000 expense would amount
to only $2.50 per family.
Q: DOES RESTRUCTURING MEAN LOSS OF LOCAL CONTROL?
A: No, not necessarily. Some restructuring options enable systems to
remain independently owned and operated.
Local control is a very important issue to consider in choosing whether or
not to restructure. Some restructuring options, such as contracting for
operation and maintenance services or cooperative buying, allow for a great
deal of local control. These options are also useful to consider when it is not
possible or not desirable to physically interconnect separate systems. Other
types of restructuring, such as formation of a public service district, allow
for less local control but may give a system access to grants and low interest
loans. The State drinking water program, technical assistance providers
and others can help an individual system decide on the best option.
Satellite Management Success Story
Shortly after Congress passed the Safe Drinking Water Ac t Amendments of 1986, the mayor and city council of Rolesville,
North Carolina knew the cost of providing water to the town's 714 residents was on its way up.
The town would need a trained operator who could devote more time to running the 256 connection system than did
the current operator, who had many other duties as well. But, town officials knew, the cost of training, wages, and fringe
benefits was unaffordable.
Contract operations and maintenance (O&M) was the only option the town had, felt the mayor. He presented the town
council with a proposal to hire Crosby Water and Sewer Inc. in nearby Wake Forest to run the system. The council agreed
inlate!987. , ,
Crosby Water and Sewer maintains Rolesville's wells, tests water quality, installs and reads meters. The company also
advises town officials on water system improvements and other water related issues, all for $8,500 to $9,500 a year. Thaf s *
less than even a part-time trained operator would cost, according to the mayor.
The benefits of contract O&M were not long in coming to Rolesville, officials note. During the first year that Crosby
operated the system, the company's operational expertise helped reduce by 75 percent town's use of chemicals to treat
water.
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Q: Is RESTRUCTURING THE ANSWER FOR SMALL SYSTEMS?
A: No. Small systems facing compliance problems over the long term
will need a mixture of solutions.
Every small system's situation is different. Its needs and the practicality
of meeting those needs through restructuring will vary depending on:
Local water quality
Nature and cost of required improvements
Current user costs and customer ability to pay
Geography and distance between systems
Availability of grants and loans
Availability of technical assistance
Local political considerations.
In many cases, restructuring won't solve all the problems. In addition to
restructuring systems should also consider:
Improving their mangement and operations through training and
technical assistance;
Finding out what flexibility the state drinking water program can
offerfor example, some states may be willing to require less frequent
monitoring in certain circumstances;
Utilizing appropriate low-cost technology if increased treatment is
necessary;
Educating customers about new requirements, increased health protec-
tion and rising costs.
Consolidation Creates a Regional System
Consolidating numerous non-viable drinking water systems into a single, viable one can make system improvements
affordable and ensure the provision of safe drinking water. That's what happened north of Lakeport, California, where
51 small water systems and 500 individual connections were formed into a single water system in December 1990.
Prior to consolidation, 80 percent of the area's small systems were having trouble meeting water quality standards. Both
the ground water and Clear Lake were poor sources of supply.
Residents complained about the water, and a juvenile hall in the area was having severe water quality problems.
Development of a 100-unit subdivision was threatened when the developer's well went dry after only 8 houses were
completed. The county wanted to build a jail in the area, but couldn't without adequate water.
A county-sponsored feasibility study considered eight options, including creation of a regional water system. Although
some residents faced water bill increases of $1-2 a month, voters approved the formation of a County Service Area and
decided to build a new modern treatment facility.
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Q: WHO is ABLE TO HELP SYSTEMS WITH RESTRUCTURING?
A: Small" systems have limited resources time, manpower,, equip-
ment, parts, inventory, and knowledge. Restructuring can sometimes
help to compensate for these limitations but it does require careful
upfront planning. The following organizations are interested and
knowledgeable about drinking water systems restructuring and can
help a system find a local source of assistance.
American Water Works Association (AWWA), Small System Department,
6666 West Quincy Avenue, Denver, CO 80235. (303) 794-7711.
National Rural Water Association (NRWA), 2915 South Thirteenth Street,
P.O. Box 1428, Duncan, OK 73534. (405) 252-0629.
Rural Community Assistance Program (RCAP), 602 S. King Street, Suite 402,
Leesburg, VA'22075. (703) 771-86361
State drinking water program staff and EPA Drinking Water Mobilization
Coordinators can also facilitate restructuring efforts. The SDWA Hotline
(800-426-4791) can identify the appropriate contact in your area.
Q: WHERE CAN I GET MORE INFORMATION?
A: The EPA Office of Water recently published a restructuring manual.
The Restructuring Manual (EPA570/9-91r035) covers different types of restruc-
turing options and discusses some of the most commonly encountered problems
that can slow or stop a restructuring effort. It is available from the EPA Safe
Drinking Water Hotline (1-800-426-4791) or the Office of Ground Water and
Drinking Water Resource Center, USEPA, 401 M St. SW, Washington, DC 20460.
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&EPA
Safe Drinking Water
Hotline
(800) 426-4791
U.S. Environmental Protection Agency
Drinking Water Programs
For More Information, contact the office that represents your state
EPA Region 1
GW Mngt./Water Supply Branch
John F. Kennedy Federal Building
Boston, MA 02203
(617)565-3610
Connecticut, Maine,
Massachusetts, Rhode Island,
New Hampshire, Vermont
EPA Region 2
D/G Water Protection Branch
26 Federal Plaza
New York, NY 10278
(212) 264-1800
New York, New Jersey,
Puerto Rico, Virgin Islands
EPA Region 3
D/G Water Protection Branch
841 Chestnut Building
Philadelphia, PA 19107
(215) 597-8227
District of Columbia, Maryland
Pennsylvania, Virginia,
West Virginia
EPA Region 4
Municipal Facilities Branch
345 Courtland Street, N.E.
Atlanta, GA 30365
(404) 347-2913
Alabama, Florida, Georgia,
Kentucky, Mississippi,
North Carolina, South Carolina,
Tennessee
EPA Region 5
Safe Drinking Water Branch
77 West Jackson Blvd.
Chicago, IL 60604
(312)886-6197
Illinois, Indiana, Minnesota,
Michigan, Ohio, Wisconsin
EPA Region 6
Water Supply Branch
1445 Ross Avenue
12th Floor, Suite 1200
Dallas, TX 75270
(214)655-7155
Arkansas, Louisiana, New Mexico,
Oklahoma, Texas
EPA Region 7
Drinking Water Branch
726 Minnesota Avenue
Kansas City, KS 66101
(913)551-7032
Iowa, Kansas,
Missouri, Nebraska
EPA Region 8
Drinking Water Branch
999 18th Street, Suite 500
Denver, CO 80202
(303) 293-1413
Colorado, Montana,
North Dakota, South Dakota,
Utah, Wyoming
EPA Region 9
D/G Water Protection Branch
75 Hawthorne Street
San Francisco, CA 94105
(415) 744-2250
Arizona, California, Hawaii,
Nevada, American Samoa,
Guam
EPA Region 10
Drinking Water Branch
1200 Sixth Avenue
Seattle, WA 98101
(206) 553-6648
Alaska, Idaho,
Oregon, Washington
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