ON THE NAT I ON A L S GE N E
G. Tracy Mehan, III Appointed Assistant Administrator
President Bush has appointed G. Iraq? Mehan Ed, former Director of Michigan's Office of
the Great Lakes and former member of Michigan Governor John Engler's cabinet, to the
position of Assistant Administrator for Water at the U.S. Environmental Protection Agency.
He previously served as an Associate Deputy Administrator in the EPA Administrator's office
(1992) and as Director of Missouri's Department of Natural Resources from 1989 to 1992.
Mr. Mehan was named Director of the Office of the Great Lakes in the Michigan
Department of Environmental Quality in 1993. Governor Engler also appointed him as
Michigan's representative to the executive committee of the Great Lakes Commission. Mr.
Mehan also served on the board of the regional Great Lakes Protection Fund, and he was
Michigan's representative in matters pertaining to the International Joint Commission (PjC),
established under the Boundary Waters Treaty for the protection of the Great Lakes.
As an Associate Deputy Administrator of the EPA, Mr. Mehan coordinated policy issues
for the agency and represented the Deputy Administrator in interactions with federal, state
and local agencies.
Mr. Mehan holds a bachelor's degree in history and a law degree from St. Louis
University. He will be responsible for the implementation of both the federal Clean Water Act
and the federal Safe Drinking Water Act.
Drinking Water Needs Survey and Allotment of DWSRF Funds
Every four years EPA is required to conduct a survey of national drinking water infrastruc-
ture needs. The second Drinking Water Infrastructure Needs Survey was released in
February 2001 and identified a 20 year infrastructure need of $150.9 billion
(www.epa.gov/safewater/needs.html). State needs ranged from $146 million for the State of
Hawaii to $17.5 billion for the State of California. The Safe Drinking Water Act requires that
EPA use the results of the most recent survey to allot the annual DWSRF appropriation with
CONTINUED ON PAGE 2
thesefarms can bealarge source orn~oTBpomrsource~poiiu-
u'on. Through studies we have determined that approximately
80% of the pollutant loading in the Beaver Reservoir water-
shed and the Illinois River watershed comes from nonpoint
CONTINUED ON PAGE 4
-------
SRF's Up
NATIONAL SCENE frontpage 1
version of the appropriations bill extended the flexibility per-
^manentjy^while the Senate version extended the provision for
SRF's Up
STATE ACTIVITIES AND TRENDS frontpages
sources. If we are to improve the quality of water in this area,
we wiU have to address nonpoint source water pollution.
We decided that the best approach to this problem would
be to partner with other established agencies in the area,
agencies that have the contacts necessary to be able to imple-
ment a nonpoint source program immediately. We deter-
mined that the Natural Resources Conservation Service
(NRCS) would be an ideal partner agency since they were
already working on this problem. NRCS works with local
Conservation Districts to help local landowners develop con-
servation plans and implement Best Management Practices
(BMPs). NRCS also administers the Environmental Quality
Incentives Program (EQIP), a grant program that helps farm-
ers implement BMPs. Although conservation districts review
numerous plans, the money for the EQIP is very limited, and
additional funding is needed. The Arkansas Revolving Loan
Fund seemed perfect for this task.
How did we develop this program? Our personnel first
contacted the NRCS office in Little Rock to discuss our ideas.
They invited us to a meeting of the Arkansas Association of
Conservation Districts and gave us the opportunity to speak
and explain what we wanted to do. From this meeting, we set
up appointments with district conservationists and some of
then: staff. After explaining the program to them, we then set
up further meetings not only with the conservationists but also
with local banks. s
We targeted banks within each county that had tradition-
ally supported the agricultural community. Every county has
them and they are quite easy to identify. We set up meetings
with these bankers and explained the basic elements of the
program. One of our main objectives was to make this pro-
gram as simple as possible for the banks. We also wanted to
make it as simple as possible for farmers to obtain a loan.
The development of this program was truly a joint effort by all
parties involved.
