United States
Environmental Protection
Agency __
Office of Water
Washington, DC 20460
EPA812/N-92-001
Volume 5
July 1992
vvEPA
Meeting the Challenge
An Update on OGWDW's Mobilization Effort
Helping Small Systems Comply With the SDWA:
The Role of Restructuring
The sweeping changes made to the Safe Drinking Wa- work with small systems to make these changes.
ar« ,mr>rm/m«r pa . Sometimes, struggling water systems will seek to re-
structure on their own. However, as the problem of
non-viable systems grows, many States and technical
assistance providers are taking an assertive approach.
Three States with strong traditions of addressing non-
viability head-on are Washington, Connecticut, and
Pennsylvania. Each has passed mandatory restructur-
ing legislation. This issue of Meeting the Challenge in-
cludes a special section which highlights their pro-
gram. Copies of the enabling legislation are included.
Helping small systems comply with the SDWA is one of
the key themes of the Mobilization effort. This issue
also includes articles on small system viability, peer
assistance programs, Statewide SDWA workshops, the
new National Drinking Water Clearinghouse, and the
recommendations of the Governor's forum.
cvci*/ ITl3I\y SITftelll &yoitnu **»*. ***«**»»»^ ».«-» „..—j
fundamentally change their management and opera-
tions in order to stay viable in today's regulatory envi-
ronment. Small systems have few customers to share
the costs of new requirements. For example, for a very
small system of 40 connections, additional water test-
ing costs of $5,000 per year would amount to $125 per
family. However, for a system of 2,000 connections that
$5,000 expense would amount to only $2.50 per family.
States and technical assistance providers can help small
systems with compliance and financial difficulties by
promoting restructuring options. Restructuring can be
as simple as several systems sharing a certified opera-
tor or as ambitious as creating a regional water author-
ity. EPA's new Restructuring Manual (page 3), is de-
signed to guide State regulators and others as they
Inside...
Helping Small Systems Comply With the SDWA 1
EPA Issues Revised Mobilization Strategy 2
Mobilization Contacts 2
New Manual Promotes Small System Restructuring 3
Statewide SDWA Workshops Achieve Success 4
Alaska, Arizona Hold Decision-makers Workshops.. ......4
Drinking Water Video Available 5
Secrets of Successful Workshops 6
New Services From the National Drinking Water
Clearinghouse 7
jur System Viable? By John McCarthy 8
Assistance Programs Help Small Systems Stay in
mpliance *
Problem of Liability in Peer Assistance Programs 10
jurce Analysis Model to Help in State Planning 11
•emor's Forum Recommends SDWA Reforms 121
MEETING THE
CHALLENGE
SPECIAL REPORT
Restructuring
Non-Viable Systems
by Law
+ Connecticut Takeover
Statutes, Public Service
Companies, Title 16
+ Washington Laws, 1990:
Chapter 133 [Substitute
Senate Bill No. 6447] Failing
Public Water Systems
+ An Act Amending Title 66
(Public Utilities) of the
Eennsvlvania Consolidated
Printed on Recycled Paper
-------
Meeting the Challenge
EPA Issues Revised Mobilization Strategy
TheOfflceofGroundWaterand Drink-
mg Water (OGWDW) and the EPA Mobilization Contacts
Regions recently revised their Mobili-
Roger Barnes National Mobilization Manager 202-260-4194
strategyidentifiesthreeinitiatives: State James Boijme State Capacity 202-260-5557
Capacity, Small Systems, and Public David Schnare Low Cost Technology 202-260-5541
Education. These initiatives represent Beth Hall Publications 202-260-5553
a consolidation and refocusing of the
old strategy’s seven initiatives: State
Capacity; Institutional Support; LoCal Regional MobilizatIon Coordinators
Health Officials; Non-Transient, Non-
Community Systems; Technology; Region I Al Wong 617-565-3608
Training; and Public Education. Region I I Richard Narang 212-264-7675
RegionalDrinkingWaterBranchChiefs Region Ill Jacqueline Pine 215-597-6531
are using the new strategy to prepare Region IV Kristi Watkins 404-347-2913
mobilization workp lans for theremain- Region V Christine Urban 312-886-9546
derofFY ‘92and FY’93. Regionshave Region VI Nancy Jenner 214-655-7155
been asked to give priority to State Region VII Glen Yager 913-551-7296
capacity and to mvolving the States m
meeting the Mobilization objectives. Region VIII Patricia Henry Denham 303-293-1420
Copies are available from Regional Region IX Michelle Moustakas 415-744-1850
Mobilization Coordinators or Roger Region X Larry Worley 206-553-1893
Barnes at EPA Headquarters.
DRINKING WATER MOBILIZATION STRATEGY
L State Program Capacity Initiative
Objective 1: Increase State drinking water program and laboratory capacity through increased appropria-
tions and/or use of alternative funding mechanisms (user fees). Where necessary, expand State
Program authority (penalties, certification, etc.) through legislative change.
Objective 2: Develop third party contracts with Local Health departments, rural water associations, and
• others todo inspections/sanitary surveys, sampling, etc.to maximiz. State program resources.
II. Small Systems Initiative
Objective 1: Establish State Viability Programs; encourage restructuring of non-viable systems; increase
understanding of s tstem financing options; and encourage public private partnerships.
Objective 2: Expand use of appropriate technology.
Objective 3: Assist formation of State training and TA coalitions.
Objective 4: Promote pollution prevention of drinking water sources;
III. Public Education Initiative
Objective 1: Educate consumers on public health and other benefits of SDWA regulations. Focus public
education efforts on creating willingness to pay, promoting compliance and supporting State
primacy retention.
CONTACT: Roger Barnes, National Mobilization Coordinator at 202-260-4194.
2 July1992
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An Update on OGWDW’s Mobilization Effort
New Manual Promotes Small System Restructuring
Non-viablesystems lack the techni cal ,financial,or managerial
capabilities to comply with drinking water regulations. You
know thesesyst ems. They cause you continual distress. They
take up much of your time, yet their problemsare never really
solved. — “Restructuring Manual.”
The problem of non-viable drinking water systems is
bound to get worse as the 1986 Amendments to the Safe
Drinking Water Act (SDWA) are fully implemented.
Systems struggling to meet current State and Federal
regulations may simply collapse under the weight of
additional monitoringand reportingrequirements, new
treatment infrastructure, and other requirements. And
if they do, the additional problems for State drinking
water programs will become enormous. -
Rather than wait for the seemingly inevitable disaster,
State regulators, technical assistance providers and
local officials can act decisively to promote drinking
water system restructuring. Restructuring is the adop-
tion of management or ownership changes that help a
drinking water system absorb new responsibilities and
increased costs. EPA’snew Rest ructuringManual (EPA!
570-9-91-035) is designed to help State regulators, tech-
nical assistance providers, and small systems in re-
structuring efforts.
Drawing on lessons from successful and unsuccessful
restructuring attempts, the manual is a step-by-step
guide to promoting restructuring. It defines the pro-
cess and addresses the commonly encountered barn-
ers. A list of experts willing to help in restructuring
efforts is also provided.
Restructuring addresses non-viable systems’ lack of
economies of scale. It enables independent water sys-
tems to make the managerial and operational changes
necessary to share resources—often without being
physically interconnected. The three major categories
of restructuring are:
• contracting for operations and maintenance (O&M)
services,
• mergers and acquisitions, and
• creation of a new water system.
Systems, consumers, and the State can all benefit from
restructuring.
Benefits to systems include:
• increased economies of scale,
• potential long-term savings,
• improved customer service, and
• improved planning for future operations.
Benefits to consumers include:
• improved water quality,
• reduced long-term costs, and
• increased reliability of supply.
Benefits to the State include:
• fewer customer complaints,
• improved compliance with regulations,
• resource savings, and
• potential reduction in the number of regulated
systems.
State drinking water programs play a key role in small
system restructuring. For example, the State can iden-
tify the systems most in need of restructuring, and often
can set the specifications for a feasibility study.
Perhaps most important, States can promote restruc-
turing by aggressively enforcing drinking-water regu-
lations. For as the Manual notes, “ [ States] must be
willing to take enforcement actions that will give the
non-viable system an incentive to consider major
changes in the way it does business. You have to make
it clear that compliance is not optional; doing nothing
is not an alternative for non-viable, non-compliant
systems.”
State laws and local attitudes, situations, and concerns
will vary greatly, so the Restructuring Manual suggests
solutions to barriers to restructuring that have been
raised in the past. These barriers include liability issues;
historical antagonisms; fears of development, loss of
local control or revenues; and consumer “rate shock.”
Safe Drinking Water Hotline
1-800-426-4791
Ordering Information...
To get your copy of the Restructuring Manual
(EPA/570-9-91-035), call the Safe Drinking Water
Hotline at 1-800-426-4791, or write to:
OGWDW Resource Center
WH-550, USEPA
401 M Street SW
Washington, DC 20460
July1992
3
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Meeting the Challenge
Statewide SDWA Workshops Achieve Success
The experience of three States—
Oklahoma, Massachusetts, and
Nevada—ifiustrates how strategic
planning and preparation can
make the most of the opportunity
to talk directly with system opera-
tors and others interested in drink-
ing water.
In Oklahoma, organizers concen-
trated on the advantages of State
primacy and actively encouraged
systems to lobby their State legis-
lators. As a result, Oklahoma re-
cently had a funding increase. In
Massachusetts, State officials co-
ordinated with a US. Congress-
man to encourage local officials to
attend. The workshop also got the
Congressman’s attention, and his
staff is now actively discussing
State-wide funding options. In
Nevada, the workshops were a
multi-agency volunteereffort. The
Director of the Nevada Associa-
tion of Counties (NAC) was asked
to help organize the meetings.
Facilitiesand lunch were provided
by the towns and the NAC. The
State also has help in follow-up
from its Cooperative Extension
Service and its Rural Water Asso-
ciation.
Oklahoma
Public support for primacy and
the means to maintain it, gener-
ated at least in part through state-
wide workshops, is credited with
promoting a recent increase in
drinking water funding. The Okla-
homa legislature raised the mini-
mum water meter charge from 10
cents to 25 cents per month (in-
creasing drinking water program
funds by $350,000a year) and voted
Alaska, Arizona Hold
Decision-makers Workshops
K ey Arizonan and Alaskan decision-makers heard about the chal-
lenges facing State drinking water programs directly at separate
workshops last fall.
“We briefed Arizona’s administration on the state of the water
industry, the state of our regulatory oversight program, and the need
to address the developing crisis to ensure that people get safe drinking
water,” said Robert Munari, manager of the Water Compliance Section
in the Department of Environmental Quality.
About 100 regulators, legislators, and water industry and public
interest group representatives attended the November seminar. Top-
ics included the viability of small systems, alternatives for funding the
state oversight program, and administrative penalty provisions to
encourage voluntary compliance with monitoring requirements.
The event kicked off consensus building among the interested
parties. “We felt we had support from the water supply industry, but
we had been unable to get the policy makers to address these issues,”
said Munari. Hence the direct approach. Munari said a 40-page
briefing document helped focus discussion and continues to be a
useful resource.
A blue-ribbon commission to study drinking water issues and
recommend regulatory and statutory changes is anticipated, in part as
a result of the seminar. The commission is scheduled to report to the
governor late this year.
() ur luncheon generated interest and brought drinking water is-
sues to the front burner,” said Bob Walker. Chair of the South
Central District of the American Water Works Association’s Alaska
section, he organized the four-hour workshop of legislators, admims-
tration officials, and EPA officials. About 130 people attended.
