£EPA
           United States
           Environmental Protection
           Agency
           Office of Water
           (4606)
EPA 816-R-00-001
April 2000
The Drinking Water State
Revolving Fund Program

Case Studies in Implementation
I. Public Participation
                            Printed on Recycled Paper

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Public participation is that part of the decision-making process through
which responsible officials become aware of public attitudes by provid-
ing ample opportunity for interested and affected parties to communicate
their views. Public participation includes providing access to the deci-
sion-making process, seeking input from and conducting dialogue with
the public, assimilating public viewpoints and preferences, and demon-
strating that those viewpoints and preferences have been considered by
the decision-making official. (40 CFR 25.3)
"We believe putting information into the hands of the American people is
one of the best ways to protect public health and the environment.  Give
people the facts and they can make  intelligent, informed decisions about
how to protect themselves, their families, and their communities."

                                   — EPA Administrator Carol Browner

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Contents
I. Introduction	1

II. State Summaries	3
  Michigan 	 3
  Minnesota  	5
  North Dakota	6
  Vermont	8
  Virginia	9
  Washington 	 11

III. Conclusion	15
  Additional Sources of Information	 16
                                                                   III
Appendix A: State Solicitation Materials and Sample Documentation

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I.   Introduction
        One goal of the 1996 Safe Drinking Water
        Act (SDWA) Amendments is to provide
        better information to the general public on
the quality of drinking water. The Amendments
emphasize public participation and consumer right-
to-know to ensure that states'  choices concerning
drinking water program implementation are respon-
sive to public need. Several provisions of the SDWA
Amendments specify that the public is to be pro-
vided with data and analyses or given the opportu-
nity to review and comment on drinking water
program implementation, regulations, strategies, and
procedures.

One such requirement appears in SDWA §1452
concerning Revolving Loan Funds for drinking water
infrastructure projects. As part of the annual
Drinking Water State Revolving Fund (DWSRF1)
capitalization grant application, a state must prepare
an Intended Use Plan (IUP). The IUP provides
information on a state's DWSRF program and
describes how it intends to use DWSRF funds to
meet the objectives of the Act  and further its public
health protection goals. SDWA §1452(b) requires a
state to provide for public review and comment on
its IUP. EPA's Final DWSRF Program Guidelines
[EPA 816-R-97-005] require a state to seek "mean-
ingful public review and comment on its funding
decisions in the IUP." A state must also describe the
public review and comment procedures and explain
how major comments and concerns were ad-
dressed. The IUP may be amended throughout the
year in accordance with provisions established in the
IUP, provided that any changes go through a public
review process. EPA hopes that this provision will
work in concert with the public involvement require-
ments for other provisions of the SDWA Amend-
ments to increase public awareness  and enhance
public health.
There are no specific requirements in the Final
DWSRF Guidelines regarding what constitutes
"meaningful public review" of the IUP. As a guide,
states should consider the objectives set forth in 40
CFR 25.3(c), which address public participation for
programs under the Resource Conservation and
Recovery Act, the Clean Water Act, and the
SDWA. The seven objectives are:

  1. To assure that the public has the opportunity to
     understand official programs and proposed
     actions, and that the government fully consid-
     ers the public's concerns;

  2. To assure that the government does not make
     any significant decision on any activity covered
     by this part without consulting interested and
     affected segments of the public;

  3. To assure that government action is as respon-
     sive as possible to public concerns;

  4. To encourage public involvement in implement-
     ing environmental laws;

  5. To keep the public informed about significant
     issues and proposed project or program
     changes as they arise;

  6. To foster a spirit of openness and mutual trust
     among EPA, states, substate agencies and the
     public; and

  7. To use all feasible means to create opportuni-
     ties for public participation, and to stimulate
     and support participation.

Due to the variation among states in resources and
in social and political climates, no single approach
will work under all conditions. Therefore, any state
process that solicits input from a variety of inter-

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ested parties, allows adequate time for the public to
comment, and allows time for the state to address
major comments meets SDWA's public participation
requirements for the IUP. Public meetings are
encouraged as one method for soliciting input, but
are not required. At a minimum,  states should make
an effort to include interested parties, such as
environmental and public health groups, that extend
beyond those on existing mailing lists when seeking
meaningful public review.

This paper is intended to serve as a tool for states in
identifying new approaches to meet the public
involvement requirements for the DWSRF program.
It highlights the approaches that six states2 (Michi-
gan, Minnesota, North Dakota, Vermont, Virginia,
and Washington) have used to obtain input from the
public in the development and review of their lUPs
and provides examples of additional roles for the
public, such as the development of and revisions to
state DWSRF programs, which includes decisions
regarding the use of set-asides. Each state summary
identifies some of the marketing tools and tech-
niques used to spread awareness of and solicit
participation in the state's program. Appendix A
presents examples of states' meeting notices,
documentation of comments, and responses to
comments prepared to satisfy EPA's Final DWSRF
Guidelines. The appendix also presents newsletters
and other solicitation materials which, while not
required by the final guidelines, were developed by
some states.3


Tor consistency, the acronym DWSRF is used
throughout the paper even though some states use
another acronym to refer to their program.

2The states reviewed in this report were selected
based on recommendations from EPA Regional
DWSRF Coordinators.

3Please note that these are selected examples only
and they do not represent all of the materials
developed by the states discussed in this report.

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II.   State   Summaries
Michigan's Drinking Water Revolving Fund is jointly
administered by the Michigan Department of
Environmental Quality (DEQ) and the Michigan
Municipal Bond Authority (MMBA). Two DEQ
divisions (the Environmental Assistance Division
[BAD] and the Drinking Water and Radiological
Protection Division [DWRPD]) are responsible for
program administration, including development of the
IUP. The DWRPD is responsible for performing the
technical review of project plans and specifications,
assessing the cost-effectiveness of the  proposed
project, issuing permits, and managing set-aside
funds. In addition, the DWRPD computes project
priority points to enable the BAD (specifically, the
Municipal Facilities Section) to prepare the project
priority list (PPL) and IUP. The processing of loans
and distribution of funds from the DWSRF to
qualified water suppliers is directed by MMBA.

                           the
During the first year of its program, Michigan DEQ
established a stakeholders group to provide input on
its DWSRF program including the use of set-asides.
The group included representatives from the Michi-
gan Section of the American Water Works Associa-
tion (AWWA), the Consulting Engineers Council, the
Michigan Municipal League (which represents some
500 cities and villages accounting for more than 98
percent of Michigan's urban population), the Michi-
gan Rural Water Association, and state environmen-
tal groups. In addition to providing input to DEQ and
MMBA on the program, the stakeholders group
members contributed to the publicity of the DWSRF
program through their respective newsletters and
through the pooling of their mailing lists to create a
comprehensive master list for the program.
DWRPD is required by statute to "annually invite
stakeholders including, but not limited to, representa-
tives of water utilities, local units of government,
agricultural interests, industry, public health organiza-
tions, medical, environmental, and consumer organi-
zations, and drinking water consumers who are not
affiliated with any of the other represented interests,
to one or more public meetings to provide recom-
mendations for the development of the annual
intended use plan as it relates to the set-asides
allowed under the federal safe drinking water act."
[Part 54, 324.5417(1)]

To introduce the DWSRF program to the general
public, DEQ conducted a series of informational
workshops in Marquette, Gaylord, Grand Rapids,
and Detroit. The workshops, attended by approxi-
mately 400 people, were designed to solicit partici-
pation in the DWSRF program and to educate
people about its requirements. Notice for the
workshops appeared in the Loan Arranger, Michi-
gan Water Works News (a quarterly publication of
the Michigan Section of the AWWA), and major
newspapers around the state.

To ensure that each project applicant provides
proper notice of the proposed project to  the affected
community, Michigan state law (part 54, 1994 PA
451) requires each utility to solicit and respond to
local public comment prior to applying for funding.
(Loan Arranger, Winter  1998)

Following development of the PPL and draft IUP, a
public hearing was convened. Announcements of
public hearings were sent to each utility and pub-
lished in newspapers throughout the state 30 days in
advance. Notice of the August 1998 public hearing
for the FY 1999 grant application appeared in three
newspapers, the Detroit  Legal News, the Lansing
State Journal, and the Marquette Mining Journal.
Information about the DWSRF program, application
deadlines, and public hearing notification also
appeared in stakeholder publications such as
Michigan's AWWA section newsletter, Michigan
Water Works News.

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Program development is ongoing in Michigan. After
the program's first funding cycle, staff from MFS
and DWRPD met to examine the success of the
DWSRF and to discuss possible improvements to its
operation, inter-divisional communication, and
customer relations. The meeting provided an oppor-
tunity for participants to discuss program communi-
cation, scheduling, and reporting. A small group
format was used to brainstorm ideas on how to
improve communication on project plan reviews, the
process for reviewing plans and specifications, the
coordination of scheduled milestones, and how to
refine the PPL to make  it more user-friendly. (Loan
Arranger, Fall 1998)

                 and

l==l=  Identification of Target Audiences.
|l=f=f  Through the establishment of a stakehold-
- -•—  .---  ers group; DEQ ensured that potential loan
         recipients and potential technical assis-
         tance providers were well informed of the
         DWSRF program and had an opportunity
         to provide input during its development.
         Representatives from the Michigan
         Section of AWWA, the Consulting Engi-
         neers Council, the Michigan Municipal
         League, the Michigan Rural Water Asso-
         ciation, and state environmental groups
         participated in the group. All DEQ mail-
         ings  and newsletters, such as the Loan
         Arranger, were sent to government
         officials, applicants for DWSRF funding,
         all public water systems on record that
         could be eligible for funding, and other
         interested parties.

         In cooperation with its stakeholders, DEQ
         and MMBA developed a variety of
         promotional materials for the program.
         Materials were sent to all recipients on the
         combined mailing list.

f:;;.T \   Newsletters. Published three times per
v?5i !i?i  year  by DEQ, The  Loan Arranger
         communicates information about
         Michigan's DWSRF program and the
         federal DWSRF program (See Appendix
         A). DEQ also has a quarterly newsletter,
         called Water Works News, which occa-
         sionally contains information on the
         DWSRF program.
      DWSRF Pamphlet. This document
      includes the DWSRF program history and
      purpose, as well as information regarding
      qualifying water suppliers and types of
      projects. Basic information regarding the
      process of applying for and receiving a
      loan is also provided.

      Website. The IUP and most of the
      informational documents listed above are
      available online (www.deq.state.mi.us/ead/
      mfsect). A Power Point presentation
      created to assist staff in presenting
      information about this new program is
      available on the DEQ website.

      Guidance Documents. To facilitate
      participation in the program, DEQ devel-
      oped three guidance documents (available
      on the website) to help water suppliers
      determine whether their project is eligible
      and whether they qualify as disadvan-
      taged, and to help them complete the
      required project plan for loan consider-
      ation.

      Handouts. Three supplementary planning
      handouts are available upon request:
      Regional Planning Agency Addresses,
      National Natural Landmarks in Michigan,
      and Michigan's Natural and Wild & Scenic
      Rivers. The Project Plan Preparation
      Guidance directs applicants to request any
      of these items, if needed, to complete the
      project plan.

      Three additional handouts pertaining to
      federal project planning cross-cutters and
      state requirements are also available upon
      request: a list of cross-cutters and the
      applicable statutes, the environmental
      contacts list, and a document detailing
Additional information is available from
Thomas Kamppinen of the Michigan
Department of Environmental Quality,
Municipal Facilities Section. He can be
reached at (517) 373-4718.

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         federal requirements related to project
         planning.

         Focus  on Set-Asides. DWRPD is
         statutorily required to hold at least one
         annual stakeholders meeting to obtain
         recommendations for the IUP as it relates
         to the set-asides. In addition, an article
         titled DWRF Set-Asides - A New Way to
         Do Business was published in the Loan
         Arranger (Winter 1998). It provided
         information on the additional responsibili-
         ties of the state as a result of the 1996
         SDWA Amendments (i.e., source water
         protection, operator certification, and
         capacity development), explained the
         various set-asides, and offered a justifica-
         tion for taking money away from the
         already under-funded infrastructure fund.

         Workshops and Information Sessions.
         Michigan has  conducted a series of
         informational workshops on the program
         and participated in various panel discus-
         sions and meetings. For example, repre-
         sentatives of DEQ and MMBA partici-
         pated in an annual meeting of the Michi-
         gan Townships Association in Detroit.
         This provided more than 100 township
         officials the opportunity to ask questions
         about the DWSRF program.
Minnesota's DWSRF program is jointly administered
by the Minnesota Department of Health (MDH) and
the Minnesota Department of Trade and Economic
Development (DTED) Public Facilities Authority
(PFA). As set forth under "Roles and Responsibili-
ties" in Minnesota's March 1998 Operating Agree-
ment, MDH prepares and maintains a comprehen-
sive PPL and provides it and any other program
information to the PFA for development of the IUP.
The PFA also manages all DWSRF funds including
state match and loan repayments.

                             the
To assist in developing its program, Minnesota
formed an advisory committee consisting of repre-
sentatives from small, medium, and large water
systems, the Consulting Engineers Council, the
Minnesota Rural Water Association, the League of
Cities, the Manufactured Housing Association, and
the PFA. Upon completion of draft rules, a notice
announcing the availability of the proposed rules was
mailed to approximately 5,000 people. The mailing
list was composed of businesses, communities,
counties, individuals, churches, schools, libraries,
government agencies, elected officials, water
systems, and the news media. The notice solicited
review and comment on the rules.

MDH conducted a series of open information
sessions and delivered presentations in various
stakeholder forums (e.g., MN Rural Water Work-
shops and local AWWA  conferences) to ensure an
understanding of the program.

To begin the annual process of developing the IUP,
MDH solicits proposals for the PPL. Solicitation
letters are sent to all eligible water systems and
engineering firms. All systems that have projects on
the priority list receive a second letter soliciting
comments on the IUP. In addition to written com-
ments, verbal input on the IUP may be provided at
the public meeting. Every individual who has ex-
pressed interest in the program or requested place-
ment of a project on the priority list is notified of the
public meeting via a letter or memorandum. Notice
of the public meeting also appears in MDH's
quarterly newsletter and  in the newsletters of
cooperating stakeholder organizations such as MN
AWWA and MN Rural Water Association.

