United States                  Office of Water              EPA 816-F-00-014
                      Environmental Protection          (4606)                    March 2000

 SEPA      Fact  Sheet

                      Using  DWSRF Set-Aside  Funds

                      to Assist Small Water  Systems

                      WHAT IS THE DWSRF?
                      The Drinking Water State Revolving Fund (DWSRF) program was established by the Safe
                      Drinking Water Act (SDWA) Amendments of 1996. The program authorizes grants to
                      States to capitalize revolving loan funds. States use funds to provide loan assistance to
                      eligible public water systems for infrastructure improvements needed to continue to ensure
                      safe drinking water. The program also emphasizes the prevention of drinking water
                      contamination by allowing States to reserve a portion of their grants to fund activities that
                      encourage enhanced water system management and source water protection.

                      Small public water systems historically have had difficulties in meeting the requirements of
                      the SDWA. Therefore, numerous sections of the  1996 Amendments stipulate the provision
                      of special assistance to systems which serve  10,000 or fewer customers. For example, States
                      are required to provide a minimum of 15 percent of the funds available for loan assistance to
                      small systems to help address infrastructure needs. Many of the set-asides also focus on the
                      needs of small systems.  By enhancing the capabilities of small systems, States can promote
                      greater long-term compliance with national primary drinking water regulations and thereby
                      ensure greater protection of public health.

                      SDWA 1452(g)(2) provides States with the following three ways by which they may target
                      DWSRF set-aside funds toward the provision of technical assistance to small systems:

                           (1)    Two percent of a State's DWSRF allotment may be used to provide technical
                                 assistance to small systems.
                           (2)    Up to 10  percent of a State's allotment may be used for State program
                                 management activities including administering or providing technical
                                 assistance, which may include small systems.
                           (3)    Up to 4 percent of a State's allotment may be used to cover the costs of
                                 DWSRF  program administration and to provide technical assistance to public
                                 water systems within the State, which may include small systems.

                      Under 1452(k), States may use up to 10 percent (of an available 15 percent) of their
                      DWSRF capitalization grants to provide technical and financial assistance to public water
                      systems as part of a capacity development strategy prepared in accordance with SDWA
                      1420, to conduct source water assessment activities, and implement wellhead protection
                      programs. States have the option of targeting assistance for these activities toward small
Printed on Recycled Paper


    Section 1452(g)(2) Small System Technical Assistance Set-Aside (2%)
       In coordination with the State Rural Water Association, the New Jersey Bureau of Safe Drinking Water will
       provide technical assistance to small systems. This assistance will include an outreach program to explain the
       DWSRF and provide guidance in completing applications for funding.  Assistance will also include support for
       systems in noncompliance and determination of well locations using GPS technology for water systems that use
       ground water as a source.
       The State of New York plans to use  funds to enhance the State's existing Small Water Systems/Self-Help and
       Comprehensive Performance Evaluation Programs and to provide direct technical assistance to small systems.
         New York's Self-Help Program provides guidance to communities considering project alternatives,
          calculating alternative project costs, preparing budgets for selected projects, and reviewing existing operation
          and maintenance practices. Under this program, the Department of Health also helps communities develop
          criteria for consultant selection, determine project priorities, improve purchasing power, and conduct
          technical assessments.
         Reviews and assessments of water filtration plants are completed under the State's Comprehensive
          Performance Evaluation Program. After evaluation, systems are provided with assistance designed to
          optimize their operation and ensure compliance with current and future standards and regulations.
       Helping small systems prepare Consumer Confidence Reports, which water systems are required to distribute to
       customers beginning in October 1999, is one of several activities being planned by New Mexico.  The State will
       assist water systems with the development of language needed to explain any area of the report with which the
       systems have  difficulty. The State will also help systems develop operation and maintenance manuals to train
       operators with new treatment or operation processes.

    Section 1452(g)(2) State Program  Management Set-Aside (10%)
       Small water systems frequently have limited resources and no prior experience with training operators.  The
       SDWA Amendments expanded the universe of water systems that are required to have a certified operator to
       include small systems. Maine will use funds to contract with organizations such as the New England Water
       Works Association and Maine Rural Water Association to provide training to operators of these small systems.
       Funds will pay for training courses and materials or for correspondence or alternative training, where applicable.

    Section S1452(10 Local Assistance Set-Aside (15%)
       Oklahoma will contract with the State Rural Water Association to provide services to small systems in the area
       of source water protection.  Contractors will assist water systems in locating potential  sources of pollution,
       developing contingency plans, and implementing management practices and  controls to protect drinking water
Information about the DWSRF Program is available on the EPA Office of Ground Water
and Drinking Water (OGWDW) homepage [www.epa.gov/safewater/dwsrf.html]. For
questions concerning a specific State, a list of State and EPA Regional DWSRF
coordinators can be found on OGWDW's webpage. You can also call the Safe Drinking
Water Hotline at 1-800-426-4791.