Retaining primacy wasa main focus, and state officials indicated
they want to retain the authority to run a state drinking water pro-
gram, Walker said. But that will require funding, something the
luncheon was intended to promote. Walker plans a follow-up work-
shop to review progress in proposing regulatory language to imple-
ment new federal requirements.
“EPA officials from Region X and Headquarters helped make
this successful,” said Walker. That, and a lotof telephone calls to water
users, providers, legislators and others. “You have to go out and
communicate with as many people who are going to be affected as
possible,” he said.
State drinking water programs are taking their SDWA
message on the road—holding workshops, meeting
with water system operators and local decisionmakers—
to explain the impact of federal regulations on drinking
water suppliers and State drinking water programs.
They are explaining that systems will have new and
more complex responsibilities in the near future, and
that State drinking water programs need increased
State funding to maintain primacy.
to increase State Environmental Laboratory funding by
$350,000.
One key was that in Oklahoma, state laboratories ana-
lyze all samples for contaminants. Losing primacy
would mean drinking water systems would pay more
for sampling, workshop speakers explained. “The
selling point,” says Nancy Jenner, Mobilization Coor-
dinator for Region VI, “is that State fees are 20 percent
Alaska AWWA Spearheads Primacy Efforts
4
July 1992
-------
An Update on OGWDW’s Mobilization Effort
lower than private labs, and they can pass that savings
on to the systems.”
Judy Duncan of the Oklahoma Department of Health
Laboratory, who has helped organize workshops for
two years, believes that of the three sources of fund-
mg—local, state, federal—the most likely in Oklahoma
is the state. So she has “made overt appeals to work-
shop participants to work on the legislature to increase
funding for the program,” and Duncan assists them by
distributing district maps. The direct link between
primacy and laboratory costs was also useful.
Duncan acknowledges that some may regard her ap-
peals as lobbying, but she believes it .is essential to
inform the public about all funding options realisti-
cally. “They’re telling The truth in Oklahoma work-
shops, and they’re telling it frankly,” says Nancy Jenner.
The feedback has been positive, Duncan says. After
approximately 50 workshops that attracted 50 to 150
participants each, only one person has criticized the
approach. Duncan also receives two or three calls each
week from financial planning boards asking for advice.
Organizers of the Oklahoma workshops give every
participant a 200-page booklet containing copies of the
slides, information about the SDWA, vulnerability as-
sessment reports, Oklahoma public water supply regu-
lations, and other information to take home. If you
have more questions about this booklet, call Judy
Duncan at (405) 271-5240.
Massachusetts
Organizers in other states find that encouraging local,
state, and even federal politicians to attend SDWA
workshops can help focus local attention on statewide
drinking water issues.
Members of U.S. Congressman John Olver’s staff were
invited to a workshop by the state’s Department of
Environmental Protection (DEP). Before the work-
shop, Olver’s staff had often fielded questions about
state funding for water from concerned local officials in
his western Massachusetts district. Olver’s staff could
answer few of the questions. “The incentive for us to
attend,” says Pat Sackery of Olver’s District Office,
“was that so many people didn’t have the answers to
questions that affect so many of our constituency.”
This workshop was one of five held last spring spon-
sored for local health officials by the State Drinking
Water program (MA DEP), EPA Region I, and the
Massachusetts Association of Health Boards. Overall,
200 people attended from 85 towns.
Responses to the workshops have been strong. “Just
keep this type of information coming,” says Gary
Fazzina of the Southwick (Mass.) Sewer Commission.
A videotape of one of these workshops may be avail-
able soon. For more information about the video, call
Al Wong, EPA Region I Mobilization Coordinator, at
(617) 565-3608.
Nevada
Our message was stay informed and plan ahead,” says
Corine Li, environmental protection engineer for EPA
Region IX, who helped organize two workshops in
rural Nevada. Other sponsors included State water
and wastewater agencies, the Rural Communities As-
sistance Corporation, the Nevada Rural Water Associa-
tion, and the University of Nevada at Reno. Organizers
held panels for about 80 utility managers and opera-
tors, local decisionmakers, managing and funding agen-
cies, economic development boards, and state univer-
sity staff. The workshops emphasized current and
future problems stenmting from increasing federal re-
quirements. They offered guidance on acquiring fund-
ing and technical assistance. For more information
about organizing these workshops and attracting par-
ticipants, call Bob Hadfield, executive director of the
Nevada Association of Counties, at (702) 883-7863.
Drinking Water Video Available
A new 27-minute video on drinking water
issues is available from the League of Women
Voters of Michigan. Drinking Water: Quality on
Tap comes with a 46-page study guide to stimu-
late discussion and 100 informational brochures
for handouts.
The video program is ideal for libraries, schools,
community groups, environmental organizations,
water utilities, and government agencies—any-
one who wants an easy-to-understand discussion
of drinking water issues.
Viewers learn where drinking water comes from,
how it gets treated and delivered, how govern-
ment regulates drinking water, what types of
home water treatment devices are available, and
how citizens can get involved. Gary Sandy, from
the television series WKRP in Cincinnati, is host
for the program.
For more information, please call the League at
(517) 484-5383. To order a copy of the video, with
accompanying education materials, send a $40
check to:
League of Women Voters of Michigan
200 Museum Drive
Lansing, MI 48933
July 1992
5
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Meeting the Challenge
Secrets of Successful Workshops
Target Your Audience and Woo Them Aggressively
In Massachusetts, a wide variety of groups—EPA, the
state DEP, the Massachusetts Association of Health
Boards, County Commissioners and Congressman
Olver’s staff—collaborated in organizing one of the
workshops. The Massachusetts DEP sent direct invita-
tions and telef axed press releases to all newspapers and
radio stations in western Massachusetts. Congressman
Olver assisted by sending invitations to local officials.
George Zoto of the Massachusetts DEP recommends
printing notices in newsletters published by councils of
mayors and selectpeople. “It’s a quick, easy, and free
way to get the message out,” Zoto says.
Corine Li asked Bob Hadfield, executive director of the
Nevada Association of Counties, to help organize work-
shops in Nevada because he is familiar with local
officials and has a strong voice in the state legislature.
Nevada health officialsalso surveyed prospective work-
shop participants to identify their concerns.
Bob Hadfield says that workshops should be held in
smaller communities if the target audience is owners
and operators of small systems. This makes people feel
that the meetings will address their needs. Joan Barry
of the Foothills Health District, who attended a work-
shop in rural Massachusetts, agrees. “It’s a pleasure to
see regulators coming to Western Massachusetts for a
change,” she says.
The target audience for the Oklahoma workshops has
been mostly system operators. Organizers encourage
their attendance simply and directly. “The carrot we
offer is certification credit,” says Judy Duncan, who has
helped organize workshops for the past two years.
Give Thent Something to Look at, Focused Informa-
tion, and Something to Take Home
Visual aids, such as 35mm slides or overheads, a clear
Harrell also recommends that speakers present num-
bers in a way that participants understand. His exhib-
its, for example, show the increase in costs for each
facility in the state rather than statewide or national cost
estimates.
A participant in a Massachusetts workshop suggests
that organizers “cite some instances of water pollution
to reinforce the need for water protection.” Several
organizers agree that demonstrating a clear link be-
tween health risks and the need for increased regula-
tion will encourage compliance and motivate the pub-
lic, decisionmakers, and system owners to work out
funding difficulties.
Many participants in the Massachusetts workshop
agreed that its question and answer period was very
useful. Al Wong believes that the videotape of the best-
attended workshop will also be useful to Boards of
Health that could not attend.
The Oklahoma booklet mentioned above helps keep
the material covered accessible to workshop attendees
long after the occasion has passed.
Keep Them Involved and Help Reinforce a Network
Bob Hadfield and others recommend that organizers
maintain contact with participants after the workshops.
Hadfield encourages Nevada participants to call him
with questions, and he telephones them directly to
foster a relationship after the workshop.
In Massachusetts, Congressman Olver’s staff have be-
gun organizing meetings between Olver and the DEP
to discuss the issue of funding on a state-wide level.
The workshops have achieved or contributed to several
changes. Perhaps most important, they foster commu-
nication among diverse groups that are in position to
prepare for the future. “One of the major benefits was
that we took small system operators out of their small
arena and into the bigger arena,” says Bob Hadfield.
Organizers and participants in Oklahoma, Massachu- and non-technical prepared script, and take-home
setts, and Nevada shared their thoughts with Meeting materials help speakers convey their messages force-
the Challenge on how to fully. Health officials in
make a workshop work: Oklahoma have been us-
Demonstrating the link between health ing all three effectively.
Mike Harrell, program en-
• before the workshop, risks and regulation can encourage
target youraudienceand
gineer in the Oklahoma
woo them aggressively; compliance and promote funding Departmentof l-lealth,ex-
plains current costs for a
• during the workshop, system and compares
givethem something to look at, focused information, them with predicted future costs using slides. “Until
and something to take home; and they saw it graphically, they didn’t understand the
effect fully,” he says.
• after the workshop, keep in touch and help reinforce
a network.
6
July 1992
-------
An Update on OGWDW’s Mobilization Effort
Meeting the Challenge Special Report
Restructuring Non-Viable Systems by Law
M andatory receivership or takeover laws let regu-
lators bring non-viable water systems under the
control of systems with the requisite financial, manage-
rial, and technical resources to provide safe drinking
water. These systems may then physically interconnect
and operate as a single unit, or they may remain sepa-
rate as they are managed and maintained by the parent
entity in a satellite arrangement.
Sometimes, struggling water systems will seek to
restructure on their own. They may solicit buyers, opt
to contract for operations and maintenance (O&M)
services, or seek “big brother” arrangements in which
large systems volunteer their O&M services. Many
benefits of restructuring, whether voluntary or state-
ordered, derive from economies of scale:
• A larger customer base makes hiring competent,
certified system operators feasible.
• The unit-cost of water treatment decreases with the
size of the treatment plant.
• Larger systems can afford the management and ad-
ministrative structure required for billing, account-
ing, record keeping, and planning.
Connecticut and Washington have the oldest man-
datory takeover laws. Connecticut’s took effect during
the mid-I 980s, and Washington’s law, which improved
a receivership process used only once in 10 years, was
signed in March1990. Pennsylvania’s limited takeover
law took effect in mid-June of this year. The Connecti-
cut, Washington, and Pennsylvania laws are reprinted
at the end of this special report.
Regulators agree that mandatory takeovers are
expensive, time-consuming, resource-intensive, and
best used sparingly. “I don’t know if there’s any way to
speed the process up,” says Raymond Jarema of the
Connecticut Department of Health Services (DOHS).
“Strict rules of procedure drive up costs, but they
eliminate problems long-term, so it’s a trade-off,” he
says. Jarema has been DOHS’s co-hearing officer in
most of the takeover cases.
Similarities in The Laws
A lthough varying in.their details, the State laws
have significant elements in common. Each gives
regulators authority to order non-viable systems into
receivership, under certain circumstances When will-
ing receivers cannot be found, Connecticut regulators
can order the most suitable public or private entity to
acquire the foundering system. A municipality that
approves a new water system without a State Certifi-
cate of Public Convenience and Necessity can be held
responsible for the system’s operation if it can’t provide
adequate service. In Washington, counties are the
receivers of last resort. If they are incapable of operat-
ing a water system, they can delegate this responsibil-
ity, by mutual agreement, to local Public Utility Dis-
tricts (PUDs) or other competent entities.