In the IUP, which is subject to public comment,
Minnesota lists the percentage the state will take for
each set-aside.

                 and

=====;  Identification  of Target Audiences. An
|l=ii=f   advisory committee of representatives
 '"•""'  ''"   from water systems, the Consulting
         Engineers Council,  the Minnesota Rural
         Water Association,  the League of Cities,
         the Manufactured Housing Association,
         and the PFA ensured awareness and
         participation by targeted stakeholder
         groups. The draft program rules were
         mailed to businesses, communities, coun-
         ties, individuals, churches, schools, librar-
         ies, government agencies, elected officials,
         water  systems, and the news media.

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    'l Mailings. To ensure public awareness of
    --• the DWSRF program, MDH announced
    :: the availability of the proposed rules for
      the program in a notice distributed to
      approximately 5,000 people. MDH also
      solicits proposals for the PPL in letters
      sent annually to all community water
      systems, nontransient noncommunity
      water systems, and engineering firms.
      Following formal approval of the IUP,
      PFA mails application materials to all cities
      and other public water systems that have
      projects in the fundable range of the IUP.

      Newsletter. Articles discussing the
   '•:-  program were published in the quarterly
      newsletter for community water systems.
      MDH extended this outreach by including
      similar articles in a separate newsletter
      that was distributed to noncommunity
      water systems. The newsletters and
      publications of stakeholder groups such as
      MN AWWA and MN Rural Water
      Association also served to market the
      program.

    | DWSRF Pamphlet. MDH, in cooperation
    } with the PFA, prepared a pamphlet titled
      "Drinking Water Revolving Fund: What it
      Means to Minnesota Public Water Suppli-
      ers." The pamphlet clearly and concisely
      lays out general information on the pro-
      gram and provides contact information for
      specific questions regarding eligibility,
      application procedures, etc. (See Appen-
      dix A).

   ;;  Website. On its website,  MDH provides a
   2  glossary of DWSRF terms (www.health.
      state.mn.us/divs/eh/dwp/pws/dwrf/
      glossary, html) and instructions for placing
      a project on the priority list
Additional information is available from
John Schnickel of the Minnesota Depart-
ment of Health, Environmental Health
Division, Section of Drinking Water Protec-
tion. He can be reached at (651) 215-0784.
         (www.health.state.mn.us/divs/eh/dwp/
         pws/dwrf/pplinstr.html).

         Workshops and Information Sessions.
         Five DWSRF information sessions were
         held in 1997, four in 1998, and two in 1999
         in various locations across the state.
         Sessions were used to  describe the
         program, eligibility, applications, changes,
         and other related matters. Due to increas-
         ing public familiarity with the program,
         MDH plans to hold approximately two
         sessions per year in the future. In addition,
         MDH has made presentations each year
         at operator continuing education training
         sessions, MN Rural Water workshops and
         conferences, and at local AWWA confer-
         ences.

         Other Direct Contact.  Meetings are
         held with community representatives to
         discuss potential DWSRF projects. MDH
         engineers and Rural Water circuit riders
         also provide information to water opera-
         tors and promote the program on  a sys-
         tem-by-system basis. This might involve a
         phone call or a visit to  the system to
         answer questions.
North Dakota's DWSRF program is administered by
the North Dakota Department of Health (NDDH),
Environmental Health Section, Division of Municipal
Facilities.

                                the
To kick off North Dakota's DWSRF program, the
North Dakota Rural Water Systems Association
sponsored a workshop in Bismarck. A brochure
advertising the workshop (See Appendix A) was
distributed to a target audience of approximately 500
recipients, including potential DWSRF loan recipi-
ents, city and consulting engineers, technical assis-
tance providers, funding agencies, and other inter-
ested parties. The brochure highlighted ranking
criteria and set-asides as two of four topics for
discussion, and encouraged people to attend and
provide input on both. Representatives from the
NDDH were the primary speakers at the workshop.
They presented an overview of the program and
explained the process of developing an IUP. The

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workshop was attended by 42 people. Attendees
were asked to complete questionnaires expressing
preferences for priority ranking criteria, weighting of
the criteria, and set-asides (see Appendix A). At the
bottom of each questionnaire, or "ballot," respon-
dents were asked to indicate the type of entity they
represented. These ballots facilitated the comment
process by simplifying the work of the commentor in
submitting comments and the work of the state in
tallying responses and tracking commentors.

Based upon input received at the workshop, NDDH
developed a draft priority ranking system and mailed
it to the same target audience described above for
further input and comments. Written comments
were provided by 20 individuals: representatives of
15 public water systems, two government/funding
agencies, one technical assistance provider, and one
consulting engineer. The priority ranking system was
revised based on these comments.

The workshop attendees supported set-asides for
small system technical assistance and the delinea-
tion/assessment of source water protection areas.
Most of the attendees expressed a strong prefer-
ence for limiting set-asides to maximize the amount
of funds available for project construction. Based
upon this input, NDDH established proposed set-
aside percentages of 16 percent for FY 1997 and six
percent for FY 1998. These percentages reflect a
combination of four percent for administration, two
percent for small system technical assistance, and
ten percent for source water delineations/assess-
ments (FY 1997 only). In a subsequent mailing to
the target audience described above, NDDH
requested written comments on these proposed set-
aside percentages. No one objected to the proposed
set-aside percentages. Therefore, prior to drafting
the FY 1997-1998 IUP, NDDH did not take addi-
tional steps to market the set-asides or seek further
input from groups potentially interested in seeing
them used.
  Additional information is available from
  Wayne Kern of the North Dakota Depart-
  ment of Health, Environmental Health
  Section. He can be reached at (701) 328-
  5225.
NDDH held public hearings in Bismarck and Fargo
to solicit comment on the draft FY 1997-1998 IUP.
Notice of the public hearings appeared in the
Bismarck Tribune, Grand Forks Herald, Forum
(Fargo), and Minot Daily News approximately 45
days prior to the meeting. A second notice was
published approximately one week later. A separate,
more detailed notice was sent to the target audience
identified earlier. The Bismarck public hearing was
attended by nine people: three representatives of
public water systems, three people representing
consulting firms, two from state agencies, and one
technical assistance provider. The Fargo public
hearing was attended by 40 people: 23 representa-
tives of public water systems, 11 people from
consulting firms, one representative from a federal
agency, two from state agencies, and three repre-
sentatives each from educational institutions, na-
tional citizens' organizations, and water industry
service organizations. NDDH prepared a detailed
summary of comments and responses and included
it as an attachment to the IUP.

                 and

 Illlllil;  Identification of Target Audiences. All
 ||||=||   mailings were distributed to a target
         audience of approximately 500 recipients
         consisting of potential DWSRF loan
         recipients, city and consulting engineers,
         technical assistance providers, funding
         agencies, and other interested parties.

; ^=lC, \  Mailings. Prior to drafting the FY 1997-
l j& *•  1998 IUP, NDDH sent several mailings to
 ' -  '; -i!  the target audience. The mailings provided
         background information on the DWSRF
         program, solicited information concerning
         potential projects, and requested input on
         the proposed priority ranking system and
         use of set-asides. In addition, a separate
         and more detailed notice was sent to the
         target audience to inform them of the
         public hearings on the draft IUP.

Ipllljl  Workshops and Information Sessions.
Irfflrl  At the Rural Water workshop, NDDH
•======^  representatives provided an overview  of
         the program and explained how the
         program could benefit eligible water
         systems and the public. The workshop
         was advertised in a brochure that was
         distributed to the target audiences.

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8
Vermont's DWSRF program is administered by the
Water Supply Division (WSD) of the Department of
Environmental Conservation (DEC) of the Agency
of Natural Resources,

                           the
As documented in its FY 1997IUP, Vermont
provided numerous opportunities for public participa-
tion in developing its DWSRF program and its first
IUP. WSD targeted water suppliers to participate in
the early planning stages of the program. Technical
and non-technical meetings were held in each of
four regions in Vermont to facilitate diversity (a total
of eight meetings were held). Two additional meet-
ings to discuss program development options were
held specifically for drinking water consultants.
Seventy-five hydrogeological and engineering
consulting firms were sent letters notifying them of
the two meetings and requesting their assistance in
the development of the program. To ensure the
awareness and participation of Vermont's neediest
public water systems, state hydrologists and engi-
neers contacted them directly by telephone.

Public meetings were held in Montpelier and
Rutland to discuss the IUP  and obtain public com-
ments. More than 700 water suppliers and 200
stakeholders were sent notices of the meetings on
bright orange postcards. Recipients included the
Northeast Rural Water Association, the Vermont
Groundwater Association, individual groups repre-
senting vulnerable populations, engineering and
hydrology consultants, and regional planning com-
missions. Approximately one week later, a "follow-
up" newsletter containing directions to the meeting
locations and additional information on eligible
infrastructure projects was distributed to the same
group of suppliers and stakeholders. WSD also
placed advertisements in the Burlington Free
Press, the Rutland Herald, the Bennington Ban-
ner, the Newport Daily Express, and the
Caledonian Record 20 days prior to  the scheduled
meeting dates. Ninety-one people attended the
Montpelier meeting, and 38 attended the Rutland
meeting. Attendees included consultants, town
managers, nonprofit groups, water system owners
and operators, and other governmental agencies.
Audio tapes and written records were made of the
discussions at both meetings.

WSD also provided detailed descriptions of the set-
asides and the state's intended uses of them in the
IUP. Notices of public meetings and requests for
comment on the IUP were sent to water systems
and organizations with potential interest in the set-
asides, such as technical assistance providers and
conservation organizations. However, no special
effort was made to attract people with a sole
interest in the set-asides.  The set-asides were
discussed at all public meetings.

At the close of the public comment period, WSD
prepared a "Responsiveness Summary" of the 110
oral and written comments received on the draft
IUP through the public meetings, the Internet, fax,
and mail, and attempted to incorporate suggested
modifications into the IUP.

Based on the success of the approach for obtaining
public comment on the FY 1997 IUP, Vermont
followed a similar approach for its FY 1998 IUP.
Once  again, WSD, with the help of the Northeast
Rural Water Association, solicited priority list
applications from water suppliers through mailings
and a series of phone calls to the neediest systems.
Twenty-six of 100 invited consultants met in Water-
bury to discuss the DWSRF Program Implementa-
tion and the draft IUP.

Upon completion of the PPL and development of
the draft FY 1998 IUP, WSD held public meetings  in
Montpelier and Rutland to obtain input on the IUP
and respond to questions about the DWSRF pro-
gram. WSD announced the meetings in the same
five newspapers and sent postcards to water
suppliers and stakeholders 30 days prior to the
meetings. The draft IUP was  also made available
for review via WSD's website. A total of 13 people
attended the meetings, and just over 30 comments
were reported in the Responsiveness Summary.

As a slight variation from the FY 1997 approach,
WSD also delivered a presentation on the DWSRF
program and the draft IUP to 58 water system




  Additional information is available from
  Thomas Bartholomew of the Vermont
  Agency of Natural Resources, Department
   of Environmental Conservation, Water
   Supply Division. He can  be reached at
   (802)241-3425.

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owners, operators, and stakeholders at the Green
Mountain Water Environmental Association Annual
Meeting. The presentation was followed by an
opportunity for comments from the public on the
DWSRF program and the draft IUP. WSD believes
that this additional opportunity may partly explain the
low turnout at the Montpelier and Rutland meetings.
In addition, minimal changes were made to the
program after the first year.

Examples of Vermont's public meeting notices and
documentation of their public involvement process
are provided in Appendix A.

                 and

(===  Identification of Target Audiences.  In
fillip:  addition to water suppliers, WSD targeted
         hydrogeological and engineering consulting
         firms, the Northeast Rural Water Associa-
         tion, the Vermont Groundwater Associa-
         tion, individual groups representing vulner-
         able populations, engineering and hydrol-
         ogy consultants, and regional planning
         commissions.

         Targeted Outreach to High Priority
         Systems. For FY 1997-1998, staff from
         WSD and Northeast Rural Water Asso-
         ciation telephoned water systems with the
         highest priority and greatest need to
         encourage them to apply for loans.

:?,-:==:.....":.,  Mailings. Rather than requiring eligible
»  f=l:;:? £  entities to request an application, WSD
  ••••••• "'••  sends DWSRF applications with instruc-
         tions to more than 600 water systems and
         70 stakeholders. In addition, brightly
         colored postcards announcing the public
         hearing on the  IUP are mailed to all
         eligible water suppliers. The postcards
         also contain information such as the
         amount of money available and project
         examples.

f'..'.'•'  ->   Newsletter. A  special one-time newslet-
 ',f%t v:4.  ter provided additional information on
         eligible infrastructure projects and notifica-
         tion of, and directions to, the public
         hearing.

  hiiili;  Website. WSD's website
         htm) provides access to the IUP and PPL
         for the current fiscal year.

         Focus on Set-Asides. To promote
         involvement in the development of its first
         IUP, Vermont developed a mailing list that
         included conservation groups and other
         organizations that might be particularly
         concerned about the set-asides. WSD still
         uses this mailing list. Also, in its regular
         newsletter, Rural Water featured a special
         article on set-aside funding changes. As of
         the writing of this report, WSD is consid-
         ering starting a newsletter that will include
         more information on set-asides and solicit
         more participation from groups with
         particular interest in the set-asides.

         Workshops and Information Sessions.
         To introduce the program, WSD held eight
         technical and non-technical meetings in
         cities throughout the state.

         Coordination with Stakeholder
         Groups. WSD delivered a presentation on
         the DWSRF program and the draft IUP to
         water system owners, operators, and
         stakeholders at the Green Mountain Water
         Environmental Association Annual Meet-
         ing. During the meeting, WSD staff
         distributed informational materials to water
         systems and stakeholders. Each public
         meeting also provided a forum for ques-
         tions about the program.
As the primacy agency, the Virginia  Department of
Health (VDH) applies for and administers capitali-
zation grants for Virginia's DWSRF program.