How does this program work? The basic elements of the
program for each bank are: 1) for each loan made to a
landowner, the Arkansas Revolving Loan Fund deposits an
amount equal to the loan in a non-interest bearing account
with the bank; 2) the bank's loan to the landowner has an
interest rate of 3 percent; and 3) loans are made for water
quality improvements only. :
The basic elements for a landowner are: 1) the landown-
er contacts the Conservation District and together they come
up with a Conservation Plan composed of specific conserva-
tion practices; 2) the plan is presented to the Conservation
Board for approval; 3) if the Board approves the plan, the
applicant receives a Certificate of Qualification; 4) the appli-
cant presents the Certificate to a participating Bank and com-
pletes a loan application; and 5) the bank conducts its normal
credit review; and 6) if the landowner is creditworthy, the
bank issues the loan. '
We have signed agreements with seven banks in the four-
county area. These seven banks have made over $500,000, in
-j.-t'--.iit-r --,-jcu--*;* -- i.r s ««/* js-*r.'ftv«*''* »#> ss-y-*jn-i*>tpi«rK yrf\*rrr***rr «ip*5«*-«!*>ftfr
loans to local farmers to implement best management prac-
tices such as stacking sheds, fencing, compost sheds and
trenching. We are also receiving calls from banks and con-
servation districts in other areas of the state asking us to
implement the program in their areas. j
f
As you can see, this program benefits everyone. The ,
banks earn interest on their loans, and they are able to pro-
vide a benefit to their communities by helping to improve
-------
.?- " CIS A
r L. :. - - :
O N T H E - N AT I O MA L S-.GJE N E
G. Tracy Mehan, III Appointed Assistant Administrator
President Bush has appointed G, Tracy Mehan ffl, former Director of Michigan's Office of
the Great Lakes and former member of Michigan Governor John Engler's cabinet, to the
position of Assistant Administrator for Water at the U.S. Environmental Protection Agency.
He previously served as an Associate Deputy Administrator in the EPA Administrator's office
(1992) and as Director of Missouri's Department of Natural Resources from 1989 to 1992.
Mr. Mehan was named Director of the Office of the Great Lakes in the Michigan
Department of Environmental Quality in 1993. Governor Engler also appointed him as
Michigan's representative to the executive committee of the Great Lakes Commission. Mr.
Mehan also served on the board of the regional Great Lakes Protection Fund, and he was
Michigan's representative in matters pertaining to the International Joint Commission (IJC),
established under the Boundary Waters Treaty for the protection of the Great Lakes.
As an Associate Deputy Administrator of the EPA, Mr. Mehan coordinated policy issues
for the agency and represented the Deputy Administrator in interactions with federal, state
and local agencies.
Mr. Mehan holds a bachelor's degree in history and a law degree from St. Louis
University. He will be responsible for the implementation of both the federal Clean Water Act
and the federal Safe Drinking Water Act.
Drinking Water Needs Survey and Allotment of DWSRF Funds
Every four years EPA is required to conduct a survey of national drinking water infrastruc-
ture needs. The second Drinking Water Infrastructure Needs Survey was released in
February 2001 and identified a 20 year infrastructure need of $150.9 billion
(www.epa.gov/safewater/needs.html). State needs ranged from $146 million for the State of
Hawaii to $17.5 billion for the State of California. The Safe Drinking Water Act requires that
EPA use the results of the most recent survey to allot the annual DWSRF appropriation with
CONTINUED ON PAGE 2
-------
SRF's Up
Tr
NATIONAL SCENE from page 1
the condition that each state receive a minimum of one per-
cent of the funds made available to states.
The release of the second Needs Survey report means
that EPA must adjust the allotments for each state to reflect
the results of the survey. EPA has posted the new allotment
percentages associated with the new survey on its website at
www.epa.gov/safewater/dwsriMot02.html. This revised allot-
ment will be used for the fiscal year 2002 through 2005
appropriations. The website includes an estimate of the grant
amount for each state based on the President's budget request
of $823,185,000 for fiscal year 2002 (less national set-asides
for American Indian and Alaska Native Village water systems,
monitoring for unregulated contaminants and operator certifi-
cation expense reimbursement grants). EPA will notify eaph
State of their allotment from a specific fiscal year's appropria-
tion after that year's final budget has been passed.
Budget Update
As of the writing of this newsletter, EPA was operating under a
continuing resolution pending passage of the fiscal year 2002
budget. The budget, which has had versions passed by both
the Senate and the House, was still under negotiations by con-
ferees from both houses. For fiscal year 2002, the President's
budget requested $823 million for the DWSRF program and
$850 million for the CWSRF program levels that were gen-
erally consistent with the fiscal year 2001 request (FY2001
CWSRF request was $800 million). The House and Senate
versions of the appropriations bill increased the DWSRF
appropriation to $850 million. The House bill increased the
CWSRF appropriation to $1.2 billion and the Senate bill
increased the CWSRF appropriation to $1.35 billion.