Washington lawmakers made counties the receiv-
ers of last resort for many of the same reasons that
Connecticut regulators often tap municipal systems to
take over failing ones. Since the problem systems were
built under the aegis of the local or county government’s
planning process, they should bear some responsibility
for their creation and should participate in correcting
their problems. (Conversely, Connecticut regulators
reason, a non-viable system that developed without a
town government’s knowledge or approval was cre-
ated to serve its residents, so the municipal water
system still has an obligation to take it over.)
County government is stronger in Washington than
in Connecticut, another reason for the prominent role
given the counties. They have police powers and are
responsible (through local health officers) for enforcing
water system rules and regulations. The State Health
Department has delegated to many counties the au-
thority to regulate water systems subject to the SDWA.
Some counties actually operate water systems.
Pennsylvania’s law is more limited in scope. Only
an estimated 200-250 systems with fewer than 1,200
connections currently regulated by the Pennsylvania
Public Utilities Commission (PUC) are subject to man-
datory takeover if they repeatedly violate drinking
water regulations. And the pooi of systems likely to be
ordered to acquire non-viable small systems is simi-
larly small, about 20 PUC-regulated systems with at
least 4,000 connections. PUC-regulated systems with
fewer than 4,000 connections can petition to be consid-
ered capable of acquiring a nonviable system. And
encouraging the involvement of large systems not regu-
lated by the PUC, such as municipal systems, will
increase the pool of potential acquiring systems, notes
Stanley Brown, assistant counsel to the PUC.
The Connecticut Experience
A takeover can be ordered if a system repeatedly
violates state drinking water regulations or fails
to provide adequate water, a notice of violation and an
administrative order have been issued, and the system
has failed to comply with the administrative order. The
acquiring system must either extend its mains or oper-
ate the non-viable system as a satellite system. It also
must make any necessary improvements to the failing
systems; the Connecticut Department of Public Utility
July1992
Special Report—I
-------
Meeting the Challenge
Control (DPUC) will adjust its rates to compensate for
sonableacquisition, renovation, and operationcosts.
About 20 takeover cases have been opened since
1985, induding three that remain on-going. Some have
ended as voluntary transfers before the takeover proce-
dure concluded. In one or
two cases, companies ____________________
headed for involuntary
transfer opted to remain
in busmess and complied
with outstanding orders.
Connecticut’s take-
over law is administered
jointly by the DOHS and
DPUC. This combination
ifiustrates the public health and public finance issues
embodied in regulating drinking water systems.
“We’re eager to know what the quality of service
has been, what system improvements are needed, and
whether the water supply is sufficient now and will be
in the future,” says DOHS’s Jarema.
“We’re concerned about the impact on the
ratepayers. We’re looking for the best deal possible for
them, but the cheapest isn’t always the best,” adds
Arthur Gamache, supervisor of technical analysis at
DPUC.
The solution to takeover cases has an engineering
component—how adequate safe drinking water will be
provided—and a business component—ensuring the
acquiringsystem has the financial, technical, and mana-
gerial wherewithal to implement the engineering solu-
tion. Connecticut’s takeover law is a success.
“We’ve been able to find entities to take failing
systems over so no one ends up without a source of
water. There are plenty of excellent companies that we
regulate who have the technical expertise to do it. And
hopefully there’s little impact on the consumers,” says
DPUC attorney Melanie Howlett, a frequent co-hear-
ing officer with Jarema.
By and large, privately owned water systems have
cooperated in takeovers of non-viable systems. Some-
times reluctant systems, however, will inflate short- or
long-term acquisition or improvement costs to avoid
being named the most suitable entity to acquire a
system. “Some utilities feel they’ve gotten more than
their fair share of these troubled systems and aren’t
eager to take on any more,” notes Jarema.
And municipal systemsmaybe reluctant acquiring
entities, especially if their water system is subsidized
with local tax revenues. “One of the biggest drawbacks
is that some municipalities question our authority to
make them take over water systems,” says Gamache.
Connecticut’s Keys to Success: A 1989 EPA study
of Connecticut’s law identified two factors responsible
for the takeover statute’s success which could be repli-
cated in other states:
• The law lets an acquiring system recover reasonable
costsassociated with the take over of a failing system.
• If no system is willing to take over a failing operation,
the state can order the takeover. (This provision also
may foster “voluntary” acquisition agreements be-
tween neighboring systems before a state-ordered
takeover becomes necessary.)
Other factors may be more
___________________ specific to the Nutmeg
State:
• Connecticut’s abun-
dant supply of potable
water facilitates takeovers.
If supplies were short, vi-
able systems might be less
willing to acquire non-vi-
- able ones, and state regulators would not order take-
overs if water supplies were inadequate.
• Connecticut’s small size—no town is more than 72
miles from the capital city of Hartford—means few
areas are so remote that no company would be unable
to provide water service to them.
• DOHS and the DPUC, which administer the takeover
law, are strong agencies that cooperate well.
• Connecticut’s program has always enjoyed substan-
tial legislative support.
The Washington Experience
U ntil Washington’s current takeover statute was
passed in 1990, the state’s system for ordering
non-viable systems into receivership was so cumber-
some it was used only once in recent memory.
“We could, before this law was passed, put a sys-
tem in receivership. What the current law does is
streamline the process and, more importantly, it gets at
who’s in charge. If the department puts a system into
receivership, and no one is available to be the receiver,
the county gets it. That’s the-real focus of the receiver-
ship legislation,” says Richard Siffert, planning pro-
gram manager in the Department of Health’s drinking
water program.
“We have not used the legislation yet to put any
systems into receivership due to staff resource limita-
tions. We are, however, pursuing our enforcement
program, and we are getting closer to receivership for
some systems,” he adds.
David Monthie, now the manager of the health
service’s Statewide Public Water System Needs Assess-
ment Project, was a legislative staffer who worked on
the receivership bifi. He says the takeover statute was
an outgrowth of committee discussions on current and
potential problems with providing safe drinking wa-
ter. Receivership as a last resort was discussed.
“Apparently the state’s last experience with it had
been so painful for everybody involved, receivership
wasn’t very useful,” Monthie says. So, after discus-
sions with the attorney general’s office, the health de-
“Some utilities feel they’ve gotten more
than their fair share of these troubled
systems and aren’t eager to take on any
more.”
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An Update on OGWDW’s Mobilization Effort
partment, and local health officials, Monthie began
drafting legislation to provide guidance to judges and
others to make receivership a more useful tool.
The changes Monthie drafted constitute elements
of a comprehensive mandatory receivership law.
Among the most significant changes, he says, were:
• a procedure to allow temporary court injunctions, ex
parte, to correct health emergencies;
• designation of counties as the receivers of last resort;
• limitations on county li-
ability when operating a
system in good faith;
• assurances that acquiring
systems would be reim-
bursed for public health
and safety-related costs;
and ___________________
• the availability of low-interest loans so local govern-
ments can make emergency repairs to systems they
are operating temporarily.
Although the new statute made many changes to
the existing receivership law, some issues remain
unaddressed. For example, if a receiver makes im-
provements to a non-viable system, then returns the
system to the owner who ran it into non-viability in the
first place, are those improvements a windfall gain and
a reward for bad management?
And when the receivership law is implemented, as
seems inevitable, will questions of due process and the
taking of private property arise? “I think, in this state,
that sort of argument would carry some weight, but
until the statute is used it’s hard to say,” Monthie says.
“1 tried to incorporate due process into the legislation,
but the question is, how much process is due?”
Counties Take Notice: One effect of Washington’s
receivership legislation has been to increase county
participation in grappling with safe drinking water
issues. “We have a regional planning system, and
counties are now more willing to sit at the table and
negotiate,” says Siffert. ‘Public Utility Districts are
being asked by the counties to be receivers, if necessary.
In turn, the counties are recognizing the PUDs as satel-
lite management agencies.” Monthie agrees. “It’s
made counties pay more attention to the problem of
failing systems,” he says.
The Pennsylvania Law
nnsylvania’s PUC may order the takeover of non-
viable investor-owned drinking water systems with
up to 1,200 connections—after considering a number of
restructuring options including voluntary merger or
acquisition, contract O&M, or satellite management.
Candidates for mandatory acquisition will be small
systems that violate PUC or Department of Environ-
mental Resources (DER) orders or regulations pertain-
ing to the provision of safe drinking water. Acquiring
entities must have the financial, managerial, and tech-
nical capabilities to acquire and operate troubled sys-
tems, and the rates charged to pre-acquisition custom-
ers cannot increase unreasonably, under the law. Pur-
chase price will be negotiated, subject to PUC approval,
or the PUC will use its eminent domain authority will
be used to accomplish the takeover.
No implementing
______________________ regulations are planned;
the law was crafted to
make regulations unnec-
essary. “What I tried to
do was make sure the
‘what-if’ situations were
all addressed in the leg-
islation,” explains attor-
ney Brown, who helped
________________________ draft the law. “We be-
lieve that the bill in its
current form gives sufficient guidance in the process
that will be used.”
The law focuses on PUC-regulated systems, but
DER will play a major role in reviewing system im-
provement plans that acquiring systems must submit.
DER also will play a vital role in informing the Commis-
sion that a PUC-regulated system is in violation of a
DER order. “We see the DER and the PUC working in
tandem on this,” says Brown.
The law is expected to promote restructuring op—
tions short of mandatory acquisition. “It is the type of
bill which, by its existence, will probably alleviate a lot
of small system problems [ by promoting restructur-
ingi,” says Brown. “We do not think the actual process
will have to be completed very often. If we can make
systems realize the Commission can order their trans-
fer or sale, they’ll realize they should consider alterna-
tives to their method of operating, which has not been
satisfactory to the Commission or DER.”
Implications for The Future
R egulators in Washington and Connecticut agree
that, as the requirements of the amended Safe
Drinking Water Act (SDWA) are implemented, more
and more systems will become chronic violators. And
more and more small system owners will simply opt
out of the business. This will leave a service vacuum
that larger, more viable, drinking water systems will
have to fill. The procedures set in place by the takeover
statutes will, regulators say, help them ensure contin-
ued provision of safe drinking water.
“I think the handwriting is on the wall,” says
Siffert. “We’re going to be using the process more and
more, either because systems will be throwing in the
towel, or we will be goitig out to where the health
problems are very bad.”
“We have not used the legislation yet to
put any systems into receivership due to
staff resource limitations. We are,
however, pursuing our enforcement
program, and we are getting closer to
receivership for some systems .”
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Meeting the Challenge
CONNECTICUT TAKEOVER STATUTES
PUBLIC SERVICE COMPANIES Title 16
Sec. 16-262k. Interconnection of public water supply
systems to relieve site-specific water shortages. The
department of public utility control may require any
water company as defined in section 16-Ito connect its
public water supply system with that of another water
company or municipal utility if it finds that such a
connection would be an effective means of relieving
site-specific water shortages.
(PA. 81-358. S 3.)