                           the
Virginia developed its DWSRF program with the
support and feedback of several local organizations,
including the Water Works Advisory Committee
(WWAC), the VA Association of Planning District
Commissions (PDCs), VA Association of Counties
(VACO), the VA Rural  Water Association (VRWA),
the VA Municipal League (VML), and the VA
section of the AW WA, the League of Women
Voters, and the VA Society of Professional Engi-
neers (VSPE). These groups have provided a

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network for communication between public and
private interest groups, and they have facilitated
VDH's efforts to solicit public opinion. For example,
VDH delivered a presentation on the DWSRF
program at the  Southeast RCAP  conference.
Examples of potential uses of the funds were
provided and set-asides were emphasized.

For its FY 1998 capitalization grant, VDH sought
public input throughout the development of the draft
IUP. To begin, VDH mailed a letter in September
1997 to all public and private, community and
nonprofit noncommunity water systems soliciting
input on the 1998 draft IUP, particularly the uses of
the set-aside funds. This mailing included a copy of
the DWSRF program; a summary of the capitaliza-
tion grant set-asides and special considerations
under SDWA; the date, time, and location of the
public meeting; and contact information to request a
specially prepared information package on the
program. Waterworks owners also received loan
applications for the DWSRF program. Later that
month, a similar request for feedback and a sum-
mary of information on the program was published
in the Virginia Register of Regulations. Loan appli-
cations and general comments on the program and
the proposed use of the set-asides were requested
by mid-November. Using the applications that were
submitted, VDH prepared the proposed PPL and
completed the draft IUP. VDH mailed a second
letter in early December, along with the draft IUP, to
all system owners and other interested parties
approximately one week before the public meeting
to request comments  on the draft  IUP and invite
them to the public meeting. VDH  compiled and
considered all public comments to prepare the final
IUP for its FY 1998 capitalization grant application.
Virginia will follow a  similar strategy to develop
future lUPs.

                and

!==;; Identification of Target Audiences.  To
:i||f=| develop and market its program, VDH
   Additional information is available from
   Tom Gray of the Virginia Department of
   Health. He can be reached at (804) 786-
   1768 or (804) 786-1087.
cultivated relationships with several local
organizations/technical assistance provid-
ers, including the Water Works Advisory
Committee (WWAC), the VA Association
of Planning District Commissions (PDCs),
VA Association of Counties (VAC), the
VA Rural Water Association (VRWA), the
VA Municipal League (VML), and the VA
section of the AWWA.

Mailings. Rather than wait for individual
systems to express interest, VDH mailed
loan applications and copies of the
DWSRF program to all eligible entities.
Included in the mailing was a summary of
the capitalization grant set-asides and
special considerations under SDWA;
contact information to request a specially
prepared information package on the
program; and logistical information for the
public meeting on the IUP. The state also
developed a fax-based information request
form so water facility owners and other
interested parties can request additional
information on loan and set-aside pro-
grams (See Appendix A).

Website. The VDH Office  of Water
Programs' website provides descriptions
of specific DWSRF loan and grant pro-
grams (e.g., planning and design and
source water protection), applications for
each of these funding opportunities, and
the VDH's Program Design Manual,
which describes the features of the
program in more detail. The site
(www.vdh.state.va.us/owp/water_supply.
htm#SRF) also solicits input on the
program for the next fiscal year's IUP
and provides suggestion forms for future
set-aside items (See Appendix A).

Focus on Set-Asides. In its initial  mailing
to system owners  on the DWSRF pro-
gram, VDH provided a detailed description
of the set-asides and sought input on the
state's use of them. Upon completion of
the draft IUP, which included a detailed
description of the four set-asides, VDH
prepared a mailing for a broader audience
(including potential technical assistance
providers) to request comment on the
draft IUP. In a separate mailing for

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         system owners and other interested
         parties, VDH explained the various uses
         of DWSRF funds. Enclosed was a one-
         page, fax-back, information request form
         listing specific examples of potential
         activities under each of the four set-asides
         and the different types of construction
         assistance (See Appendix A). Further-
         more, VDH's relationships with its stake-
         holders provide a network to disseminate
         information to a variety of groups and
         individuals that may benefit directly from
         the DWSRF through a funded project or
         through assistance provided under  a set-
         aside.

         Coordination with Stakeholder
         Groups. VDH works closely with  several
         stakeholder groups listed previously (e.g.,
         PDCs, VRWA, and AWWA). Through the
         newsletters and publications of each
         organization, Virginia's DWSRF program
         is marketed to a diverse audience of
         potential loan recipients. In addition, VDH
         staffed a booth at the VA Rural Water
         convention and provided information on
         the DWSRF program. VDH also has
         delivered presentations at annual meetings
         of some of these organizations.
Washington's program is jointly administered by the
Department of Health (DOH) and the Public Works
Board in partnership with the Board's fiscal agent,
the Department of Community, Trade and Economic
Development (CTED). As described in
Washington's Drinking Water State Revolving
Fund Program  - Legislative Report, DOH is the
lead agency for administering the program and
determining capital project eligibility and priority for
funding. The Board is responsible for determining
loan eligibility and administering the loan contracts
(DOH Pub #331-116, December 1997).

                               the
During the first year of its program, Washington
took steps to ensure public awareness of the pro-
gram and to solicit the involvement of interested
parties. A Joint Advisory Committee comprised of
representatives  of the Public Works Board and the
Department of Health, Division of Drinking Water's
Water Supply Advisory Committee (WSAC) was
established to discuss program development and
implementation. Members from the Board and
WSAC represented a broad spectrum of interest
groups, including publicly and privately owned water
systems of various sizes, the environmental commu-
nity, and the development community (e.g., con-
struction companies). EPA also was represented on
this advisory committee. Committee discussions
centered around organizational issues, establishment
of the loan program, and development of the work
plan.

Public workshops held in Spokane, Everett, and
Olympia provided information on the DWSRF
program. (The state continues to conduct three
workshops each year at various locations.) Two
special editions of Water Tap, DOH's quarterly
newsletter on drinking water topics, focused entirely
on the DWSRF program. The first edition provided
valuable background information on the new
DWSRF program and identified contacts for addi-
tional information. The second special edition,
February 1999, highlighted several success stories of
projects funded under the DWSRF. This edition was
particularly well-received because it showed poten-
tial clients that the program was helping a wide
variety of systems finance a broad array of capital
construction projects (See Appendix A). DOH
surveyed all applicants to obtain input on the parts  of
the program that worked and areas for improve-
ment. Based on this information, and the information
obtained from staff in the field, DOH improved loan
rates and terms, increased technical assistance to
clients, and streamlined application processing.

DOH has now completed two rounds of project loan
application reviews, and the draft IUP for round
three was out for public review as this report was
being written. During each cycle, DOH headquar-
ters staff, with support from field engineers, plan-
ners, and compliance staff, review and rank the
applications and prepare a preliminary PPL.
DWSRF staff and regional engineers from the
Division of Drinking Water Assurance gather for a
one-day meeting to finalize the PPL. The field
staff's detailed knowledge of the operational history
and compliance status of individual systems helps to
assess the true public health significance of the
proposed projects and ensure consistent scoring.
The PPL is forwarded to the Public Works Board
for financial review and published in the draft IUP,
which is then released for a 30-day public  comment

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12
period. The draft IUP is made available through the
Internet, the state library, public libraries, and DOH.
In partnership with CTED and the Board, DOH
convenes a public hearing, advertised in several
major newspapers across the state. In 1999, notice
of the public hearing appeared in six major newspa-
pers. Information about the DWSRF, application
deadlines, and public hearing notification also
appeared in issues of the DOH's newsletter, Water
Tap. All mailings were sent to government officials,
applicants for DWSRF funding, all potential loan
candidates and applicants,  and other interested
parties. The state then considered, responded to,  and
incorporated public comments before submitting the
final IUP to EPA.

Despite extensive outreach efforts, Washington has
found that response  and comments during the IUP
development process have  been negligible (perhaps
two or three comments per year). Because the state
has consistently received many more positive than
negative comments, DOH  is not concerned that the
lack of comments on the draft lUPs indicates a lack
of support or interest in the program. Washington
expects to receive more public input as the program
evolves and projects begin to be turned down
because they do not score high enough to receive
funding. (As of the writing of this report, no eligible
application has been denied funding.)

Washington's public  involvement strategy initially
focused on project loans. Therefore, outreach has
been geared toward  development of the IUP with
no specific goal of obtaining input on the set-asides.
However, DOH has  obtained some input on the set-
asides through the joint advisory committee, through
staff interactions with technical advisory groups,  and
through comments on the IUP from groups, such as
technical assistance  providers, that could benefit
from the set-asides.  Occasionally, DOH hears from
outside interest groups such as Evergreen Rural
Water Association of Washington. Early on, Wash-
ington did not make a special effort to market the
set-aside funds. As of the writing of this report,
            Additional information is available from
            Richard Sarver of the Washington Depart-
            ment of Health, Division of Drinking Water.
            He can be reached at (360) 236-3093.
however, program leaders were working to identify
and solicit various third parties who could provide
technical assistance and other benefits to public
water systems using these funds. DOH and the
Board recently developed a formal description of the
set-asides that lays out the percentages that the
state will take under each set-aside and describes
how the money will be used. The state is trying to
expand the focus of its public involvement strategy
to incorporate the set-asides and target specific
groups that may be interested in each one.

                 and

Illlllll  Identification of Target Audiences.
1||1=||:  DOH identified public water  systems of
         various types and sizes (public, private,
         investor-owned, small, large, etc.), repre-
         sentatives of local governments, and other
         affected parties (e.g., construction compa-
         nies) to form an advisory committee. In
         addition, notification of the availability of
         the draft IUP is provided to all potentially
         affected water systems. Although
         Washington's municipal systems are
         eligible for assistance from a Public Works
         Fund and other sources of financing, the
         small, privately owned systems that are
         the majority of the state's water systems
         have virtually no access to public funding
         assistance. For this reason, and because
         this group has a history of compliance
         problems, DOH has targeted this group in
         particular when developing the rates,
         terms, and marketing strategies for the
         DWSRF program.
    e!^-
         Targeted Outreach to High Priority
         Systems. As a pilot project, DOH devel-
         oped a list of systems that have compli-
         ance problems and appear to  be good
         candidates for DWSRF assistance and
         contacted them. Systems that have
         expressed interest in the DWSRF are
         receiving direct technical and financial
         assistance from DOH and the Board.

f ..,  :;   Newsletter.  Water Tap, DOH's quarterly
7J;;S_;•• 
-------
contained detailed information on the
purpose of the program and eligibility
requirements. In February 1999, after the
first round of loans, DOH prepared
another special issue which highlighted
some of the program's "success stories"
(See Appendix A). Water Tap is also
available online at www.doh.wa.gov/ehp/
dw/watertap .htm.

Website. Extensive information on
Washington's program, including guidelines
and application forms, is made available on
the Public Works Board website
(www. crab. wa.gov/pwtf/programs.htm).
The DOH Division of Drinking Water site
(www.doh.wa.gov/ehp/dw/) also provides
information such as fact sheets,  announce-
ments, and a list of current events (i.e.,
meetings, workshops, etc.).

Coordination with Stakeholder
Groups. The Infrastructure Assistance
Coordinating Council (IACC) publishes an
annual guidebook that includes all available
state grant and loan programs for capital
construction projects. Every two years,
the IACC holds a multi-day workshop to
provide program information to interested
parties. DOH and the Public Works Board
provide information on the DWSRF for
inclusion in the guidebook, and participate
in the biennial workshop.

Workshops and Information Sessions.
Each year, DOH hosts three educational
workshops in separate locations in the
state to present Washington's program and
provide a forum for questions. DOH and
the Public Works Board also participate in
the biennial workshop held by IACC, as
noted above.

Other Direct Contact. DOH and Public
Works Board staff work with various
potential clients throughout the  year.
These contacts provide direct marketing
opportunities on an regular basis.

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 III.   Conclusion
    In general, an effective public participation
    strategy involves a series of several steps or
    phases. States must consider the audience they
are trying to reach, the media that will be most
effective in reaching it, the amount of background
information necessary, and the proper times to solicit
input. Because budget and resources vary from
state to state, they must also be factored into a
state's strategy for involving the public (Strategies
for Effective Public Involvement, League of
Woman Voters Education Fund [1998]).

In most of the states discussed in this report, the
"public" that has been involved in providing input on
the DWSRF program thus far primarily consists of
stakeholders such as water system owners,  associa-
tion representatives, consulting engineers, and
technical assistance providers (i.e., those with a
vested interest). The "general public" (i.e., the
consumer who is not engaged in managing or
regulating a water supply) has not exhibited much
interest in the process. However, states should
continue to reach out to members of the general
public and will be reviewed on their effort to include
them. States that conduct some research and target
their mailings and promotional materials to those
with a vested interest (i.e., water suppliers, consult-
ing engineers, etc.) in addition to broad-based
solicitation (i.e., newspaper notices, Internet
postings, collaboration with associations/organiza-
tions, etc.) will achieve the best results. A diverse
advisory board or committee, such as Washington's,
can also help to ensure the input of all critical
sectors including the "general public."

Working with partners is often effective in making
information available to a wide range of people and
groups. North Dakota worked with its stakeholders,
primarily the North Dakota Rural Water Systems
Association, to supplement its resources. North
Dakota Rural Water sponsored a DWSRF work-
shop to provide general information on the program.
In addition, the partnership with Rural Water gave
the state access to the association's mailing list. This
access facilitated the state's fulfillment of the public
review requirements by maximizing responses from
a knowledgeable public, and it served as a marketing
tool for North Dakota's DWSRF program without
extra effort and resources on the part of the state.
Other states (e.g., Michigan, Vermont, and Virginia)
have developed similar collaborative arrangements.

Multiple opportunities for public input and a variety
of publicity vehicles to maximize participation help
ensure a "meaningful" process. To avoid logistical
problems and encourage participation from all
sectors of the public, each of the six states reviewed
in this report held multiple hearings and workshops
in various locations and made their draft lUPs
available for review by anyone unable to attend the
hearings and workshops. For example, Vermont
used a combination of targeted stakeholder discus-
sions and public meetings to develop its annual IUP.
Through various efforts to educate the public about
the program and actively recruit applicants through
mailings, telephone calls, etc., Vermont has obtained
input from water system owners and operators,
vulnerable populations, engineering and hydrology
consultants, regional planning commissions, town
managers, nonprofit groups, and other governmental
agencies.