As part of its budget request EPA asked Congress to per-
manently extend to states the flexibility to transfer funds
between their DWSRF and CWSRF programs. To date, more
than 10 states have used this flexibility to address their most
pressing public heath and environmental needs. The House
version of the appropriations bill extended the flexibility per-
manently, while the Senate version extended the provision for
only one year. While it looks like transfers will be extended
into the future, the duration of the extension will not be
known until the bill is finalized.
Security and Terrorism
This newsletter comes on the heels of the terrorist attacks in
I
September which have focused attention on the potential vul-
nerability of the nation's infrastructure to acts of terrorism.
Although there is a heightened awareness of the issue at this
time, the water industry has always had to ensure that facilities
are secured against vandalism. EPA is working collaboratively
with states and organizations representing the water industry
to develop information tools and training to ensure that the
utilities are putting measures into place to protect public
health and the environment.
The SRF programs may be able to help utilities address
the infrastructure improvements they need to make to ensure
security of their facilities. Many of the types of infrastructure
improvements a water system would need to make to ensure
security are also eligible for SRF funding and have likely been
included within the scope of infrastructure projects funded
through the program to date. States may also be able to use
the SRF program to provide assistance to public water systems
and wastewater treatment plants to allow them to complete
vulnerability assessments and contingency and emergency
response plans.
EPA encourages state water programs and SRF programs
to continue to work with utilities to help them identify their
i
vulnerability to security threats and vandalism and take steps
to ensure protection of the health of their customers and the
environment.
Policy Memorandum Notes Wider CWSRF
Project Eligibilities in Estuary Study Areas
EPA recently issued a policy memorandum clarifying the eligi-
bility of certain types of projects for CWSRF funding in
-------
SRF'I Up
STATE ACTIVITIES AND TRENDS
National Estuary Program (NEP) study areas. Almost all activ-
ities identified in an estuary program's Comprehensive
Conservation and Management Plan are eligible for CWSRF
funding. For this reason, two sources of nonpoint source
pollution that are not typically eligible for CWSRF funding
concentrated animal feeding operations and stormwater flows
in larger municipalities - can be addressed in NEP study
areas. The only significant type of water quality project in an
NEP study area that cannot receive CWSRF funding is a pri-
vately owned wastewater treatment plant.
For additional information or questions, please call
Cleora Scott of EPA Headquarters at (202) 564-0687.
Arkansas Agriculture Water
Quality Loan Program
Mike Chandler, Arkansas Soil and Water
Conservation Commission
How can a nonpoint source loan program covering the whole
state be implemented? This was the challenge facing the
Arkansas Soil and Water Conservation Commission, the state
agency that administers the Arkansas Revolving Loan Fund.
After much consideration and study we decided to attack this
problem much like you eat an elephant - one bite at a time.
Since 1989, the Arkansas Soil and Water Conservation
Commission has used the Arkansas Revolving Loan Fund to
address point source poEution. We have a loan portfolio of
approximately 80 loans totaling 280 million dollars, and we
have another 130 million dollars of loans ready to come into
the program this year. 'Although we felt we were doing a good
job addressing point source pollution, we also realized that
we were not doing enough to reduce nonpoint source pollu-
tion. In reviewing state water quality information, we found
that two of the top three priority watersheds in Arkansas, the
Beaver Reservoir watershed and the Illinois River watershed,
were located in the northwest corner of the state. We there-
fore decided that the four-county area in northwest Arkansas
would be a good place to start tackling our nonpoint source
pollution problems.
The four-county area in northwest Arkansas covers more
than 2 million acres, an area roughly the size of Yellowstone
National Park. According to the Bureau of the Census, this
area is the sixth fastest growing metropolitan area in the
United States. According to data from the Department of
Agriculture, this area also contains more than 7000 farms -
these farms can be a large source of nonpoint source pollu-
tion. Through studies we have determined that approximately
80% of the pollutant loading in the Beaver Reservoir water-
shed and the Illinois River watershed comes from nonpoint
CONTINUED ON PAGE 4
-------
SRF's Up
STATE ACTIVITIES AND TRENDS frontpage 3 I
i
i
I
sources. If we are to improve the quality of water in this area,
we will have to address nonpoint source water pollution.
We decided that the best approach to this problem would
be to partner with other established agencies in the area,
agencies that have the contacts necessary to be able to imple-
i
ment a nonpoint source program immediately. We deter- |
mined that the Natural Resources Conservation Service [
(NRCS) would be an ideal partner agency since they were !
already working on this problem. NRCS works with local !