Sec. 16-2621. Receivership of water compa-
nies for failure to provide adequate service. Personal
liability of directors, officers and mangers. (a) As used
in this section, “water company” includes every corpo-
ration, company, association, joint stock association,
partnership or person, or lessee thereof, except an
association providing water only to its members, own-
ing, leasing, maintaining, operating, managing or con-
trolling any pond, lake, reservoir, stream, well or dis-
tributing plant or system employed for the purpose of
supplying water to twenty-five or more consumers on
a regular basis, provided if any corporation, company,
association, joint stock association, partnership or per-
son, or lessee thereof, owns or controls eighty per cent
of the equity value of more thanone such water system,
the number of consumers shall, for the purposes of this
definition, be the total number of consumers of all such
systems so controlled by that corporation, company,
association, joint stock association, partnership or per-
son, or lessee thereof.
(b) If the department of public utility control deter-
mines, after notice and hearing, that any water com-
pany is unable or unwilling to provide adequate ser-
vice to its consumers, the department may petition the
superior court for any judicial district wherein the
company conducts its business for an order attaching
the assets of the company and placing it under the sole
control and responsibility of a receiver.
(c) Notwithstanding the provisions of subsection (b)of
this section, the department, the municipality served
by a water company or an organization representing
twenty percent of the consumers of the company may,
upon notice to the company, petition the superior court
for an order attaching the assets of the water company
and placing it under the sole control and responsibility
of a receiver, if (1) the company has failed to supply
water to consumers for at least five days during the
preceding three months, (2) the department of health
services determines that the company has not met the
standards adopted under section 25-32 for the quality
of public drinking water or (3) the petitioner has rea-
sonable cause to believe the consumers of the company
have not received and are unlikely to receive adequate
service due to gross mismanagement of the company.
Upon the filing of such a petition, the court shall order
the company to show cause why such an order of
attachment and receivership should not issue ten days
from the date of service of the order to show cause upon
the company at its last known address.
(d) Any receiver appointed by the court shall file a
bond in accordance with section 52-506 unless the court
finds it unnecessary. The receiver shall operate the
company to preserve its assets and to serve the best
interests of its consumers. If the receiver determines
that the water company’s actions which caused it to be
placed under the control and responsibility of the re-
ceiver under subsection (b) or (c) of this section were
due to misappropriation or wrongful diversion of the
assets of such company or to other willful misconduct
by any director, officer or manager of the company the
receiver shall file a petition, with the superior court that
issued the order of attachment and receivership, for an
order that such director, officer or manager be ordered
to pay compensatory damages to the company by
reason of such misappropriation, diversion or miscon-
duct.
(e) The department of public utility control shall deter-
mine the value of the assets of a water company at the
time of appointment of a receiver and immediately
prior to return of the assets of the owner. The daim of
the owner of the company shall be limited to the value
determined at the time of the appointment of the re-
ceiver. The assets shall be returned to the owner after
full restitution has been made to the receiver for the
value of any improvements to the system and after
payment has been made for any appraisal pursuant to
this subsection.
(P.A. 81-358, S. 4; ?.A. 82-4 2, S. 51; P.A. 83-542; P.A. 84-
330, S. 7.)
Flistory:P.A.82-472madetechnical correction in Subsec.
(a): P.A. 83-542 added Subsec. (c) allowing, in addition
to department, municipalities and organizations repre-
senting water company consumers to petition superior
court for receivership in certain situations and provid-
ing for expedited judicial proceedings in such situa-
tions and added provisions in Subsec. (d) allowing
receiver to petition superior court in certain situations
for order that director, officer or manager pay compen-
satorydamages to company; P.A.84-330added Subsec.
(e) revaluation of assets of water company.
Sec. 16-262m. Construction specifications for water
companies. (a) As used in this section, sections 16-262n
to 16-262q, indusive, and section 8-25a, “water com-
pany” includes every corporation, company, assoda-
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An Update on OGWDWs Mobilization Effort
lion, joint stock association, partnership, municipality,
other entity or person, or lessee thereof, owning, lea s-
ing, maintaining, operating, managing or controlling
any pond, lake, reservoir, stream, well or distributing
plant or system employed for the purpose of supplying
water to not less than fifteen service connections or
twenty-five persons nor more than two hundred fifty
service connections or one thousand persons on a regu-
lar basis.
(b) No water company may begin the construction or
expansion of a community water supply system on or
after October 1, 1984, without having first obtained a
certificate of public convenience and necessity for the
construction or expansion from the department of
public utility control and the department of health
services. An application for a certificate shall be on a
form prescribed by the department of public utility
control in consultation with the department of health
services and accompanied by a copy of the water
company’s construction or expansion plans and a fee of
one hundred dollars. The departments shall issue a
certificate to an applicant upon determining, to their
satisfaction, that (1) no feasible interconnection with an
existing system is available to the applicant, (2) the
applicant will complete the construction or expansion
in accordance with engineering standards established
by regulation by the department of public utility con-
trol for community water supply systems, (3) the appli-
cant has the financial, managerial and technical re-
sources to operate the proposed water supply system in
a reliable and efficient manner and to provide continu-
ous adequate service to consumers served by the sys-
tem, (4) the proposed construction or expansion will
not result in a duplication of water service in the appli-
cable service area and (5) the applicant meets all federal
and state standards for community water supply. Any
construction or expansion with respect to which a
certificate is required shall thereafter be built, main-
tained and operated in conformity with the certificate
and in any terms, limitations or conditions contained
therein.
(c) The department of public utility control, in consul-
tation with the department of health services, shall
adopt regulations in accordance with the provisions of
chapter 54 to carry out the purposes of this section.
(P.A. 81-427, S. 1.3; P.A. 84-330, S. 1.)
History: P.A. 84-330 amended Subsec. (a) to apply
definition of water company “to sections 16-262n to 16-
262q, inclusive, and secfion 8-25a “to include munici-
palities in such definition and to expand the definition
by including companies supplying water to not less
than fifteen service connections or twenty-five persons
nor more than two hundred fifty service connections or
one thousand persons, amended Subsec. (b) to require,
as a condition for issuing a certificate that determina-
tion be made that no feasible interconnection with an
existing system is available and that applicant meets all
federal and state standards for community water sup-
ply and amended Subsecs. (b) and (c) to require depart-
ments of public utility control and health services to
jointly carry out purposes of the section.
Sec. 16-262n. Failure of water company to comply
with orders. Hearing. Whenever any water company
fails to comply with an order issued pursuant to section
16-11, 25-32, 25-33 or 25-34 concerning the availability
or potability of water or the provision of water at
adequate volume and pressure, the department of pub-
lic utility control and the department of health services
may, after notice to public and private water compa-
nies, municipalities furnishing water service, munici-
palities or other appropriate governmental agencies in
the service area of the water company, conduct a hear-
ing in accordance with the provisions of section 4-177 to
determine the actions that may be taken and the cx pen-
ditures that may be required, including the acquisition
of the water company by the most suitable public or
private entity, to assure the availability and potability
of water and the provision of water at adequate volume
and pressure to the persons served by the water com-
pany.
(P.A. 84-330, S. 2.)
Sec. 16-262o. Acquisition of water company. Rates
and charges. (a) The department of public utility
control, in consultation with the department of health
services, upon a determination that the costs of im-
provements to and the acquisition of the water com-
pany are necessary and reasonable, shall order the
acquisition of the water company by the most suitable
public or private entity. In making such determination,
the department shall consider: (1) The geographical
proximity of the acquiring entity to the water company,
(2) whether the acquiring entity has the financial, mana-
gerial and technical resources to operate the water
company in a reliable and efficient manner and to
provide continuous, adequate service tO the persons
served by the company and (3) any other factors the
department deems relevant. Such order shall authorize
the recovery through rates of all reasonable costs of
acquisition and necessary improvements. A public
entity acquiring a water company beyond the bound-
aries of such entity may charge customers served by the
acquired company for water service and may, to the
extent appropriate, recover through rates all reason-
able costs of acquisition and necessary improvements.
(b) Notwithstanding the provisions of any special act,
the department of public utility control shall extend the
franchise areas of the acquiring water company to the
service area of the water company acquired pursuant to
this section.
(c) In the case of a public entity acquiring a water
company beyond its boundaries, the rates charged the
customers of the acquired water company shall be
July 1992
Special Report—5
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Meeting the Challenge
subject to the approval of the department of public
utility control, upon petition by such customers.
(P.A. 84-330, S. 3.)
Sec. l 6 - 2 6 2 p. Improvementsby acquiring entity. Any
recipient of an order pursuant to section 16-2620 shall
make the necessary improvements to assure the avail-
ability and potability of water and the provision of
water at adequate volume and pressure to the persons
served by the water company. The water company
shallimmediately take the steps necessaly for the trans-
fer of the company to the acquiring company, munici-
pal water authority, municipality or other public or
private entity.
(P.A. 84-330. S. 4.)
Sec. 16-262q. Compensation for acquisition of water
company. Compensation for the acquisition of a water
company pursuant to section 16-262o shall be deter-
mined by the procedures for determining compensa-
tion under section 25-42 or by agreement between the
parties, provided the department of public utility con-
trol in consultation with the department of health ser-
vices, after a hearing, approves such agreement.
(PA. 84-330, S. 5.)
CHAPTER 133
[ Substitute Senate Bill No. 6447]
FAILING PUBLIC WATER SYSTEMS
AN ACT Relating to failing water systems; amending RCW
36.94.140, 43.70.190, 43.70.200, 43.155.065, 70.119A.040, and
70.05.070; adding a new section to chapter 43.70 RCW; creat-
ing new sections; prescribing penalties; and declaring an
emergency.
Be it enacted by the Legislature of the State of Washing-
ton:
NEW SEC1ION . Sec. 1. The legislature finds the best
interests of the citizens of the state are served if:
(1) Customers served by public water systems
are assured of an adequate quantity and quality of
water supply at reasonable rates;
(2) There is improved coordination between
state agencies engaged in water system planning and
public health regulation and local governments re-
sponsible for land use regulation and public health and
safety;
(3) Public water systems in violation of health
and safety standards adopted under RCW 43.20.050
remain in operation and continue providing water
service providing that public health is not compro-
mised, assuming a suitable replacement purveyor is
found and deficiencies are corrected in an expeditious
manner consistent with public health and safety; and
(4) The state address, in a systematic and com-
prehensive fashion, new operating requirements which
will be imposed on public water systems under the
federal Safe Drinking Water Act.
Sec. 2. Section 14, chapter 72, Laws of 1967 as
amended by section 2, chapter 188, Laws of 1975 1st ex.
sess. and RCW 36.94.140 are each amended to read as
follows
Every county, in the operation of a system of
sewerage and/or water, shall have full jurisdiction and
authority to manage, regulate and control it and to fix,
alter, regulate and control the rates and charges for the
service to those to whom such county service is avail-
able, and to levy charges for connection to such system.
The rates for availability of service and connection
charges are so charged must be uniform for the same
class of customers or service.
In classifying customers served, service fur-
nished or made available by such system of sewerage
and br water, or the connection charges, the board
may consider any or all of the following factors:
(1) The difference in cost of service to the vari-
ous customers within or without the area;
(2) The difference in cost of maintenance, op-
eration, repair and replacement of the various parts of
the systems;
(3) The different character of the service fur-
nished various customers;
(4) The quantity and quality of the sewage
and/or water delivered and the time of its delivery;
(5) Capital contribution made to the system or
systems, including, but not limited to, assessments;
((and))
(6) The cost of acquiring the system or portions
of the system in making system improvements neces-
sary for the public health and safety; and
(7) Any other matters which present a reason-
able difference as a ground for distinction.
Such rates shall produce revenues sufficient to
take care of the costs of maintenance and operation,
revenue bond and warrant interest and principal au-
thorization requirements, and all other charges neces-
sary for the efficient and proper operation of the sys-
tem.