Virginia developed an information request form that
enabled the state to provide information on its
DWSRF program in an effective and efficient
manner. The form served as an educational tool by
providing examples of activities under each of the
set-asides.  It  enabled VDH to personalize the
information that it sent, thereby maximizing the
effectiveness of the information. Resources were
conserved because only requested materials were
sent. The form also acted as a survey of the public's
IS

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interests, providing valuable information on the areas
of greatest interest to particular groups. The infor-
mation obtained from the form could be used by the
state to help design general mailings for a broad-
based audience and more specific pieces geared
toward the group or groups of individuals that
expressed the greatest interest on the form.

For a successful marketing campaign, it is important
for states to research  and identify their public and to
target special promotional materials to them. Com-
mon marketing tools used by states include newslet-
ters, information sessions/workshops, pamphlets and
brochures on the program, direct mail, and Internet
sites. North Dakota and Vermont also made tele-
phone calls to some of the neediest systems that
may be less likely to apply for a loan or attend a
workshop.

While all six states provide good examples of
meaningful public participation processes, Michigan
requires an additional level of public involvement.
State law (Part  54, 1994 PA 451) mandates detailed
documentation of public involvement from each
entity requesting loan assistance. This requirement
provides an additional opportunity for the public to
comment on the direct impact of the program at the
local level. Michigan DEQ then holds a state-wide
review of the entire draft IUP before submitting it to
EPA.

All of the states discussed in this report have
worked closely with potential technical assistance
providers through stakeholders groups, advisory
committees, etc., to develop their programs and
obtain input on  the IUP, including the use of set-
asides. For example, Michigan established a stake-
holders group that included representatives of
AWWA, Rural Water, and consulting engineering
firms. North Dakota identified technical assistance
providers as a target audience for all mailings, and
Virginia worked closely with several potential
providers to establish a communication network
which includes the League of Women Voters and a
number of conservation groups.  Although these
states are reaching some of the groups that could be
interested in set-asides (e.g., technical assistance
providers, conservation organizations, environmental
groups, and public interests groups), DWSRF
promotional materials have not focused on set-
asides in most states.  Washington is trying to shift
the focus of its public participation strategy toward
the  set-asides because the public has become more
familiar with the loan fund program. A contact in the
state explained that Washington's first priority was
to ensure public awareness and understanding of the
loan fund; now it can devote more resources to
promoting the set-asides.

While there is no model strategy for successful
public participation, there are a number of examples
from which states may glean ideas for their own
strategy. To effectively serve the public interest, all
institutions must consider the public's input at some
point. This paper provides a few case studies
specific to the DWSRF program, but there are
hundreds of other programs that states can learn
from as well. A couple of examples are provided in
the Additional Sources of Information section below.
Although the topics vary, many of the underlying
principles for successful public participation are
sociological—the entity that is soliciting external
input on a particular issue must first learn what
motivates people and how it can most effectively
reach those people. To supplement the information
that is provided in this report, EPA is developing a
brochure on public participation in the DWSRF
program.

                                of

The League of Women Voters (www.lwv.org)
"encourages the informed and active participation of
citizens in government, works to increase under-
standing of major public policy issues, and influences
public policy through education and advocacy." To
that end, the League has developed a series of
documents, videos, and other materials on topics
ranging from drinking water to the workings of
national, state, and local governments, including
Tools for Drinking Water Protection Community
Outreach Kit  (1997) and Strategies for Effective
Public Involvement—Drinking Water Source
Assessment and Protection (1998).

The International Association for Public Participa-
tion (IAP2) seeks to promote public participation in
activities related to governments and other institu-
tions that serve the public interest. Additional
information regarding the Association and its
functions is available via the Internet at
www.pin.org/. IAP2 publications include a quarterly
newsletter titled The Participation Quarterly,
which features interviews and news on public
participation and short case studies. Improving the
Practice supplements the newsletter, offering tips

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and suggestions for improving public participation
programs. Interact is the Association's semi-annual
journal. It includes in-depth articles, case studies, and
discussions of national and international trends and
techniques for stimulating public involvement. The
Association's website also has links to many other
organizations seeking to improve public participation
in government activities.
 For more information about the DWSRF program,
 consult the EPA Office of Ground Water
 Drinking              for the program at
 www.epa.gov/safewater/dwsrf.html.
                                                                                                          17

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The
Loan   Arranger
Winter 1998
    Municipal Facilities Section - Environmental Assistance Division
   	Michigan Department of Environmental Quality
                                     Pardon Our Dust
From off on the horizon comes a cloud of dust and the
familiar expression, "Hi-ho, Silver!" We know The Loan
Arranger has arrived. Please pardon  the throwback to
the days when baby boomers were truly babies, but we
thought it appropriate to invoke memories of good deeds
performed by the legendary masked man.

Our dust results from the changes made in the Municipal
Facilities Section (MFS) to accommodate a new envi-
ronmental  financing program.   The  MFS has  been
working for over a year to build a low-interest financing
program for drinking water projects, similar to the State
Revolving Fund (SRF) for wastewater.  This newsletter is
a product of the changes that have been made. For the
past several years, it was known as The Digester.  Since
this name is inherently linked to wastewater treatment,
staff felt it would not be appropriate to carry it on  once we
began the Drinking Water Revolving Fund (DWRF).

Since we deal with silver, or at least the currency  of the
country, we started to laugh about the prospects of the
cry "Hi-ho,  Silver!" to those to whom we could offer
financial assistance.  From this, the evolution of the
name The Loan Arranger was quick.  It invoked memo-
ries of the  legendary cowboy riding  to the rescue of
those who needed aid.  That's what we do as well, both
in the DWRF and the SRF.  Our goal  is to provide
financial assistance to qualified applicants to help protect
the health, vitality and safety of the environment and the
citizens of Michigan.

The  Loan Arranger will be expanded to encompass
articles about the new DWRF,  as well as continue to
communicate issues relating to the SRF.  Readership
lists are being expanded to include community and non-
         community water suppliers, and consultants who may
         not have been involved in the SRF. We will continue to
         publish three times a year, but you will likely see a few
         more pages because there is more to communicate.

         We also would like to welcome into our partnership, the
         staff of the DEQ, Drinking  Water  and  Radiological
         Protection  Division (DWRPD), who are  responsible for
         administering the Drinking Water Program in Michigan.
         The DWRPD staff come  from the  former Michigan
         Department of Public Health. They will be our partner in
         administering the DWRF and you will see articles specific
         to their activities in this and future issues.

         We  welcome your feedback and comments on the
         newsletter  and hope that you find it informative.  If you
         have suggestions for future articles or features, please
         address them to The Loan Arranger Editor, Municipal
         Facilities Section, at the address shown on the back.

         We  look forward to a long  and  productive  run, but for
         now...we're back to the clouds of dust!
         If you wish to make additions, deletions, or changes to
         The Loan Arranger mailing list, please call the Editor,
         Cindy Salmon,  at 517-373-2161,  or send your correct
         name and address to  The Loan Arrzngsr,  Municipal
         Facilities Section, Environmental Assistance Division,
         Michigan Department  of  Environmental Quality, PO
         Box 30457, Lansing, MI 48909-7957.	
 Printed by authority of Parts 53 and 54 of the NREPA. 1994 PA 451
 Total number of copies printed:   1000  Total Cost: $  266.18
    Cost per copy: $.266
        DC&
Michigan Department of Environmental Quality
                                                                                      Michigan -1

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    Making Water Revolting Fund
           Ths Mgktnkg Eouad
The "thud" heard at the offices of the Municipal Facilities
Section  on January 2 was the sound of project plans
being dropped off in pursuit of Drinking Water Revolving
Fund  (DWRF) assistance  in Fiscal Year  1998 (FY98).
Project plans for 36 projects were submitted by public
water suppliers, each  with the hope of grabbing some
portion  of  the  $75 million currently  available  in  the
DWRF.   With only  seven months remaining  in FY98,
applicants,  their engineers, and bond counsels, as well
as staff  of the Department of  Environmental  Quality,
Michigan  Municipal   Bond  Authority,  and  Attorney
General have their work cut out for them.

What happens now?  The submitted plans have been
screened.  Those 25 plans that  propose a legitimate
DWRF project and whose contents are consistent with
the requirements of Section 5405  of Michigan's Natural
Resources and Environmental Protection Act, appear on
the draft FY98 Project Priority List.  A public hearing on
this list and the state's FY98 Intended Use Plan will be
held at  1:30 p.m. on Tuesday, March 17, 1998, in the
G. Mennen Williams Building (formerly known as the Law
Building)  Auditorium.    Project   managers  from  the
Municipal Facilities  Section  and  staff  of the Drinking
Water and Radiotogicat ProtecliorrDivisiorr have-already-
begun working with  the  applicants for these  projects
toward planned DWRF loan closings in late June or late
September of 1998.  Project plan review  and approval,
development  and approval  of  a  revenue collection
system, completion of design, and the receipt of con-
struction bids are all tasks that must be completed prior
to loan  closing.   The remainder of FY98 will  be very
busy!

For FY99,  we hope to begin using a standard annual
cycle for managing the  DWRF  program.    Suppliers
seeking  loan assistance  in  FY99  must submit a final
project plan on or before May 1, 1998.  Projects in the
fundable range of the FY99 Project Priority List will be
able to close on their loans in one of four quarters; the
end of December 1998, or the end of March, June, or
September of 1999.

Department staff are currently working with a number of
suppliers who intend to make May 1 submittals. Included
are  some  water suppliers who submitted inadequate
project  plans on  January  2.  Suppliers and their engi-
neers should be  reminded to closely follow the Project
Plan  Preparation Guidance available from this office.
Special attention should be paid to ensuring that alterna-
tives are adequately evaluated and that public participa-
tion opportunities are sufficient.   The final plan  must
contain a  description of  these opportunities.   Project
officials should maintain close contact with their project
manager from the Municipal Facilities Section throughout
the project planning process.  This will help to ensure
that all necessary steps are taken in a timely manner.
Questions about the Project Plan Preparation Guidance
may be directed to the  Municipal Facilities Section  at
517-373-2161.
              DWRF Set-Asides
        A New Way to do Business
                fey Jim Clekadv DWRFU
The  term "set-asides" originated with passage  of  the
federal Safe Drinking Water Act in August 1996. Among
state drinking water regulators and  state revolving fund
administrators  across the nation,  it has  become  an
integral part of the vocabulary.

There  are two types of set-asides;  national set-asides
administered  by  the  U.S.  Environmental Protection
Agency, and state set-asides administered by each state
with  a Drinking Water  Revolving Fund (DWRF).  Set-
asides are used to meet the objectives of Congress and
the states  in  the administration of a comprehensive
drinking  water  program.   By funding  program  needs
through  set-asides,  Congress  meets the  Unfunded
Mandates Act and allows states  flexibility in funding
programs with the tiigrtest priority for their specific needs.

It should be obvious that setting aside any funds from the
appropriation for a DWRF will erode the assets of the
fund and provide less money for waterworks construction
projects. However, Congress has included several new
mandates in the reauthorized Safe  Drinking Water Act,
and is relying on set-asides to fund them. If states fail to
meet the new mandates,  they are  penalized  by either
suffering a 20-40 percent loss of DWRF grant funds, or
loss of federal grant funds dedicated to the state Public
Water Supply Supervision Program.

This creates competition (and conflict) in the use of the
same  appropriated money, but  it does allow  states to
apply funds to areas of greatest need.  For example, of
the eleven allowable state set-asides in the Safe Drinking
Water Act, Michigan is  using only three in FY97  and six
in FY98.

State  set-asides  can be up to  31  percent of the total
federal grant awarded.   Michigan  is proposing  to  use
approximately 15 percent of the money for set-asides,
and much of the money will be returned to  local  govern-
ment and public water suppliers.

Each year that Michigan applies for federal grant funds,
an Intended  Use Plan must be  prepared  and a public
hearing held on both the money intended for construction
                                                                                                    Michigan -2

-------
projects, and the  money  proposed to be set aside.  In
addition, the state holds stakeholder meetings  in ad-
vance of the Intended Use Plan to receive public input on
the proposed set-asides,  a  process which was included
in  1997 PA  26, the statute  which  created the DWRF in
Michigan  by  adding  Part  54,  Safe  Drinking  Water
Assistance to 1994 PA 451.

Michigan is proposing some important new  programs
using set-asides to improve public water supplies and
drinking water quality.   Source water  protection  is a
primary theme and three  separate  set-asides will be
used in this area.  The state, through contracts with  local
health  departments and  Michigan  State University, will
be assessing  each  public water supply  source for
vulnerability to contamination. The information and maps
generated will be  used by the state, local health depart-
ments, and  the public for siting new public and  private
wells and  setting  priorities for water resource protection
activities.   The state will initiate efforts to  address the
problems  of abandoned  wells.   Improperly abandoned
wells provide a direct avenue for the migration of surface
contaminants into the aquifers  used for drinking water.
The state  is also proposing a matching grant program to
public  water  suppliers  who are  performing Wellhead
Protection  Program activities under the voluntary  state
program.  These efforts will provide long term benefits by
focusing resources on source  protection  and pollution
prevention.

Other  set-asides  will be  used for direct technical assis-
tance to public water suppliers for water system opera-
tion and management. A new program will  focus on the
technical,  financial, and  managerial capacity  of public
water  supplies to assure long-term compliance with all
national drinking  water standards.  The state operator
certification and training  program will be expanded and
improved, especially for small public water supplies.

The new provisions  of  the Safe Drinking Water Act,
including  the new money  to  construct water  system
improvements, should have dramatic impacts upon the
quality of drinking water  in  Michigan and in the nation in
future years.  More information will be published in future
 issues of the Loan Arranger.

 The Drinking Water and  Radiological  Protection Division
 will assume primary  responsibility for administering the
 set-asides,  and welcomes your participation and  input.
 Please call 517-335-9218 if you have any questions.
              DWRF Publications
 Since Governor John Engler signed Acts 26 and 27 into
 law establishing the new Drinking Water Revolving Fund
 (DWRF)  program, a number of documents  have been
 developed  to assist applicants  in meeting  program
requirements.   Please  review the following  list  and
contact  the  Municipal Facilities Section if you wish to
receive any of these materials.