Conservation Districts to help local landowners develop con-
servation plans and implement Best Management Practices
(BMPs), NRCS also administers the Environmental Quality
Incentives Program (EQIP), a grant program that helps farm-
ers implement BMPs. Although conservation districts review
numerous plans, the money for the EQIP is very limited, and
additional funding is needed. The Arkansas Revolving Loan
Fund seemed perfect for this task.
How did we develop this program? Our personnel first
contacted the NRCS office in Little Rock to discuss our ideas.
They invited us to a meeting of the Arkansas Association of
Conservation Districts and gave us the opportunity to speak
and explain what we wanted to do. From this meeting, we set
up appointments with district conservationists and some of
their staff. After explaining the program to them, we then set
up further meetings not only with the conservationists but also
with local banks. '
We targeted banks within each county that had tradition-
ally supported the agricultural community. Every county has
them and they are quite easy to identify. We set up meetings
with these bankers and explained the basic elements of the
program. One of our main objectives was to make this pro-
gram as simple as possible for the banks. We also wanted to
make it as simple as possible for farmers to obtain a loan.
The development of this program was truly a joint effort by all
parties involved.
How does this program work? The basic elements of the
program for each bank are: 1) for each loan made to a
landowner, the Arkansas Revolving Loan Fund deposits an
amount equal to the loan in a non-interest bearing account
.with the bank; 2) the bank's loan to the landowner has an
interest rate of 3 percent; and 3) loans are made for water
quality improvements only.
The basic elements for a landowner are: 1) the landown-
er contacts the Conservation District and together they come
up with a Conservation Plan composed of specific conserva-
tion practices; 2) the plan is presented to the Conservation
Board for approval; 3) if the Board approves the plan, the
applicant receives a Certificate of Qualification; 4) the appli-
cant presents the Certificate to a participating Bank and com-
pletes a loan application; and 5) the bank conducts its normal
credit review; and 6) if the landowner is creditworthy, the
bank issues the loan.
We have signed agreements with seven banks in the four-
county area. These seven banks have made over $500,000 in
: ;* w,..-f-*=..'-..-. *« '.. -,f = ; rr. ~*f t V**'.,. ,-.o«>"rir" V* ?-1*nf*^f1 *WJ?*v*-»rt*
loans to local farmers to implement best management prac-
tices such as stacking sheds, fencing, compost sheds and
trenching. We are also receiving calls from banks and con-
servation districts in other areas of the state asking us to ,
implement the program in their areas.
As you can see, this program benefits everyone. The .
banks earn interest on their loans, and they are able to pro-
vide a benefit to their communities by helping to improve
-------
SRF's Up
water quality. Farmers receive low interest rates on their
loans. Conservation districts implement best management
practices on a larger number of farms. And the Arkansas Soil
and Water Conservation Commission impacts the nonpoint
source poEution problem, thereby improving the quality of
the state's waters and the quality of We of the state's citizens.
We all win because we have brought varied groups together to
increase people's awareness of environmental needs, taken
action to address specific sources of water poEution, and
made a positive difference for the environment.
For additional information contact Mike Chandler,
Arkansas SoE and Water Conservation Commission,
(501) 682-0547 or emaE mike.chandler@maE.state.ar.us.
State Focus on Value Engineering through
the DWSRF- Iowa's Use of the Technical
Assistance Set Aside for Small Drinking
Water Systems
Based on a presentation for the 2001 State
Revolving Fund Program Management Workshop -
Dennis Alt, Water Supply Section Supervisor of the
Iowa Environmental Protection Division
The Value of Value Engineering
Value Engineering (VE) is a systematic approach maximizing
facEity performance whEe minimizing unnecessary Me cycle
and up front construction costs. Value engineering works to
identuy cost-saving alternatives, without sacrificing quality,
reliabEity or efficiency.
The Feasibility of Funding Value Engineering
through the DWSRF
In an effort to determine if value engineering is "of value" to
small public water systems, Iowa recently completed a demon-
stration project of value engineering studies for four smaE
drinking water projects funded by the DWSRF Technical
Assistance Set-Aside. After the four public water systems assess
the results of Eieir value engineering studies and move for-
ward, construction costs wEl be supported by DWSRF loans.
Iowa's Water Supply SRF Program (http://www.state.ia.us/
government/dnr/organiza/epd/wtrsuply/wtrsup.htm) selected
an experienced engineering firm to provide value engineering
services to the Mowing four drinking water projects:
Project 1 - Upgrade Treatment & Storage
Project 2 - New Treatment Plant
Project 3 - Upgrade Treatment and Distribution System
Project 4 - New ClearweE
The value engineering process is conducted with a team.