Sec. 3. Section 5, chapter 102, Laws of 1967 ex.
sess. as last amended by section 258, chapter 9, Laws of
1989 1st ex. sess. and RCW 43.70.190 are each amended
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An Update on OGWDW’s Mobilization Effort
to read as follows:
The secretary of health or local health officer
may bring an action to enjoin a violation or the threat-
ened violation of any of the provisions of the public
health laws of this state or any rules or regulation made
by the state board of health or the department of health
pursuant to said laws, or may bring any legal proceed-
ing authorized by law, including but not limited to the
special proceedings authorized in Title 7 RCW, in the
superior court in the county in which such violation
occurs or is about to occur, or in the superior court of
Thurston counìty. Upon the filing of any action, the
court may. upon a showing of an immediate and seri-
ous danger to residents constituting an emergency.
issue a temporary injunctive order ex parte.
NEW SECTION . Sec. 4. A new section is added
to chapter 43.70 RCW to read as follows:
(1) In any action brought by the secretary of
health or by a local health officer pursuant to chapter
7.60 RCW to place a public water system in receiver-
ship, the petition shall include the names of one or more
suitable candidates for receiver who have consented to
assume operation of the water system. The department
shall maintain a list of interested and qualified indi-
viduals, municipal entities, special purpose districts,
and investor-owned water companies with experience
in the provision of water service and a history of satis-
factory operation of a water system. If there is no other
person willing and able to be named as receiver, the
court shall appoint the county in which the water
system is located as receiver. The county may desig-
nate a county agency to operate the system, or it may
contract with another individual or public water sys-
tem to provide management for the system. If the
county is appointed as receiver, the secretary of health
and the county health officer shall provide regulatory
oversight for the agency or other person responsible for
managing the water system.
(2) In any petition for receivership under sub-
section (I) of this section, the department shall recom-
mend that the court grant to the receiver full authority
to act in the best interests of the customers served by the
public water system. The receiver shall assess the
capability, in conjunction with the department and
local government, for the system to operate in compli-
ance with health and safety standards, and shall report
to the court its recommendations for the system’s fu-
ture operation, including the formation of a water
district or other public entity, or ownership by another
existing water system capable of providing service.
(3) If a petition for receivership and verifying
affidavit executed by an appropriate departmental of-
ficial allege an immediate and serious danger to resi-
dents constituting an emergency, the court shall set the
matter for hearing within three days and may appoint
a temporary receiver ex parte upon the strength of such
petition and affidavit pending a full evidentiary hear-
ing, which shall be held within fourteen days after
receipt of the petition.
(4) A bond, if any is imposed upon a receiver,
shall be minimal and shall reasonably relate to the level
of operating revenue generated by the system. Any
receiver appointed pursuant to this section shall not be
held personally liable for any good faith, reasonable
effort to assume possession of, and to operate, the
system in compliance with the court’s orders.
(5) The court shall authorize the receiver to
impose reasonable assessments on a water system’s
customers to recover expenditures for improvements
necessary for the public health and safety.
Sec. 5. Section 6, chapter 102, Laws of 1967 ex.
sess. as last amended by section 259, chapter 9, Laws of
1989 1st ex. sess. and RCW 43.70200 are each amended
to read as follows:
Upon the request of a local health officer, the
secretary of health is hereby authorized and empow-
ered to take legal action to enforce the public health
laws and rules and regulations of the state board of
health or local rules and regulations within the jurisdic-
tion served by the local health department, and may
institutes any civil legal proceeding authorized by the
laws of the state of Washington, ncIuding a proceeding
under Title 7 RCW .
Sec. 6. Section 12, chapter 446, Laws of 1985 as
last amended by section 3, chapter 93, Laws of 1988 and
RCW 43.155.070 are each amended to read as follows:
(1) To qualify for loans or pledges under this
chapter the board must determine that a local govern-
ment meets all of the following conditions:
(a) The city or county must be imposing a tax
under chapter 82.46 RCW at a rate of at least one-
quarter of one percent;
(b) The local government must have devel-
oped a long-term plan for financing public works needs;
and
(c) The local government must be using all
local revenue sources which are reasonably available
for funding public works, taking into consideration
local employment and economic factors.
(2) The board shall develop a priority process
for public works projects as provided in this section.
The intent of the priority process is to maximize the
value of public works pro jects accomplished with assis-
tance under this chapter. The board shall attempt to
assure a geographical balance in assigning priorities to
projects. The board shall consider at least the following
factors in assigning a priority to a project:
(a) Whether the local government receiving
assistance has experienced severe fiscal distress result-
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Special Report—7
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Meeting the Challenge
ing from natural disaster or emergency public works
(b) Whether the project is critical in nature and
would affect the health and safety of a great number of
citizens;
(c) The cost of the project compared to the size
of the local government and the amount of loan money
available;
(ci) number of communities served by the
ñmding project
(e) Whether the project is located in an area of
high unemployment, compared to the average state
unemployment; ((and))
( f) Whether the project is the acquisition, ex-
pansion. impiovement. or renovation by a local gov-
eminent of a public water system that is in violation of
health and safety standards, including the cost of ex-
tending existing service to such a system. and
(g) Other criteria that the board considers ad-
visable.
(3) Existing debt or financial obligations of
local governments shall not be refinanced under this
chapter. Each local government applicant shall pro-
vide documentation of attempts to secure additional
local or other sources of funding for each public works
project for which financial assistance is sought under
this chapter.
(4) Before November 1 of each year, the board
shall develop and submit to the chairs of the ways and
means committees of the senate and house of represen-
tatives a descnption of the emergency loans made
under RON 43.155.065 during the preceding fiscal year
and a prioritized list of projects which are recom-
mended for funding by the legislature, including one
copy to the staff of each of the committees. The list shall
include, but not be limited to, a description of each
project and recommended financing, the terms and
conditions of the loan or financial guarantee, the local
government jurisdiction and unemploymentrate,dem-
onstration of the jurisdiction’s critical need for the
projectand documentation of local fundsbeing used to
finance the public works project. 11 list shall also
includemeasures of fiscal capacity for each jurisdiction
recommended for financial assistance, compared to
authorized limits and state averages, including local
government sales taxes; real estate excise taxes, prop-
erty taxes; and charges for or taxes on sewerage, water,
garbage, and other utilities.
(5) The board shall not sign contracts or other-
wise financially obligate funds from the public works
assistance account before the legislature has appropri-
ated funds for a specific list of public works projects.
The legislature may remove projects from the list rec-
omrnended by the board. The legislature shall not
change the order of the priorities recommended for
funding by the board.
(6) Subsections (4) and (5) of this section do not
apply to loans made foremergency public works projects
under RCW 43.155.065.
Sec. 7. Section 1, chapter 93, Laws of 1988 and
RON 43.155.065 are each amended to read as follows:
The board may make low-interest or interest-
free loans to local governments for emergency public
works projects. Emergency public works projects shall
indudetheconstruction. repair. reconstruction, replace-
ment. rehabilitation, or improvement of a public water
system that is in violation of health and safety stan-
dards and is being operated by a local government on
a temporamy basis . The loans may be used to help fund
all or part of an emergency public works project less
any reimbursement from any of the following sources:
(1) Federal disaster or emergency funds, including
fundsfrom the f ederal emergency management agency;
(2) state disaster or emergency funds; (3) insurance
settlements; or (4) litigation. Emergency loans may be
made only from those funds specifically appropriated
from the public works assistance account for such
purpose by the legislature. The amount appropriated
from the public works assistance account for emer-
gency loan purposes shall not exceed five percent of the
total amount appropriated from this account in any
biennium.
Sec. 8. Section 4, chapter 271, Laws of 1986 as
amended by section 135, chapter 175, Laws of 1989 and
RCW 70.119A.040 are each amended to read as follows:
(1) In addition to or as an alternative to any
other penalty provided by law, every person who
commits any of the acts or omissions in RCW
70.1 19A.030 shall be subjected toapenalty in an amount
of not less than five hundred dollars. The maximum
penalty shall be not more than five thousand dollars per
day for every such violation. Every such violation shall
be a separate and distinct offense. The amount of fine
shall reflect the health significance of the violation and
the pervious record of compliance on the part of the
public water supplier. In case of continuing violation,
every day’s continuance shall be a separate and distinct
violation. Every person who, through and act of com-
mission or omission, procures, aids, or abets in the
violation shall be considered to have violated the pro-
visions of this section and shall be subject to the penalty
provided in this section.
(2) The penalty provided for in this section
shall be imposed by a notice in writing to the person
against whom the civil fine is assessed and shall de-
scribe the violation. The notice shall be personally
served in the manner of service of a summons in a civil
action or in a manner that shows proof of receipt. A
penalty imposed by this section is due twenty-eight
days after receipt of notice unless application for remis-
sion or mitigation is made as provided in subsection (3)
of this section or unless application for an adjudicative
July 1992
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An Update on OGWDW’s Mobilization Effort
proceeding is filed as provided in subsection (4) of this
section.
(3) Within fourteen days after the notice is
received, the person incurring the penalty may apply in
writing to the department for the remission or mitiga-
tion of such penalty. Upon receipt of the application,
the department may remit or mitigate the penalty upon
whatever terms the department in its discretion deems
proper, giving consideration to the degree of hazard
associated with the violation, provided the department
deems such remission or mitigation to be in the best
interests of carrying out the purposes of this chapter.
The department shall not mitigate the fines below the
minimum penalty prescribed in subsection ( 1) of this
section . The department shall have authority to ascer-
tain the facts regarding all such applications in such
reasonable manner as it may deem proper. When an
application for remission or mitigation is made, a pen-
alty incurred under this section is due twenty-eight
days after receipt of the notice setting forth the disposi-
tion of the application, unless an application for an
adjudicative proceeding to contest the disposition is
filed as provided in subsection (4) of this section.
(4) Within twenty-eight days after notice is
received, the person incurring the penalty may file an
application for an adjudicative proceeding and may
pursue subsequent review as provided in chapter 34.05
RCW and applicable rules of the department or board
of health.
(5) A penalty imposed by a final order after an
adjudicative proceeding is due upon service of the final
order.
(6) The attorney general may bring an action in
the name of the department in the superior court of
Thurston county, or of any county in which such viola-
tor may do business, to collect a penalty.
(7) All penalties imposed under this section
shall be payable to the state treasury and credited to the
general fund.
NEW SECTION . Sec. 9. A new section is added
to chapter 8.25 RCW to read as follows:
Consistent with standard appraisal practices,
the valuation of a public water system as defined in
RCW 70.119A.020 shall reflect the cost of system im-
provements necessary to comply with health and safety
rules of the state board of health and applicable regula-
tions developed under chapter 43.20, 43.20A, or 70.116
RCW.