DWRF Brochure:  This brochure provides an introduc-
tion to the DWRF program.   It includes  the  program
history and  purpose, as well as  information  regarding
qualifying water suppliers and types of projects.  Basic
information regarding the process of  applying for and
receiving a loan is also provided.

Project Plan Preparation Guidance:  This guidance is
intended to assist water suppliers in fulfilling the project
planning requirements of the DWRF program.  A final
project plan must include all applicable elements identi-
fied  in  Part  54 (Safe  Drinking Water Assistance)  of
Michigan's  Natural   Resources   and  Environmental
Protection Act (1994 PA 451) MCL 324.5401-324.5418.
This  document  provides  guidance  regarding  those
project  planning  requirements.   It also  stresses  the
uniqueness  of every project  and the importance  of
contacting this office early in the process for assistance
in identifying applicable  planning  requirements.  It was
published in September 1997.

Three  supplementary   planning   handouts  are  also
available  upon  request:   Regional  Planning  Agency
Addresses, National Natural Landmarks in Michigan, and
Michigan's Natural and  Wild  &  Scenic Rivers.   The
Project Plan  Preparation Guidance directs applicants
request any  of these items if needed to  complete the
project plan.

Finally, three additional  handouts pertaining  to  federal
project planning crosscutters and state requirements are
available  upon request:  a list of crosscutters and the
applicable statutes, the environmental contacts list, and a
document detailing federal   requirements  related  to
project planning.

Eligibility Guidance:  This guidance provides informa-
tion on the eligibility of project costs for DWRF financing.
 Both general and specific eligibility criteria are provided.
Such criteria are necessary to ensure consistency of
 program decisions regarding eligible costs to include in
 DWRF loans. This guidance was  published in February
 1998.  The document will be  modified in  the future, as
 new eligibility questions  are addressed.

 Disadvantaged Community Guidance:  The intent of
 this guidance is to provide water suppliers with informa-
 tion regarding the "disadvantaged community" provisions
 of the  DWRF program.   It expands upon the statutory
 provisions contained in Part  54, 1994 PA 451.   The
 guidance may be used  to assist applicants in assessing
 whether  they  qualify as a disadvantaged community.
 This document became available in February 1998.
                                                                                                       Michigan -3

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Application:   The first  step in applying  for  DWRF
assistance is preparation and submittal of a project plan.
After the project is listed on the Project Priority List and
identified as fundable, an application must be completed.
The  application  includes financial information,  project
costs, and bid data.  This application is currently under
development and will be available  in February 1998.

In addition to the above  materials, project plan  review
checklists have also been developed to assist both the
MFS and Drinking  Water and Radiological  Protection
Division (DWRPD)  staff  in  the review of project  plan
submittals.   A Powerpoint presentation has  also been
created to assist staff in presenting information about this
new program.  Please contact the MFS to schedule an
informational  meeting and viewing of the slide show.
Photocopies of the slides have also been printed and are
available upon request.
 Plsadvaataged Community State
The new Drinking Water Revolving Fund (DWRF) offers
additional benefits to disadvantaged municipalities. Such
determinations are made by the Technical Support Unit
of the Municipal Facilities Section, based on information
provided by water suppliers interested in obtaining a loan
from the DWRF.

To qualify  as a disadvantaged community,  a supplier
must  meet several qualifications.   First, only suppliers
meeting the definition of a "municipality" in Part 54, Safe
Drinking Water Assistance, 1994 PA 451, may qualify.

Next, the updated Median Annual Household  Income
(MAHI)  for the area to be served by a proposed project
must  not exceed  120 percent of the updated statewide
MAHI for Michigan.   This is calculated  by  taking the
published amounts from the U.S. Bureau of the Census
statistics and applying the Detroit Consumer Price Index
published by the U.S. Bureau of Labor Statistics.

The  proposed  project  costs must  also  be  directly
assessed to users within the area served by the pro-
posed project. The intent of the disadvantaged status is
to provide  relief primarily to residential customers who
may  be economically distressed  by high annual user
costs.  This is  determined by the  comparison of MAHI
information to annual user costs.  If the project costs are
borne over an area wider than the area to be served by
the project, then  the updated MAHI for  the  entire as-
sessment area would be reviewed.

If these three criteria are  met, a determination will then
be based on one of the following four applicable stan-
dards:
1.   More than 50 percent of the area to be served by the
    project  is identified as a poverty  area  by the  U.S.
    Bureau of the Census.

2.   The updated MAHI for the area to be served is less
    than  the  most recently published Federal  Poverty
    Guidelines for a family of four in the contiguous
    United States.

3.   If the updated MAHI for the area to be served is less
    than  the updated statewide MAHI for Michigan, an-
    nual  user  costs  must exceed 1.5 percent of the
    MAHI for the service area.

4.   If the updated MAHI  for the area to be served is
    greater than the updated statewide MAHI,  annual
    user  costs must exceed 3.0 percent of the  updated
    MAHI for the service area.

If a water supplier meets the criteria identified here, they
will receive 50 additional points in the priority system, be
offered repayment terms up to 30 years, and may obtain
help in defraying  their costs of project planning.  Two
reviews will be conducted.  One will occur based on
project plan information  to determine  qualification for
priority points.  The second will occur  after bid costs are
known to determine whether  or  not the  supplier will
receive planning assistance and the additional years to
repay the loan.

More details can be found in the DWRF Disadvantaged
Community Guidance.   Copies may be requested by
calling the Municipal Facilities Section at 517-373-2161.
     Fiscal Year 1997 Annual Report
       for tk« State Revolving Fund
Staff of the Municipal  Facilities Section recently com-
pleted the  FY1997 Annual Report for Michigan's State
Revolving Fund (SRF).  The SRF provides low-interest
loans to municipalities undertaking water pollution control
projects.

Completing its ninth year, the SRF has matured into an
attractive financing alternative for municipal financing of
wastewater treatment  projects.   During  FY1997,  the
Department of Environmental Quality  (DEQ)  and  the
Michigan Municipal Bond Authority (MMBA) closed on 16
loans which totaled $104.2 million. To date, the SRF has
financed $706.9 million for 130 projects.

The distribution  of different  types  of projects among
municipalities  of  differing sizes is  also  encouraging.
Since its inception, 36.3 percent of all SRF loans made
have  been committed  to  municipalities  of less than
10,000 in size. While combined sewer overflow (CSO)
                                                                                                      Michigan -4

-------
corrections account for 48 cents of every dollar spent,
the commitments for  CSO correction in  FY1997 were
only 8.4 percent.  This reduction permits other wastewa-
ter treatment upgrade projects to  qualify for available
loan funds.

The SRF  has also pushed outlays once commitments
were made.  We have disbursed 75 cents  of every dollar
made in loan commitments to local municipalities. This
means the dollars materialize  more quickly for  munici-
palities  and  their contractors, and  keeps  the  work
progress moving forward.  This has also paid off  in
quicker administrative  completion of projects in the SRF
program.  Dollars  remaining are committed to projects
still under construction.

The SRF program was designed to operate as a revolv-
ing fund.   As  repayments have come  into  the SRF
accounts from earlier loans, the DEQ and the MMBA
have used them to augment the waning federal contribu-
tion. Federal funds accounted  for less than one-third  of
the available capital during FY1997.

For further information about the FY1997 SRF  Annual
Report,  please  check  out  our  MFS  Homepage  at
www.deq.state.mi.us/ead/mfsect/.
Many water suppliers submitted Drinking Water Revolv-
ing Fund  (DWRF)  project  plans  on January  2,  1998
hoping to  be placed on the Project Priority List (PPL).
Unfortunately,  inadequate  submittals  precluded  some
projects from being placed on the FY98 PPL.

Part 54, 1994 PA 451  specifies what a complete project
plan must include.  Municipal  Facilities Section staff
made the  Project Plan Preparation Guidance available in
September 1997, which explained the law.

One of the most common misunderstandings in this first
round of submittals involved public participation require-
ments.  The language in Part 54 was intended to ensure
that each  applicant had provided proper public notice of
the proposed project to the affected community.   The
following steps must be taken to ensure adequate public
participation.

•   The applicant must hold a public hearing on  the
    proposed project.  The date, time, and place chosen
    must be conducive to maximizing public input oppor-
    tunities. An early morning or noontime hearing may
    not  afford the public an adequate  opportunity to at-
    tend.  Similarly, scheduling  a  hearing on or near a
    holiday may not maximize public participation in  the
    decision-making process.
•   The public hearing needs to be advertised at least 30
    days in advance.   The  advertisement  should  be
    placed in one or more publications of local circulation
    in order to reach the greatest number of affected
    parties.  Using  the local newspaper, as well as post-
    ing  the  notice at the  water  supplier's  or  munici-
    pal/township offices, or  direct  mailing  to  system
    customers is recommended.

•   The draft project plan must be available to the public
    for examination for  at  least 30  days prior to the
    hearing, with the location of its availability mentioned
    in the advertisement.   Typically, the  applicant dis-
    plays the plan,  and may be able to answer questions
    prior to the hearing.

•   A verbatim written transcript or an audio recording of
    the entire public hearing must be provided with the
    project  plan submittal.  Summaries  or  meeting min-
    utes are not complete  records of the  hearing, and
    are unacceptable.

•   Changes to the draft  project  plan resulting  from
    public concerns should  be described in detail in the
    final submittal.

•   An attendance  list from the public hearing, including
    names  and complete addresses, is required in the
    final project plan submittal.

•   Copies of all written  public comments on the project,
    along with the applicant's responses, must be in-
    cluded in the final project plan submittal.

After concluding the public participation process, the final
plan must  contain a  resolution  of adoption from the
governing body of the  participating municipality(ies), or a
statement of intent from a  water supplier  who is not a
municipality.  This  resolution  must occur  only after the
public hearing has been held.

Documentation of the public participation process is only
one critical  component  of  an acceptable final project
plan.  Water suppliers submitting plans for the May 1,
1998  deadline are advised to contact the Municipal
Facilities Section as soon as possible,  so that a
project manager can assist them.
                                                                                                   Michigan -5

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The Loan Arranger
                                                                                          FIRST CLASS
                                                                                         U.S. POSTAGE
                                                                                            PAID
                                                                                          LANSING, Ml
                                                                                         PERMIT NO. 1200
ENVIRONMENTAL ASSISTANCE DIVISION
MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY
PO BOX 30457
LANSING Ml 48909-7957
Address Correction Requested
                                          State of Michigan
                                        John Engter, Governor
                                   m ftepartitterttof Eriwofimeritat duality
                                      Russell J. Harding, Director
                                   Environmental Assistance Division
                                          £>auT£ugger, Chief

                                   MUNICIPAL FACILITIES SECTION
                                      Thomas  Kamppinen, Chief
                                     Dave KfUSfk, East Unit Chief
                                                  , tytest Unit Chief
                                Ed Meyer, Technical Support Unit Chief
                             JNTERNET; www»d6q.state.mi»us/ead/mfsect/
              The iow Arranger is pubJisherf tn-annually by the Municipal facilities Section,
                     Correspondence may be addressed to The iom Arranger Editor;
                               ENVIRONMENTAL ASSISTANCE DIVISION
                       MICHIGAN DEPARTMENT OP ENVIRONMENTAL QUALITY
                                           £0 BOX 304i7
                                      LANSING Ml 48909-7957
 The Michigan Department of Environmental Quality (MDEQ) will not discriminate against any individual or group on the basis of race, sex, religion,
 age, national origin, color, marital status, disability, or political beliefs. Questions or concerns should be directed to the MDEQ Office of Personnel
 Services, PO Box 30473, Lansing, Ml 48909.
                                                                                              Michigan -6

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To talk to your district engineer or
public health sanitarian, contact an
MDH District Office:

 Bemidji
   1819 Bemidji Avenue
   Bemidji, Minnesota 56601-3866
   218/755-3820  FAX: 218/755-3823

 Duluth
   320 West Second Street, Room 703
   Duluth, Minnesota 55802-1402
   218/723-4643  FAX: 218-723-4920

 Fergus Falls
   Building 4A, East Drive
   Fergus Falls, Minnesota 56537-4103
   218/739-7585  FAX: 218/739-7544

 Mankato
   410 Jackson Street, Suite 150
   Mankato, Minnesota  56001-3752
   507/389-2501  FAX: 507/389-5563

 Marshall
   109 South Fifth Street
   Marshall, Minnesota  56258-1268
   507/537-7151  FAX: 507/537-7194

 Rochester
   18 Woodlake Drive Southeast
   Rochester, Minnesota  55904-5506
   507/285-7289  FAX: 507/285-7445

 St. Cloud
   3400 North First  Street, Suite 305
   St. Cloud, Minnesota 56303-4000
   320/255-4216  FAX: 320/255-4264

For general information about the
Drinking Water Revolving Fund
program, contact:
  Minnesota Department of Health
  Drinking Water Protection Section
  121 East Seventh Place Suite 220
  P. O. Box 64975
  St. Paul, Minnesota 55164-0975
  651/215-0770  FAX: 651/215-0775
For information regarding the Public
Facilities Authority's application procedures
and financial assistance available through
the Drinking Water Revolving Fund,
contact:

  Minnesota Department of Trade and
    Economic Development
  Public Facilities Authority
  500 Metro Square
  121 East Seventh Place
  St. Paul, Minnesota 55101-2146
  1/800/657-3858 or 651/297-1530
  FAX: 651/296-5287
                                                    Drinking

                                                         Watei
            Revolving

                  Fund
                                                  What it Means to  Minnesota
                                                      Public Water Quppliers
 To request this document in another format, call
      651/215-0700; TDD 651/215-0707
 or toll-free through the Minnesota Relay Service,
    1/800-627-3529 (ask for 651/215-0700).
                                                                            February 1999
I H H E S 0 T Al
                                                  [PARTMEHTOF HEALTH
         Minnesota Department of Health
         Drinking water Protection Section
                                                                                                                                Minnesota -1

-------
         Overview
            of  the
   Drinking Water
  Revolving  Fund
The Drinking Water Revolving Fund
provides below-market-rate loans to
municipalities and other community drink-
ing water systems—as well as to nonprofit
noncommunity drinking water suppliers—
to improve or construct treatment, storage,
and distribution systems that are necessary
to maintain compliance with the federal
Safe Drinking Water Act and improve
drinking water infrastructure.