VE team members must have project-specEic experience and
coEectively possess a varied background in areas such as
process design, structural or architectural design, electrical or
mechanical engineering, and knowledge in operations or proj-
ect construction.
Once the team was established, Iowa set out with assis-
tance from the engineering contractor to test the feasibEity of
the seven-phase Value Engineering process. These stages are
information coEection, functional definition, alternative gener-
ation, alternative analysis (screening), final recommendation,
proposal presentation and final implementation. In working
through this process for each of the four drinking water
demonstration projects, Iowa looked to answer the foEowing
three questions:
Is there a benefit to completing value engineering on smaE-
er drinking water projects?
CONTINUED ON PAGE 6
-------
Step's Up
STATE ACTIVITIES AND TRENDS frontpages I
\
I
What is a reasonable cost for the process? j
Would this process improve public water system capacity?
i
Case Studies in Value Engineering
Following completion of Iowa's demonstration project, the
four drinking water projects are expected to achieve a savings
of 10% overall with a total VE contract cost of $50,000 ,
(between $16,000 and $17,000 per project). (See figure 1.)
Two of the four case studies are described in detail below. For
additional case study information, please refer to the contact
information provided following the project descriptions.
Project 1st Cost
Savings
1st $74
2nd $192
3rd $154
4th $350
Total $770
As % 10%
Life Cycle
Savings
$66
$180
$425
$360
$1,031
13.5%
Other
Savings
$36
$117
$74
$227
3%
Project
Costs
$334
$1,500
$795
$5,006
$7,62$
i
VE Cost $50
Figure 1
All Costs in $1,000
Project 1 - Upgrade Treatment and Storage
Population:
Project Costs:
First Cost Savings:
Life Cycle Savings:
Other Savings:
500
$334,000
$74,000
$66,000
$36,000
Project one had an initial estimate of project costs of
$334,000 to upgrade existing treatment and storage facilities
including the installation of a new well, a new rehab treat-1
ment building, new aeration, detention and filtration systems,
a new chemical feed system, a new high service pumping
rr * i i r i ~
,J:
facility, a new emergency generator and new water mains for
looping and extension purposes.
The value engineering process recommended twelve full
serace alternatives that would reduce first costs by $74,000
<
(or 21% of total project costs) and Me cycle costs by
$66,000. Two reduced function alternatives would reduce first
costs by $36,000.
. Recommendations included using alternate building j
materials and treatment system equipment, changing the
building layout and/or size, and changing the location of new
water mains.
The engineer and the public water system owner adopted
many of the recommended suggestions, and they believe the
effort has designed a better project through VE-related cost
savings.
Project 2 - New Treatment Plant
Population:
Project Costs:
First Cost Savings:
Life Cycle Savings:
Other Savings:
2000
$1.5 M
$192,000
$180,000
$117,000
-------
SRF's Up
Project two had an initial cost estimate of $1.5 million for the
construction of a new treatment plant including the installa-
tion of new wells, new aeration and detention facilities, new
filters, a new chemical feed system, new clearwell and high
sendee pumps, a new backwash reclamation system, and a
new building.
The value engineering process recommended eleven full
service alternatives predicted to reduce first costs by
$192,000 (or 13% of the total costs) and life cycle costs by
$180,000. In addition, two reduced function alternatives were
predicted to reduce first costs by $117,000.
Full function recommendations included relocating the
aerator and detention facilities outdoors, using two rather
than three filters, using alternate building materials, changing
building layout and/or size and changing the treatment system
equipment (e.g. changing to unitized aeration/detention/filtra-
tion). Reduced function recommendations included replace-
ment of the backwash recovery tank with lagoon and waste
backwash water, elimination of pumped backwash and a
reduction of the clearwell size.
Conclusion: Is Value Engineering of Value?
In the past, value engineering was not often viewed as a viable
option due to the small number of engineering firms qualified
to assist with such an undertaking. However, these circum-
stances are no longer present today with increases in the num-
ber of qualified engineering firms available to assist on such
projects. Although value engineering remains a difficult sell to
individual water systems, it is important to explore the benefits
of such methods, as cost savings realized may be significant.