Sec. 10. Section 12, chapter 51, Laws of 1967 ex.
sess. as last amended by section 7, chapter 25, Laws of
1984 and RCW 70.05.070 are each amended to read as
follows:
The local health officer, acting under the direc-
tion of the local board of health or under direction of the
administrative officer appointed under RCW 70.05.040,
if any, shall:
(1) Enforce the public health statutes of the
state, rules and regulations of the state board of health
and the secretary of social and health services, and all
local health rules, regulations and ordinances within
his or her jurisdiction including imposition of penal-
ties authorized under RCW 70.1 19A.030 and filing of
actions authorized by RCW 43.70.190 ;
(2) Take such action as is necessary to maintain
health and sanitation supervision over the territory
within his or hei jurisdiction ;
(3) Control and prevent the spread of any dan-
gerous, contagious or infectious diseases that may oc-
cur within his or her jurisdiction;
(4) Inform the public as to the causes, nature,
and prevention of disease and disability and the pres-
ervation, promotion and improvement of health within
his or her jurisdiction;
(5) Prevent, control or abate nuisances which
are detrimental to the public health;
(6) Attend all conferences called by the secre-
tary of social and health services or his or her autho-
rized representative;
(7) Collect such fees as are established by the
state board of health or the local board of health for the
issuance or renewal of licenses or permits or such other
fees as may be authorized by law or by the rules and
regulations of the state board of health ((-));
(8) Inspect, as necessary, expansion or modifi-
cation of existing public water systems, and the con-
struction of new public water systems, to assure that
the expansion. modification, or construction conforms
to system design and plans ;
(9) Take such measures as he or she deems
necessary in order to promote the public health, to
participate in the establishment of health educational
or training activities, and to authorize the attendance of
employees of the local health department or individu-
als engaged in community health programs related to
or part of the programs of the local health department.
NEW SECTION . Sec. 11. The department shall
prepare a report for the legislature no later than Decem-
ber 1, 1990, with regard to the problems of small water
systems and proposed solutions. Such a report shall be
prepared in consultation with the utilities and trans-
portation commission, the department of community
development, department of ecology, public works
assistance board, and associations of cities, counties,
public and private utilities, water districts, local health
directors, and other interested groups. The report shall
address, at a minimum, the following topics, with
alternative approaches or solutions:
(1) The number and locations of existing public
water systems that do not meet public health and safety
July1992
Special Report—9
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Meeting the Challenge
standards;
(2) Costs associated with state enforcement of
new federal standards under the 1986 amendments to
the Safe Drinking Water Act, including expenses and
potential financing mechanisms for the operating costs
of receivers of water systems when the system revenue
is otherwise inadequate to cover the costs;
(3) Available financing for capital improve-
nwnts for both publicly owned and privately owned
water systems;
(4) Legal and regulatory barriers to improved
deliveiyof safe and reliable drinking water supplies to
the staWs residents and in particular regulating and
enforcement overlap between the department and the
utilities and transportation commission;
(5) The effect of failing or inadequate water
supplies on the ability of an owner to sell, or a buyer to
obtain financing to buy, residential real estate in this
state;
(6) Staffing levels for both state and local agen-
cies responsible for enforcing the state’s drinking water
laws, including mechanisms for funding such staff;
(7) Revisions to requirements relating to certi-
fication of operators for public water systems, includ-
ing the utilization state-wide of a system of satellite
operators; and
relevant.
(8) Such other topics as are significant and
NEW SECFION . Sec. 12. If any provision of
this act or its application to any person or circumstance
is held invalid, the remainder of the act or the applica-
tion of the provision to other persons or circumstances
is not affected.
NEW SECFION . Sec. 13. This act is necessary
for the ininiediate preservation of the public peace,
health, or safety, or support of the state government
and its existing public institutions, and shall take effect
immediately.
THE GENERAL ASSEMBLY OF PENNSYLVANIA
AN ACT
Amending Title 66 (Public Utilities) of the Pennsylva-
nia Consolidated Statutes, providing for the Commis-
sion to order the acquisition of small water and sewer
utibties providing for approval of utility Clean Air Act
implementation plans; and further providing for gas
The General Assembly of the Commonwealth of Penn-
sylvania hereby enacts as follows:
Section 1. Title 66 of the Pennsylvania consolidated
statutes is amended by adding sections to read:
§ 529. Power of Commission to order acquisition of
small water and sewer utilities.
(A) General Rule—The Commission may order a
capable public utility to acquiiea small water or sewer
utility if the Commission, after notice and an opportu-
nity to be heard, determines.
(1) That the small water or sewer utility is in
violation of Statutory or regulatory standards, induct-
ing, but not limited to, the Act of June 22, 1937 (P.L
1987, No. 394), known as the Clean Streams Law, The
Act of January 24,1966(1965 P.L. 1535, No. 537), known
as the Pennsylvania Sewage Facilities Act, and the Act
of May 1,1984 (P.L 206, No 43), known as the Pennsyl-
vania Safe Drinking Water Act, and the regulations
adopted thereunder, which affect the safety, adequacy,
efflciencyorreasonabl ssof the service provided by
the small water or sewer utility;
(2) That the small water or sewer utility has failed
to comply, within a reasonable period of time, with any
order of the Department of Environmental Resources
or the Commission concerning the safety, adequacy,
efficiency or reasonableness of service, including, but
not limited to, the availability of water, the potability of
water, the palatability of water or the provision of
water at adequate volume and pressure;
(3) That the small water or sewer utility cannot
reasonably be expected to furnish and maintain ad-
equate, efficient, safe and reasonable service and facili-
ties in the future;
(4) That alternatives to acquisition have been con-
sidered in accordance with subsection (B) and have
been determined by the Commission to be impractical
or not economically feasible;
(5) That the acquiring capable public utility is
financially, managerially and technically capable of
acquiring and operating the small water or sewer util-
ity in compliance with applicable statutory and regula-
tory standards; and;
(6) That the rates charged by the acquiring capable
public utility to its preacquisition customers will not
increase unreasonably because of the acquisition.
(B) Alternatives to Acquisition.—Before the Com-
mission may order the acquisition of a small water or
sewer utility in accordance with subsection (A), the
Special Rq*wt—1O
July 1992
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An Update on OGWDW’s Mobilization Effort
Commission shall di scuss with the small water or sewer
utility, and shall give such utility a reasonable opportu-
nity to investigate, alternatives to acquisition, includ-
mg, but not limited to:
(1) The reorganization of the small water or sewer
utility under new management.
(2) The entering of a contract with another public
utility or a management or service company to operate
the small water or sewer utility.
(3) The appointment of a receiver to assure the
provision of adequate, efficient, safe and reasonable
service and facilities to the public.
(4) The merger of the small water or sewer utility
with one or more other public utilities.
(5) The acquisition of the small water or sewer
utility by a municipality, a municipal authority or a
cooperative.
(C) Factors to be considered .—In making a determi-
nation pursuant to subsection (A), the Commission
shall consider:
(1) The financial, managerial and technical ability
of the small water or sewer utility.
(2) The financial, managerial and technical ability
of all proximate public utilities providing the same type
of service.
(3) The expenditures which may be necessary to
make improvements to the small water or sewer utility
to assure compliance with applicable statutory and
regulatory standards concerning the adequacy, effi-
ciency, safety or reasonableness of utility service.
(4) The expansion of the franchise area of the
acquiring capable public utility so as to include the
service area of the small water or sewer utility to be
acquired.
(5) The opinion and advice, if any, of the depart-
ment of Environmental Resources as to what steps may
benecessary to assure compliance with applicable statu-
tory or regulatory standards concerning the adequacy,
efficiency, safety or reasonableness of utility service.
(6) Any other matters which may be relevant.
(D) Order of the Commission.—Subsequent to the
determinations required by subsection (A), the Com-
mission shall issue an order for the acquisition of the
small water or sewer utility by a capable public utility.
Such order shall provide for the extension of the service
area of the acquiring capable public utility.
(E) Acquisition Price.—The price for the acquisition
of the small water or sewer utility shall be determined
by agreement between the small water or sewer utility
and the acquiring capable public utility, subject to a
determination by the Commission that the price is
reasonable. If the small water or sewer utility and the
acquiring capable public utility are unable to agree on
the acquisition price or the Commission disapproves
the acquisition price on which the utilities have agreed,
the Commission shall issue an order directing the ac-
quiring capable public utility to acquire the small water
or sewer utility by following the procedure prescribed
for exercising the power of eminent domain pursuant
to the Act of June 22, 1964 (SP. SESS., P.L. 84, No. 6),
known as the Eminent Domain Code.
(F) Separate Tariffs.—The Commission may, in its
discretion and for a reasonable period of time after the
date of acquisition, allow the acquiring capable public
utility to charge and collect rates from the customers of
the acquired small water or sewer utility pursuant to a
separate tariff.
(C) Appointment of receiver.—The Commission
may, in its discretion, appoint a receiver to protect the
interests of the customers of the small water or sewer
utility. Any such appointment shall be by order of the
Commission, which order shall specify the duties and
responsibilities of the receiver.
(H) Notice.—The notice required by subsection (A)
or any other provision of this section shall be served
upon the small water or sewer utility affected, the
Office of Consumer Advocate, the Office of Small Busi-
ness Advocate, the Office of Trial Staff, the Department
of Environmental Resources, all proximate public utili-
ties providing the same type of service as the small
water or sewer utility, all proximate municipalities and
municipal authorities providing the same type of ser-
vice as the small water or sewer utility, and the munici-
palities served by the small water or sewer utility. The
Commission shall order the affected small water or
sewer utility to provide notice to its customers of the
initiation of proceedings under this section in the same
maimer in which the utility is required to notify its
customers of proposed general rate increases.
(I) Burden of Proof .—The Law Bureau shall have the
burden of establishing a prima facie case that the acqui-
sition of the small water or sewer utility would be in the
public interest and in compliance with the provisions of
this section. Once the Commission determines that a
prima facie case has been established:
(1) The small water or sewer utility shall have the
burden of proving its ability to render adequate, effi-
cient, safe and reasonable service at just and reasonable
rates; and
(2) A proximate public utility providing the same
July1992
Special Report—Il
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Meeting the Challenge
type of service as the small water or sewer utility shall
have the opportunity and burden of proving its finan-
cial, managerial or technical inability to acquire and
operate the small water or sewer utility.
(J) Plan for improvements—Any capable public
utility ordered by the Commission to acquire a small
water or sewer utility shall, prior to acquisition, submit
to the Commission for approval a plan, including a
timetable, for bringing the small water or sewer utility
into compliance with applicable statutory and regula-
tory standards. The capable public utility shall also
provide a copy of the plan to the Department of Envi-
mnmentalResourcesandsuchotherstateorlocalagency
as the Commission may direct. The Commission shall
give the Department of Environmental Resources ad-
equate opportunity to comment on the plan and shall
consider any comments submitted by the Department
in deciding whether or not to approve the plan. The
reasonably and prudently incurred costs of each im-
provement shall be recoverable in rates only after that
improvement becomes used and useful in the public
service.
(K) Limitations on Liability.—Upon approval by the
Commission of a plan for improvements submitted
pursuant to subsection (J) and the acquisition of a small
water or sewer utility by a capable public utility, the
acquiring capable public utility shall not be liable for
any damages beyond the aggregate amount of $50,000,
includinga maximum amount of $5,000 per incident, if
the cause of those damages is proximately related to
identified violations of applicable statutes or regula-
tions by the small water or sewer utility. This subsec-
tion shall not appl)r
(1) Beyond the end of the timetable in the plan for
improvements;
(2) Whenever the acquiring capable public utility
isnotin compliance with the plan for improvements; or
(3) U within 60 days of having received notice of
the proposed plan for improvements, the Department
of Environmental Resources submitted written objec-
tions to the Commission and those objections have not
subsequently been withdrawn.