Water is our most important resource. We
are fortunate in Minnesota to have a safe
and adequate supply of water. However,
this will continue only if we remain vigilant
and address emerging issues, such as
deteriorating drinking-water infrastructures.

Some public drinking water systems in
Minnesota are 50 to 100 years old. Funds
are needed to upgrade or expand water
systems and to remedy water quality prob-
lems and threats. The Drinking Water
Revolving Fund could mean relief for these
aging water systems.

Enacted in the summer of 1996 as part of
the reauthorized Safe Drinking Water Act,
this program allows states to set up revolv-
ing-loan funds for drinking water projects
similar to those already in place for waste-
water treatment projects.
      Drinking Water  Revolving  Fund
Program Purpose: To provide financial
assistance—primarily in the form of
below-market-rate loans—to municipali-
ties and other eligible public water
suppliers to improve or construct water
treatment, storage, and distribution
systems needed to comply with the Safe
Drinking Water Act and to improve
drinking water infrastructure.

Eligible Applicants: All community
water suppliers and nonprofit, noncom-
munity water suppliers, such as schools
and government office buildings, are
eligible for the loans.  This program is
not available to private well owners.

How It Works: The  federal government
awards funds to states to capitalize  their indi-
vidual revolving funds. In Minnesota, these
federal funds can be leveraged through the sale
of tax-exempt bonds to generate  additional
funds that can be loaned to municipalities for
eligible drinking water systems. Upon comple-
tion of its project, the loan recipient will repay
the loan.  These repaid funds will then be lent
to other eligible drinking water suppliers. The
revolving loan fund will help water suppliers
meet projected needs many years into the fu-
ture.

Interest Rates: The loans will be made
at below-market rates with the specific
rate based on the size and financial
capability of each municipality. The
interest rate will be determined by finan-
cial need for municipal water systems and
by a reduction of up to two percent on
bank-loan rates for eligible nonmunicipal
and noncommunity water systems.
Priorities: The Safe Drinking Water Act
gives priority for the use of funds to
projects that address the most serious risk
to human health, are necessary to ensure
compliance with the requirements of the
Safe Drinking Water Act, and assist the
systems most in need on a per household
basis according to state affordability
criteria.
Money Available: Minnesota expects to
receive approximately $130 million in
federal funds through 2003, plus an
additional $26 million in required state
matching funds. If necessary, these funds
can be leveraged through the sale of
bonds to generate additional loan funds.
Administration: The Drinking Water
Revolving Fund is being administered by
the Minnesota Department of Health and
the Public Facilities Authority (Minnesota
Department of Trade and Economic
Development). The Health Department
will set priorities for the use of the re-
volving-fund money, review the proposed
projects for technical adequacy, and
provide training and technical assistance
for public drinking water suppliers.  The
Public Facilities Authority will review the
borrower's financial
capability, sell bonds to fund projects, set
the interest rate, terms, and conditions of
the loans, and process and award the
loans.
                                                                                                                          Minnesota - 2

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WHO SHOULD
ATTEND?
 "Z.   "^
HOW  So
G Si f*3   —
U. (- 5  D f*>

iliii
O rt v)  < pj
Z 5 ^  2 ft-
 O   cfl
     5
0  City Engineers & Public Works Directors
0  Rural Water System Managers
0  Trailer Court & Subdivision Owners'
0  Noncommunity Drinking Water Suppliers2
0  Consulting Engineers
0  Technical Assistance Providers
0  Funding Agencies
0  Anyone involved  in protecting  public
   drinking water supplies

'If the facility is regulated under the SDWA.
2Nonprofit only.
Workshop Presenters

Jack Long, Director
Division of Municipal Facilities
ND Department of Health

D. Wayne Kern, Program Administrator
Drinking Water Program
ND Department of Health

Dave Koland, Executive Director
ND Rural Water Systems Association
                                                     Drinking Water
                                                                SRF
                                                          Workshop
                                                            April 16,1997
  c
  o
  u
  o
                                             « 5 *
                                            >. u
                                            If
                                                          Bismarck Radisson Inn
                                                                                                                    Minnesota - 3

-------
Drinking Water  SRF Workshop
Drinking Water SRF Overview
Its New!!! When Does It start? How does it
work? How do I get on the priority list?

State Set-Asides Available
What are set-asides?  Which ones do  we
need in North Dakota?  What types of pro-
jects can set-asides be used for?

Intended Use Plan (IUP)
What is an IUP?  Will  the public get a
chance to  comment on the IUP?  What
projects are eligible for  inclusion in  the
IUP? Can I combine money from MR&I,
RDA, the Bond Bank and the Drinking Wa-
ter SRF?

Ranking System Factors
What factors should be used to evaluate and
prioritize projects?
WORKSHOP OBJECTIVE

This workshop is designed to:
0  Provide background information on the
   Drinking Water SRF and how it might
   benefit your system.

0  Obtain public input on the use of Drink-
   ing Water SRF set-asides.

0  Obtain public input on the factors to be
   considered in developing a priority
   ranking system for eligible Drinking
   Water SRF projects.
    Your INPUT is needed!

You can help set the direction of
the NEW Drinking Water SRF!
      o
 SRF=State Revolving Fund
     Radisson Inn
        Bismarck
     April 16,1997
Registration
Registration begins at 9:45 a.m and will
include coffee and rolls in the foyer of the
Heart/Sheyenne Room


The workshop will begin  promptly  at
10:00 a.m. The workshop is scheduled  to
end at 3:30 p.m.


Lunch is  not included  but a noon buffet
will be available in the Radisson Inn dining
room for  $5.95. The Radisson Inn is lo-
cated at 800 South 3rd Street. There is no
charge for the workshop.


Please fill out the enclosed registration slip
or call 1-800-349-6951 to register today!
Sponsored by:
         North Dakota
     Rural Water Systems
          Association
                                                                                                                        Minnesota - 4

-------
                                                  BALLOT
                                                     ON
                              NORTH DAKOTA DWSRF SET-ASIDES FOR FY97 (1)

                                             DWSRF WORKSHOP
                                         BISMARCK RADISSON INN
                                               APRIL 16,1997
Small System (<10,000) Technical Assistance
Local Assistance & Other State Programs
•     Loans To PWSs To Acquire Land Or
      Conservation Easements
•     Loans to CWSs To Implement Source
      Water Protection Measures
•     Assist PWSs In Capacity Development
•     State Delineation And Assessment Of
      Source Water Protection Areas
•     State Development Or Implementation Of
      Wellhead Protection Program
Loan Subsidies For Disadvantaged Communities
0%
1%
2%
Other % (<2%)	No Opinion (NO)
                                                NOTE: Specify other % if selected (i.e., 1.5%, 8%, ect.).
0%
0%
0%
0%
3%
3%
3%
3%
5%
5%
5%
5%
                       10%     Other %(< 10%
                                           NO
                       10%     Other % (< 10%)	NO.
                       10%     Other %(<10%).
                                           NO
                       10%     Other % (<10%)	NO
0%
3%
5%
10%
Other % (<10%)	NO
NOTE: The Sum Of The Five Activities Under Local Assistance &
        Other State Programs May Not Exceed 15%.  No individual
        activity may exceed 10%.
0%     5%      10%     15%	20%	25%	30%	
                                                                                 Other % (<30%)	NO
(1) Based on the FY97 Congressional appropriation, North Dakota's potential capitalization grant for FY97 is $12,558,800.
      1%=$125588       3%=$376,764       10%=$ 1,255,880     20%=$2,511,760     30%=$3,767,640
      2%=$25 U 76       5%=$627,940       15%-$ 1,883,820     25%=$3,139,700
Representing: City Engineer	Public Works Director	Rural Water System Manager	Water Operator	
Trailer Court/Subdivision Owner	Consulting Engineer	Technical Assistance Provider	Funding Agency	
Other (Specify)	.	
                                                                                                          North Dakota -1

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                                               STATE OF NORTH DAKOTA
                                 DRINKING WATER STATE REVOLVING FUND (DWSRF)
              POTENTIAL FY97 SET-ASIDES BASED ON A FY97 CAPITALIZATION GRANT OF $12,558,800 (1)
                    SET-ASIDE CATEGORY
                       —         ' '       ' '•''
                        PROGRAMMATIC

        DWSRF ADMINISTRATION
        STATE PROGRAM ASSISTANCE (3)
        SMALL SYSTEM (<10,000) TECHNICAL ASSISTANCE
        LOCAL ASSISTANCE & OTHER STATE PROGRAMS (5)
                            PROJECTS

        LOANS TO SMALL SYSTEMS (<10,000)
        LOANS TO DISADVANTAGED COMMUNITIES
            SET-ASIDE AMOUNT (2)
             UP TO 4.0% OR $502,352
          UP TO 10.0% OR $1,255,880 (4)
             UP TO 2.0% OR $251,176
    UP TO 10.0% OR $1,255,880 FOR ANY
ACTIVITY— UP TO 15.0% OR $1,883,820 FOR ALL
             COMBINED ACTIVITIES
    MANDATORY 15.0% OF DWSRF FUND (6)
      OPTIONAL-UP TO 30% OR $3,767,640
(1) Based on the FY97 Congressional appropriation, North Dakota's potential capitalization grant for FY97, assuming no withholdings by^the U.S^EPA is
Any time one year after a state establishes a DWSRF, but prior to FY2002, the Governor of a state may transfer 33% of the funds in the DWSRF to the Clean Water Act
SRF.  The same dollar amount may be transferred from the Clean Water Act SRF to the DWSRF.                 r, ™, ,„ , , ft, , 0^
(2) The maximum permissible set-asides are set forth under Section 1452 of the Safe Drinking Water Act Amendments of 1996 (P.L. 104-182).
(3) State program assistance includes the Public Water Supply Supervision (PWSS) program, source water protection program(s), capacity development program, and

                                    for capitalization grant funds used for this set-aside. At least one-half of the match must be in addition to state funds

   L                       pams includes: loans to acquire land or conservation easements for source water protection purposes; loans to implement^ source
water protection measures; state delineation and/or assessment of source water protection areas; state development and ,mplementat,on of an EPA-approved wellhead
protection program; and, state assistance to systems for capacity development. FY97 is the only year when funds w,ll be available for state del.neat.on and/or
assessment of source water protection areas.  Funds set aside for this purpose must be obligated by the state within four fiscal years.
(6) The 15% set-aside for loans to small systems is based on the capitalization grant minus funds dedicated to the other set-as.des (exclud.ng the set-as.de for loans to
disadvantaged communities).
                                                                                                                       North Dakota - 2

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                        RANKING SYSTEM FACTORS


Issue:                                                            Percentage:

Affordability                                                       	%

Conservation                                                      	%

Operation & Maintenance                                           	%

Project Cost                                                       	%

Water Quality                                                     	%

Water Quantity                                                    	%


Representing:

City Engineer	 Public Works Director	 Rural Water System Manager	
Water Operator	 Trailer Court or Subdivision Owner	
Consulting Engineer	 Technical Assistance Provider	
Funding Agency	 Other (Specify)	
                                                                        North Dakota - 3

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                          RANKING SYSTEM CRITERIA


Water Quality:

1.     Address present exceedance of enforceable standards

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 7.
2.    Address future standard exceedances where no standards presently exist

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
3.    Address future standard exceedance while the present standard is currently
      being met

      High Priority   Medium Priority  Low Priority  No Opinion  Not to be Considered
4.    Address aesthetic problems (nonenforceable standards and other quality
      problems)

      High Priority  Medium Priority  Low Priority  No Opinion   Not to be Considered
 5.     Susceptibility to water contamination

       High Priority  Medium Priority Low Priority  No Opinion  Not to be Considered
 6.     Availability of alternative water source with acceptable quality

       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
                                                                            North Dakota - 4

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Water Quantity:

1.     Address quantity problems

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
              75 gpcd
             100gpcd
             150 gpcd
             200 gpcd
                Other
2.     Inadequate pressure during peak flow

       High Priority  Medium Priority  Low Priority No Opinion Not to be Considered
 3.     Is another source of water available

       High Priority Medium Priority  Low Priority  No Opinion  Not to be Considered
 4.
       High Priority  Medium Priority Low Priority  No Opinion  Not to be Considered
 Affordability:

  1.    Population served

       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
  2.    Ability to pay based on Average Household Median Income (AHMI) or other
       indicator	—

       High Priority  Medium Priority Low Priority  No Opinion  Not to be Considered
  3.   Degree of local participation ($'s contributed)

       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
                                                                             North Dakota - 5

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4.   Ability to receive funding elsewhere

     High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered
 5.   Ability to finance internally

     High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
6.    Present water bill as percent of AHMI

      High Priority Medium Priority  Low Priority  No Opinion  Not to be Considered
 7.    Future water bill (after construction) as percent of AHMI

      High Priority Medium Priority Low Priority  No Opinion  Not to be Considered
 8.    System meets state/EPA definition of a disadvantaged system

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 9.    Cost effectiveness

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
            Cost/person served  	
            Cost/tap served      	
            Other (specify)       	

10.   Readiness to proceed

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
            Immediately
            6 months
            12 months
            More than a year
11.   Separate water department account (from general fund)

      High Priority  Medium Priority  Low Priority No Opinion Not to be Considered
                                                                            North Dakota - 6

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12.    Willingness to pay

      High Priority Medium Priority  Low Priority  No Opinion  Not to be Considered
13.
      High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered


14.	