The cost savings realized through the implementation of VE
recommendations free funds for other SRF projects. In addition,
VE cost savings reduce the need for project subsidies and free
local funds for other services such as wastewater management,
solid waste treatment and education. Through this demonstra-
tion project, Iowa has proven that VE cost savings can be recov-
ered several times over, even on fairly small drinking water sys-
tem projects. Iowa hopes to use the value engineering process
with at least 10 more projects in its SRF program.
For further information, please contact Dennis Alt, Water
Supply Section Supervisor of the Iowa Environmental
Protection Division at (515) 725-0275.
State Activities and Trends Briefs
Wisconsin Makes CWSBF Loans to Brownfields
The State of Wisconsin passed legislation that allocates $20
million of its CWSRF funding to municipal projects that
address brownfield site impacts on water quality. The CWSRF
program offers loans with interest rates that are 55 percent of
the municipal bond market rate. To date, Wisconsin has fund-
ed two brownfield cleanup projects for $1.9 million.
One site that used CWSRF funding was the City of
Plymouth landfill. Plymouth used this site for the disposal of
construction debris, commercial waste, and industrial waste
from 1955 through 1990. A $1.3 million CWSRF loan support-
ed investigation and remediation of the site. The city capped
and covered the landfill and installed groundwater monitoring
equipment. The low-interest CWSRF loan will save the city
hundreds of thousands of dollars.
New Mexico Starts Brownfield Funding
through the CWSRF
New Mexico's Voluntary Remediation Program was introduced
in July 1999. This program hopes to use CWSRF funding to
encourage the voluntary cleanup of brownfield sites. Two projects
CONTINUED ON PAGE 8
-------
SFIF's Up
STATE ACTIVITIES AND TRENDS/ro>»/>a£e 7 ;
are currently planned. The City of Santa Fe plans to use
CWSRF funds for site assessment, remediation and water qual-
I
ity monitoring, and the City of Deming plans to use CWSRF
funds for site assessment and soil remediation.
In 1995, the City of Santa Fe purchased an idle
railyard^ndustrial site of 50 acres that was initially developed
in the 1880s. The city plans to improve the water quality of
the Acequia Madre (an irrigation canal that runs through the
site) and redevelop the property with a mixture of uses. The
city is completing a comprehensive environmental assessment
for the properly with the support of an EPA Brownfields Pilot
Grant. CWSRF funding will support water quality monitoring,
environmental studies, risk assessment, and remediation ;
activities that address water quality. |
i
This project is expected to cost $21 million. The city
plans to finance approximately $4 million (20 percent of the
project cost) with a CWSRF loan. A three-percent CWSRF loan
will allow the project to remain financially viable and will help
keep future lease rates attractive to developers. The city will
use residential and retail lease payments to repay the loan.
The Peru Hill Mill site in Deming, NM covers 1,320 acres
of abandoned zinc mining lands. Uncontained tailings (refuse
that remains after ore has been processed) in a 104 acre
impoundment and windblown tailings on 161 adjacent acres
have caused elevated levels of lead, arsenic, cadmium, cobalt,
copper, iron, manganese and zinc in soils on the site. These
contaminants threaten the City of Deming's drinking water J
groundwater that runs underneath the property. The project will
include site investigation and remediation activities. The city has
I
applied for a $300,000 CWSRF loan to assist with cleanup of the
site. If this application is approved, the CWSRF loan will have a
20-year term and an interest rate of one percent.
Missouri - Capacity Development Grants
through the DWSJRF
In an effort to increase the involvement of small water systems
in the DWSRF, Missouri has created a grant program to fund
engineering contract services through the Technical Assistance
Set Aside of the DWSRF. Grant funds through this program ;are
used to help small water systems achieve and maintain techni-
cal, managerial, and financial capacity. The Missouri
Department of Natural Resources has been successful in
increasing the number of small drinking water systems that
apply for DWSRF funding.
Since inception three years ago, this grant program has
funded nearly 40 capacity development projects for small
drinking water systems. A competitive application process for
ranking projects ensures the most pressing system problems
are addressed first. Priority ranking is based on items in such
areas as system compliance, source water information, distri-
bution information, storage information, and consolidation |
options. Grants funded through the DWSRF technical assistance
set-aside may be used for up to 90 percent, or $10,000, per
report for engineering services to small water systems. These
grants are paid directly to the contracted engineering firm and
each firm is directly chosen by the individual water system
rather than at the state level. The remaining 10 percent, or any
amount exceeding $10,000, is eligible for financing under the
DWSRF, and is to be paid directly by the water system.