(L) Limitations on Enforve nent Actions.—Upon
approval by the Commission of a plan for improve-
ments submitted pursuant to subsection (J) and the
acquisition of a small waterorsewerutilityby a capable
public utility, tie acquiring capable public utility shall
not be subject to any enforcement actions by state or
local agencies which had notice of the plan if the basis
of such enforcement action is proximately related to
identified violations of applicable statutes or regula-
tions by tie small water or sewer utility. This subsec-
— shafi not app
(1) Beyond the end of the timetable in the plan for
improvements;
(2) Whenever the acquiring capable public utility
is not in compliance with the plan for improvements;
(3) If, Within 60 days of Having received notice of
the proposed plan for improvements, the Department
of Environmental Resources submitted written objec-
tion to the Commission and those objections have not
subsequently been withdrawn; or
(4) To emergency interim actions of the Commis-
sion or the Department of Environmental Resources,
including, but not limited to, the ordering of boil-water
advisories or other water supply warnings, of emer-
gency treatment or of temporary, alternate supplies of
water.
(M) Definitions.—As used in this section, the follow-
ing words and phrases shall have the meanings given
to them in this subsection:
“Capable Public Utility.” A public utility which
regularly provides the same type of service as the small
water utility or the small sewer utility to 4,000 or more
customer connections, which is not an affiliated inter-
est of the small water utility or the small sewer utility,
and which provides adequate, efficient, safe and rea-
sonable service. A public utility which would other-
wise be a capable public utility except for the fact that
it has fewer than 4,000 customer connections may elect
to be a capable public utility for the purposes of this
section regardless of the number of its customer con-
nections and regardless of whether or not it is proxi-
mate to the small sewer utility or small water utility to
be acquired.
“Small Water Utility.” A public utility which regu-
larly provides water service to 1,200 or fewer customer
connections.
Sp Rqiort—12
July1992
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Water Clearinghouse
If you’re looking for information about small commu-
nity drinking water issues, you should check out the
National Drinking Water Clearinghouse (NDWC).
The NDWC was established in 1991 at West Virginia
University and funded by the Farmers Home Adminis-
tration. Its mission is to develop and maintain services
and information related to small and rural community
drinking water systems.
NDWC provides several free services for small com-
munities and those interested in rural drinking water
issues:
• A free quarterly newsletter;
• Free telephone consultation, technical assistance,
and referrals;
• Three databases storing information about tech-
nologies, regulations, and other issues important
to small water systems;
• A free computer bulletin board; and
• Free or low-cost educational products.
First distributed in March 1992, the newsletter On Tap
provides drinking water news for America’s small
communities. It includes regulatory updates, health
and educational information, hints about financial re-
sources, and a calendar of events. About 7,000 people
receive the newsletter already.
An engineer and two technical assistants are available
at NDWC to answer questions about drinking water
regulations, finances, and technological issues. If they
cannot answer a question, they will refer the caller to an
appropriate organization. For free consultation and
referral services, call 1 -800-624-8301.
You can access information in three databases by call-
ing NDWC’s technical assistance number. In the fu-
ture, some of these may be available through a modem.
These databases include:
• The USEPA National Primary Drinking Water
Regulations database;
• A small systems facilities database for information
about low-cost water treatment systems; and
• A bibliography (with abstracts) of research docu-
ments and products for small water systems.
The computer bulletin board system, the Drinking
Water Information Exchange, will help NDWC users
discuss small water system concerns. You can use the
bulletin board to ask and answer questions on drinking
water issues. You can also post news items and receive
information such as On Tap articles and its calendar of
events. To use the bulletin board, you’ll need a com-
puter, a 300-2,400 baud modem, and communications
software (no parity, I stop bit, 8 data bits). You can call
the toll-free number 24 hours a day from anywhere in
the United States: 1-800-932-7459.
Brochures, videotapes, government publications, and
other free or low-cost educational products are avail-
able from NDWC. Topics range from drinking water
regulations to technologies to children’s educational
literature.
For more information about the Clearinghouse, or to be
added to its mailing list, call Sanjay Saxena, interim
program coordinator, at 1-800-624-8301.
An Update on OGWDW’s Mobilization Effort
New Services From the National Drinking
National Drinking 466 High St.
P.O. Box 6064
Water Clearinghouse Morgantown, WV 26506
1-800-624-8301
July 1992
7
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Meeting the Challenge
Is Your System Viable?
By John Mccarthy
The Safe Drinking Water Act (SDWA), is intended to
assure that all public water supplies provide safe water.
For many reasons, this is a complex and difficult task.
Here are a few examples:
• Microscopic viruses found in surface water sup-
plies are resistant to disinfection and can only be
removed by filtration;
• Many chemicals harmful to humans have been
found in drinking water, including some that occur
naturally, such as radon;
• The natural corrosiveness of water can leach dan-
gerous amounts of lead or copper from the pipes
that bring the water to consumers.
While all of these problems can be solved, the solutions
are often very expensive. In light of the costs, it may not
be possible for regulations to eliminate all of the poten-
tial threats to water supplies; yet EPA has been charged
with this task. A number of the most important of these
SDWA rules (i.e., The Surface Water Treatment Rule,
The Radionuclides Rule, and The Corrosion Control
Rule) are now in effect, or are scheduled to go into effect
soon, and will be very costly for many of our smallest
water systems to implement.
What this means is that many systems that are able to
pay their bills now may not be able to in the near future.
By small system viability we mean the capability of
individual small systems to remain in compliance with
the SDWA without increasing user rates to an exorbi-
tant level. This may not be possible for many small
systems.
Why will the costs be so high for small systems? Two
examples may help explain:
1. It has been estimated by some EPA officials that
new regulations coming on line will increase water
testing costs to about $5,000 per year. This would
amount to $333 per family for a very small system.
However, for a larger system of 2,000 connections the
same $5,000 expense would amount to only $2.50 per
family.
2. To comply with the new regulations many water
systems will have to construct new facilities. Unfortu-
nately, it costs approximately the same for an engineer
to gather information and draw up plans for a small
facility as for a large one. When you consider the
multitude of separate tasks required to design and
build a facility, it is not surprising that it can cost up to
ten times more per family when building for a small
system than for a large one.
While costs for all systems will go up, the small system
annual cost per family is expected to reach $1,000 per
year, according to a study sponsored by the EPA.
What can be done to reduce these costs?
One option for some systems may be to consolidate, or
join with a neighboring system (or systems), in order to
reduce costs. There are a variety of ways in which
systems can consolidate: Join physically and adminis-
tratively with another system:
• Receiving the water they produce, sharing owner-
ship and user fees, and helping them reduce the per
user costs of the new treatment procedures they
need to meet the SDWA regulations;
• Join administratively with another system: shar-
ing costs such as purchasing, salary for the certified
operator billing, accounting, and the like; but main-
taining separate identity, ownership, water supply
and infrastructure;
• Join administratively with another system by be-
coming part of a county, sub-county or multi-
county water district, with joint ownership and
uniform rates charged throughout the water dis-
trict, but perhaps maintaining a separate water
supply and infrastructure.
While any of these, or other, variations on the theme of
consolidation should bring cost savings , it is not clear
whether consolidation will reduce costs enough to
keep small systems viable under SDWA requirements.
Physically joining two or more systems, or joining a
county-wide water district with uniform user rates, are
the two options most likely to bring about big cost
savings on a per user basis. Whether these savings will
be large enough to keep systems viable will vary from
case to case. The potential benefit for a given water
system will depend upon an analysis of the improve-
ments needed for that system, current user costs, costs
associated with the consolidation, and a host of other
factors. Your state drinking water agency may be able
to help you analyze the condition of your system and
estimate your economic outlook for the future.
Unfortunately, for many small systems, physical con-
solidation with a neighboring system is neither pos-
sible nor practical. Often administrative consolidation
may not save enough to keep the system viable. The
capital and operating expenses of monitoring, filtra-
tion, corrosion control, and/or radionuclides removal
may prove too costly. For these systems, there are very
few options that have yet been identified.
John McCarthy is the Program Director for Rural Housing Im-
provement, Inc., The Northeastern Rural Community Assistance
Program. Hisarticleis reprint e4from RHI/NERCAP s newsletter,
From Watershed to Well.
8
July 1992
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To help small drinking water systems cope with their
increasing responsibilities under federal and State regu-
lations, some States are using peer assistance. Under
this approach, authorities provide small systems with
lists of experts, typically from larger drinking water
systems, from which small systems operators can seek
advice and assistance on a variety of issues.
“The whole idea of the program,” says John Stubbart,
who directs a successful peer assistance program in
Hawaii, “is to provide information and suggestions to
help small systems come into compliance.”
Typically these programs are organized by non-regula-
tors such as the AWWA, small systems groups, or large
systems groups, although they are funded by EPA or
State environmental agencies in most cases. Many
believe this arrangement helps small systems get the
assistance they need to stay in compliance without the
fear of being punished for violations. Also, when these
programs are sponsored by regulators, “it makes the
regulators seem more helpful,” says John Stubbart.
Peer assistance programs are currently operating or
planned in Hawaii, Massachusetts, California, Ohio,
Montana, and Oklahoma. Each of these States is dis-
cussed below, with a special focus on Hawaii and how
it set up its very successful program.
Hawaii’s Hui’Wal: How to Set Up a Peer Assistance
Program
Hawaii has developed a unique and successful peer
assistance program that other States may wish to use as
a model for their own programs.
Hawaii’s Hui’Wai (“family of water”) Program pro-
vides small systems with a telephone list of expert
contacts from large systems organized by island and by
subject. Subjects include sampling and testing, moni-
toring requirements, hazardous materials, and setting
water rates. Hawaii updates these lists annually.
In addition to providing telephone lists, Hawaii’s pro-
gram organizes a hui (pronounced “hoo-ee”), or family
group, on each island. The members of these groups —
county utility officials, AWWA members, EPA, and
owners and operators of large and small systems —
meet as often as possible to exchange information. Each
hui has an island coordinator from the major island
water utility. Coordinators attempt to contact all par-
ticipants at least monthly.
Finally, Hawaii’s program requests large systems to
open their training sessions to small systems operators,
if appropriate. Not all training sessions are necessarily
open or free. The program compiles and distributes a
list of sessions deemed important for small systems.
About half of all small water systems in Hawaii partici-
pate in the one-year-old program.
AWWA’s Small Water Committee in Hawaii runs the
program. John Stubbart, Chair of the Committee and
President of the Waimea Water Services in Kamuela,
says the program has been successful in part because it
earned support from the County Board of Water Sup-
pliers, the State Department of Health, and EPA. He
believes the support of these groups helped spark
interest quickly among large and small systems.
Stubbart also believes that the island group organiza-
tion appealed to the small systems operators, who
“don’t want to call someone in Honolulu who has no
knowledge of their local conditions.” It also allows
people to meet in person more easily.
Hawaii’s AWWA Section advertises the program to
small water systems in its newsletter, and it sent two
direct mailings to all small systems in Hawaii. To
encourage large systems to participate, the AWWA
sent information to them directly and asked about their
areas of expertise.
When a small system expresses interest in the program,
the AWWA sends the operator a Memorandum of
Agreement. The MOA states that the small system will
not hold large systems liable for any problems that
occur after assistance is provided. As soon as the small
system returns the MOA, AWWA sends the system a
copy of the telephone contact list and a list of partici-
pants on each island.
NEWWA Developing Massachusetts Directory
In Massachusetts, the New England Water Works As-
sociation (NEWWA) is developing a telephone direc-
tory identifying drinking water professionals and oth-
ers who are willing to provide free technical assistance
in operations and management. This directory will be
organized geographically (by county) and by subject.