      High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered
Project Cost:

1.     Cost of project

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
            $0-$10K
            $10K-$50K
            $50K-$1M
            $1M-$5M
            $5M-$10M
            Greater than $10M
2.     Prorate maximum project cost to annual fund

       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 3.    Ability for project to be funded in multiple places

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 4.
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
                                                                           North Dakota - 7

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Operation and Maintenance:
 1.    Facility at or exceeds useful or design life
      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 2.   Facility at or exceeds design capacity
      High Priority  Medium Priority Low Priority  No Opinion  Not to be Considered
 3.   Facility recycles plant or process water
      High Priority Medium Priority Low Priority  No Opinion  Not to be Considered
 4.    Facility sludge used as a beneficial product
       High Priority Medium Priority  Low Priority  No Opinion  Not to be Considered
  5.    Project includes consolidation or restructuring of water systems
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
  6.    Committed to source water protection
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
  7.    Has or will have certified operator(s)
       High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered
  8.    Has or will develop a routine maintenance program
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
  9.    Applicant current on all SDWA monitoring and reporting requirements
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
                                                                             North Dakota - 8

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10.    Has or will develop an emergency response plan
      High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered
11.    Has or will develop a backflow protection program
      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
12.   Has or will establish a repair/scheduled replacement program
      High Priority  Medium Priority  Low Priority No Opinion  Not to be Considered
13.
      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 14.
       High Priority Medium Priority  Low Priority  No Opinion  Not to be Considered
 15.
       High Priority  Medium Priority Low Priority  No Opinion  Not to be Considered
 Conservation:
 1.     Has or will establish nondeclining block water rates
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 2.     System is 100% metered
       High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
                                                                             North Dakota - 9

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3.     Has a leak detection program

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
4.
      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered


5.    	;	

      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
6.
      High Priority  Medium Priority  Low Priority  No Opinion  Not to be Considered
 Representing:

 City Engineer	 Public Works Director	 Rural Water System Manager.
 Water Operator	 Trailer Court or Subdivision Owner	
 Consulting Engineer	 Technical Assistance Provider	
 Funding Agency	 Other (Specify)	
                                                                           North Dakota-10

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                            Vermont's Intended Use Plan for
                       Drinking Water State Revolving Loan Fund

The Vermont Water Supply Division is inviting you to help us determine how to spend the Fiscal
Year 1998 Drinking Water State Revolving Fund of $8.5 million A draft Intended Use Plan has
been prepared which identifies how the Water Supply Division proposes to spend $8.5 million on
drinking water infrastructure improvements, source water protection, and water system
management enhancements. This plan includes a list of the projects proposed for funding with the
$8.5 million.

Please attend one of the information meetings to discuss the Plan, ask questions, and provide
comments and suggestions. Written comments are also requested. Please send written comments
to the DWSRF Program, Water Supply Division, 103 South Main Street, Waterbury, VT
05671-0403.
                                 Meeting Information

                                  June 2, 1998, 7-9pm
                              Pavilion Building Auditorium
                                      109 State St
                                    Montpelier, VT.

                                 June 3, 1997, 7-9pm
                           Rutland High School - Lecture Hall
                              Stratton Road (Route 4 East)
                                     Rutland, VT

For a copy of the Intended Use Plan please call (800) 823-6500 or FAX (802) 241-3284 or view
it on the Internet at http://www.anr.state.vt.us
                                                                                        Vermont -1

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                            RESPONSIVENESS SUMMARY

The following comments were made verbally during the two public meetings in Montpelier and
Rutland, the Consultant's workshop in Waterbury, the Green Mountain Water Environment
presentation in Rutland, or received in writing (i.e., letter, fax, or e-mail) during the public
comment period. The comments have been edited and consolidated for brevity and clarity. The
Water Supply Division has a file available to the public which contains the notes from the public
meetings and written comments received during the public comment period.

1. Will public comments result in changes to the priority list?

Priority scoring sheets are available for all projects on the priority list and water systems are
advised to review the scoring sheets for accuracy. Priority scores are adjusted as appropriate. The
scores for several projects on this year's list were  changed based on public comments.
2. Will applications received after the draft list was published but before the list was finalized be
considered for the priority list?

Applications received after the draft list was published will not be included on the list unless the
project was an "Emergency Project".
3. Can loans be made from the Planning Loan Fund when an application is submitted if funds
are available?

Yes, if the application is complete and the project meets eligibility criteria.
4. Is there a schedule which shows realistic times for planning, loan approvals and construction
for a typical project?

We are working on development of such a schedule.
 5. Can a Final Design application be submitted prior to a bond vote?

 Yes.
                                                                                           Vermont - 2

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6. Are there plans to update the "cost curve" used for estimating allowable engineering costs for
small projects?

Yes, the cost curves were updated several years ago and need review and adjustment, as
appropriate.
7. Are water meter replacement projects eligible?

Water meters, as well as backflow preventers and remote meter readers, are eligible as part of a
total improvement project. A project to just replace water meters is questionable and would not
receive any priority points for funding.
8.  What is meant by distribution system land is eligible?

Land purchases necessary for the construction of distribution facilities are an eligible project cost.



9.  What population is used for determining the median household income?

The water system may use the census data for the town or village where the water system is
located or do a survey of the system users. If a water system has users in two different census
areas, the median household income is determined by prorating the census data or doing a survey.



10. Where are Bond Bank loan application forms obtained?

Bond Bank loan application forms must be obtained from the Bond Bank.
11. How long does it take to complete the administrative process of loan application review,
approval and loan execution?

We are currently estimating 2 months.
12. How long does it take to process payment requests?
                                                                                          Vermont - 3

-------
It takes 2 or 3 days plus the time for the Bond Bank to sign off and the Chittenden Bank to issue
the check to municipal systems.

Payments to private systems are made by the Vermont Economic Development Authority.

Short-term borrowing expenses to cover the processing time are eligible costs under the loan.



13. Will the state only fund the most cost effective alternative?

This is generally true, however, there may be other considerations such as capacity and
consolidation of systems. This will be a project specific determination.



14. How detailed or complete does Preliminary Engineering need to be?

Preliminary engineering should include adequate investigation to select the appropriate alternate,
prepare an estimate of project cost within 10% and complete the environmental review necessary
to issue a categorical  exclusion for the project.



15. Does DBE on engineering contracts apply towardDBE goals?

Yes.
16. Are costs associated with the required environmental review and historic preservation
compliance eligible for funding?

Yes.
17. Are DBE requirements a goal or a requirement?

The DBE requirements are a goal.



18. Who determines the type of procurement requirements that must be used on the project?
                                                                                         Vermont - 4

-------
The Facilities Engineering Division makes these determinations.
 19. Are Source Protection Plans an eligible cost?

 Source Protection Plans are only eligible for funding when they are part of new source
 development.
20. What is the state going to do for funding of set-aside programs when and if EPA no longer
provides funding?

The planning loan program and the Source Protection Loan Program are revolving loan programs
and funds will be available from loan repayments. Other states have established loan
administration fees to cover administrative costs. We have no plans for funding the technical
assistance and program management set-asides.
21. If a community funds their own planning and is ready to go, will that help them obtain funds
for construction?

Water systems not on the fundable list that have completed preliminary engineering, passed bond
votes and completed the required environmental reviews for their project may be able to take
advantage of available funds late in the fiscal year.
22. Is there a difference in the required legal opinion on sites and rights of way between the
clean water program and drinking water program?

There is no difference.
23. Does the proposed April 1 deadline for passage of required bonds by a municipality make
"readiness to proceed" a critical consideration for funding?

Points for readiness to proceed cannot be included in the priority system, however, a requirement
for a system to demonstrate "readiness to proceed" can be used to determine eligibility for
funding.
                                                                                           Vermont - 5

-------
24. How do the interest rate on the priority list compare to the interest rate and terms included
in the loan agreement?

The interest rates on the priority list are preliminary estimates based on information provided by
the water system on the priority list application. Loan interest rates and terms are determined at
time of loan approval based on detailed engineering reports and cost estimates. There may be
significant differences between the preliminary projection and the final determination.
25. After reviewing the plan in advance of the meeting on 06/03/98,1 found it easily
understandable and there was very good integration of potentially subjective standards. As an
operator of a small water system, 1 appreciate the clarity of the plan and its presentation.
26. The 1UP should include a policy statement recognizing the benefits of water conservation
and provide for consideration of water conservation in evaluation of requests for DWSRF funds.
At a minimum, the 1UP should reflect the recommendations in the EPA guidelines.

The EPA draft guidelines are dated April 20, 1998, and the state legislation was passed in April.
The use of the water conservation guidelines and the state legislation in the DWSRF program will
be evaluated during the next year and appropriate provisions included for consideration in next
year's Intended Use Plan. There was not adequate time to evaluate alternatives and develop a plan
this year. In addition, the state capacity development strategy will be developed during the next
18 months with the participation of water system owners, operators and other stakeholders.
Identification of specific water conservation programs, policies and procedures may be included in
the capacity strategy. Water use issues are always a consideration in evaluation of alternatives and
review of plans and specifications.
27. ANR should include priority points for those systems that have water conservation measures.

This was considered last year and we were advised by EPA that only minimal points could be
assigned (tie-breaker type points) for systems with water conservation programs. Points could not
be awarded for including water conservation measures in a project. It was determined that
assigning points for this factor would have minimal, if any, impact on the projects funded, and
increasing the complexity of the priority system was not justified.
28. Alternative mechanisms should be put in place to avoid bypassing high priority planning and
construction projects in favor of low priority projects that are simply ready to proceed.
                                                                                           Vermont - 6

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We believe the current program adequately addresses this issue. (1) Systems are only bypassed for
a few months. A high priority project bypassed in April will have funding available by September.
There is no project delay. (2) We have provided both adequate technical assistance and planning
funds in set-asides specifically for these systems.
29. A higher priority should be placed on design and planning.

Over $500,000 has been set aside specifically for feasibility studies, planning and preliminary
designs. We have effectively made this the highest priority.
30. Comments on priority scoring for specific projects are not included in the responsiveness
summary. These comments were reviewed by Regional Managers and appropriate adjustments
made.
31. There were a number of specific comments and suggestions on the policies, procedures and
forms being used to implement the program. These comments and suggestions will be evaluated
and we expect to make a number of modifications.
                                                                                          Vermont - 7

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                                                                    DUE  DATE:  JUNE  15,  1999
                              VIRGINIA DEPARTMENT OF HEALTH
                     DRINKING WATER STATE REVOLVING FUND PROGRAM
RETURN TO: Thomas B. Gray, P.E.
Virginia Department of Health
Office of Water Programs
1500 East Main Street, Room 109
Richmond, VA 23219
(voice 804-786-1087)
(Fax 804-786-5567)

                                         SET-ASIDE SUGGESTIONS

SECTION A - ORGANIZATIONAL DATA

1.   Organization Name

    a. Name of Respondent             	

    b. Respondent Address:             	
    c. Contact Person:
    d. Telephone Number: 	FAX Number:  	

1.   Waterworks type (if applicable):

    Publically-owned community  	    PWS ID number:	   System Name	
    Investor-owned community    	    PWS ID number:	   System Name	
    Nonprofit noncommunity     	    PWS ID number:	   System Name	
    None of the above           	

Submittal of this suggestion(s) is for the purpose of assisting the state to determine the extent of interest in the various set-
asides.

       Chief Administrative Officer of Organization:


       NAME and TITLE:
       SIGNATURE                                     DATE:
SECTION B - SET-ASIDE SUGGESTIONS


                                                 Page 1 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                      Virginia -1

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                                                                             DUE DATE:  JUNE 15,  1999
1.   4% Administration and Technical Assistance

    Activity - The purpose of this set-aside is to finance the administration of the capitalization grant and to provide supplemental
    funding to implement technical assistance activities to assist owners in complying with regulations or preparing planning and
    design documents.

    Activities may include outsourcing technical assistance related to specific PWS's project planning and plan development, and
    preparation of loan application, and oversight of set-aside contacts.

Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	.
General suggested activities or comments on this set-aside.
2.   2% Small System Technical Assistance (Systems serving 10,000 people or fewer)




                                                       Page 2 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                                   Virginia - 2

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                                                                              DUE DATE:  JUNE 15,  1999
    Activity - A state may use these funds to support a technical assistance team or to contract with outside organizations to provide
    technical assistance.

    Activities may include providing assistance to significant non-compliers, operational hands-on assistance, record keeping
    instruction or provide seminars on selected topics.

    Suggested activity that could be accomplished/utilized by the respondent. Related fund ($)	.
General suggested activities or comments on this set-aside.
                                                        Page 3 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                                     Virginia - 3

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                                                                             DUE DATE:  JUNE  15,  1999


3.   10% State Program Management

    Activity

    a.   Funds for use by VDH to supplement the existing public water supply supervision program - suggestions appreciated.

    Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	.
    b.   Administer or provide technical assistance through source water protection programs.

Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	
    c.   Capacity development strategy (state level) - This issue addresses a waterworks owners ability to provide a viable
        waterworks over the long term.  VDH has initiated this effort and will continue to refine its focus.

Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	.
    d.   Supplement an operator licensure program.

Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)
General suggested activities or comments on this set-aside.
                                                       Page 4 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                                   Virginia - 4

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                                                                             DUE  DATE:  JUNE  15,  1999


4.   15% Local Assistance and Other Programs

    Activity

    a.   Land acquisition and conservation easements - This will allow loan money to purchase land or easements to protect water
        sources and such purchases do not have to be integral to a construction project.

    Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	.
    b.   Voluntary source water protection program - This will allow a loan to assist a community waterworks to implement
        voluntary incentive-based source water protection measures in areas delineated under a source water assessment program.

    Suggested activity that could be accomplished/utilized by the respondent. Related fund ($)	.
    c.   Source water protection partnership per SDWA 1454.

    Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)
    d.   Capacity development (local level) - Provide technical assistance to waterworks in implementing the states capacity
        development strategy.  This includes providing necessary services to complete a Business Plan (BP) for every community
        and nonprofit noncommunity waterworks serving less than 3300 people (contact with almost 1400 waterworks). The BP
        refers to the managerial, financial, and technical capabilities needed by an owner to ensure long-term operation of a
        waterworks.

    Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)	.
        Priority will be focused on SNCs, loan applicants, new waterworks applicants, and disadvantaged waterworks.
        Construction loans may not be given to an owner who does not have capabilities identified in the BP.

                                                       Page 5 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                                   Virginia - 5

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                                                                            DUE  DATE:  JUNE  15,  1999
    Suggested activity that could be accomplished/utilized by the respondent.  Related fund ($)
    e.   Source water protection delineation and assessment program - This will allow the state to ensure that a program is
        established and implemented to delineate and assess source water protection areas for every water source as mentioned in
        91453 of the SDWA.  The SDWA limits use of these funds to those under the FFY97 capitalization grant; however,
        the funds may be used over a period of 4 years.