-------
»,-***,
SRF's Up
IN THE WORKS
EPA Preparing Response to
Peer Review of Gap Analysis
In the last two years, the American Water Works Association,
the Association of Metropolitan Sewerage Agencies, the Water
Environment Federation, and the Water Infrastructure
Network issued three separate reports with a similar conclu-
sion - current levels of wastewater and drinking water infra-
structure spending will not meet future needs. These organi-
zations suggest that the nation will require multi-billion dollar
increases to its annual infrastructure investments.
EPA reviewed these reports and recently completed a
study of its own to quantify the difference between historic
wastewater and drinking water infrastructure spending and
estimated needs for the next twenty years. This "gap analysis"
suggests that wastewater and drinking water systems may
require significant additional investments to meet projected
needs.
EPA is using a peer review process to evaluate its find-
ings. Peer reviewers from varying backgrounds including
economics, public finance, statistics, engineering and infra-
structure management have reviewed the gap analysis report.
EPA is reviewing the comments provided by the reviewers and
hopes to produce a final report later this year.
DWSRF Products in the Works
The DWSKF program continues to work on a report to
Congress on the status of state DWSRF programs through fis-
cal year 2001. The report will include information from the
DWSRF National Information Management System and will
include descriptions of each of the programs for the fifty
states and Puerto Rico. EPA expects to release the document
in the early part of 2002.
The DWSRF program is also working to develop a series
of fact sheets on new rules which highlights the types of infra-
structure improvements that may be needed to help systems
comply with the regulations. The 1996 SDWA Amendments
included a demanding schedule for rule development that will
require many systems to come into compliance with new reg-
ulations during the period between 2000 and 2006. It is
hoped that the fact sheets will help state DWSRF programs
market their services to utilities that will need to address their
infrastructure needs in the next several years.
GAO Reports
During the past year and a hah0, the General Accounting Office
(GAO) has been busy responding to Congressional requests
by developing reports that directly or tangentially address the
SRF programs. In August 2000, the GAO released a report,
Drinking Water: Spending Constraints Could Affect States'
Ability to Implement Increasing Program Requirements
(GAO/RCED-00-199). In reporting on states' ability to fund
and maintain drinking water programs, the report investigated
state usage of DWSRF set-aside funds and challenges that
states were having in utilizing funds.
In July 2001, GAO released U.S. Infrastructure:
Agencies'Approaches to Developing Investment Estimates
Vary (GAO-01-835). As part of the report, GAO reported on
the methods used for the Drinking Water and Clean Water
Infrastructure Needs Surveys.
Two additional reports are pending for this fall. The first
is reviewing EPA's oversight of state DWSRF programs and
state utilization of provisions intended to assist disadvantaged
communities. The second is reviewing funding of water and
wastewater infrastructure in the nation over the past ten years
- from federal, state and local sources.
New SRF State Activity Updates
in Development
EPA Headquarters regularly publishes activity updates that
highlight innovative activities in SRF programs. Whereas SRF
fact sheets provide one-page overview descriptions of a topic
(e.g., funding estuary projects with the CWSRF), state activity
updates provide more detailed discussions of topics (e.g.,
CONTINUED ON PAGE 10
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SRF's Up
10
IN THE WORKS from page 9
New Jersey's cross-collateralization structure). EPA is devel-
oping four new state activity updates. One will highlight
CWSRF programs that support private borrowers addressing
nonpoint sources of pollution. A second report will discuss
how a few forerunning states use CWSRF funds to address
water pollution from brownfield sites. A third report will
highlight how states have integrated SRF application processes
with the application processes of other state and federal fund-
ing programs. A fourth report will discuss financial planning
in SRF programs.
Released Reports, Factsheets, and Updates
The DWSRF and CWSRF programs have released many reports
and factsheets in the past year. To download these docu-
ments, please visit the DWSRF and CWSRF websites.