To get support for the directory, the NEWWA will
survey all large-water-supply operators and retired
operators to determine their willingness to participate
and their areas of experience. Areas of experience
include sources and distribution, sampling and analy-
sis, operation and maintenance of treatment systems,
water resource protection issues, troubleshooting, and
financial administration. The NEWWA is receiving
An Update on OGWDW’s Mobilization Effort
Peer Assistance Programs Help Small
Systems Stay in Compliance
July 1992
9
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Meeting the Challenge
$4,000 from the national AWWA. It is also receiving
help from EPA Region I, county and local rural water
associations, the Rural Housing Assistance Program,
and the State Department of Environmental Protection.
The NEWWA belongs to the Massachusetts Technical
Assistance Network of more than 30 organizations.
The NEWWA intends to distribute the directory by
hand at first — at EPA meetings, at training sessions
sponsored by the State, EPA, or AWWA, or by rural
water circuit-riders. Savas Danos of the Littleton Water
Department, who leads the NEWWA small systems
committee, believes that the directory should be deliv-
ered by hand initially so people will recognize its value.
Later, he says, they will consider mailings to trailer
park associations, people on rural water systems mail-
ing lists, and other groups.
California’s Adopt-a-Small-System Program
The Alameda County Water District (ACWD) pre-
pared a telephone list of large system operators who
volunteered to provide technical assistance on a variety
of subjects. The list is organized by subject and assigns
a particular operator to each subject. The subjects
include sampling and testing procedures, monitoring
requirements, meter information and repair, emergency
operation procedures, setting water rates, and other
areas.
According to John Marchand of ACWD, questions
have ranged from, “How do you fish out a dropped
well casing?” to “How much chlorine do we need in the
reservoir?”
In addition to answering questions over the phone,
organizers of the Program encourage small systems
owners and operators to visit the ACWD and meet one-
to-one with technicians and engineers there.
The ACWD has distributed the phone list to the 22
small systems in Alameda County. They also distrib-
uted a letter explaining
the service, informing the
operators that it’s free,
and explaining the limi-
tations in liability. Cir-
cuit riders from Califor-
nia Rural Water Associa-
tion who have estab-
lished personal relation-
ships with the small sys-
tems owners and opera-
tors have also dissemi-
nated the information.
Ohio’s Big Brother-Big
Sister Program
Large systems in Ohio
have volunteered to an-
swer questions and pro-
vide advice to small sys-
tems in a peer assistance
program sponsored by
the Small Systems Com-
mittee of the Ohio
AWWA. Small systems
can call the Committee,
which refers them to a
participating large sys-
tem, usually in their area.
As of 1991, more than 25
large systems had volun-
teered to participate inthe
program. Curtis Truss,
Assistant Director of the
Operator Training Com-
mittee and organizer of
the big brother-big sister
The Problem of Liability in Peer Assistance Programs
Q ne of the biggest worries with peer assistance programs is liability,
according to States that run these programs and States that are planning
to set up their own programs. Small systems must be aware that large systems
are not liable if problems occur after they give advice.
States that have developed these programs have come up with a variety of
solutions to the problem of liability.
In Hawaii, all small systems wishing to participate in the Hui’Wai Program
must sign memoranda of agreement. The MOA states the intent of the program,
that no engineering services will be provided, that the program is voluntary
and free, and that the small system will not hold the large systems liable for any
problems that may arise after technical assistance is provided.
“We were able to come up with an MOA that all parties agreed with,” said John
Stubbart. The MOA was reviewed and approved by the legal staff of the
County Board of Water Suppliers.
In Massachusetts, the NEWWA will state in the introduction to its telephone
directory that no large systems advisors can be held liable for problems, that
they’re just giving suggestions. According to Savas Danos, the attitude of the
advisors will be, “If I were in your shoes, this is what I’d do.”
Organizers in California tell their volunteers that the organizers “are not asking
anyone to undertake a major engineering study, just enough good advice to
steer [ small systems operators] in the right direction.” In a letter to the small
systems operators, the organizers write, “Because this is a voluntary service,
neither the individual staff member nor the ACWD can assume any liability
based on the advice given.”
In Ohio, Curtis Truss says that participants have not been excessively con-
cerned about liability: “it’s not like we’re rolling up our sleeves and doing the
work: it’s just advice and referrals,” he says. “We just try to steer people in the
right direction.”
10
July 1992
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An Update on OGWDWs Mobilization Effort
program, says the secret of the informal network is that
small systems are often referred to nearby large sys-
tems. These systems may have similar problems, such
as water quality concerns, and operators from the large
and small systems may be able to meet in person. “They
want to call someone a county away, not necessarily in
big cities,” says Truss.
Montana’s Peer Backup Network
Montana’s Midwest Assistance Program has
developed a Peer Backup Network to supple-
ment its operator training sessions. Funded
by EPA, the Network facilitates interaction
among large and small systems owners and
operators. It is a valuable complement to
training because “owners and operators
sometimes have difficulty traveling dis-
tances to training sessions,” according to
Judy Sass, a Rural Development Specialist.
She also believes “the training is frequently
targeted to large systems, land] regulators
are viewed as the enemy.”
Larger systems volunteer to assist smaller
systems in the Network. “Some system
operators share tools or occasionally fill in
for one another,” claims Sass. Through the Network,
small systems can get advice or information on opera-
tor certification, proposed regulations, management
issues, and other areas.
Oklahoma Peer Assistance initiative
In Oklahoma, the AA Operators Club, representing the
State’s larger systems, organized four State-accredited
drinking water training sessions for small systems.
More than 150 operators attended each of these ses-
sions and received credit toward operator certification.
The Operators Club will begin providing peer assis-
tance to small systems operators in 1993.
Resource Analysis Model to Help in State Planning
The Office of Ground Water and Drinking Water is
developing a State Drinking Water Program Resource
Analysis Model that will enable States to estimate the
resources needed to fund their drinking water pro-
grams for the next six years, and will allow EPA to
prepare national cost estimates. The model has two
purposes: building State capacity and updating the
EPA/ASDWA Resource Needs Survey.
The project has evolved through three stages. The first
developed a direct implementation model to estimate
staffing needed by EPA to administer a drinking water
program directly if a State lost primacy, or EPA with-
drew primacy. The second, following EPA’s proposed
priorities strategy, modified this model to estimate
staffing required to carry out a minimum function State
program. The third, and current, stage is developing a
resource analysis model to measure the workload asso-
ciated with a fully functional State program.
The model forecasts State program resource needs for
FY 1993-1998. Staffing requirements for each program
activity and for program divisions will also be pro-
vided. Results will be interpreted using a built-in
prioritization scheme.
The model is being designed with default assumptions
that reflect national aggregate conditions. States will be
able to override these default values to reflect their
specific requirements more accurately.
Several States have expressed considerable interest in
the model and have requested that preliminary runs be
prepared for use in their State capacity building efforts.
During the fall of 1992, this program and a user’s
manual will be mailed to all States. All States will be
allowed to participate in the development of the State
Resource Analysis Assessment. A resource analysis
report should be in draft by December1992, with a final
version expected by February 1993.
A working group, representing several States, ASDWA,
Headquarters and Regional personnel, has been formed
to critique model assumptions. The working group has
recommended several changes to improve its accuracy,
and the model is being revised to incorporate their
recommendations.
Peer Assistance Contacts
State contacts from the Peer Assistance article include:
Salvas C. Danos, Massachusetts: (508) 486-3104
John Stubbert, Hawaii: (808) 885-5941
John Marchand, California: (510) 659-1970
Curtis Truss, Ohio: (614) 268-6826
Judy Sass, Montana: (406) 273-0410
July 1992
11
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Meeting the Challenge
Governor’s Forum Recommends SDWA Reforms
The Governors’ Forum on Environmental Manage-
ment, a bipartisan group of governors, has presented
EPA Administrator William K. Reilly with recommen-
dations designed to respond to state and municipal
concerns that implementation of the Safe Drinking
Water Act is being restricted by resources and capabil-
ity limitations.
Last April, Reilly re-
quested that Governor
Michael Castle of Dela-
ware chair a group of gov-
ernors to examine Safe
Drinking Water Act imple-
mentation problems. On
June 21, Reilly received
those recommendations at ____________________
a meeting of the Gover-
nors’ Forum at Jackson Hole, Wyoming.
“1 am grateful for the constructive recommendations
from the Forum,” Reilly said. “This document should
serve as the basis of an important discussion among the
States and Congress for considering the merits of a
sensible, risk-based approach to assuring safe drinking
water for all Americans.”
Thegovernors’ proposed eight point program demands
action in three major areas: 1) increasing the availabil-
ity of resources, 2) improving program efficiency, and
3) making statutory changes. The members of the
Governor’s Forum on Environmental Management rec-
ommend that:
“The Federal government increase the resources ap-
propriated to the States for implementation of the Safe
Drinking Water Act (SDWA) to $100 million. This
would address the present Federal burden placed on
primary States. Future requirements should not be
imposed unless Federal resources are provided to meet
75 percent of the States’ cost.”
“The States commit themselves to explore seeking ad-
ditional resources from general funds or special funds
to help dose the remaining resource gap.”
“The Environmental Protection Agency and the States
aggressively implement the risk-based approach em-
bodied in the PWSS Program Priority Guidance adopted
June 15, 1992.”
“TheEnvironmental Protection Agencyemphasizepol-
lution prevention by providing incentives to States and
localities to adopt effective wellhead and watershed
protection initiatives through such means as reducing
expensive monitoring and other regulatory require-
ments for water supply systems that have implemented
such pollution prevention programs.”
“In consultation with the States, EPA should identify
and implement ways of using existing administrative
authorities to allow States
_____________________ and localities to focus their
resources on controlling
the most significant real
public health risks. To the
extent allowed by existing
statutory authority, States
should be allowed the flex-
ibility to determine the
scope of monitoring re-
quirements with appro-
priate public participation
to ensure accountabilityand protection of public health.
EPA should also streamline implementation of vari-
ance, exemption, and waiver procedures.”
“Until the Safe Drinking Water Act is re-authorized,
Congress should take appropriate action to ensure that
States and localities are not required to implement new
regulatory requirements unless they address signifi-
cant risks and the resources are provided to help imple-
ment them.”
“Congress should re-authorize the Safe Drinking Wa-
ter Act as soon as feasible and eliminate the current
provisions that require specified numbers of contami-
nants be regulated without regard to the risk they
present. The Forum recommends this be done by
enacting substitute provisions that would focus Fed-
eral and State resources on the most significant remain-
ing risks.”
“If the administrative proposals recommended in items
4 and 5 are found not to be allowable under existing
statutory authority, they should be incorporated in the
reauthorization. The goal is to have clear and simple
regulations, allowing States the maximum flexibility to
focus the available resources on protecting public
health.”
The members of the Governors’ Forum, in addition to
Chairman Castle, include Fife Symington (Arizona),
Pete Wilson (California), Lawton Chiles (Florida), Cecil
Andrus (Idaho), William Weld (Massachusetts), John
Engler (Michigan), George Sinner (North Dakota), and
Barbara Roberts (Oregon).
Copies of the recommendations can be obtained through
the EPA Press Office at 202-260-4355.
“This document should serve
as the basis of an Important discussion
among the States and Congress
for considering the merits of a sensible,
risk-based approach to assuring
safe drinking water for all Americans.”
12
July 1992
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