    Suggested activity that could be accomplished/utilized by the respondent. Related fund ($)	.
General suggested activities or comments on this set-aside.
                                                      Page 6 of 6

FY 2000 DRINKING WATER STATE REVOLVING FUND SET ASIDE SUGGESTIONS
                                                                                                                 Virginia - 6

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                                                                                                          Attachment

                    Virginia Drinking Water State Revolving Fund (DWSRF) Programs and Activities

Please check (* ) the items for which you would like to receive more information and return this form to:

                                                 Thomas B Gray, P.E.
                                             Virginia Department of Health
                                            1500 East Main Street,  Suite 109
                                               Richmond, Virginia 23219
                                                  Fax: (804) 786-5567

Construction Assistance:
        (  ) Construction Loan - Interest rates range from 3% to ceiling rate which is 1% below prevailing municipal bond market
            rates. Maximum term 20 years. Lower rates and longer terms are considered for waterworks meeting disadvantaged
            criteria.
        (  ) Construction Grant-Will be considered for waterworks meeting disadvantaged criteria.

General Technical Assistance:
        (  ) Planning/Design Grant - Ten grants up to $25,000 per project to be awarded annually.  Grants are especially for
            small, rural, financially stressed, community waterworks.

Small System Technical Assistance-Applies to public water systems serving  10,000 people or less:
        (  ) Circuit Rider-An  independent contractor will provide on-site operational assistance to 1,000 waterworks with less
            than 500 population.
        (  ) Source Water Protection -An independent contractor will provide guidance to 100 waterworks in developing and
            implementing a Source Water Protection Program.
        (  ) Compliance Guidance - An independent contractor will provide assistance to 26 waterworks that are in significant
            non-compliance or nearly so.
        (  ) Small System Management Institute - An  educational program to provide small system waterworks owners and
            superintendents intensive training  in current  business management techniques.
        (  ) Professional Series of Specialty Seminars and Training Events - Training for waterworks owners to include such
            topics as emerging technology, regulatory compliance, and  business plan development.
        (  ) Training Scholarships - Awarded to waterworks operators to attend the Water Treatment Plant Operations Short
            Course and the AWWA Water Utility Management Institute at Virginia Tech.
        (  ) Equipment - Particle Counters and Leak Detectors are available for loan to waterworks.
        (  ) Innovative Technology

State Programs Assistance:
        (  ) Operator Certification - A "Distance Education" program using video telecourses to be available to assist operators in
            obtaining certification.
        (  ) Operator Scholarships for Distance Learning
        (  ) Courier
        (  ) Lab Equipment at  Division of Consolidated Laboratory Services (DCLS)
        (  ) Research - capacity; telemetry; web site
        (  ) Research - Operator Availability and Certification Strategies
Local Assistance:
        (  ) Loans to Acquire Land/Conservation Easements to Protect Source Water - Interest rate is 4% and term is 20 years.
            Disadvantaged waterworks may receive a 3% interest rate.
        (  ) Loans to Establish Local. Voluntary Incentive-Based Source Water Protection Measures - Interest rate is 4% and term
            is 20 years.  Disadvantaged waterworks may receive a 3% interest rate.
        (  ) Comprehensive Business Plan - An independent contractor will provide hands-on guidance and assistance to 25
            waterworks in developing a Comprehensive Business Plan that follows Virginia  Department of Health guidelines.
        (  ) Peer Review or Mentoring

                                              Information Request From:

                        Name                                 Title
                        Representing_

                        Address
                        City	State	Zip_

                        Phone (	)                          FAX (       )
Revised June 23, 1999
Prepared 7/16/98
                                                                                                                 Virginia - 7

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         WASHINGTON'S  DRINKING  WATER  NEWSLETTER
             Two      ago, the Drinking Water      Revolving Fund
                     was just a plan on      and a lot of
             that we          it work. Today,      of us at the De-
             partment of       who     brought it     are justifiably
             proud of what we     accomplished. I know I      for
             our partners at the Public Works Board and the board's
                       the           of Community, Trade and Eco-
             nomic Development, when I say they      our

Soon we will take          for a third.  So far, we've         roughly
$38      in            to Washington's             While we rec-
      that this      only a          in Washington's          we
    know that the DWSRF program has     a major difference to the
water systems that             from it.

With the onset of a third round of funding,     will be     changes.  The
DWSRF will be      to use and more appealing, financially.  Recent revi-
     to DWSRF                           the already-low
rate        on             and                   requirements.
The DWSRF loan fee has also     reduced. We've           the appli-
             it's       and
These        will help us     the primary    of the DWSRF in  Wash-
ington: to put                     and         within the      of
small and medium-sized water systems in Washington      We      you
can

          Sincerely,
           /7         X       A'
          Grefc/Grunenfelder
                                                                           Mtofwif fo» State Deptrlmmt of
                                                                   JitHedth
                                                                   Environmental Health Programs
                                                                        February 1999
1999 DWSRF Loan
   Quick  Facts:
»           $2?
     be       for
            $8     of

  cycles)

»


        ire

»
                  A


»        $2     per
  system

»        up to $6
  for

»          at

»                for
        in
  communitiei"

»                for
        in
  communities"

» No

»     fee      to 2%

»
  March 30-April 1,1595

»
  July 1,1999

»
        by
                                                                                  Washington -1

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                   What  You   Can    Do
                 To give you an idea of what can be
                 done through the Drinking Water State
                 Revolving Fund, here are descriptions
                 of some projects funded in the first
                 round of applications.
                 In an effort to address the serious
                 drinking water issues it has experienced
                 over the last several years, Aberdeen is
                 constructing a new membrane filtration
plant. In addition to building the plant, Aberdeen will
implement residential metering, corrosion control, and
storage improvements. When this project is completed, the
city will be in full compliance with the Surface Water
Treatment Rule of the Safe Drinking Water Act.

  County: Grays Harbor
  Project Funding:  DWSRF Loan      $ 1,030,000
                 Other Sources*      12,399,193
              Total Project Cost
$13,429,193
This project has two parts. The first part allows Bremerton
to comply with Washington State Department of Health lead
and copper rules. The city is constructing a facility to house
three storage tanks for drinking water treatment chemicals,
several metering pumps, an emergency generator, a control
room and a lavatory.  Two vaults being built on a reservoir
inlet line adjacent to the facility will contain a flowmeter,
sampling pumps, and chemical sampling and injection
points. The second part of the project replaces an existing
floating hypalon cover.

  County: Kitsap
  Project Funding:  DWSRF Loan     51,030,000
                 Other Sources*     S  151,000
              Total Project Cost     $1,181,000

                                           /


This project gives 155 Chelan County residences and
businesses a safe and potable source of drinking water.
Residents now drink unfiltered water from an irrigation
system that does not provide adequate safeguards against
cross-contamination from orchard and fruit processing
operations or waterborne diseases. The project will provide
an entirely new domestic water system. A new distribution
system is being constructed,  and filtered domestic water will
be purchased from the City of Chelan. When  the system is
up and running, these two water districts will be in com-
plete compliance with the Safe Drinking Water Act.

  County: Chelan
  Project Funding:  DWSRF Loan     61,411,100
                 Other Sources*     $ 356,989
              Total Project Cost     $1,768,089
Colfax is constructing a new water booster pump station for
the southwest section of the city. The southwest section now
relies on a single well and reservoir.  Line looping consisting
of new 12-inch piping connected to an existing 8-inch
asbestos cement pipe, and new 8-inch pipe connected to an
existing 6-inch asbestos cement pipe  will be installed.
The benefits to the residents of Colfax through this project?
Adequate fire protection and a domestic water supply
system.

  County: Whitman
  Project Funding:  DWSRF Loan    $318,270
                 Other Sources*    S 59,000
              Total Project Cost

      Of
The City of Cosmopolis' project assures that its water system
has sufficient pressure and flow to supply safe drinking
water to homes that are now served by a sub-standard,
private, community well.  The city will install a domestic
water supply line, standby generator, transfer switch,
booster pump, and a new  pump house, along with miscella-
neous construction items.
                           County: Grays Harbor
                           Project Funding:  DWSRF Loan
                                          Other Sources*
                                       Total Project Cost
                                   $166,878
                                   S 74,503
                                   5241,381
                         South Bend's project allows the city to protect against
                         contaminants entering its drinking water system. The project
                         funds construction of a new membrane treatment facility.
                         Interior process piping, site piping modifications, finished
                         water pumps, water treatment plant controls and telemetry,
                         a 3-Phase/480 Volt electrical service, standby generator,
                         safety equipment, and construction of a treatment plant
                         building will be included. The project also lets South Bend
                         meet existing disinfection requirements with no change to its
                         current distribution configuration.
                           County: Pacific
                           Project Funding:  DWSRF Loan
                                          Other Sources*
                                       Total Project Cost
                                   $1,030,000
                                   $1,774,738
                                   52,804,738
                         In this project, the DWSRF and the City of Stanwood join
                         forces to fund construction of a new wellhouse, install
                         pumping equipment that is capable of 500 GPM (plus all
                         electrical and telemetering equipment necessary for opera-
                         tions), and lay approximately 600 feet of ductile iron pipe.
                         The project will replace the well Stanwood now uses, which
                         is perforated, does not have a well seal, and is less than 25
                                                                                                 Washington - 2

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feet from a creek in pastureland. Stanwood will gain a
potable drinking water source, eliminate existing construc-
tion and wellhead problems, and erase the risk of
contamination from outside sources.
  County:  Snohomish
  Project Funding:  DWSRF Loan
                  Other Sources*
               Total Project Cost
5265,458
$ 29,594
$295,052
                              •&•
of
Camp Zanika Lache currently uses water that comes directly
from a small creek above lake Wenatchee. The creek water
is not filtered. The camp is subject to an "agreed" order
with the Department of Health to bring its water source into
compliance with the Surface Water Treatment Rule. It will
do this by bringing a new well, drilled in 1997 but not put
into service, on line. Improvements associated with the new
well - pumps, storage, distribution, and standby disinfection
- will complete the project.
  County:  Chelan
  Project Funding:  DWSRF Loan     884,873
                  Other Sources*     $ 8,487
               Total Project Cost
$93,360
The Town of Tieton will construct a new, 400,000-gallon,
drinking water reservoir. Tieton's existing 200,000-gallon
reservoir is 80,000 gallons short of providing enough storage
to meet the town's needs. The project addresses the town's
current and 20-year shortages and provides a modest buffer
for growth beyond the 20-year horizon.
  County:  Yakima
  Project Funding:  DWSRF Loan
                  Other Sources*
               Total Project Cost
8358,749
$ 38,700
$397,449
  * Other
      »       Works Trust
      » U5DA
      »
       or other grant funds
      » capital reserves
      »            or
                                                                    Dear   Dr.   Drip
Dear Dr. Drip:
I thought the Drinking Water State
Revolving Fund was intended to
finance treatment plants and put
pipes in the ground.  Now I hear that
the state is using the money for other
stuff! What's up?
Signed, Pipeless in Seattle
;~-
11 comes as no surprise to Dr. Drip thai you thought the fund was
only for construction, 'That's what's been highlighted. In fact,
Drinking Water Slate Revolving Fund dollars also are available for
other things, like wellhead protection, that can improve a water
system's operation. We call these non-construction dollars set-asides.
The Department of Health and the Public Works Board use a small
percentage of set-asides to administer the fund. The Department of
Health uses set-aside funds to help maintain "primacy" and keep the
regulation of Washington's drinking water systems in Olympia,
Washington, rather than Washington, DC,
A large portion of set-asides is used  to help water systems. For
instance,  DOH contracts with the Evergreen Rural Water Association
to send a  "circuit rider" around the state to develop wellhead protec-
tion plans. Set-asides let DOH provide source water assessment and
protection, and supports a technical assistance program for small
water systems. And set-asides are used to keep the cost to water
systems of system plans and project reviews at a minimum.
Why is DOH putting so much money into set-asides? Congress
authorizes the states to use up to 31 percent of their federal DWSRF
grants for set-asides.  DOH is taking advantage of  this by using a
large portion of allowable set-asides from its initial grants. This
temporary strategi/ is driven bi/ the fact that DOH received fewer
construction project requests than hoped for early on, but must still
use DWSRF funds according to a federal deadline.  The stale is
authorized to use these set-asides over the next several years.
Washington's water si/sterns loill benefit several ways. Set-asides from
earlier grants will be available for future non-construction activities.
More funds from future DWSRF grants will be available for construc-
tion.  And Washington can commit all of the federal funds to use prior
to the federal deadline,
                                                                                                                     Washington - 3

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Workshops will be held from 9:00 a.m. - Noon
    «  March 30 - Everett Holiday Inn, 101 - 128th Street SE, Everett, WA, 98208, (425) 337-2900,
      Pacific Crest Theatre
    «  March 31 - Moses Lake Hallmark Inn, 3000 Marina Drive E, Moses Lake, WA, 98837, (509)
      765-9211
    *  April 1 - Tumwater Labor & Industries Bldg., 7273 Linderson Way, Tu in water, WA, 98501,
      (360) 902-5804, Training Room S-ll 7
  Please fill out and mail or fax to:
  Public Works Board, PO Box 48319,
  Olympia, Washington, 98504-8319
  Attention: Ann Barickman
  Fax (360) 664-3029 «  Phone (360) 586-2472

  Name
   O Workshop Sign-up

   D         for 1999
      Loan Application &
      Guidelines

  Phone
  Water System
  Address
  Workshop Location	
  # Guidelines/Applications Requested
# Persons Attending
                                                                                       Recognition
The
         to the
of this            of
Tap:

                 and
McCoIIough,

Water Tap is        by the
          of Health, Division
of Drinking Water, to provide
          on
      water      owners,
water works
             In
water.

Comments            are
welcome. Past      are
       by writing to the
     i¥ffer Tap, Division of
             EO. Box

7822, Or e-mail your      to:
Department of
Division of Drinking Water
PO Box
Olympia, WA
1-800-521-0323
                                                  BULK
                                               US POSTAGE
                                                 Washington State
                                              Department of Printing
                                                                                         (1^ /Q printed on recycled paper
                                                                                                        Washington - 4

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