(wwv.epa.gov/safewater/dwsrf.html, www.epa.gov/owm/finan.htm)
Implementation of Transfers in the Glean Water and
Drinking Water State Revolving Fund Programs -
Report to Congress, October 2000
Accelerated Loan Commitment in the SRF Program,
October 2000
Potential Roles for Clean Water State Revolving Fund
Programs in Smart Growth Initiatives, October 2000 j
The Drinking Water State Revolving Fund: Financing
America's Drinking Water, November 2000
Development, Selection, and Pilot Demonstration of
Preliminary Environmental Indicators for the Clean
Water State Revolving Loan Program, March 2001
Integrated Planning and Priority Setting in the Clean
Water State Revolving Fund Program, March 2001
Financing America's Clean Water Since 1987A Report
of Progress and Innovation, May 2001
Using Drinking Water State Revolving Fund (DWSRF)
Set-Aside Funds for Capacity Development and Technical
AssistanceExamples of Requests for Proposals, June 2001
FAXBACK FORSVI
Please fax to EPA Headquarters:
CWSRF PROGRAM (Attn: S. Platt) 202-501-2403
or
DWSRF PROGRAM (Attn: V. Blette) 202-401-2345
Comments on Current Newsletter:
Suggestions for Articles or Event Announcements
in Future Newsletters:
If you wish to receive future newsletters, please com-
plete the following to be added to the mailing list:
Name: '
Title:
Address:
email:
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SRF's Op
1. American Water Works Association Water
Sources Conference & Exhibition: Reuse,
Resources, Conservation
Location: Las Vegas, Nevada
Date: January 27 - 31, 2002
Information: www.awwa.org/02Sources
2. Association of State and Interstate Water Pollution
Control Agencies Mid-Year Meeting
Location: Alexandria, VA
Date: March 10 - 13, 2002
Information: www.asiwpca.org
3. Association of Metropolitan Water Agencies
Legislative and Regulatory Conference
Location: Washington, D.C.
Date: March .1.8.- 20, 2002
Information: www.amwa.nef/features/meetings
4. Council of Infrastructure Financing
Authorities Annual Legislative Conference
Location: Washington, D.C.
Date: May 2-3, 2002
Information: www.cifanet.org/conf.html
5. Association of Metropolitan Sewerage Agencies
National Environmental Policy Forum & 32nd
Annual Meeting
Location: Washington, D.C.
Date: May 18 - 22, 2002
Information: www.amsa-cleanwater.org/meetings
6. Managing Extremes- Floods and Droughts, EWRI
2002 Conference on Water Resources Planning &
Management
Location: Roanoke, VA
Date: May 19 - 22, 2002
Information: www.asce.org/conferences/eventsmore.cfm
1. CWSRF/DWSRF@EPA
Both SRFs maintain pages on the EPA website with informa-
tion on the programs. Both sites contain guidance, policy
documents and contact lists for state and regional staff.
The URLs are as follows:
CWSRF: www.epa.gov/owm/finan.htm
DWSRF: www.epa.gov/safewater/dwsrf.html
The DWSRF site includes a link to a Local Drinking Water
Information page, which has state by state information on
drinking water systems and programs. Where available,
this page includes a link to state DWSRF programs.
2. National Associations
American Water Works Association: www.awwa.org
Association of Metropolitan Sewerage Agencies:
www.amsa-cleanwater.org
Association of Metropolitan Water Agencies:
www.amwa.net
Association of State Drinking Water
Administrators: www.asdwa.org
Association of State and Interstate Water Pollution
Control Agencies: www.asiwpca.org
Council of Infrastructure Financing Authorities:
www.cifanet.org
National Association of Water Companies:
www.nawc.org
3. State Programs
Many SRF programs have websites that are used to provide
program information and application materials. This
newsletter places a spotlight on Washington.
Washington State Department of Ecology:
www.ecy.wa.gov/programs/wq/funding/2002 (CWSRF)
Washington State Department of Health
www.doh.wa.gov/ehp/dw/Our_Main_Pages/
DWSREhtm (DWSRF)
11
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SRF's Up
vvEPA
United States
Environmental Protection
Agency
Washington, DC 20460
Official Business
Penalty for Private Use
$300
12
li
^fy*f-7- 3
"V
IN THIS ISSUE.
On the National Scene
G. Tracy Mehan, HI Appointed Assistant Administrator
Drinking Water Needs Survey and Allotment of DWSRF Funds
Budget Update
Security and Terrorism
Wider CWSRF Project Eligibilities in Estuary Study Areas
State Activities and Trends
Arkansas Agriculture Water Quality Loan Program
State Focus: Value Engineering through Iowa's DWSRF
Wisconsin Makes CWSRF Loans to Brownfields
New Mexico Starts Brownfield Funding through the CWSRF
Missouri - Capacity Development Grants through the DWSRF
In the Works - Report on Ongoing SRF Activities
Peer Review of Gap Analysis
DWSRF Products in the Works ,
GAO Reports
New SRF State Activity Updates in Development
Released Reports, Factsheets, and Updates
SRF Fax Back Events SRF Links
Clean Water
State Revolving Fund
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